Knight Therapeutics Reports Second Quarter 2024

Knight Therapeutics Inc. (TSX: GUD) ("Knight" or "the Company"), a leading pan- American (ex-US) specialty pharmaceutical company, today reported financial results for its second quarter ended June 30, 2024. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

Q2   2024   Highlights

Financial Results

  • Delivered record revenues of $95,573, an increase of $5,668 or 6% over the same period in prior year driven by growth of our key promoted products partly offset by our mature products.
  • Gross margin of $47,337 or 50% of revenues compared to $37,493 or 42% of revenues in the same period in prior year.
  • Adjusted EBITDA 1 was $15,744, an increase of $1,475 or 10% over the same period in prior year.
  • Adjusted EBITDA per share 1 of $0.16, an increase of $0.03 or 23% over the same period in prior year.
  • Net loss was $1,942, compared to net income of $1,840 in the same period in the prior year.
  • Cash outflow from operations was $1,086, compared to $1,486 in the same period in prior year.

Corporate   Developments

  • Completed the NCIB launched in July 2023 with a total purchase of 5,999,524 shares at an average price of $4.87 for aggregate cash consideration of $29,231.
  • Shareholders re-elected Jonathan Ross Goodman, Samira Sakhia, James C. Gale, Robert N. Lande, Michael J. Tremblay, Nicolás Sujoy and Janice Murray on the Board of Directors.

Products

  • Entered into an exclusive supply and distribution agreement for Jornay PM™ (methylphenidate HCI extended-release capsules) for Canada and Latin America.

Subsequent   to   quarter-   end

  • Launched a NCIB in July to purchase up to 5,312,846 common shares of the Company over the next year.

"I am excited to report that for the six months ended June 30, 2024, we delivered record revenues of over $180 million and adjusted EBITDA of over $29 million. This strong performance is the result of the growth of our key promoted products and of our commercial execution across Canada and Latin America. In addition, we have expanded and strengthened our pipeline and will be leveraging our existing neurology infrastructure with the in-licensing of Jornay PM TM , our third neurology product added in the last nine months," said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.

1 Adjusted   EBITDA   and   Adjusted   EBITDA   per   share   are   non-GAAP   measures.   Refer   to   section   Non-GAAP   measures   for   additional   details.

SELECTED FINANCIAL RESULTS REPORTED UNDER IFRS
[In thousands of Canadian dollars]
Change Change
Q2-24 Q2-23 $ 1 % 2 YTD-   24 YTD-23 $ 1 % 2
Revenues 95,573 89,905 5,668 6 % 182,177 172,502 9,675 6%
Gross margin 47,337 37,493 9,844 26% 89,036 78,255 10,781 14%
Gross   margin   % 50   % 42   % 49   % 45   %
Selling and marketing 13,264 12,874 (390 ) 3% 25,913 23,539 (2,374 ) 10%
General and administrative 12,099 9,119 (2,980 ) 33% 22,637 18,225 (4,412 ) 24%
Research and development 5,806 4,336 (1,470 ) 34% 10,786 8,523 (2,263 ) 27%
Amortization of intangible assets 11,674 11,274 (400 ) 4% 22,546 22,445 (101 ) —%
Operating expenses 42,843 37,603 (5,240 ) 14% 81,882 72,732 (9,150 ) 13%
Operating income (loss) 4,494 (110) 4,604 4185% 7,154 5,523 1,631 30%
Net (loss) income (1,942   ) 1,840 (3,782 ) 206% (6,488   ) (2,097) (4,391 ) 209%

1 A   positive   variance   represents   a   positive   impact   to   net   income   (loss)   and   a   negative   variance   represents   a   negative   impact   to   net   income   (loss)
2 Percentage   change   is   presented   in   absolute   values

