Exhibit 99.2
KAMADA LTD.
KAMADA LTD.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2020
(Unaudited)
TABLE OF CONTENTS
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1
KAMADA LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
As of June 30, | As of December 31, | |||||||||||
2020 | 2019 | 2019 | ||||||||||
Unaudited | Audited | |||||||||||
U.S Dollars in thousands | ||||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 57,399 | $ | 23,835 | $ | 42,662 | ||||||
Short-term investments | 47,272 | 38,122 | 31,245 | |||||||||
Trade receivables, net | 19,823 | 25,497 | 23,210 | |||||||||
Other accounts receivables | 2,980 | 3,292 | 3,272 | |||||||||
Inventories | 47,646 | 35,501 | 43,173 | |||||||||
Total Current Assets | 175,120 | 126,247 | 143,562 | |||||||||
Non-Current Assets | ||||||||||||
Property, plant and equipment, net | 24,574 | 24,478 | 24,550 | |||||||||
Right-of-use-assets | 3,796 | 3,946 | 4,022 | |||||||||
Other long term assets | 1,058 | 174 | 352 | |||||||||
Contract asset | 911 | - | - | |||||||||
Deferred taxes | 632 | 1,644 | 1,311 | |||||||||
Total Non-Current Assets | 30,971 | 30,242 | 30,235 | |||||||||
Total Assets | $ | 206,091 | $ | 156,489 | $ | 173,797 | ||||||
Liabilities | ||||||||||||
Current Liabilities | ||||||||||||
Current maturities of bank loans | $ | 431 | $ | 480 | $ | 489 | ||||||
Current maturities of lease liabilities | 990 | 960 | 1,020 | |||||||||
Trade payables | 22,760 | 19,879 | 24,830 | |||||||||
Other accounts payables | 5,497 | 4,876 | 5,811 | |||||||||
Deferred revenues | 589 | 461 | 589 | |||||||||
Total Current Liabilities | 30,267 | 26,656 | 32,739 | |||||||||
Non-Current Liabilities | ||||||||||||
Bank loans | 63 | 482 | 257 | |||||||||
Lease liabilities | 3,704 | 3,988 | 3,981 | |||||||||
Deferred revenues | 1,025 | 542 | 232 | |||||||||
Employee benefit liabilities, net | 1,267 | 818 | 1,269 | |||||||||
Total Non-Current Liabilities | 6,059 | 5,830 | 5,739 | |||||||||
Shareholder’s Equity | ||||||||||||
Ordinary shares | 11,662 | 10,418 | 10,425 | |||||||||
Additional paid in capital | 207,731 | 179,471 | 180,819 | |||||||||
Capital reserve due to translation to presentation currency | (3,490 | ) | (3,490 | ) | (3,490 | ) | ||||||
Capital reserve from hedges | 411 | 8 | 8 | |||||||||
Capital reserve from financial assets measured at fair value through other comprehensive income | - | 187 | 145 | |||||||||
Capital reserve from share-based payments | 6,204 | 9,663 | 8,844 | |||||||||
Capital reserve from employee benefits | (356 | ) | 4 | (359 | ) | |||||||
Accumulated deficit | (52,397 | ) | (72,258 | ) | (61,073 | ) | ||||||
Total Shareholder’s Equity | 169,765 | 124,003 | 135,319 | |||||||||
Total Liabilities and Shareholder’s Equity | $ | 206,091 | $ | 156,489 | $ | 173,797 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements..
2
KAMADA LTD.
