Contract drug maker Patheon Inc. reported a big increase in both its fourth-quarter and full-year loss on Monday, citing higher expenses and foreign currency fluctuations.
The Toronto-based global provider of contract development and manufacturing services to the pharmaceutical industry said its loss in the three months ended Oct. 31 was $5.4-million (U.S.) or just over four cents per share.
That compared with a net loss of $1.78-million or 1.4 cents per share in the same year-earlier period.
Revenue was $181.6-million, up from $177.7-million.
Despite the worsening bottom line, CEO James Mullen noted that the company's business and revenues are up, adding that “key internal performance metrics are improving.
“Underlying performance in the fourth quarter was impacted by the non-recurrence in 2011 of $11.2-million of deferred revenue at our U.K. facility in 2010.”
“SG&A costs, which have increased due to consulting expenses associated with our transformation efforts, should become less of a factor in the fourth quarter of fiscal 2012,” Mr. Mullen added.
For the full year, Patheon reported a net loss of $16.8-million or 13 cents per share on revenues of $700-million. In fiscal 2010, the company reported a net loss of $5-million or 3.9 cents per share on revenues of $671.2-million.
Gross profit for fiscal 2011 decreased to $138.1-million from $145-million in 2010.
“The decrease in gross profit was due to a reduction in gross profit margin to 19.7 per cent for fiscal 2011 from 21.6 per cent for fiscal 2010, partially offset by higher revenues,” Patheon said in a release.
It blamed the drop in gross profit margin on an unfavourable foreign exchange impact, higher labour costs, higher inventory writeoffs and the impact of the prior year's research and development investment tax credits taken in fiscal 2010 among other things.
“These were partially offset by favourable mix resulting from the reservation fee and higher deferred revenue amortization related to the amended manufacturing and supply agreement in the U.K.,” it said.
Selling, general and administrative expenses in fiscal 2011 increased to $120.2-million from $110.6-million due to higher consulting and professional fees of $12.8-million, higher costs related to the former CEO's severance of $1.1-million, higher stock based compensation of $1.4-million.
That was partially offset by elimination of costs associated with the special committee of independent directors of $3-million for fiscal 2010 and lower depreciation of $3-million.
The impact of unfavourable foreign exchange rates on SG&A expense was approximately $3.4-million versus prior year.