SELECTED FINANCIAL RESULTS EXCLUDING IAS 29 1
[In thousands of Canadian dollars]
Change Change
Q2-   24 Q2-23 $ % YTD-   24 YTD-23 $ %
Revenues 94,121 90,400 3,721 4% 179,917 173,067 6,850 4%
Gross margin 45,281 40,244 5,037 13% 85,977 81,630 4,347 5%
Gross   margin   % 48   % 45   % 48   % 47   %
Selling and marketing 12,968 12,985 (17 ) —% 25,461 23,698 1,763 7%
General and administrative 11,578 9,188 2,390 26% 21,790 18,075 3,715 21%
Research and development 5,577 4,623 954 21% 10,417 8,725 1,692 19%
Amortization of intangible assets 11,699 11,189 510 5% 22,545 22,314 231 1%
Operating expenses 41,822 37,985 3,837 10% 80,213 72,812 7,401 10%
EBITDA 1 15,641 14,269 1,372 10% 29,230 32,506 (3,276 ) 10%
Adjusted EBITDA 1 15,744 14,269 1,475 10% 29,333 32,506 (3,173 ) 10%
Adjusted EBITDA per share 1 0.16 0.13 0.03 23% 0.29 0.30 (0.01 ) 3%

1 Financial   results   excluding   the   impact   of   IAS   29,   EBITDA,   adjusted   EBITDA   and   adjusted   EBITDA   per   share   are   non-GAAP   measures.   Refer   to   section   "   Non-   GAAP   measures" for additional details.

Revenues
For the quarter ended June 30, 2024, revenues excluding the impact of IAS 29 were $94,121 an increase of $3,721 or 4% mainly driven by a growth of $7,125 or 11% from our key promoted products offset by a decline in our mature products. The table below provides revenues by therapeutic area.

Excluding   the   impact   of   IAS   29 1
Change
Therapeutic   Area Q2-   24 Q2-   23 $ %
Oncology/Hematology 35,625 27,935 7,690 28%
Infectious Diseases 37,824 45,567 (7,743 ) 17%
Other Specialty 20,672 16,898 3,774 22%
Total 94,121 90,400 3,721 4%

1 Revenues   excluding   the   impact   of   IAS   29   is   a   non-GAAP   measure,   refer   to   section   "   Non-GAAP   measures"   for   additional   details.

The increase in revenues is explained by the following:

  • Oncology/Hematology : The oncology/hematology portfolio grew by $7,690 due to the continued growth of key promoted products including Lenvima ® , Akynzeo ® , Trelstar ® and the launch of Minjuvi ® in Brazil.
  • Infectious Diseases: The infectious diseases portfolio decreased by $7,743 driven mainly by the timing of orders for Ambisome ® under the MOH contract, a decrease in the demand of Impavido ® partly offset by the growth of our key promoted products including Cresemba ® and timing of orders for certain products. During Q2-24 the Company delivered $8,900 of Ambisome ® to MOH compared to $18,000 in Q2-23.
  • MOH Contract : The Company signed a contract with the Ministry of Health of Brazil for Ambisome ® in December 2022 ("2022 MOH Contract"). Knight delivered a total of $34,600 under the 2022 MOH Contract as follows: $7,000 in 2022, $25,200 in 2023 ($2,400 in Q1-23, $18,000 in Q2-23 and $4,800 in Q4-23) and $2,400 Q1-24. In December 2023, Knight signed a new contract with the MOH ("2024 MOH Contract") and delivered $6,800 in Q1-24 and $8,900 in Q2-24. The total MOH sales Ambisome ® delivered in Q2-24 and YTD-24 was $8,900 and $18,100, respectively.
  • Other   Specialty : The other specialty portfolio increased by $3,774, primarily driven by the commercial transition of Exelon ® from Novartis to Knight. As a result of advanced purchases by certain customers in Q1-23, the revenues of Exelon ® were negatively impacted in Q2-23.

Gross   margin
Excluding the impact of IAS 29, gross margin as a percentage of revenues was 48% in Q2-24 compared to 45% in Q2-23. The increase in the Q2-24 gross margin, as a percentage of revenues, was due to product mix including a lower proportion of Ambisome ® sales to MOH.

Selling   and   marketing   ("S&M")   expenses: For the quarter ended June 30, 2024 S&M expenses excluding the impact of IAS 29, were $12,968 in Q2-24 compared to $12,985 in Q2-23, a decrease of $17. There was no significant variance.

General   and   administrative   ("G&A")   expenses: For the quarter ended June 30, 2024 G&A expenses excluding the impact of IAS 29, were $11,578 in Q2-24 compared to $9,188 in Q2-23, an increase of $2,390 or 26%. The increase was mainly driven by an increase in structure and compensation expenses.

