Patheon comfortable with liquidity, CFO says

By Jennifer Lanning Drey

Savannah, Ga., June 10 - Patheon Inc. ended its fiscal second quarter with $125 million of liquidity, which the company is comfortable with from an operating perspective, chief financial officer Eric Evans said Friday during Patheon's quarterly earnings conference call.

The April 30 liquidity figure included $39.3 million of cash.

Patheon is currently engaged in a strategic assessment process to ensure that the company is on the right course, Jim Mullen, its chief executive officer, said during the call.

"I can tell you that driving additional operating performance improvements across the company is a key priority," he said of the process.

Patheon will provide details of the resulting strategy in the second half of the year, he said.

For the fiscal second quarter, Patheon reported adjusted EBITDA of $14.3 million on revenues of $170.0 million. The figures compared to adjusted EBITDA of $30.0 million on revenues of $175.4 million in the second quarter of fiscal 2010.

The company said the second-quarter results reflected an unusual level of contract cancellations and delays in the pharmaceutical development services business during the first half of fiscal 2011. Patheon's commercial business was also negatively impacted by operating performance issues and production delays at several commercial sites.

Patheon posted adjusted EBITDA of $43.8 million for the first six months of fiscal 2011 on revenues of $345.7 million. The company reported adjusted EBITDA of $39.4 million on revenues of $330.2 million in the first half of fiscal 2010.

Looking forward, Mullen said the commercial production forecast for the balance of 2011 has strengthened, and Patheon has a strong book of business in the pharmaceutical development services business.

Patheon is a Research Triangle Park, N.C.-based provider of drug development and manufacturing services to the pharmaceutical industry.

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