Knight Therapeutics Reports Third Quarter 2020 Results

Montreal, Quebec, CANADA


MONTREAL, Nov. 13, 2020 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD) ("Knight" or “the Company”), a leading pan-American (ex-US) specialty pharmaceutical company, today reported financial results for its third quarter ended September 30, 2020. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

Q3 2020 Highlights

Financials

  • Revenues were $45,239, an increase of $41,209 or 1,023% over prior year.
  • Gross margin was $19,533 or 43% compared to $3,301 or 82% in prior year.
  • Interest income generated of $3,188 a decrease of $2,870 or 47% over prior year.
  • Adjusted earnings1 of $6,582, an increase of $1,020 or 18% over prior year.
  • Net income for the period was $17,492 compared to a net loss of $2,959 in prior year.

Corporate Developments

  • Launched a normal course issuer bid (“NCIB”) in July 2020 and purchased 797,952 common shares for an aggregate cost of $4,745.
  • Completed the tender offer process and acquired all of the outstanding Brazilian Depositary Receipts (“BDR”) of Biotoscana Investments S.A. (“GBT”).

Products

  • Obtained regulatory approval for Lenvima® and Halaven® in Ecuador.
  • Received regulatory approval from Health Canada for Imvexxy™ and Bijuva®.
  • Submitted a supplement to a New Drug Submission (“NDS”) of Nerlynx for HER2-positive metastatic breast cancer.

Strategic Investments

  • Received distributions of $14,887 from strategic fund investments and realized a gain of $9,348.

Key Subsequent Event

  • Signed a new exclusive distribution agreement with Gilead for the continued commercialization of AmBisome® in Brazil, effective January 1, 2021.

“We are pleased to have completed the GBT acquisition and are knee deep in needed integration work which is complicated by COVID-19. In addition, we remain focused on execution of business development initiatives to in-license and acquire innovative pharmaceuticals for the Canadian and Latin American markets”, said Jonathan Ross Goodman, CEO of Knight Therapeutics Inc.

_____________________
1Adjusted earnings is not a defined term under IFRS, refer to the definition below for additional details.


SELECT FINANCIAL RESULTS & BALANCE SHEET ITEMS
[In thousands of Canadian dollars]

   Change  Change
 Q3-20 Q3-19$1%2YTD-20 YTD-19$1%2
         
Revenues45,239 4,030 41,209 1,023%144,328 10,190 134,138 1,316%
Gross margin19,533 3,301 16,232 492%61,630 8,519 53,111 623%
Selling and marketing7,763 1,146 (6,617)577%26,928 3,341 (23,587)706%
General and administrative10,835 4,761 (6,074)128%27,424 12,339 (15,085)122%
Research and development2,967 892 (2,075)233%8,035 2,502 (5,533)221%
Amortization of intangible assets5,703 424 (5,279)1,245%17,546 1,273 (16,273)1,278%
Operating loss(7,735)(3,922)(3,813)97%(18,303)(10,936)(7,367)67%
Interest income(3,188)(6,058)(2,870)47%(11,515)(18,108)(6,593)36%
Interest expense822  (822)N/A 3,070  (3,070)N/A 
Foreign exchange loss703 638 (65)10%9,666 3,315 (6,351)192%
Net income (loss)17,492 (2,959)20,451 N/A 23,527 21,186 2,341 11%
Basic net earnings (loss) per share0.138 (0.021)0.159 N/A 0.256 0.150 0.106 71%
Adjusted earnings36,582 5,562 1,020 18%23,510 14,755 8,755 59%
1 Includes fair value adjustments recorded on the business combination
2 A positive variance represents a positive impact to net income and a negative variance represents a negative impact to net income
3 Percentage change is presented in absolute values


     Change
 09-30-20 12-31-19 $ %1
       
Cash, cash equivalents, restricted cash and marketable securities392,352 536,182 (143,830)27%
Trade and other receivables65,611 108,182 (42,571)39%
Inventory61,783 70,870 (9,087)13%
Financial assets173,116 159,151 13,965 9%
Accounts payable, accrued and other liabilities44,128 96,156 (52,028)54%
Bank loans43,407 55,579 (12,172)22%
1 Percentage change is presented in absolute values
 

