Knight Therapeutics Reports First Quarter 2023 Results

Knight Therapeutics

- Achieves Record EBITDA

MONTREAL, May 11, 2023 (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 first quarter ended March 31, 2023. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

Q1 2023 Highlights

Financials

• Revenues were $82,597, an increase of $18,790 or 29% over the same period in prior year.

• Gross margin of $40,762 or 49% compared to $32,477 or 51% in the same period in prior year.

• Adjusted EBITDA¹ was $18,237, an increase of $4,925 or 37% over the same period in prior year.

• Adjusted EBITDA per share² of $0.17, an increase of $0.05 or 45% over the same period in prior year.

• Net loss on financial assets measured at fair value through profit or loss of $11,847.

• Net loss was $3,937, compared to net loss of $18,811 in the same period in prior year.

• Cash inflow from operations was $3,711, compared to a cash inflow from operations of $12,879 in the same period in prior year.
  

Corporate Developments

• Purchased 2,243,905 common shares through Knight’s NCIB at an average price of $4.83 for an aggregate cash consideration of $10,830.
  

Products

• Submitted marketing authorization application for tafasitamab in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplantation (ASCT) to ANMAT in Argentina in Q1-23.

• Launched Palbocil^® (palbociclib) in Argentina in March 2023.

• Obtained regulatory approval for Bapocil^® (palbociclib) in Chile in March 2023.
  

Subsequent Events

• 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.

• Purchased an additional 1,144,520 common shares through NCIB for an aggregate cash consideration of $5,359.

“I am excited to report impressive Q1 revenues of over $82,000, a 29% growth compared to the same period last year, and a record adjusted EBITDA of over $18,000, representing a growth of 37%. This strong performance is a testament to the hard work and dedication of our team and the continued success of our portfolio and recent launches. I am also proud to announce that we acquired $16 million of shares under the Normal Course Issuer Bid this year, further demonstrating our commitment to delivering value to our shareholders,” said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.

¹ _{Adjusted EBITDA is a non-GAAP measure, refer to section “Non-GAAP measures” and “Reconciliation to adjusted EBITDA” for additional details.}
² _{Adjusted EBITDA per share is a non-GAAP ratio, refer to section “Non-GAAP measures” for additional details.}

SELECT FINANCIAL RESULTS REPORTED UNDER IFRS
[In thousands of Canadian dollars]

							Change
		Q1-23		Q1-22			$1		%2
Revenues		82,597		63,807			18,790		29	%
Gross margin		40,762		32,477			8,285		26	%
Gross margin %		49	%	51		%
Operating expenses4		35,129		32,793			(2,336	)	7	%
Net loss		(3,937	)	(18,811		)	14,874		79	%
EBITDA3		18,237		13,312			4,925		37	%
Adjusted EBITDA3		18,237		13,312			4,925		37	%

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}
³ _{EBITDA and adjusted EBITDA are non-GAAP measures, refer to the definitions in section “Non-GAAP measures” for additional details}
⁴ _{Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of intangible assets}

SELECT FINANCIAL RESULTS AT CONSTANT CURRENCY
[In thousands of Canadian dollars]

		Q1-23		Q1-22		Variance
		Excluding impact of IAS 293
				Constant Currency3		$1		%2
Revenues		82,667		66,020		16,647		25	%
Gross margin		41,386		35,153		6,233		18	%
Gross margin %		50	%	53	%
Operating expenses4		34,827		32,914		(1,913	)	6	%
EBITDA3		18,237		14,193		4,044		28	%
Adjusted EBITDA3		18,237		14,193		4,044		28	%

¹ _{A positive variance represents a positive impact to adjusted EBITDA and a negative variance represents a negative impact to adjusted EBITDA}
² _{Percentage change is presented in absolute values}
³ _{Financial results at constant currency and excluding impact of IAS 29, EBITDA and adjusted EBITDA are non-GAAP measures, refer to the specific sections for additional details}
⁴ _{Operating expenses include selling and marketing expenses, general and administrative expenses, research and development expenses, amortization and impairment of intangible assets}

SELECT BALANCE SHEET ITEMS
[In thousands of Canadian dollars]

