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Atrium generates strong growth during the second quarter
Date:8/7/2008

Significant increase in revenues and net earnings from continued

operations of 165% and 157% respectively

All amounts are in US dollars.

QUEBEC CITY, Aug. 7 /PRNewswire-FirstCall/ - Atrium Innovations Inc. (TSX: ATB), a recognized leading developer, manufacturer and marketer of science-based and professionally endorsed products for the health and nutrition industries, disclosed today its financial results for the second quarter of 2008.

Quarterly highlights:

- Sale of AI&SC Division completed, allowing to focus activities in the

promising health and nutrition sector;

- Strong organic growth in sales and earnings;

- Strong growth also contributed by the two recent acquisitions, Mucos

and MCO. Integrations are proceeding smoothly;

- Strong financial position and well positioned to pursue the acquisition

strategy;

- Favorable short-term outlook.

During the quarter ended June 30, 2008, Atrium recorded revenues from continuing operations of $74.5 million, which represents an increase of 165% compared to revenues of $28.2 million for the corresponding quarter in 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the second quarter of 2008 increased by 128% to $18.2 million compared to $8.0 million for the same period in 2007. For the quarter ended June 30, 2008, net earnings from continuing operations were $10.7 million compared to $4.2 million for the same period in 2007, an increase of 157%.

The Company's total net earnings were $43.9 million compared to net earnings of $6.6 million for the corresponding period in 2007. For the second quarter of 2008, net earnings per share on a diluted basis rose to $1.33 per share, compared to $0.20 per share for the same period in 2007. Net earnings and net earnings per share in 2008 include a net gain of $30.9 million on the sale of the AI&SC Division.

For the six-month period ended June 30, 2008, revenues from continuing operations were $140.3 million, up 119% from $64.1 million for the corresponding period in 2007. EBITDA from continuing operations for the first half of 2008 was $36.6 million, an increase of 108% compared to $17.6 million for the same period last year. For the first half of 2008, total net earnings increased by 284% to $58.6 million generating fully diluted earnings per share of $1.77, compared to $15.2 million and $0.47 per share for the first six months of 2007.

"We are extremely satisfied with our results for the second quarter, confirming the soundness of our strategic development plan. Strong organic growth exceeding our target, combined with the benefits of our recent acquisitions, allows us to be optimistic for the remainder of 2008. Moreover, completing the sale of our Active Ingredients and Specialty Chemicals Division is providing us all the financial flexibility required to pursue our growth strategy through acquisitions in the promising sector of specialties health and nutrition products," said Mr. Pierre Fitzgibbon, Atrium's President and Chief Executive Officer.

For the second quarter of 2008, cash flows from continuing operating activities, before changes in non-cash working capital items, were $12.2 million, an increase of 149% compared to $4.9 million for the same period of the preceding year. For the six-month period ended June 30, 2008, cash flows from continuing operating activities, before changes in non-cash working capital items, were $23.9 million, an increase of 115% compared to $11.1 million for the same period in 2007. As at June 30, 2008, the Company had a total debt amounting to $144 million as the Company has a revolving credit facility that provides $300 million of borrowing capacity. In addition, through an unsecured loan, the Company has additional capacity of $35.9 million that can be used in whole or in part by December 31, 2008 according to the amendment signed on May 21, 2008.

Discontinued Operations - Active Ingredients and Specialty Chemicals

(AI&SC) Division

On May 22, 2008, Atrium completed the sale of its Active Ingredients and Specialty Chemicals Division for total proceeds of $166.4 million in cash, subject to a post-closing working capital adjustment. Atrium has become a health and nutrition pure play and the net proceeds from the transaction will provide the Company with increased financial flexibility to pursue its development strategy.

The AI&SC Division's operations from April 1, 2008 to May 21, 2008, which are included in the second quarter of 2008 and presented as discontinued operations, generated revenues of $34.3 million, compared to revenues of $48.3 million for the complete quarter of 2007. For the same periods, EBITDA was $3.4 million in 2008 compared to $4.7 million in 2007.

For the period between January 1, 2008 and May 21, 2008, revenues from discontinued operations were $102.3 million compared to $107.0 million for the six-month period ended June 30, 2007. For the same periods, EBITDA from discontinued operations was $9.8 million in 2008 compared to $10.0 million in 2007.