Revenue: For the quarter ended September 30, 2020, GBT’s financial results accounted for $40,574 of incremental revenues ($16,020 in Brazil, $8,497 in Argentina, $7,659 in Colombia and $8,398 in the rest of the Latin American region). The remainder of the growth in revenues of $635 attributable to timing of sales of Impavido® and the in-licensing of Trelstar®. The increase in year-to-date revenues is primarily attributed to consolidation of GBT’s financial results as well as the growth in sales of Movantik®, timing of sales of Impavido®, and in-licensing of Trelstar®.

Gross margin: For the quarter ended September 30, 2020, the gross margin decreased to 43% compared to the same period in the prior year due to consolidation of GBT’s results and an inventory provision of $1,871 due to impact of COVID-19 on certain new product launches. The gross margin would have been 46%, an increase of 3%, from 43% after excluding the adjustment of hyperinflation accounting in accordance with IAS 29.

Selling and marketing: The increase of $6,617 for the quarter is primarily driven by the consolidation of GBT.

General and administrative: The increase in general and administrative expenses of $6,074 for the quarter ended September 30, 2020 is due to consolidation of GBT’s financial results which accounted for $4,710 of incremental general and administrative expenses for the three-month ended September 30, 2020. In addition, in Q3-2020 Knight incurred $3,490 in legal and advisory fees in relation to the unified tender offer compared to $2,476 in Q3-2019 for the acquisition of 51.2% of GBT.

Research and development: GBT’s financial results accounted for $2,006 of incremental research and development expenses for the three-month period ended September 30, 2020.

Amortization of intangible assets:  Increase due to the amortization of the definite-life intangible assets acquired in the GBT acquisition.

Interest income: Interest income is the sum of interest income on financial instruments measured at amortized costs and other interest income.  For the quarter, interest income was $3,188 a decrease of 47% or $2,870 compared to the same period prior year. The decrease is due to lower interest rates, average cash and marketable securities balances and average loan balance.

Interest expense:  The consolidation of GBT’s financial results accounted for $822 of incremental interest expense for the three-month period ended September 30, 2020 mainly related to interest on its bank loans.

Net income or loss:  For the quarter net income was $17,492 an increase of $20,451 compared to the same period last year. The variance mainly resulted from the above-mentioned items as well as (i) net gain on the revaluation of financial assets measured at fair value through profit or loss of $12,873 (Q3-19 loss of $4,883), (ii) net gain on mandatory tender offer (“MTO”) liability of $10,502 mainly driven by the public shareholders of GBT tendering their shares using the Alternative Offer Price at BRL 10.40 per share, (iii) loss on hyperinflation of $401 due to net monetary positions under hyperinflation accounting.

Adjusted Earnings: For the three-month period ended September 30, 2020, adjusted earnings were $6,582 an increase of $1,020 or 18% compared to the same period last year. The variance is mainly explained by the incremental adjusted earnings of the GBT acquisition offset by a decline in interest income.

Cash, cash equivalents, restricted cash and marketable securities:  As at September 30, 2020, Knight had $392,352 in cash, cash equivalents and marketable securities, a decrease of $143,830 or 27% as compared to December 31, 2019. The variance is primarily due to cash outflows related to the acquisition of the outstanding BDRs of GBT, shares repurchased through NCIB and changes in working capital.

Trade and other receivables:  As at September 30, 2020, Knight had $65,611 in trade and other receivables, a decrease of $42,571 compared to December 31, 2019 which primarily relates to the net collection of receivables of $24,494 as well as depreciation of Latin American (“LATAM”) currencies of $9,445, and an increase in estimated credit loss provision recorded in 2020 of $2,819. The remaining difference is mainly due to collection of a distribution receivable from a fund investment, a decrease in interest receivable due to timing of the maturities of the marketable securities as well as a decline in interest rates.