Research   and   development   ("R&D")   expenses: For the quarter ended June 30, 2024 R&D expenses excluding the impact of IAS 29, were $5,577 in Q2-24 compared to 4,623 in Q2-23, an increase of $954 or 21%. The increase was driven by an increase in product development activities in connection with our pipeline products and medical initiatives related to key promoted products. Knight invested $815 in Q2-24, an increase of $795 versus the prior year on its pipeline development activities. All costs related to development activities have been expensed which typically include regulatory submissions, analytical method transfers, stability studies and bio equivalence studies.

Adjusted   EBITDA
For the quarter ended June 30, 2024, adjusted EBITDA increased by $1,475 or 10%. The increase was driven by a higher gross margin partly offset by higher G&A expenses, mainly related to structure and compensation increase and an increase in R&D expenses mainly due to an increase in our product development activities behind our pipeline.

SELECT BALANCE SHEET ITEMS
[In
  thousands   of   Canadian   dollars]
June   30,
  2024
December   31,
  2023
Change
$ %
Cash, cash equivalents and marketable securities 152,668 161,825 (9,157 ) 6%
Trade and other receivables 135,203 141,684 (6,481 ) 5%
Inventories 103,645 91,834 11,811 13%
Financial assets 115,728 128,369 (12,641 ) 10%
Accounts payable and accrued liabilities 84,821 90,617 (5,796 ) 6%
Bank loans 50,952 61,866 (10,914 ) 18%


Cash, cash equivalents and marketable securities
: As at June 30, 2024, Knight had $152,668 in cash, cash equivalents and marketable securities, a decrease of $9,157 or 6% as compared to December 31, 2023. The decrease is mainly due to the settlement of upfront and milestone payments in connection with product licensing agreements including Qelbree™, IPX203, Jornay PM™ and Cresemba ® , principal and interest payments on bank loans and repurchase of shares through the NCIB, partly offset by the cash inflows from operations. The cash inflows from operating activities were $29,795 driven by the operating results adjusted for noncash items such as depreciation, amortization as well as decrease in working capital of $3,576. The decrease in working capital was mainly due to a decrease in accounts receivable driven by the timing of collections from customers and an increase in inventory excluding the impact of IAS 29 driven by the timing of sales and purchases of inventory.

Bank loans: As at June 30, 2024, bank loans were at $50,952, a decrease of $10,914 or 18% as compared December 31, 2023 due to principal repayments of bank loans as well as the depreciation of the Brazilian Real and Colombian Pesos.

Corporate   Updates

NCIB

On July 11, 2024, the Company announced that the Toronto Stock Exchange approved its notice of intention to launch a NCIB ("2024 NCIB"). Under the terms of the 2024 NCIB, Knight may purchase for cancellation up to 5,312,846 common shares of the Company which represented 10% of its public float as at June 30, 2024. The 2024 NCIB commenced on July 15, 2024 and will end on the earlier of July 14, 2025 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.

During the three-month period ended June 30, 2024, the Company purchased 205,661 common shares at an average price of $6.04 for aggregate cash consideration of $1,242 under the 2023 NCIB. Subsequent to the quarter-end up to July 31, 2024, the Company purchased an additional 165,000 common shares at an average purchase price of $5.67 for an aggregate cash consideration of $936.

The Company has purchased an aggregate of 42.5 million shares at an average price of $5.70 since the launch of its share buy back program in 2019.

Financial   Outlook   Update

Financial Outlook

Knight provides guidance on revenues on a non-GAAP basis. This is due to both the difficulty in predicting Argentinian inflation rates and its IAS 29 impact.

