![]() NORDION INC.
(Translation of registrant's name into English)
|
447 March Road
Ottawa, Ontario Canada K2K 1X8
(Address of principal executive offices)
|
NORDION INC. | ||
|
|
|
Date: September 5, 2013 | By: | /s/ Grant Gardiner |
Grant Gardiner |
||
Title: Senior Vice President, General Counsel & Corporate Secretary |
No.
|
Document
|
1
|
Nordion Inc. - Interim Financial Statements for the Third Quarter ended July 31, 2013
|
2 | Nordion Inc. - Interim Management's Discussion and Analysis for the Third Quarter ended July 31, 2013 |
3 | Nordion Inc. - Form 52-109F2 Certificate of Interim Filings by CEO (pursuant to Canadian regulations) |
4 | Nordion Inc. - Form 52-109F2 Certificate of Interim Filings by CFO (pursuant to Canadian regulations) |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
[UNAUDITED]
|
July 31
|
October 31
|
||
(thousands of U.S. dollars, except share amounts)
|
2013
|
2012
|
||
ASSETS
|
||||
Current assets
|
||||
Cash and cash equivalents
|
$
|
281,947
|
$
|
109,360
|
Accounts receivable
|
35,660
|
46,488
|
||
Notes receivable (Notes 9(a))
|
3,894
|
4,004
|
||
Inventories (Note 4)
|
38,243
|
33,977
|
||
Income taxes recoverable
|
4,850
|
23,951
|
||
Current portion of deferred tax assets
|
4,018
|
4,141
|
||
Other current assets (Note 5)
|
3,532
|
2,042
|
||
Total current assets
|
372,144
|
223,963
|
||
Restricted cash (Note 6)
|
39,368
|
3,906
|
||
Property, plant and equipment, net (Note 7)
|
49,413
|
88,217
|
||
Deferred tax assets
|
37,173
|
52,855
|
||
Long-term investments (Note 8)
|
1,450
|
1,450
|
||
Other long-term assets (Note 9)
|
50,812
|
58,190
|
||
Total assets
|
$
|
550,360
|
$
|
428,581
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||
Current liabilities
|
||||
Accounts payable
|
$
|
17,970
|
$
|
18,783
|
Accrued liabilities (Note 10)
|
37,385
|
80,322
|
||
Income taxes payable
|
667
|
9,494
|
||
Current portion of long-term debt (Note 11)
|
4,027
|
4,190
|
||
Current portion of deferred revenue
|
667
|
1,500
|
||
Total current liabilities
|
60,716
|
114,289
|
||
Long-term debt (Note 11)
|
38,279
|
39,141
|
||
Deferred revenue
|
1,101
|
1,958
|
||
Long-term income taxes payable
|
1,925
|
3,960
|
||
Other long-term liabilities
|
68,649
|
74,468
|
||
Total liabilities
|
170,670
|
233,816
|
||
Shareholders’ equity
|
||||
Common shares at par – Authorized shares: unlimited; Issued and outstanding shares: 61,909,101 and 61,909,101, respectively; (Note 13)
|
252,168
|
252,168
|
||
Additional paid-in capital
|
85,949
|
84,726
|
||
Accumulated deficit
|
(84,587)
|
(265,474)
|
||
Accumulated other comprehensive income (Note 20)
|
126,160
|
123,345
|
||
Total shareholders’ equity
|
379,690
|
194,765
|
||
Total liabilities and shareholders’ equity
|
$
|
550,360
|
$
|
428,581
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
[UNAUDITED]
|
Three months ended July 31
|
Nine months ended July 31
|
||||||
(thousands of U.S. dollars, except per share amounts)
|
2013
|
2012
|
2013
|
2012
|
||||
Revenues
|
$
|
71,709
|
$
|
67,141
|
$
|
181,462
|
$
|
170,169
|
Costs and expenses
|
||||||||
Direct cost of revenues
|
32,024
|
30,384
|
84,040
|
80,428
|
||||
Selling, general and administration
|
19,028
|
17,362
|
63,352
|
47,988
|
||||
Depreciation and amortization
|
3,071
|
3,509
|
9,405
|
13,847
|
||||
Restructuring (recovery) charges (Note 15)
|
35
|
(46)
|
87
|
(699)
|
||||
Change in fair value of embedded derivatives (Note 14)
|
288
|
1,992
|
494
|
8,417
|
||||
Impairment of long lived assets (Note 7)
|
29,201
|
-
|
29,201
|
-
|
||||
Other (income) expenses, net (Note 16)