Inventory: Overall decrease in inventories of $9,087 as compared to December 31, 2019 is due to increase of $1,516 related net inventory purchases (purchases offset by cost of goods sold) driven by the timing of inventory purchases and new product launches, offset by $3,806 of decrease related to depreciation of LATAM currencies and $6,797 of additional inventory provision recorded in the period ending September 30, 2020.  

Financial assets:  The increase of $13,965 as compared to December 31, 2019 in financial assets is due to the following: (i) increase of $3,859 attributable to loans and receivables as a result of additional loans issued and $883 of gain on foreign exchange (ii) decrease in equity investments, warrants and derivatives of $5,673 due to disposal and revaluation, and (iii) increase of $15,779 attributable to fund investments due to capital calls, foreign exchange gains and mark to market adjustments partially offset by distribution received.

Accounts payable, accrued, and other liabilities: Decrease in accounts payable and accrued liabilities balance of $52,028, or 54% is mainly due payments of inventory purchases, GBT transaction fees, the depreciation of LATAM currencies and lower accrual balance as compared to December 31, 2019 due to timing.

Bank Loans: As at September 30, 2020, bank loans were at $43,407, a decrease of $12,172 mainly due to loan repayment of $8,219 and the foreign exchange revaluation, partially offset by additional loan issued to a subsidiary of GBT.


Product Updates

In September 2020, Knight announced that it has submitted a supplemental NDS to Health Canada for neratinib in combination with capecitabine for the treatment of patients with HER2-positive metastatic breast cancer who have failed two or more prior lines of HER2-directed treatments.

On July 31, 2018, Knight entered into an exclusive licensing agreement for the commercial rights of Imvexxy™ and Bijuva™ in Canada and Israel. Both Imvexxy™ and Bijuva™ were approved by Health Canada during Q3-20.  Imvexxy™, an estradiol vaginal inserts, has been approved for the treatment of postmenopausal moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy (VVA), due to menopause. Bijuva™, a once-daily combination of estradiol and progesterone in a single oral capsule, was approved for the treatment of moderate-to-severe vasomotor symptoms due to menopause. The Company expects to launch both products in 2022

In July 2020, Knight obtained regulatory approval for Lenvima® (lenvatinib) in Ecuador for the treatment of (i) unresectable hepatocellular carcinoma (HCC); (ii) advanced renal cell carcinoma (RCC), in combination with everolimus; and (iii) differentiated thyroid cancer (DTC).  In addition, in August 2020, the Company obtained regulatory approval for Halaven® in Ecuador for the treatment of patients with metastatic breast cancer.  Through its acquisition of GBT, Knight has the license to Halaven® and Lenvima® from Eisai for all Latin America excluding Mexico.

On October 26, 2020, the Company announced a new exclusive agreement with Gilead for the commercialization of AmBisome®. The new agreement is effective starting January 1, 2021. AmBisome® is a liposomal amphotericin B that is used to treat antifungal infections. This product has been part of Knight’s Brazilian affiliate’s portfolio for over twenty years.

NCIB

On July 10, 2020, the Company announced that the Toronto Stock Exchange approved its notice of intention to make a NCIB. Under the terms of the NCIB, Knight may purchase for cancellation up to 10,856,710 common shares of the Company which represented 10% of its public float as at July 6, 2020. The NCIB commenced on July 14, 2020 and will end on the earlier of July 13, 2021 or when the Company completes its maximum purchases under the NCIB. Furthermore, Knight entered into an agreement with a broker to facilitate purchases of its common shares under the NCIB. Under Knight’s automatic share purchase plan, the broker may purchase common shares which would ordinarily not be permitted due to regulatory restrictions or self-imposed blackout periods.  During the three-month period ended September 30, 2020, the Company purchased 797,952 common shares, for an aggregate cash consideration of $4,745, of which $1,009 remains to be settled and 172,642 shares remain to be cancelled as at September 30, 2020. 