CONSOLIDated condensed statements of comprehensive income
Six months period ended | Three months period ended | Year ended | ||||||||||||||||||
June 30, | June 30, | December 31, | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2019 | ||||||||||||||||
Unaudited | Unaudited | Audited | ||||||||||||||||||
U.S Dollars In thousands | ||||||||||||||||||||
Revenues from proprietary products | $ | 47,942 | $ | 47,662 | $ | 22,625 | $ | 27,281 | $ | 97,696 | ||||||||||
Revenues from distribution | 18,437 | 14,388 | 10,464 | 7,972 | 29,491 | |||||||||||||||
Total revenues | 66,379 | 62,050 | 33,089 | 35,253 | 127,187 | |||||||||||||||
Cost of revenues from proprietary products | 27,881 | 25,178 | 12,934 | 14,688 | 52,425 | |||||||||||||||
Cost of revenues from distribution | 15,932 | 12,088 | 9,040 | 6,965 | 25,025 | |||||||||||||||
Total cost of revenues | 43,813 | 37,266 | 21,974 | 21,653 | 77,450 | |||||||||||||||
Gross profit | 22,566 | 24,784 | 11,115 | 13,600 | 49,737 | |||||||||||||||
Research and development expenses | 6,970 | 6,253 | 3,623 | 3,487 | 13,059 | |||||||||||||||
Selling and marketing expenses | 2,118 | 2,280 | 1,178 | 1,188 | 4,370 | |||||||||||||||
General and administrative expenses | 4,619 | 4,621 | 2,307 | 2,527 | 9,194 | |||||||||||||||
Other expenses | 34 | 28 | 32 | 5 | 330 | |||||||||||||||
Operating income | 8,825 | 11,602 | 3,975 | 6,393 | 22,784 | |||||||||||||||
Financial income | 615 | 559 | 298 | 274 | 1,146 | |||||||||||||||
Income (expense) in respect of securities measured at fair value, net * | 102 | (58 | ) | - | (7 | ) | (5 | ) | ||||||||||||
Income (expenses) in respect of currency exchange differences and derivatives instruments, net | 65 | (528 | ) | (367 | ) | (215 | ) | (651 | ) | |||||||||||
Financial expenses | (135 | ) | (149 | ) | (58 | ) | (72 | ) | (293 | ) | ||||||||||
Income before tax on income | 9,472 | 11,426 | 3,848 | 6,373 | 22,981 | |||||||||||||||
Taxes on income | 796 | 360 | 390 | 230 | 730 | |||||||||||||||
Net Income | $ | 8,676 | $ | 11,066 | $ | 3,458 | $ | 6,143 | $ | 22,251 | ||||||||||
Other Comprehensive Income (loss) : | ||||||||||||||||||||
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met | ||||||||||||||||||||
Gain (loss) from securities measured at fair value through other comprehensive income | (188 | ) | 198 | - | 90 | 143 | ||||||||||||||
Gain (loss) on cash flow hedges | 441 | 71 | 200 | (3 | ) | 92 | ||||||||||||||
Net amounts transferred to the statement of profit or loss for cash flow hedges | (7 | ) | (2 | ) | (41 | ) | - | (23 | ) | |||||||||||
Items that will not be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||
Remeasurement gain (loss) from defined benefit plan | - | - | - | - | (388 | ) | ||||||||||||||
Tax effect | 15 | (49 | ) | (12 | ) | (21 | ) | (11 | ) | |||||||||||
Total comprehensive income | $ | 8,937 | $ | 11,284 | $ | 3,605 | $ | 6,209 | $ | 22,064 | ||||||||||
Earnings per share attributable to equity holders of the Company: | ||||||||||||||||||||
Basic net earnings per share | $ | 0.20 | $ | 0.27 | $ | 0.08 | $ | 0.15 | $ | 0.55 | ||||||||||
Diluted net earnings per share | $ | 0.20 | $ | 0.27 | $ | 0.08 | $ | 0.15 | $ | 0.55 |
* | Refer to note 5c for additional information. |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
3
KAMADA LTD.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Capital reserve from securities | ||||||||||||||||||||||||||||||||||||
measured at fair value | Capital reserve | Capital | Capital | |||||||||||||||||||||||||||||||||
Additional | through other | due to translation to | Capital reserve | reserve from | reserve from | |||||||||||||||||||||||||||||||
Share | paid in | comprehensive | presentation | from | sharebased | employee | Accumulated | Total | ||||||||||||||||||||||||||||
capital | capital | income | currency | hedges | payments | benefits | deficit | equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
U.S Dollars in thousands | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2020 (audited) | $ | 10,425 | $ | 180,819 | $ | 145 | $ | (3,490 | ) | $ | 8 | $ | 8,844 | $ | (359 | ) | $ | (61,073 | ) | $ | 135,319 | |||||||||||||||
Net income | - | - | - | - | - | - | - | 8,676 | 8,676 | |||||||||||||||||||||||||||
Other comprehensive income (loss) | - | - | (188 | ) | - | 434 | - | - | - | 246 | ||||||||||||||||||||||||||
Taxes effect | - | - | 43 | - | (31 | ) | - | 3 | - | 15 | ||||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | (145 | ) | - | 403 | - | 3 | 8,676 | 8,937 | ||||||||||||||||||||||||||
Issuance of ordinary shares | 1,217 | 23,684 | - | - | - | - | - | - | 24,901 | |||||||||||||||||||||||||||