For fiscal 2024, Knight has increased its financial guidance on revenues and now expects to generate between $355 million to $365 million in revenues up from $335 to $350 million. The adjusted EBITDA 1 is expected to be approximately 16% of revenues. The change in the financial outlook is primarily due to an improvement in forecasted LATAM currencies against the Canadian dollar as well as an acceleration of investments on our pipeline products. The guidance is based on a number of assumptions, including but not limited to the following:

  • no revenues or expenses for business development transactions not completed as at August 7, 2024
  • no unforeseen termination to our license, distribution & supply agreements
  • no interruptions in supply whether due to global supply chain disruptions or general manufacturing issues
  • no new generic entrants on our key pharmaceutical brands
  • no unforeseen changes to government mandated pricing regulations
  • successful commercial execution on product listing arrangements with HMOs, insurers, key accounts, and public payers
  • successful execution and uptake of newly launched products
  • no material increase in provisions for inventory or trade receivables
  • no significant variations of forecasted foreign currency exchange rates
  • inflation remaining within forecasted ranges

Should any of the assumptions differ, the financial outlook and the actual results may vary materially. Refer to the risks and assumptions referred to in the Forward-Looking Statements section of this news release for further details.

1 Revenues   excluding   the   impact   of   IAS   29   and   adjusted   EBITDA   are   a   non-GAAP   measure.   Refer   to   the   definitions   in   section   "Non-GAAP   measures"   for   additional   details.

Conference   Call   Notice

Knight will host a conference call and audio webcast to discuss its second quarter ended June 30, 2024, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: Thursday, August 8, 2024
Time: 8:30 a.m. ET
Telephone : Toll Free: 1-800-836-8184 or International 1-289-819-1350
Webcast: www.knighttx.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 www.knighttx.com

About   Knight   Therapeutics   Inc.

Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing and commercializing pharmaceutical products for Canada and Latin America. Knight's Latin American subsidiaries operate under United Medical, Biotoscana Farma and Laboratorio LKM. 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.knighttx.com or www.sedarplus.ca .

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, 2023 as filed on www.sedarplus.ca . Knight Therapeutics Inc. disclaims any intention or obligation to update or revise any forward-looking statements whether because of new information or future events, except as required by law.

CONTACT   INFORMATION:

Investor   Contact:
Knight Therapeutics Inc.
Samira Sakhia Arvind Utchanah
President & Chief Executive Officer Chief Financial Officer
T: 514.484.4483 T. +598.2626.2344
F: 514.481.4116
Email: IR@knighttx.com Email: IR@knighttx.com
Website: www.knighttx.com Website: www.knighttx.com


NON-GAAP
  MEASURES
[In thousands of Canadian dollars]

The Company discloses non-GAAP measures and ratios 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. Non-GAAP financial measures and adjusted EBITDA per share ratio 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-GAAP measures.

Revenues   and   Financial   results   excluding   the   impact   of   hyperinflation   under   IAS   29

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.

Revenues and financial results under IFRS are adjusted to remove the impact of hyperinflation under IAS 29. The impact of hyperinflation under IAS 29 is calculated by applying an appropriate general price index to express the effects of inflation. After applying the effects of translation, the statement of income is converted using the closing foreign exchange rate of the month.

Revenues and financial results excluding the impact of hyperinflation under IAS 29 allow results to be viewed without the impact of IAS 29 thereby facilitating the comparison of results period over period. The presentation of revenues and financial results excluding the impact of hyperinflation under IAS 29 is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

The following tables are reconciliations of financial results under IFRS to financial results excluding the impact of hyperinflation under IAS 29.

Q2-   24 YTD-   24
Reported
  under IFRS
IAS 29
Adjustment
Excluding   the
Impact of
  IAS   29
Reported
under IFRS
IAS 29
Adjustment
Excluding   the
Impact of
  IAS   29
Revenues 95,573 (1,452 ) 94,121 182,177 (2,260 ) 179,917
Cost of goods sold 48,236 604 48,840 93,141 799 93,940
Gross   margin 47,337 (2,056 ) 45,281 89,036 (3,059 ) 85,977
Gross   margin   (%) 50% 48% 49% 48%
Expenses
Selling and marketing 13,264 (296 ) 12,968 25,913 (452 ) 25,461
General and administrative 12,099 (521 ) 11,578 22,637 (847 ) 21,790
Research and development 5,806 (229 ) 5,577 10,786 (369 ) 10,417
Amortization of intangible assets 11,674 25 11,699 22,546 (1 ) 22,545
Operating   income   (loss) 4,494 (1,035 ) 3,459 7,154 (1,390 ) 5,764