Acquisition of GBT

On July 15, 2020, Knight announced the launch of the tender offer for the acquisition and delisting of the remaining 48.8% Brazilian Depository Receipts (“BDRs”) of GBT. The public shareholders had the choice between the following two tender options:

  • BRL11.23 per BDR with an amount equivalent to 20% deposited in an escrow account to secure the sellers' indemnification obligations under the purchase agreement for the GBT Transaction, provided that BRL 0.91 of the escrow amount shall be mandatorily paid on or at any time prior to November 29, 2022. The escrow amount will be released equally over a period of three years from closing, net of claims in accordance with the terms and conditions of the Share Purchase Agreement.
  • BRL10.40 per BDR in cash on the settlement date (“Alternative Offer Price”).

Upon close of the tender offer process, 99.6% of the public shareholders tendered their BDRs through the Alternative Offer Price. The Company paid an aggregate purchase price of $170,855 [BRL 537,523] and acquired all the BDRs outstanding.  On October 23, 2020, the BDR program of GBT was cancelled by the Brazilian Securities and Exchange Commission. 

COVID-19 Update

The recent outbreak of the coronavirus, or COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity. Certain countries where the Company has significant operations, have required entities to limit or suspend business operations and have implemented travel restrictions and quarantine measures. Knight is continuing to work to alleviate some of the pressure that the global COVID-19 pandemic has placed on our healthcare systems and ensure that we maintain supply of our medicines to patients. The Company and its employees have transitioned to working remotely, including our field sales and medical teams. The Company has taken steps to establish digital and virtual channels to ensure that physicians and patients continue to receive continued support.  Knight is developing return to field or office protocols on a country by country basis. Furthermore, the Company has not faced any inventory shortages and has sufficient liquidity to meet all operating requirements for the foreseeable future. As the date hereof, the outbreak has not had a material impact on the Company’s results.


Conference Call Notice 

Knight will host a conference call and audio webcast to discuss its third quarter results today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: November 13, 2020
Time: 8:30 a.m. ET
Telephone: Telephone: Dial-in information will be provided to participants following pre-registration
Webcast: www.gud-knight.com or Webcast 
This is a listen-only audio webcast. Media Player is required to listen to the broadcast.
Replay: An archived replay will be available for 30 days at https://www.gud-knight.com

Please pre-register in advance of the call.
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the COVID-19 pandemic.

Online pre-registration: http://www.directeventreg.com/registration/event/4687537

Phone pre-registration: 1-(888)-869-1189 and provide the Conference ID: 4687537 to the Live Agent who will take your details.

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About Knight Therapeutics Inc. 

Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing and commercializing innovative pharmaceutical products for Canada and Latin America. Knight owns a controlling stake in Grupo Biotoscana, a pan-Latin American specialty pharmaceutical company. Knight Therapeutics Inc.'s shares trade on TSX under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the company's web site at www.gud-knight.com or www.sedar.com.

Forward-Looking Statement

This document contains forward-looking statements for Knight Therapeutics Inc. and its subsidiaries. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. Knight Therapeutics Inc. considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared but cautions the reader that these assumptions regarding future events, many of which are beyond the control of Knight Therapeutics Inc. and its subsidiaries, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations are discussed in Knight Therapeutics Inc.'s Annual Report and in Knight Therapeutics Inc.'s Annual Information Form for the year ended December 31, 2019 as filed on www.sedar.com. Knight Therapeutics Inc. disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events, except as required by law.


CONTACT INFORMATION:

Investor Contact: 
Knight Therapeutics Inc. 
Samira SakhiaArvind Utchanah
President & Chief Operating OfficerChief Financial Officer
T: 514.484.4483 ext.122T. 514.484.4483 ext. 115
F: 514.481.4116F. 514.481.4116
Email: info@knighttx.comEmail: info@knighttx.com
Website: www.gud-knight.comWebsite: www.gud-knight.com


IMPACT OF HYPERINFLATION
[In thousands of Canadian dollars]

The Company applies IAS 29, Financial Reporting in Hyperinflation Economies, as the Company’s Argentine subsidiaries used the Argentine Peso as their functional currency. IAS 29 requires that the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy be adjusted based on an appropriate general price index to express the effects of inflation. If the Company did not apply IAS 29, the effect on the Company’s operating income would be as follows:

Q3-20

 Reported
under IFRS 
 Excluding impact
of IAS 29
 Variance
  $1 %2
     
Revenues45,239 45,847 (608)1%
Cost of goods sold25,706 24,765 (941)4%
Gross margin19,533 21,082 (1,549)7%
Gross margin (%)43%46%  
     
Expenses    
Selling and marketing7,763 7,604 (159)2%
General and administrative10,835 10,883 48 0%
Research and development2,967 3,026 59 2%
Amortization of intangible assets5,703 5,756 53 1%
Operating Loss(7,735)(6,187)(1,548)25%
1 A positive variance represents a positive impact to net income due to the application of IAS 29 and a negative variance represents a negative impact to net income due to the application of IAS 29
2 Percentage change is presented in absolute values
 

YTD-20

 Reported
under IFRS
 Excluding impact
of IAS 29
 Variance
  $1 %2
     
Revenues144,328 145,860 (1,532)1%
Cost of goods sold82,698 78,792 (3,906)5%
Gross margin61,630 67,068 (5,438)8%
Gross margin (%)43%46%  
     
Expenses    
Selling and marketing26,928 27,021 93 0%
General and administrative27,424 26,656 (768)3%
Research and development8,035 8,175 140 2%
Amortization of intangible assets17,546 17,407 (139)1%
Operating Loss(18,303)(12,191)(6,112)50%
1 A positive variance represents a positive impact to net income due to the application of IAS 29 and a negative variance represents a negative impact to net income due to the application of IAS 29
Percentage change is presented in absolute values


RECONCILIATION TO ADJUSTED EARNINGS
[In thousands of Canadian dollars]

Non-IFRS measure: EBITDA and Adjusted earnings

The Company discloses non-IFRS measures that do not have standardized meanings prescribed by IFRS. The Company believes that shareholders, investment analysts and other readers find such measures helpful in understanding the Company’s financial performance and in interpreting the effect of the GBT Transaction on the Company. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and may not have been calculated in the same way as similarly named financial measures presented by other companies.

The Company uses the following non-IFRS measures:

EBITDA: Operating (loss) income adjusted to exclude amortization and impairment of intangible assets, depreciation, purchase price allocation accounting, and the impact of IAS 29 (accounting under hyperinflation) but to include costs related to leases.

Adjusted earnings: Operating (loss) income adjusted to exclude amortization and impairment of intangible assets, depreciation, acquisition costs, non-recurring expenses incurred but to include interest income earned net of interest expenses and costs related to leases.

Adjustments to operating (loss) income include the following:

  • With the adoption of IFRS 16, the lease payments of Knight are not reflected in operating expenses.  The IFRS 16 adjustment approximates the cash outflow related to leases of Knight.
  • Acquisition costs relate to expenses of $3,490 for the quarter, for the acquisition of GBT.
  • Other non-recurring expenses relate to expenses incurred by Knight that are not due to, and are not expected to occur in, the ordinary course of business. For the quarter ended September 30, 2020, Knight recorded one-time costs of $595 related to restructuring activities including severance to certain employees as part of restructuring and integration of GBT
  • Interest income Includes “Interest income on financial instruments measured at amortized cost” and “Other interest income”. Primarily from interest earned on loans, cash and cash equivalents, marketable securities and accretion on loans receivable.
  • Interest expense on bank loans includes GBT’s interest expense mainly related to interest on its bank loans and excludes Knight’s interest accretion

For the three-month and nine-month periods ended September 30, 2020, the Company calculated adjusted earnings as follows:

 Q3-20 Q3-19 YTD-20 YTD-19 
Operating (loss) income(7,735)(3,922)(18,303)(10,936)
Adjustments to operating (loss) income:    
Amortization of intangible assets5,703 424 17,546 1,273 
Depreciation of property, plant and equipment1,382 112 4,916 305 
Lease costs (IFRS 16 adjustment)(820)(122)(2,405)(274)
Impact of PPA accounting  865  
Impact of IAS 291,601  5,973  
EBITDA131 (3,508)8,592  (9,632)
Acquisition costs3,490 2,476 3,810 2,476 
Other non-recurring expenses595 536 2,663 3,803 
Interest income3,188 6,058 11,515 18,108 
Interest expense on bank loans(822) (3,070) 
Adjusted earnings6,582 5,562 23,510 14,755 
         