						Change
		03-31-23		12-31-22		$		%1
Cash, cash equivalents and marketable securities		160,469		172,674		(12,205	)	7	%
Trade and other receivables		160,472		151,669		8,803		6	%
Inventory		98,988		92,489		6,499		7	%
Financial assets		164,808		176,563		(11,755	)	7	%
Accounts payable and accrued liabilities		110,994		108,730		2,264		2	%
Bank loans		75,333		70,072		5,261		8	%

¹ _{Percentage change is presented in absolute values}

Revenues: For the quarter ended March 31, 2023, revenues, excluding the impact of IAS 29, was $82,667 an increase of $18,833 or 30% compared to the same prior year period. The revenues by therapeutic areas are as follows:

		Excluding impact of IAS 293
						Change
Therapeutic Area		Q1-23		Q1-22		$1		%2
Oncology/Hematology		29,141		23,816		5,325		22	%
Infectious Diseases		30,848		26,682		4,166		16	%
Other Specialty		22,678		13,336		9,342		70	%
Total		82,667		63,834		18,833		30	%

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}
³ _{Revenues excluding the impact of IAS 29 is a non-GAAP measure, refer to section “Non-GAAP measures” for additional details.}

The change in revenues by therapeutic areas is explained by the following:

• Oncology/Hematology: The oncology/hematology portfolio grew by approximately $7,600 due to continued growth of key promoted products including Halaven^®, Lenvima^® and Trelstar^® and the assumption of commercial activities of Akynzeo^® in Brazil, Argentina and Canada. This increase is offset by a reduction in revenues of our mature and branded generics products due to their lifecycle including the market entrance of new competitors.

• Infectious Diseases: : The infectious disease portfolio grew by approximately $7,800, excluding the impact of the planned transition and termination of the Gilead Amendment. This growth is driven by our key promoted products and the buying patterns of certain customers. In addition, Knight recorded revenues of $2,400 in Q1-23 related to a one-time sales contract with the Ministry of Health in Brazil for Ambisome^® (“2022 MOH Contract”). The 2022 MOH Contract was signed in December 2022 for a total value of $18,400 of which $7,000 was delivered in 2022, $2,400 in Q1-23 and $9,000 in April 2023.
  
  In addition to the full amount of the 2022 MOH Contract of $18,400, subsequent to the quarter, Knight received an order for an additional $9,000 (“2023 MOH Contract”) from the Ministry of Health of Brazil which was delivered in April 2023.
  

• Other Specialty: The Other Specialty portfolio grew by approximately $6,200 excluding the impact of the change in accounting treatment of Exelon^® from net profit transfer to revenues with related cost of sales. The increase is mainly due to advance purchases of Exelon^® driven by the commercial transition from Novartis to Knight in certain countries as well as the purchasing patterns of certain customers.
  

Gross margin: Under IFRS, gross margin, as a percentage of revenues, was 49% in Q1-23 and 51% in Q1-22. Excluding the impact of IAS 29, gross margin, as a percentage of revenues, was 50% in Q1-23 and 53% in Q1-22. The decrease in gross margin, as a percentage of revenues, is due to product mix including Exelon^® recorded as a net profit transfer in Q1-22 compared to revenues with related cost of sales in Q1-23.

Selling and marketing (“S&M”): For the quarter ended March 31, 2023, S&M expenses were $10,665, an increase of $975 or 10% compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $1,014 or 10%.

General and administrative (“G&A”): For the quarter ended March 31, 2023, G&A expenses were $9,106, an increase of $274 or 3%, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $342 or 4%.

Research and development (“R&D”): For the quarter ended March 31, 2023, R&D expenses were $4,187, an increase of $1,204 or 40%, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $1,260 or 44%. The increase is driven by compensation expense and medical initiatives related to key promoted products including Akynzeo^® in-licensed in H2-22.

Amortization and impairment of intangible assets: For the quarter ended March 31, 2023, amortization and impairment of intangible assets was $11,171, a decrease of $117 or 1%.