Q2-   23 YTD-   23
Reported under IFRS IAS 29
Adjustment
Excluding the Impact of IAS 29 Reported under IFRS IAS 29
Adjustment
Excluding the Impact of IAS 29
Revenues 89,905 495 90,400 172,502 565 173,067
Cost of goods sold 52,412 (2,256) 50,156 94,247 (2,810) 91,437
Gross   margin 37,493 2,751 40,244 78,255 3,375 81,630
Gross   margin   (%) 42   % 45% 45   % 47%
Expenses
Selling and marketing 12,874 111 12,985 23,539 159 23,698
General and administrative 9,119 69 9,188 18,225 (150) 18,075
Research and development 4,336 287 4,623 8,523 202 8,725
Amortization of intangible assets 11,274 (85) 11,189 22,445 (131) 22,314
Operating   income (110   ) 2,369 2,259 5,523 3,295 8,818


Revenues
  and   Financial   results   at   constant   currency
Revenues and financial results at constant currency are obtained by translating the prior period revenues and financial results from the functional currencies to CAD using the conversion rates in effect during the current period. Furthermore, with respect to Argentina, the Company excludes the impact of hyperinflation and translates the revenues and results at the average exchange rate in effect for each of the periods.

Revenues and financial results at constant currency allow results to be viewed without the impact of fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of revenues and financial results under constant currency is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

The following tables are reconciliations of financial results under IFRS to financial results and financial results at constant currency.

Q2-   23
YTD-   23
Reported under IFRS IAS 29
Adjustment
Constant Currency Adjustment Constant Currency Reported under IFRS IAS 29
Adjustment
Constant Currency Adjustment Constant Currency
Revenues 89,905 495 112 90,512 172,502 565 3,592 176,659
Cost of goods sold 52,412 (2,256 ) (224 ) 49,932 94,247 (2,810 ) 1,453 92,890
Gross   margin 37,493 2,751 336 40,580 78,255 3,375 2,139 83,769


Expenses
Selling and marketing 12,874 111 (53 ) 12,932 23,539 159 205 23,903
General and administrative 9,119 69 301 9,489 18,225 (150 ) 501 18,576
Research and development 4,336 287 20 4,643 8,523 202 96 8,821
Amortization of intangible assets 11,274 (85 ) 233 11,422 22,445 (131 ) 128 22,442
Operating   income (110 ) 2,369 (165 ) 2,094 5,523 3,295 1,209 10,027


EBITDA

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

EBITDA allows results to be viewed without the impact of amortization and impairment of intangible assets, depreciation, purchase price allocation accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation) but to include costs related to leases fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of EBITDA is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

Adjusted   EBITDA

Adjusted EBITDA is defined EBITDA adjusted for acquisition costs and non-recurring expenses.

Adjusted EBITDA allows results to be viewed without the impact of amortization and impairment of intangible assets, depreciation, purchase price allocation accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation), acquisition costs and non-recurring expenses but to include costs related to leases fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of adjusted EBITDA is considered to be a non-GAAP measure and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

The following table is a reconciliation of operating income (loss) to EBITDA and adjusted EBITDA.

Q2-   24 Q2-   23 YTD-   24 YTD-   23
Operating   income   (loss) 4,494 (110 ) 7,154 5,523
Adjustments to operating income (loss):
Amortization of intangible assets 11,674 11,274 22,546 22,445
Depreciation of property, plant and equipment and ROU assets 1,495 884 3,204 2,796
Lease costs (IFRS 16 adjustment) (982 ) (636 ) (1,864 ) (1,367 )
Impact of IAS 29 (1,040 ) 2,857 (1,810 ) 3,109
EBITDA 15,641 14,269 29,230 32,506
Acquisition and transition costs 103 103
Adjusted   EBITDA 15,744 14,269 29,333 32,506


Adjusted
  EBITDA   per   share

Adjusted EBITDA per share is defined as Adjusted EBITDA over number of common shares outstanding at the end of the respective period. The presentation of adjusted EBITDA per share is considered to be a non-GAAP ratio and does not have any standardized meaning under GAAP. As a result, the information presented may not be comparable to similar measures presented by other companies.