INTERIM CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
[Unaudited]

 09-30-20 12-31-19 
     
ASSETS    
Current    
Cash, cash equivalents and restricted cash 218,091  174,268 
Marketable securities 158,944  235,045 
Trade receivables 51,894  85,845 
Other receivables11,809 17,622 
Inventories61,783 70,870 
Prepaids and deposits2,927   3,306 
Other current financial assets26,248 26,303 
Income taxes receivable6,439 8,265 
Total current assets538,135 621,524 
     
Marketable securities15,317 126,869 
Trade receivables1,908 4,715 
Prepaids and deposits4,066 4,652 
Right-of-use Asset4,651 6,409 
Property, plant and equipment21,979 22,639 
Investment properties 1,439  1,740 
Intangible assets 156,641  173,372 
Goodwill 77,770  88,262 
Other financial assets 146,868  132,848 
Deferred income tax assets1,123 3,991 
Other long-term receivables41,582 41,582 
 473,344 607,079 
Assets held for sale2,484 76,700 
Total assets1,013,963 1,305,303 
     


INTERIM CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]
[Unaudited]

 09-30-20 12-31-19 
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current    
Accounts payable and accrued liabilities42,475 94,406 
Lease liabilities1,089 1,788 
Other liabilities1,270 1,750 
Other financial liabilities 184,023 
Bank loans41,567 50,557 
Income taxes payable11,828 15,447 
Other balances payable802 2,833 
Total current liabilities99,031 350,804 
     
Accounts payable and accrued liabilities383  
Lease liabilities3,351 4,812 
Bank loan1,840 5,022 
Other balances payable8,495 1,699 
Deferred income tax liabilities18,641 27,860 
Total liabilities131,741 390,197 
     
Equity    
Share capital695,066 723,832 
Warrants117 785 
Contributed surplus18,203 16,463 
Accumulated other comprehensive income2,530 17,405 
Retained earnings166,306 52,246 
Attributable to shareholders of the Company882,222 810,731 
Non-controlling interests 104,375 
Total equity882,222 915,106 
Total liabilities and  Equity1,013,963 1,305,303 
     


INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)
[In thousands of Canadian dollars, except for share and per share amounts]
[Unaudited]

 Three months ended September 30
 Nine months ended September 30
 
 2020 2019 2020 2019 
     
Revenues45,239 4,030 144,328 10,190 
Cost of goods sold25,706 729 82,698 1,671 
Gross margin19,533 3,301 61,630 8,519 
     
Expenses    
Selling and marketing7,763 1,146 26,928 3,341 
General and administrative10,835 4,761 27,424 12,339 
Research and development2,967 892 8,035 2,502 
Amortization of intangibles5,703 424 17,546 1,273 
Operating loss(7,735)(3,922)(18,303)(10,936)
     
Interest income on financial instruments measured at amortized cost(1,754)(4,825)(7,477)(14,651)
Other interest income(1,434)(1,233)(4,038)(3,457)
Interest expense822  3,070  
Other income(243)(1,579)(133)(1,949)
Net (gain) loss on financial instruments measured at fair value through profit or loss(12,873)4,883 (22,642)(19,649)
Net gain on mandatory tender offer liability(10,502) (12,072) 
Realized gain on sale of asset held for sale  (2,948) 
Realized gain on automatic share purchase plan  (4,168) 
Share of net income of associate (128) (448)
Foreign exchange loss703 638 9,666 3,315 
Loss on hyperinflation401  1,205  
Income before income taxes17,145 (1,678)21,234 25,903 
     