Exercise and forfeiture of share-based payment into shares | 20 | 3,228 | - | - | - | (3,228 | ) | - | - | 20 | ||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 588 | - | - | 588 | |||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | 11,662 | $ | 207,731 | $ | - | $ | (3,490 | ) | $ | 411 | $ | 6,204 | $ | (356 | ) | $ | (52,397 | ) | $ | 169,765 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
4
KAMADA LTD.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Capital reserve from securities | ||||||||||||||||||||||||||||||||||||
measured at fair value | Capital reserve | Capital | Capital | |||||||||||||||||||||||||||||||||
Additional | through other | due to translation to | Capital reserve | reserve from | reserve from | |||||||||||||||||||||||||||||||
Share | paid in | comprehensive | presentation | from | sharebased | employee | Accumulated | Total | ||||||||||||||||||||||||||||
capital | capital | income | currency | hedges | payments | benefits | deficit | equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
U.S Dollars in thousands | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 (audited) | $ | 10,409 | $ | 179,147 | $ | 34 | $ | (3,490 | ) | $ | (57 | ) | $ | 9,353 | $ | 4 | $ | (83,024 | ) | $ | 112,376 | |||||||||||||||
Cumulative effect of initially applying IFRS 16 | - | - | - | - | - | - | - | (300 | ) | (300 | ) | |||||||||||||||||||||||||
Balance as at January 1, 2019 (after initially applying IFRS 16) | 10,409 | 179,147 | 34 | (3,490 | ) | (57 | ) | 9,353 | 4 | (83,324 | ) | 112,076 | ||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | 11,066 | 11,066 | |||||||||||||||||||||||||||
Other comprehensive income | - | - | 198 | - | 69 | - | - | - | 267 | |||||||||||||||||||||||||||
Taxes effect | - | - | (45 | ) | - | (4 | ) | - | - | - | (49 | ) | ||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | 153 | - | 65 | - | - | 11,066 | 11,284 | |||||||||||||||||||||||||||
Exercise and forfeiture of share-based payment into shares | 9 | 324 | - | - | - | (324 | ) | - | - | 9 | ||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 634 | - | - | 634 | |||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | 10,418 | $ | 179,471 | $ | 187 | $ | (3,490 | ) | $ | 8 | $ | 9,663 | $ | 4 | $ | (72,258 | ) | $ | 124,003 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
5
KAMADA LTD.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Capital reserve from | ||||||||||||||||||||||||||||||||||||
securities | ||||||||||||||||||||||||||||||||||||
measured at fair value | Capital reserve | Capital | Capital | |||||||||||||||||||||||||||||||||
Additional | through other | due to translation to | Capital reserve | reserve from | reserve from | |||||||||||||||||||||||||||||||
Share | paid in | comprehensive | presentation | from | sharebased | employee | Accumulated | Total | ||||||||||||||||||||||||||||
capital | capital | income | currency | hedges | payments | benefits | deficit | equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
U.S Dollars In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of April 1, 2020 | $ | 11,647 | $ | 204,702 | $ | - | $ | (3,490 | ) | 264 | $ | 8,903 | $ | (356 | ) | $ | (55,855 | ) | $ | 165,815 | ||||||||||||||||
Net income | - | - | - | - | - | - | - | 3,458 | 3,458 | |||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | 159 | - | - | - | 159 | |||||||||||||||||||||||||||
Taxes effect | - | - | - | - | (12 | ) | - | - | - | (12 | ) | |||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | - | - | 147 | - | - | 3,458 | 3,605 | |||||||||||||||||||||||||||
Exercise into shares and forfeiture of share-based payment | 15 | 3,029 | - | - | - | (3,029 | ) | - | 15 | |||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 330 | - | - | 330 | |||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | 11,662 | $ | 207,731 | $ | - | $ | (3,490 | ) | $ | 411 | $ | 6,204 | $ | (356 | ) | $ | (52,397 | ) | $ | 169,765 |
Capital reserve from | ||||||||||||||||||||||||||||||||||||
securities | ||||||||||||||||||||||||||||||||||||
measured at fair value | Capital reserve | Capital | Capital | |||||||||||||||||||||||||||||||||
Additional | through other | due to translation to | Capital reserve | reserve from | reserve from | |||||||||||||||||||||||||||||||
Share | paid in | comprehensive | presentation | from | sharebased | employee | Accumulated | Total | ||||||||||||||||||||||||||||
capital | capital | income | currency | hedges | payments | benefits | deficit | equity | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
U.S Dollars In thousands | ||||||||||||||||||||||||||||||||||||
Balance as of April 1, 2019 | $ | 10,412 | $ | 179,352 | $ | 118 | $ | (3,490 | ) | $ | 11 | $ | 9,463 | $ | 4 | $ | (78,401 | ) | $ | 117,469 | ||||||||||||||||