Interest income: Interest income is the sum of interest income on financial instruments measured at amortized cost and other interest income. For the quarter ended March 31, 2023, interest income was $3,352, an increase of 126% or $1,872, compared to the same period in prior year due to higher interest rates on cash and marketable securities.

Interest expense: For the quarter ended March 31, 2023, interest expense was $2,791, an increase of $1,680 or 151%, compared to the same period in prior year due to higher average loan balance resulting from IFC loan received in December 2022 and higher variable interest rates, partially offset by principal repayments of Itaú Unibanco Brasil and Bancolombia bank loans in 2022.

Adjusted EBITDA: For the quarter ended March 31, 2023, adjusted EBITDA was $18,237, an increased of $4,925 or 37%. The decrease in adjusted EBITDA is driven by an increase in gross margin of $8,285, offset by an increase in operating expenses.

Net loss: For the quarter ended March 31, 2023, net loss was $3,937 compared to net loss of $18,811 for the same period in prior year. The variance mainly resulted from the above-mentioned items and (1) a net loss on the revaluation of financial assets measured at fair value through profit or loss of $11,847 versus a net loss of $16,363 in the same period in prior year, mainly due to unrealized revaluations of the strategic fund investments, (2) a foreign exchange gain of $73 versus a foreign exchange loss of $6,189 and (3) the income tax recovery of $1,009 in Q1-23 of driven by the recognition of certain deferred tax assets due to timing differences related to our financial assets, tax loss in certain jurisdictions and certain intercompany transactions, offset by current income tax expense due to operating income, compared to the income tax recovery of $3,501 in Q1-22 driven by the recognition of certain deferred tax assets due tax losses generated and timing differences related to our financial assets.

Cash, cash equivalents and marketable securities: As at March 31, 2023, Knight had $160,469 in cash, cash equivalents and marketable securities, a decrease of $12,205 or 7% as compared to December 31, 2022. The variance is primarily due to outflows certain regulatory and sales milestones on certain products, including AKYNZEO^® and ALOXI^® from Helsinn, shares repurchased through NCIB, partially offset by cash inflows from operating activities and proceeds from the disposal of Medimetriks.

Financial assets: As at March 31, 2023, financial assets were at $164,808, a decrease of $11,755 or 7%, as compared to the prior year, mainly due to negative mark-to-market adjustments of $11,522 driven by the decline in the share prices of the publicly-traded equities of our strategic fund investments, distributions of $509, offset by foreign exchange gains of $623. Given the nature of the fund investments there could be significant fluctuations in the fair value of the underlying assets.

Bank Loans: As at March 31, 2023, bank loans were at $75,333, an increase of $5,261 or 8% as compared to December 31, 2022, due to accrued interest of $2,186 and the appreciation of BRL, COP, CLP and MXN against CAD.

Product Updates

Knight launched Palbocil^® (palbociclib) in Argentina in March 2023. Palbocil^® / Bapocil^® (palbociclib) is indicated for the treatment of patients with hormone receptor (HR) positive, human epidermal growth factor receptor 2 (HER2)-negative locally advanced or metastatic breast cancer in combination with an aromatase inhibitor as initial endocrine-based therapy in post-menopausal women; or fulvestrant in patients with disease progression after prior endocrine therapy. In addition, in March 2023, Knight obtained regulatory approval for Bapocil^® (palbociclib) in Chile.

Corporate Updates

NCIB

During the three-month period ended March 31, 2023, the Company purchased 2,243,905 common shares at an average price of $4.83 for aggregate cash consideration of $10,830. Subsequent to quarter-end up to May 5, 2023, the Company purchased an additional 1,144,520 common shares at an average purchase price of $4.68 for an aggregate cash consideration of $5,359.

Financial Outlook Update

Knight provides guidance on revenues¹ on a non-GAAP basis. This is due to both the difficulty in predicting Argentinian inflation rates and its IAS 29 impact.