About Atrium

Atrium Innovations Inc. is a recognized leading developer, manufacturer and marketer of science-based and professionally endorsed products for the health and nutrition industries. The Company focuses primarily on growing segments of the health and nutrition markets which are benefiting from the trends towards healthy living and the ageing of the population. Atrium markets a broad portfolio of finished products through its highly specialized sales and marketing network in more than 35 countries, primarily in North America and Europe. Atrium has over 575 employees and operates five manufacturing facilities. Additional information about Atrium is available on its Web site at http://www.atrium-innov.com.

Conference Call and Webcast

Atrium will hold its quarterly conference call and webcast to discuss its second quarter 2008 on Thursday, August 7, 2008 at 10:00 a.m. Eastern time. Participants may access the call by using the following numbers: 416-644-3418, 514-807-8791 or 1-800-732-0232. A live webcast is also available via the Company's website at http://www.atrium-innov.com in the "Investors" section. A replay of the webcast will also be available on our website for a period of 30 days. A copy of Atrium's interim unaudited financial statements will also be available on the Company's website.

Caution Regarding Non-GAAP Measures

This press release is based on reported earnings in accordance with Canadian generally accepted accounting principles (GAAP). It is also based on earnings before interest, income taxes, depreciation and amortization (EBITDA) and gross margin. These measures do not have a standardized meaning prescribed by GAAP; therefore, other issuers using these terms may calculate them differently. Management believes that a significant portion of the users of its Consolidated Financial Statements and MD&A analyze the Company's results based on these performance measures.

Cautionary Note and Forward-Looking Statements

This press release contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The Company considers the assumptions on which these forward-looking statements are based to be reasonable, but cautions the reader that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Company. For additional information with respect to these and other factors, see the Company's quarterly and annual filings with the Canadian securities commissions. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

Attachment: Financial summary

Atrium Innovations Inc.

Summary of Interim Consolidated Financial Statements

(in millions of US dollars except per share amounts)

Consolidated Results for the 3-month

periods ended June 30

(unaudited)

2008 2007 Change

-------- ------- ---------

Revenues 74.5 28.2 164.7%

Gross Margin(1) 37.2 15.0 148.2%

49.8% 53.1%

EBITDA(2) 18.2 8.0 128.0%

24.4% 28.3%

Net earnings from continuing operations 10.7 4.2 157.1%

Net earnings from discontinued operations 33.2 2.4

-------- -------

Net earnings 43.9 6.6

-------- -------

Net earnings per share from continuing

operations

Basic 0.33 0.14

Diluted 0.32 0.13

Net earnings per share

Basic 1.36 0.22

Diluted 1.33 0.20

Cash flow from continuing operating

activities before changes in non-cash

operating working capital items 12.2 4.9 148.7%

(1) Gross margin means sales less cost of goods sold.

(2) EBITDA means earnings before interest, income taxes, depreciation and

amortization.

Consolidated Results for the 6-month

periods ended June 30

(unaudited)

2008 2007 Change

-------- ------- ---------

Revenues 140.3 64.1 119.0%

Gross Margin(1) 72.7 32.1 126.5%

51.8% 50.1%

EBITDA(2) 36.6 17.6 107.7%

26.1% 27.5%

Net earnings from continuing operations 21.2 9.5 123.8%

Net earnings from discontinued operations 37.4 5.7

-------- -------

Net earnings 58.6 15.2

-------- -------

Net earnings per share from continuing

operations

Basic 0.66 0.31

Diluted 0.64 0.29

Net earnings per share

Basic 1.81 0.50

Diluted 1.77 0.47

Cash flow from continuing operating

activities before changes in non-cash

operating working capital items 23.9 11.1 114.5%

Consolidated Balance Sheet

(unaudited)

As at As at

June December

30, 2008 31, 2007

----------- ----------

Cash and cash equivalents 20.0 27.4

Other current assets 96.7 162.2

Goodwill 194.8 168.8

Other long-term assets 217.0 266.8

----------- ----------

Total assets 528.5 625.2

----------- ----------

Short-term liabilities 39.2 79.7

Long-term debt 143.9 279.0

Other long-term liabilities 62.6 55.6

Shareholders' equity 282.8 210.9

----------- -----------

Total liabilities and shareholders' equity 528.5 625.2

----------- -----------

(1) Gross margin means sales less cost of goods sold.

(2) EBITDA means earnings before interest, income taxes, depreciation and

amortization.


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SOURCE Atrium Innovations Inc.
Copyright©2008 PR Newswire.
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