Net income | - | - | - | - | - | - | - | 6,143 | 6,143 | |||||||||||||||||||||||||||
Other comprehensive income | - | - | 90 | - | (3 | ) | - | - | - | 87 | ||||||||||||||||||||||||||
Taxes effect | - | - | (21 | ) | - | - | - | - | - | (21 | ) | |||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | 69 | - | (3 | ) | - | - | 6,143 | 6,209 | ||||||||||||||||||||||||||
Exercise into shares and forfeiture of share-based payment | 6 | 119 | - | - | - | (119 | ) | - | - | 6 | ||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 319 | - | - | 319 | |||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | 10,418 | $ | 179,471 | $ | 187 | $ | (3,490 | ) | $ | 8 | $ | 9,663 | $ | 4 | $ | (72,258 | ) | $ | 124,003 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
6
KAMADA LTD.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Capital reserve from securities | ||||||||||||||||||||||||||||||||||||
measured at fair value | Capital reserve | Capital | Capital | |||||||||||||||||||||||||||||||||
Additional | through other | due to translation to | Capital reserve | reserve from | reserve from | |||||||||||||||||||||||||||||||
Share | paid in | comprehensive | presentation | from | sharebased | employee | Accumulated | Total | ||||||||||||||||||||||||||||
capital | capital | income | currency | hedges | payments | benefits | deficit | equity | ||||||||||||||||||||||||||||
Audited | ||||||||||||||||||||||||||||||||||||
U.S Dollars in thousands | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | $ | 10,409 | $ | 179,147 | $ | 34 | $ | (3,490 | ) | $ | (57 | ) | $ | 9,353 | $ | 4 | $ | (83,024 | ) | $ | 112,376 | |||||||||||||||
Cumulative effect of initially applying IFRS 16 | - | - | - | - | - | - | - | (300 | ) | (300 | ) | |||||||||||||||||||||||||
Balance as at January 1, 2019 (after initially applying IFRS 16) | 10,409 | 179,147 | 34 | (3,490 | ) | (57 | ) | 9,353 | 4 | (83,324 | ) | 112,076 | ||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | 22,251 | 22,251 | |||||||||||||||||||||||||||
Other comprehensive income (loss) | - | - | 143 | - | 69 | - | (388 | ) | - | (176 | ) | |||||||||||||||||||||||||
Taxes effect | - | - | (32 | ) | - | (4 | ) | - | 25 | - | (11 | ) | ||||||||||||||||||||||||
Total comprehensive income (loss) | - | - | 111 | - | 65 | - | (363 | ) | 22,251 | 22,064 | ||||||||||||||||||||||||||
Exercise into shares and forfeiture of share-based payment | 16 | 1,672 | - | - | - | (1,672 | ) | - | - | 16 | ||||||||||||||||||||||||||
Cost of share-based payment | - | - | - | - | - | 1,163 | - | - | 1,163 | |||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | 10,425 | $ | 180,819 | $ | 145 | $ | (3,490 | ) | $ | 8 | $ | 8,844 | $ | (359 | ) | $ | (61,073 | ) | $ | 135,319 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
7
KAMADA LTD.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Six months period Ended | Three months period Ended | Year Ended | ||||||||||||||||||
June, 30 | June, 30 | December 31, | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2019 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
U.S Dollars In thousands | ||||||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||||||
Net income | $ | 8,676 | $ | 11,066 | $ | 3,458 | $ | 6,143 | $ | 22,251 | ||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Adjustments to the profit or loss items: | ||||||||||||||||||||
Depreciation and impairment | 2,380 | 2,251 | 1,188 | 1,124 | 4,519 | |||||||||||||||
Financial expenses (income), net | (647 | ) | 176 | 127 | 20 | (197 | ) | |||||||||||||
Cost of share-based payment | 588 | 634 | 330 | 319 | 1,163 | |||||||||||||||
Taxes on income | 796 | 360 | 390 | 230 | 730 | |||||||||||||||
Loss (gain) from sale of property and equipment | (6 | ) | (2 | ) | (6 | ) | 4 | (2 | ) | |||||||||||
Change in employee benefit liabilities, net | (2 | ) | 31 | 16 | (5 | ) | 94 | |||||||||||||
3,109 | 3,450 | 2,045 | 1,692 | 6,307 | ||||||||||||||||
Changes in asset and liability items: | ||||||||||||||||||||
Decrease (increase) in trade receivables, net | 3,416 | 2,602 | 6,432 | (2,125 | ) | 5,117 | ||||||||||||||
Decrease (increase) in other accounts receivables | 741 | 249 | (772 | ) | 118 | (214 | ) | |||||||||||||
Increase in inventories | (4,473 | ) | (6,185 | ) | (5,859 | ) | (3,793 | ) | (13,857 | ) | ||||||||||
Decrease (increase) in Contract asset and deferred expenses | (911 | ) | (272 | ) | (490 | ) | (26 | ) | 399 | |||||||||||
Increase (decrease) in trade payables | (2,719 | ) | 1,927 | 4,497 | 4,295 | 6,259 | ||||||||||||||
Increase (decrease) in other accounts payables | (314 | ) | (53 | ) | 866 | 457 | 863 | |||||||||||||