For fiscal 2023, Knight has updated its guidance and expects to generate $300 to $320 million in revenue, an increase of $20 million on the lower and upper range. The adjusted EBITDA, as a percentage of revenues is expected to be between 14% to 15% of revenues. The increase in the financial outlook is primarily due to an improvement in the forecasted LATAM currencies against the Canadian dollar and the 2023 MOH Contract for Ambisome^®. The guidance is based on a number of assumptions, including but not limited to the following:

• no revenues for business development transactions not completed as at May 10, 2023

• discontinuation of certain distribution 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 significant restrictions or economic shut down due to global pandemics

• foreign currency exchange rates 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 is 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 first quarter ended March 31, 2023, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: Thursday, May 11, 2023
Time: 8:30 a.m. ET
Telephone: Toll Free: 1-855-669-9657 or International 1-412-317-0790
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.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, 2022 as filed on www.sedar.com. 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: info@knighttx.com		Email: info@knighttx.com
Website: www.knighttx.com		Website: www.knighttx.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:

	Q1-23
		Reported under IFRS		Excluding impact of IAS 291		Variance
						$2		%3
Revenues		82,597		82,667		(70	)	0	%
Cost of goods sold		41,835		41,281		(554	)	1	%
Gross margin		40,762		41,386		(624	)	2	%
Gross margin (%)		49	%	50	%
Expenses
Selling and marketing		10,665		10,713		48		0	%
General and administrative		9,106		8,887		(219	)	2	%
Research and development		4,187		4,102		(85	)	2	%
Amortization and impairment of intangible assets		11,171		11,125		(46	)	0	%
Operating income		5,633		6,559		(926	)	14	%

¹ _{Financial results excluding the impact of hyperinflation (IAS 29) is a non-GAAP measure. Refer to the definitions in section “Non-GAAP measures” for additional details}
² _{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}
³ _{Percentage change is presented in absolute values}

NON-GAAP MEASURES
[In thousands of Canadian dollars]

Non-GAAP measures

The Company discloses non-GAAP measures and adjusted EBITDA per share ratio 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: Revenues and financial results under IFRS are adjusted to remove the impact of hyperinflation under IAS 29. 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/financial results at constant currency allow revenues/financial 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/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.

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

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

Adjustments 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 costs incurred on legal, consulting and advisory fees for the acquisitions.

• 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 three months ended March 31, the Company calculated EBITDA and adjusted EBITDA as follows:

					Change
	Q1-23		Q1-22		$1		%2
Operating (loss) income	5,633		(316	)	5,949		n/a4
Adjustments to operating (loss) income:
Amortization and impairment of intangible assets	11,171		11,288		(117	)	1	%
Depreciation of property, plant and equipment and ROU assets	1,912		2,093		(181	)	9	%
Lease costs (IFRS 16 adjustment)	(731	)	(646	)	(85	)	13	%
Impact of IAS 29	252		893		(641	)	72	%
EBITDA3	18,237		13,312		4,925		37	%
Acquisition and transaction costs	—		—		—		n/a4
Other non-recurring expenses	—		—		—		n/a4
Adjusted EBITDA3	18,237		13,312		4,925		37	%

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}
³ _{EBITDA and adjusted EBITDA are non-GAAP measures, refer to the definitions in section “Non-GAAP measures” for additional details}
⁴ _{Percentage change not relevant}

Adjusted EBITDA per share: Adjusted EBITDA over number of common shares outstanding at the end of the respective period.

The Company calculated adjusted EBITDA per share as follows:

		Q1-23		Q1-22
Adjusted EBITDA1		18,237		13,312
Adjusted EBITDA per common share1		0.166		0.114
Number of common shares outstanding at period end (in thousands)		110,082		116,546

¹ _{Ajusted EBITDA is non-GAAP measure and adjusted EBITDA per share is a non-GAAP ratio, refer to the definition in section "Non-GAAP Measures" for additional details}

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

As at
	March 31, 2023		December 31, 2022
ASSETS
Current
Cash and cash equivalents	56,218		71,679
Marketable securities	89,094		85,826
Trade receivables	103,573		94,890
Other receivables	13,254		12,930
Inventories	98,988		92,489
Prepaids and deposits	1,773		1,704
Other current financial assets	38,062		33,716
Income taxes receivable	2,248		2,385
Total current assets	403,210		395,619
Marketable securities	15,157		15,169
Prepaids and deposits	3,927		4,355
Right-of-use assets	5,455		5,827
Property, plant and equipment	16,810		16,806
Intangible assets	331,518		338,780
Goodwill	84,797		82,274
Other financial assets	126,746		142,847
Deferred income tax assets	13,509		9,310
Other long-term receivables	43,645		43,849
Total non-current assets	641,564		659,217
Total assets	1,044,774		1,054,836