The following table calculates adjusted EBITDA per share as follows:

Q2-   24 Q2-   23 YTD-   24 YTD-   23
Adjusted EBITDA 15,744 14,269 29,333 32,506
Adjusted EBITDA per common share 0.16 0.13 0.29 0.30
Number of common shares outstanding at period end (in thousands) 101,327 107,177 101,327 107,177


SELECTED FINANCIAL RESULTS AT CONSTANT CURRENCY
[In thousands of Canadian dollars]
Excluding impact   of   IAS   29
Constant Currency 1 Change Constant Currency 1 Change
Q2- 24 Q2-23 $ % YTD-   24 YTD-23 $ %
Revenues 94,121 90,512 3,609 4% 179,917 176,659 3,258 2%
Gross margin 45,281 40,580 4,701 12% 85,977 83,769 2,208 3%
Gross   margin   % 48   % 45   % 48   % 47 %
Operating expenses 41,822 38,486 (3,336 ) 9% 80,213 73,742 (6,471 ) 9%
EBITDA 15,641 14,227 1,414 10% 29,230 33,915 (4,685 ) 14%
Adjusted EBITDA 15,744 14,227 1,517 11% 29,333 33,915 (4,582 ) 14%
Adjusted EBITDA per share 0.16 0.13 0.03 23% 0.29 0.31 (0.02 ) 6%

1 Financial results at constant currency is a non-GAAP measure. Refer to section "Non-GAAP measures" for additional details.

INTERIM CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
[Unaudited]
As   at June   30,   2024 December 31, 2023
ASSETS
Current
Cash and cash equivalents 60,807 58,761
Marketable securities 88,028 95,657
Trade receivables 84,976 88,722
Other receivables 5,835 7,427
Inventories 103,645 91,834
Prepaids and deposits 4,601 4,881
Other current financial assets 8,631 15,753
Income taxes receivable 4,087 2,080
Total   current   assets 360,610 365,115


Marketable securities


3,833


7,407
Prepaids and deposits 7,283 7,767
Right-of-use assets 6,673 6,190
Property, plant and equipment 14,814 11,669
Intangible assets 295,548 289,960
Goodwill 84,604 79,844
Other financial assets 107,097 112,616
Deferred income tax assets 20,510 19,390
Other long-term receivables 44,392 45,535
Total   non-current   assets 584,754 580,378
Total   assets 945,364 945,493


INTERIM CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]
[Unaudited]
As   at June   30,   2024 December 31, 2023


LIABILITIES   AND   EQUITY
Current
Accounts payable and accrued liabilities 77,808 85,366
Lease liabilities 2,569 1,728
Other liabilities 1,801 1,046
Bank loans 16,988 17,850
Income taxes payable 918 1,182
Other balances payable 5,745 6,857
Total   current   liabilities 105,829 114,029


Accounts payable and accrued liabilities


7,013


5,251
Lease liabilities 4,587 5,497
Bank loans 33,964 44,016
Other balances payable 26,222 27,012
Deferred income tax liabilities 4,948 2,817
Total   liabilities 182,563 198,622


Shareholders'   equity
Share capital 540,945 540,046
Warrants 117 117
Contributed surplus 25,662 25,991
Accumulated other comprehensive income 51,820 29,829
Retained earnings 144,257 150,888
Total   shareholders'   equity 762,801 746,871
Total   liabilities   and   shareholders'   equity 945,364 945,493


INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)  
[In thousands of Canadian dollars, except for share and per share amounts]
[Unaudited]
Three months ended June 30,  
Six months ended June 30,  
2024 2023 2024 2023
Revenues 95,573 89,905 182,177 172,502
Cost of goods sold 48,236 52,412 93,141 94,247
Gross margin 47,337 37,493 89,036 78,255
Expenses
Selling and marketing 13,264 12,874 25,913 23,539
General and administrative 12,099 9,119 22,637 18,225
Research and development 5,806 4,336 10,786 8,523
Amortization of intangible assets 11,674 11,274 22,546 22,445
Operating income (loss) 4,494 (110 ) 7,154 5,523
Interest income on financial instruments measured at amortized cost   (1,960 ) (2,015 ) (4,096 ) (4,194 )
Other interest income (624 ) (1,072 ) (1,129 ) (2,245 )
Interest expense 2,284 3,004 4,861 5,795
Other expense (42 ) (310 ) (211 ) (216 )
Net loss (gain) on financial instruments measured at fair value through profit or loss 665 (3,939 ) 16,932 7,908
Foreign exchange loss (gain) 5,542 4,918 3,608 4,845
Gain on hyperinflation (2,084 ) (908 ) (6,380 ) (1,636 )
(Loss) income before income taxes 713 212 (6,431 ) (4,734 )
Income tax
Current 1,245 33 2,914 2,139
Deferred 1,410 (1,661 ) (2,857 ) (4,776 )
Income tax expense (recovery) 2,655 (1,628 ) 57 (2,637 )
Net income (loss) for the period (1,942 ) 1,840 (6,488 ) (2,097 )
Basic and diluted net income (loss) per share (0.02 ) 0.02 (0.06 ) (0.02 )
Weighted average number of common shares outstanding
Basic 101,330,154 108,475,559 101,251,374 109,988,526
Diluted 101,330,154 108,678,732 101,251,374 109,988,526


INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
OPERATING ACTIVITIES
Net (loss) income for the period (1,942 ) 1,840 (6,488 ) (2,097 )
Adjustments reconciling net income to operating cash flows:
Depreciation and amortization 13,169 12,158 25,750 25,241
Net loss (gain) on financial instruments 665 (3,939 ) 16,932 7,908
Unrealized foreign exchange (gain) loss (4,124 ) (809 ) (6,329 ) (2,062 )
Other operating activities 3,078 407 (3,646 ) (92 )
10,846 9,657 26,219 28,898
Changes in non-cash working capital and other items (11,932 ) (11,143 ) 3,576 (26,068 )
Cash inflow (outflow) from operating activities (1,086 ) (1,486 ) 29,795 2,830


INVESTING ACTIVITIES
Purchase of marketable securities (41,625 ) (76,334 ) (77,922 ) (185,550 )
Proceeds on maturity of marketable securities 69,674 75,200 91,990 181,168
Investment in funds (1,072 ) (148 ) (1,203 ) (170 )
Purchase of intangible assets (16,735 ) (26,817 ) (7,667 )
Other investing activities 1,511 5,482 1,339 7,705
Cash inflow (outflow) from investing activities 11,753 4,200 (12,613 ) (4,514 )


FINANCING ACTIVITIES
Repurchase of common shares through Normal Course Issuer Bid (1,242 ) (13,951 ) (1,242 ) (24,465 )
Principal repayment of bank loans (6,930 ) (5,422 ) (8,659 ) (6,009 )
Proceeds from bank loans 747 1,443 1,292 2,090
Other financing activities (3,937 ) (4,165 ) (5,650 ) (5,583 )
Cash outflow from financing activities (11,362 ) (22,095 ) (14,259 ) (33,967 )


Increase (decrease) in cash and cash equivalents during the period


(695


)


(19,381


)


2,923


(35,651


)
Cash and cash equivalents, beginning of the period 62,835 56,218 58,761 71,679
Net foreign exchange difference (1,333 ) 1,007 (877 ) 1,816
Cash and cash equivalents, end of the period 60,807 37,844 60,807 37,844


Cash and cash equivalents


60,807


37,844


60,807


37,844
Marketable securities 91,861 103,779 91,861 103,779
Total cash, cash equivalents and marketable securities 152,668 141,623 152,668 141,623

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Medtronic announces cash dividend for third quarter of fiscal year 2025

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Bold thinking. Bolder actions. We are Medtronic . Medtronic plc , headquartered in Galway , Ireland , is the leading global healthcare technology company that boldly attacks the most challenging health problems facing humanity by searching out and finding solutions. Our Mission — to alleviate pain, restore health, and extend life — unites a global team of 95,000+ passionate people across more than 150 countries. Our technologies and therapies treat 70 health conditions and include cardiac devices, surgical robotics, insulin pumps, surgical tools, patient monitoring systems, and more. Powered by our diverse knowledge, insatiable curiosity, and desire to help all those who need it, we deliver innovative technologies that transform the lives of two people every second, every hour, every day. Expect more from us as we empower insight-driven care, experiences that put people first, and better outcomes for our world. In everything we do, we are engineering the extraordinary. For more information on Medtronic , visit www.Medtronic.com and follow Medtronic on LinkedIn .

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