Decrease in deferred revenues | 793 | (126 | ) | 396 | (63 | ) | (283 | ) | ||||||||||||
(3,467 | ) | (1,858 | ) | 5,070 | (1,137 | ) | (1,716 | ) | ||||||||||||
Cash received (paid) during the period for: | ||||||||||||||||||||
Interest paid | (107 | ) | (124 | ) | (52 | ) | (61 | ) | (243 | ) | ||||||||||
Interest received | 601 | 300 | 150 | 128 | 1,106 | |||||||||||||||
Taxes paid | (74 | ) | (16 | ) | (13 | ) | (8 | ) | (134 | ) | ||||||||||
420 | 160 | 85 | 59 | 729 | ||||||||||||||||
Net cash provided by operating activities | $ | 8,738 | $ | 12,818 | $ | 10,658 | $ | 6,757 | $ | 27,571 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
8
KAMADA LTD.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Six months period Ended | Three months period Ended | Year Ended | ||||||||||||||||||
June, 30 | June, 30 | December 31, | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2019 | ||||||||||||||||
Unaudited | Audited | |||||||||||||||||||
U.S Dollars In thousands | ||||||||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||
Proceeds of investment in short term investments, net | $ | (15,646 | ) | $ | (5,128 | ) | $ | - | $ | (4,070 | ) | $ | 1,727 | |||||||
Purchase of property and equipment and intangible assets | (1,901 | ) | (757 | ) | (1,005 | ) | (453 | ) | (2,300 | ) | ||||||||||
Proceeds from sale of property and equipment | 6 | 9 | 6 | 3 | 9 | |||||||||||||||
Net cash used in investing activities | (17,541 | ) | (5,876 | ) | (999 | ) | (4,520 | ) | (564 | ) | ||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||
Proceeds from exercise of share base payments | 20 | 9 | 15 | 6 | 16 | |||||||||||||||
Repayment of lease liabilities | (540 | ) | (529 | ) | (262 | ) | (266 | ) | (1,070 | ) | ||||||||||
Repayment of long-term loans | (246 | ) | (232 | ) | (123 | ) | (117 | ) | (476 | ) | ||||||||||
Proceeds from issuance of ordinary shares, net | 24,894 | - | - | - | - | |||||||||||||||
Net cash provided by (used in) financing activities | 24,128 | (752 | ) | (370 | ) | (377 | ) | (1,530 | ) | |||||||||||
Exchange differences on balances of cash and cash equivalent | (588 | ) | (448 | ) | (1,178 | ) | (62 | ) | (908 | ) | ||||||||||
Increase in cash and cash equivalents | 14,737 | 5,742 | 8,111 | 1,798 | 24,569 | |||||||||||||||
Cash and cash equivalents at the beginning of the period | 42,662 | 18,093 | 49,288 | 22,037 | 18,093 | |||||||||||||||
Cash and cash equivalents at the end of the period | $ | 57,399 | $ | 23,835 | $ | 57,399 | $ | 23,835 | $ | 42,662 | ||||||||||
Significant non-cash transactions | ||||||||||||||||||||
Right-of-use asset recognized with corresponding lease liability | $ | 345 | $ | 4,548 | $ | 287 | $ | 117 | $ | 5,035 | ||||||||||
Purchase of property and equipment | $ | 722 | $ | 385 | $ | 722 | $ | 385 | $ | 992 |
The accompanying Notes are an integral part of the Interim Consolidated Financial Statements.
9
KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 1:- | General |
Kamada Ltd. (“the Company”) is a plasma-derived biopharmaceutical company focused on orphan indications, with an existing marketed product portfolio and a late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived immune globulins. The Company’s flagship product is Glassia® (“Glassia”), the first liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. FDA. The Company markets Glassia in the U.S. through a strategic partnership with Takeda Pharmaceuticals Company Limited (“Takeda”) and in other countries through local distributors. The Company’s second leading product is KamRab®, a rabies immune globulin (Human) for post-exposure prophylaxis against rabies infection. KamRab is FDA approved and is being marketed in the U.S. under the brand name KedRab® (“KedRab”) through a strategic partnership with Kedrion S.p.A. In addition to Glassia and KedRab, the Company has a product line of four other plasma-derived pharmaceutical products administered by injection or infusion, that are marketed through distributors in more than 15 countries, including Israel, Russia, Brazil, India and other countries in Latin America and Asia. The Company has late-stage products in development, including an inhaled formulation of AAT for the treatment of AAT deficiency. In addition, the Company’s intravenous AAT is in development for other indications, such as GvHD and prevention of lung transplant rejection, and during 2020, the Company initiated the development of a plasma derived immunoglobulin (IgG) product as a potential treatment for coronavirus disease (COVID-19). The Company leverages its expertise and presence in the plasma-derived protein therapeutics market by distributing more than 20 complementary products in Israel that are manufactured by third parties.