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

As at
	March 31, 2023		December 31, 2022
LIABILITIES AND EQUITY
Current
Accounts payable and accrued liabilities	107,989		106,061
Lease liabilities	2,132		2,578
Other liabilities	1,687		5,793
Bank loans	20,293		17,674
Income taxes payable	2,252		2,274
Other balances payable	1,099		6,941
Total current liabilities	135,452		141,321
Accounts payable and accrued liabilities	3,005		2,669
Lease liabilities	5,172		5,050
Bank loan	55,040		52,398
Other balances payable	21,903		23,176
Deferred income tax liabilities	5,333		4,365
Total liabilities	225,905		228,979
Shareholders’ Equity
Share capital	587,173		599,055
Warrants	117		117
Contributed surplus	24,447		23,664
Accumulated other comprehensive loss	48,154		41,266
Retained earnings	158,978		161,755
Total shareholders’ equity	818,869		825,857
Total liabilities and shareholders’ equity	1,044,774		1,054,836

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

	Three months ended March 31,
	2023		2022
Revenues	82,597		63,807
Cost of goods sold	41,835		31,330
Gross margin	40,762		32,477
Expenses
Selling and marketing	10,665		9,690
General and administrative	9,106		8,832
Research and development	4,187		2,983
Amortization and impairment of intangible assets	11,171		11,288
Operating (loss) income	5,633		(316	)
Interest income on financial instruments measured at amortized cost	(2,179	)	(346	)
Other interest income	(1,173	)	(1,134	)
Interest expense	2,791		1,111
Other expense	94		90
Net loss on financial instruments measured at fair value through profit or loss	11,847		16,363
Foreign exchange (gain) loss	(73	)	6,189
Gain on hyperinflation	(728	)	(277	)
Income (loss) before income taxes	(4,946	)	(22,312	)
Income tax
Current	2,106		173
Deferred	(3,115	)	(3,674	)
Income tax recovery	(1,009	)	(3,501	)
Net loss for the period	(3,937	)	(18,811	)
Basic and diluted net loss per share	(0.04	)	(0.16	)
Basic and diluted weighted average number of common shares outstanding	111,518,305		117,173,258

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

	Three months ended March 31,
	2023		2022
OPERATING ACTIVITIES
Net loss for the period	(3,937	)	(18,811	)
Adjustments reconciling net income to operating cash flows:
Depreciation and amortization	13,083		13,381
Net gain on financial instruments	11,847		16,363
Unrealized foreign exchange loss	(1,253	)	6,650
Other operating activities	(1,104	)	(2,811	)
	18,636		14,772
Changes in non-cash working capital and other items	(14,925	)	(1,893	)
Cash inflow from operating activities	3,711		12,879
INVESTING ACTIVITIES
Purchase of marketable securities	(109,216	)	(15,808	)
Proceeds on maturity of marketable securities	105,968		36,546
Investment in funds	(22	)	(40	)
Purchase of intangible assets	(7,667	)	(234	)
Other investing activities	2,223		354
Cash (outflow) inflow from investing activities	(8,714	)	20,818
FINANCING ACTIVITIES
Repurchase of common shares through Normal Course Issuer Bid	(10,514	)	(6,663	)
Principal repayment on bank loans	(587	)	—
Proceeds from bank loans	647		422
Other financing activities	(813	)	(571	)
Cash outflow from financing activities	(11,267	)	(6,812	)
Increase (decrease) in cash and cash equivalents during the period	(16,270	)	26,885
Cash and cash equivalents, beginning of the period	71,679		85,963
Net foreign exchange difference	809		609
Cash and cash equivalents, end of the period	56,218		113,457
Cash and cash equivalents	56,218		113,457
Marketable securities	104,251		42,939
Total cash, cash equivalents and marketable securities	160,469		156,396