Income tax     
Current(3,079)999 1,386 3,168 
Deferred2,732 282 (3,679)1,549 
Income tax (recovery) expense(347)1,281 (2,293)4,717 
Net income for the period17,492  (2,959)23,527 21,186 
     
Attributable to:    
Shareholders of the Company18,094 (2,959)33,834 21,186 
Non-controlling interests(602) (10,307) 
     
Attributable to shareholders of the Company    
Basic (loss) earnings per share0.138 (0.021)0.256 0.150 
Diluted (loss) earnings per share0.138 (0.021)0.256 0.150 
     
Weighted average number of common shares outstanding    
Basic130,867,769 137,783,892 132,346,922 141,147,239 
Diluted131,051,220 138,154,629 132,614,809 141,519,892 
         


INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]

  Three months ended September 30,
 Nine months ended September 30,
 
 2020 2019 2020 2019 
OPERATING ACTIVITIES    
Net income for the period17,492 (2,959)23,527 21,186 
Adjustments reconciling net income to operating cash flows:    
Deferred income tax expense (recovery)2,732 282 (3,679)1,549 
Share-based compensation expense725 484 1,422 1,639 
Depreciation and amortization7,085 536 22,462 1,578 
Net (gain) loss on financial instruments(12,873)4,883 (22,642)(19,649)
Net gain on mandatory tender offer liability(10,502) (12,072) 
Realized gain on sale of asset held for sale  (2,948) 
Realized gain on automatic share purchase plan  (4,168) 
Interest expense822  3,070  
Foreign exchange loss703 638 9,666 3,315 
Loss on hyperinflation401  1,205  
Share of net income of associate (128) (448)
Other adjustments424 (180)(50 )(363)
 7,009 3,556 15,793 8,807 
Changes in non-cash working capital and other items(15,413)472 (30,974)2,368 
Other long-term receivable   (18,242)
Dividends from associate   4,159 
Interest payments on bank loans(8) (1,321) 
Cash (outflow) inflow from operating activities(8,412)4,028 (16,502)(2,908)
     
INVESTING ACTIVITIES    
Acquisition of shares through mandatory tender offer(170,855) (170,855) 
Purchase of marketable securities(662)(20,300)(37,778)(203,445)
Purchase of intangible assets(1,191)(328)(14,024)(2,317)
Purchase of property and equipment(861) (3,119)(4)
Exercise of warrant investments  (397) 
Issuance of loans receivables (1,987)(7,364)(20,038)
Purchase of equity investments   (6)
Investment in funds(2,010)(5,864)(15,010)(18,434)
Proceeds on sale of asset held for sale  77,000  
Proceeds on maturity of marketable securities32,440 90,543 226,999 362,091 
Proceeds from repayments of loans receivable17 873 7,786 3,574 
Proceeds from disposal of equity investments 1,676 2,919 1,676 
Proceeds from distribution of funds14,887 8,500 26,996 9,177 
Cash (outflow) inflow from investing activities(128,235)73,113 93,153 132,274 
     
FINANCING ACTIVITIES    
Proceeds from exercise of stock options115  595  
Proceeds from contributions to share purchase plan62 62 175 178 
Proceeds from repayment of share purchase loans 425  425 
Proceeds from bank loans  10,998  
Repurchase of common shares through Normal Course Issuer Bid(3,736)(54,181)(35,001)(54,181)
Principal repayment of lease liabilities(888)(68)(2,406)(205)
Principal repayments on bank loans(701) (8,219) 
Cash outflow from financing activities(5,148)(53,762)(33,858)(53,783)
     
(Decrease) increase in cash and cash equivalents during the period(141,795)23,379  42,793 75,583 
Cash, cash equivalents and restricted cash, beginning of the period359,593 294,911   174,268 244,785 
Net foreign exchange difference293 835 1,030 (1,243)
Cash, cash equivalents and restricted cash, end of the period218,091 319,125 218,091 319,125 
     
Cash and cash equivalents            218,091 319,125 
Short-term marketable securities  158,944 243,790 
Long-term marketable securities  15,317 137,177 
Total cash, cash equivalents and marketable securities  392,352 700,092