Pursuant to an agreement with Takeda (as detailed on Note 17 of the Company’s annual financial statements as of December 31, 2019) the Company will continue to produce Glassia for Takeda through 2021. Takeda is planning to complete the technology transfer of Glassia, and pending FDA approval, will initiate its own production of Glassia for the U.S. market in 2021. Accordingly, following the transition of manufacturing to Takeda, the Company will terminate the manufacturing and sale of Glassia to Takeda resulting in a significant reduction in revenues. Pursuant to the agreement, upon initiation of sales of Glassia manufactured by Takeda, Takeda will pay royalties to the Company at a rate of 12% on net sales through August 2025, and at a rate of 6% thereafter until 2040, with a minimum of $5 million annually, for each of the years from 2022 to 2040.
These financial statements have been prepared in a condensed format as of June 30, 2020 and for the three months then ended (“interim consolidated financial statements”).
These financial statements should be read in conjunction with the Company’s annual financial statements as of December 31, 2019 and for the year then ended and the accompanying notes (“annual consolidated financial statements”).
Note 2:- | Significant Accounting Policies |
a. | Basis of preparation of the interim consolidated financial statements: |
The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, “Interim Financial Reporting”.
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 2:- | Significant Accounting Policies (continued) |
b. | Implementation of new accounting standards |
The accounting policy applied in the preparation of the interim consolidated financial statements is consistent with that applied in the preparation of the annual consolidated financial statements, except for the following:
Amendments to IFRS 9, IFRS 7 and IAS 39 |
In September 2019, the IASB published an amendment to IFRS 9, “Financial Instruments”, IFRS 7, “Financial Instruments: Disclosures” and IAS 39,” Financial Instruments: Recognition and Measurement” (“the Amendment”).
In view of global regulatory changes, numerous countries have considered introducing a reform in the benchmark Interbank Offered Rates (“IBORs”) (LIBOR, the London Interbank Offered Rate, being one of the most common examples) and switching to a risk-free interest rate alternative (“RFR”) which extensively rely on data of specific transactions. The IBOR reform leads to uncertainty regarding the dates and amounts to be attributed to future cash flows relating to both hedging instruments and hedged items that rely on existing IBORs.
According to the existing accounting guidance of IFRS 9 and IAS 39, entities that have entered into the above hedges are facing uncertainty as a result of the IBOR reform which is likely to affect their ability to continue meeting the effective hedging requirements underlying existing transactions as well as the hedging requirements of future transactions. In order to resolve this uncertainty, the IASB issued the Amendment to offer transitional reliefs for entities that apply IBOR-based hedge accounting. The Amendment represents phase one in the reform that will include additional amendments in the future.
The Amendment also permits certain reliefs in applying the hedge accounting effectiveness tests during the period of transition from IBORs to RFRs. These reliefs assume that the benchmark interest underlying the hedge will not change as a result of the expected interest reform. The reliefs will be effective indefinitely, until the occurrence of one of the events specified in the Amendment. The Amendment also requires entities to provide specific disclosures of the application of any reliefs.
The Amendment was applied retrospectively for annual periods beginning on or after January 1, 2020. Early adoption is permitted.
The Company estimates that the adoption of the Amendment will have no effect on its financial statements since it does not currently enter into substantial IBOR-based hedges.
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 3:- | Significant events in the reporting period |
a. | Effects of the COVID-19 Outbreak: |
Following the global COVID-19 outbreak, there has been a decrease in economic activity worldwide, including Israel. The spread of the COVID-19 pandemic led, inter alia, to a disruption in the global supply chain, a decrease in global transportation, restrictions on travel and work that were announced by the State of Israel and other countries worldwide as well as a decrease in the value of financial assets and commodities across all markets in Israel and the world.
The Company’s business activity and commercial operation were affected by these factors, and the Company has taken several actions to ensure its manufacturing plant remains operational with limited disruption to its business continuity. The Company increased its inventory levels of raw materials through its suppliers and service providers in order to appropriately manage any potential supply disruptions and secure continued manufacturing. In addition, the Company is actively engaging its freight carriers to ensure inbound and outbound international delivery routes remain operational and identify alternative routes, if needed. The Company expedited shipments of certain of its products to its customer to minimize any potential shortages.
The Company is complying with the State of Israel mandates and recommendations with respect to its work-force management and currently maintains the work-force levels required to support its ongoing commercial operations. The Company has taken a number of precautionary health and safety measures to safeguard its employees and continues to monitor and assess orders issued by the State of Israel and other applicable governments to ensure compliance with evolving COVID-19 guidelines.
The COVID-19 outbreak affected some of the Company’s research and development programs resulting in certain delays while a new development program for a plasma derived immunoglobulin IgG therapy for COVID-19 was initiated. In addition, the Company taken action to reduce certain costs and activities throughout its business operations.
While COVID-19 related disruption had various effect on the Company’s business activities, commercial operation, revenues and operational expenses, as a results of the actions taken by the Company to date, its overall results of operations for the first six months of 2020 and financial position as of June 30, 2020 were not materially affected. The Company expects that its continued actions will allow meeting its annual revenue guidance, however, a number of factors, including but not limited to, continued effect of the factors mentioned above as well as, continued demand for the Company’s products, including GLASSIA and KEDRAB, in the U.S. market and its distributed products in Israel, financial conditions of the Company’s customer, suppliers and services providers, the Company’s ability to manage operating expenses, additional competition in the markets that the Company competes, regulatory delays, prevailing market conditions and the impact of general economic, industry or political conditions in the U.S., Israel or otherwise, may have an effect on the Company’s future financial position and results of operations.
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 3:- | Significant events in the reporting period (continued) |
b. | On February 10, 2020, the Company closed a private placement with FIMI Opportunity Fund 6, L.P. and FIMI Israel Opportunity Fund 6, Limited Partnership (the “FIMI Funds”), a then 12.99% shareholder of the Company. Pursuant to the private placement the Company issued 4,166,667 ordinary shares at a price of $6.00 per share, for an aggregate net proceeds of $24,894 thousands. Upon closing of the private placement, the FIMI Funds ownership represents approximately 21% of the Company’s outstanding shares. Concurrently, the Company entered into a registration rights agreement with the FIMI Funds, pursuant to which the FIMI Funds are entitled to customary demand registration rights (effective six months following the closing of the transaction) and piggyback registration rights with respect to all shares held by FIMI Funds. Mr. Ishay Davidi, Ms. Lilach Asher Topilsky and Mr. Amiram Boehm, members of our board of directors, are executives of the FIMI Funds. |
c. | On March 25, 2020, the Company’s shareholders approved the grant of options to purchase 90,000 Ordinary Shares of the Company at an exercise price of NIS 21.34 per share and 30,000 RS to the Company’s CEO. The fair value of the options and of the RSs was estimated based on the binomial option valuation model, and was $166 thousands and $167 thousands, respectively. |
In addition, on such date, the Company’s shareholders approved the grant of options to purchase 212,000 Ordinary Shares of the Company at an exercise price of NIS 23.67 per share to the Company’s Board of Directors. The fair value of the options calculated on the date of grant using the binomial option valuation model was estimated at $356 thousands.
Note 4:- Operating Segments
a. | General: |
The Company has two operating segments, as follows:
Proprietary Products | - | Research and development, manufacture and sale of plasma-derived therapeutics products. |
Distribution | - | Distribution in Israel of drugs manufactured by third parties, majority of which are produced from plasma or its derivatives products. |
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 4:- | Operating Segments (continued) |
b. | Reporting on operating segments: |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Six months period ended June 30, 2020 | ||||||||||||
Revenues | $ | 47,942 | $ | 18,437 | $ | 66,379 | ||||||
Gross profit | $ | 20,061 | $ | 2,505 | $ | 22,566 | ||||||
Unallocated corporate expenses | (13,741 | ) | ||||||||||
Finance expenses, net | 647 | |||||||||||
Income before taxes on income | $ | 9,472 |
Proprietary | ||||||||||||
Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Six months period ended June 30, 2019 | ||||||||||||
Revenues | $ | 47,662 | $ | 14,388 | $ | 62,050 | ||||||
Gross profit | $ | 22,484 | $ | 2,300 | $ | 24,784 | ||||||
Unallocated corporate expenses | (13,182 | ) | ||||||||||
Finance income, net | (176 | ) | ||||||||||
Income before taxes on income | $ | 11,426 |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Three months period ended June 30, 2020 | ||||||||||||
Revenues | $ | 22,625 | $ | 10,464 | $ | 33,089 | ||||||
Gross profit | $ | 9,691 | $ | 1,424 | $ | 11,115 | ||||||
Unallocated corporate expenses | (7,140 | ) | ||||||||||
Finance expenses, net | (127 | ) | ||||||||||
Income before taxes on income | $ | 3,848 |
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 4:- | Operating Segments (continued) |
b. | Reporting on operating segments (cont.): |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Three months period ended June 30, 2019 | ||||||||||||
Revenues | $ | 27,281 | $ | 7,972 | $ | 35,253 | ||||||
Gross profit | $ | 12,593 | $ | 1,007 | $ | 13,600 | ||||||
Unallocated corporate expenses | (7,207 | ) | ||||||||||
Finance expenses, net | (20 | ) | ||||||||||
Income before taxes on income | $ | 6,373 |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Year Ended December 31, 2019 | ||||||||||||
Revenues | $ | 97,696 | $ | 29,491 | $ | 127,187 | ||||||
Gross profit | $ | 45,271 | $ | 4,466 | $ | 49,737 | ||||||
Unallocated corporate expenses | (26,953 | ) | ||||||||||
Finance income, net | 197 | |||||||||||
Income before taxes on income | $ | 22,981 |
c. | Reporting on operating segment by geographic region |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Six months period ended June 30, 2020 | ||||||||||||
Geographical markets | ||||||||||||
U.S.A. | $ | 40,460 | $ | - | $ | 40,460 | ||||||
Israel | 2,005 | 18,437 | 20,442 | |||||||||
Europe | 3,287 | - | 3,287 | |||||||||
Latin America | 1,873 | - | 1,873 | |||||||||
Asia | 296 | - | 296 | |||||||||
Others | 21 | - | 21 | |||||||||
$ | 47,942 | $ | 18,437 | $ | 66,379 |
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 4:- | Operating Segments (continued) |
c. | Reporting on operating segments by geographic region: (cont.) |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Six months period ended June 30, 2019 | ||||||||||||
Geographical markets | ||||||||||||
U.S.A. | $ | 42,405 | $ | - | $ | 42,405 | ||||||
Israel | 1,273 | 14,388 | 15,661 | |||||||||
Europe | 1,374 | - | 1,374 | |||||||||
Latin America | 1,577 | - | 1,577 | |||||||||
Asia | 1,008 | - | 1,008 | |||||||||
Others | 25 | - | 25 | |||||||||
$ | 47,662 | $ | 14,388 | $ | 62,050 |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Three months period ended June 30, 2020 | ||||||||||||
Geographical markets | ||||||||||||
U.S.A. | $ | 17,256 | $ | - | $ | 17,256 | ||||||
Israel | 1,417 | 10,464 | 11,881 | |||||||||
Europe | 2,733 | - | 2,733 | |||||||||
Latin America | 1,015 | - | 1,015 | |||||||||
Asia | 183 | - | 183 | |||||||||
Others | 21 | - | 21 | |||||||||
$ | 22,625 | $ | 10,464 | $ | 33,089 |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Unaudited | ||||||||||||
Three months period ended June 30, 2019 | ||||||||||||
Geographical markets | ||||||||||||
U.S.A. | $ | 24,342 | $ | - | $ | 24,342 | ||||||
Israel | 726 | 7,972 | 8,698 | |||||||||
Europe | 502 | - | 502 | |||||||||
Latin America | 1,338 | - | 1,338 | |||||||||
Asia & others | 373 | - | 373 | |||||||||
$ | 27,281 | $ | 7,972 | $ | 35,253 |
Proprietary Products | Distribution | Total | ||||||||||
U.S Dollars in thousands | ||||||||||||
Audited | ||||||||||||
Year ended December 31, 2019 | ||||||||||||
Geographical markets | ||||||||||||
U.S.A. | $ | 84,572 | $ | - | $ | 84,572 | ||||||
Israel | 2,486 | 29,491 | 31,959 | |||||||||
Europe | 4,701 | - | 4,701 | |||||||||
Latin America | 3,792 | - | 3,792 | |||||||||
Asia | 2,067 | - | 2,067 | |||||||||
Others | 96 | - | 96 | |||||||||
$ | 97,696 | $ | 29,491 | $ | 127,187 |
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KAMADA LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 5:- | Financial Instruments |
a. | Classification of financial instruments by fair value hierarchy |
Financial assets (liabilities) measured at fair value
Level 1 | Level 2 | |||||||
U.S Dollars in thousands | ||||||||
June 30, 2020 | ||||||||
Fair value through other comprehensive income : | ||||||||
Derivatives instruments | - | 560 | ||||||
$ | - | $ | 560 | |||||
June 30, 2019 | ||||||||
Fair value through other comprehensive income : | ||||||||
Debt securities (corporate and government) | $ | 1,737 | $ | 8,596 | ||||
Derivatives instruments | - | (37 | ) | |||||
$ | 1,737 | $ | 8,559 | |||||
December 31, 2019 | ||||||||
Fair value through other comprehensive income: | ||||||||
Debt securities (corporate and government) | $ | 4,289 | $ | 8,543 | ||||
Derivatives instruments | - | 15 | ||||||
$ | 4,289 | $ | 8,558 |
b. | During the six months ended on June 30, 2020 there were no transfers of any financial instrument from Level 1 to Level 2, and there were no transfers to or from Level 3 due to the fair value measurement of any financial instrument. |
c. | During the six months ended June 30, 2020 the company divested all of its investments in debt securities (corporate and government) and realized the fair value of such debt securities through other comprehensive income. As a result, the Company recognized a loss of $102 thousands in the Consolidated Condensed Statements of Comprehensive Income. |
Note 6:- | EVENTS SUBSEQUENTS TO THE REPORTING PERIOD |
On August 11, 2020, the Company’s Board of Directors approved the grant of 55,000 options to purchase Ordinary Shares of the Company, to Company employees at an estimated exercise price of NIS 29.68 per share. The fair value of the options was estimated at $23.5 thousand. |
- - - -
17