|
(22,131)
|
1,098
|
(10,637)
|
5,909
|
||||
Total costs and expenses
|
61,516
|
54,299
|
175,942
|
155,890
|
||||
Gain on sale of Targeted Therapies (Note 3)
|
(188,870)
|
-
|
(188,870)
|
-
|
||||
Operating income
|
199,063
|
12,842
|
194,390
|
14,279
|
||||
Interest expense
|
(896)
|
(1,197)
|
(3,112)
|
(3,489)
|
||||
Interest income
|
1,070
|
1,335
|
3,924
|
4,610
|
||||
Income before income taxes
|
199,237
|
12,980
|
195,202
|
15,400
|
||||
Income tax expense (Note 17)
|
18,813
|
678
|
14,316
|
764
|
||||
Net income
|
$
|
180,424
|
$
|
12,302
|
$
|
180,886
|
$
|
14,636
|
Basic and diluted earnings per share (Note 12)
|
$
|
2.91
|
$
|
0.20
|
$
|
2.92
|
$
|
0.24
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||
[UNAUDITED]
|
Three months ended July 31
|
Nine months ended July 31
|
||||||
(thousands of U.S. dollars)
|
2013
|
2012
|
2013
|
2012
|
||||
Net income
|
$
|
180,424
|
$
|
12,302
|
$
|
180,886
|
$
|
14,636
|
Foreign currency translation
|
(1,239)
|
(3,722)
|
(2,649)
|
(2,776)
|
||||
Repurchase and cancellation of Common shares
|
-
|
(39)
|
-
|
(859)
|
||||
Unrealized (loss) gain on derivatives designated as cash flow hedges, net of tax of $172 (2012 - $11) and $123 (2012- $(54)), respectively
|
(508)
|
(34)
|
(365)
|
160
|
||||
Reclassification of realized loss on derivatives designated as cash flow hedges, net of tax of $(58) (2012 - $120) and $(28) (2012 - $7), respectively
|
167
|
(359)
|
82
|
(19)
|
||||
Pension liability adjustments, net of tax of $nil (2012 - $nil)
and $1,444 (2012 - $nil), respectively
|
-
|
-
|
5,747
|
-
|
||||
Other comprehensive (loss) income
|
(1,580)
|
(4,154)
|
2,815
|
(3,494)
|
||||
Comprehensive income
|
$
|
178,844
|
$
|
8,148
|
$
|
183,701
|
$
|
11,142
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
|
Three months ended
July 31
|
Nine months ended
July 31
|
||||||
(thousands of U.S. dollars)
|
2013
|
2012
|
2013
|
2012
|
||||
Operating activities
|
||||||||
Net income
|
$
|
180,424
|
$
|
12,302
|
$
|
180,886
|
$
|
14,636
|
Adjustments to reconcile net income to cash (used in) provided by operating
activities (Note 18):
|
||||||||
Items not affecting current cash flows
|
(174,545)
|
1,989
|
(157,400)
|
15,921
|
||||
Changes in operating assets and liabilities
|
(4,166)
|
(2,352)
|
(12,758)
|
4,611
|
||||
Cash provided by operating activities
|
1,713
|
11,939
|
10,728
|
35,168
|
||||
Investing activities
|
||||||||
Proceeds of sale of Targeted Therapies
|
200,732
|
-
|
200,732
|
-
|
||||
Purchase of property, plant and equipment
|
(470)
|
(1,172)
|
(1,423)
|
(5,828)
|
||||
Decrease (increase) in restricted cash
|
-
|
795
|
(35,327)
|
1,261
|
||||
Cash provided by (used in) investing activities
|
200,262
|
(377)
|
163,982
|
(4,567)
|
||||
Financing activities
|
||||||||
Payment of cash dividends
|
-
|
(6,196)
|
-
|
(18,632)
|
||||
Repurchase and cancellation of Common shares
|
-
|
(170)
|
-
|
(3,691)
|
||||
Cash used in financing activities
|
-
|
(6,366)
|
-
|
(22,323)
|
||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(1,562)
|
(1,100)
|
(2,123)
|
(449)
|
||||
Net increase in cash and cash equivalents during the period
|
200,413
|
4,096
|
172,587
|
7,829
|
||||
Cash and cash equivalents, beginning of period
|
81,534
|
77,800
|
109,360
|
74,067
|
||||
Cash and cash equivalents, end of period
|
$
|
281,947
|
$
|
81,896
|
$
|
281,947
|
$
|
81,896
|
1.
|
Basis of Presentation
|
2.
|
Changes in Significant Accounting Policies and Recent Accounting Pronouncements
|
3.
|
Divestiture of Targeted Therapies Business
|
Accounts receivable
|
$
|
6,631
|
Inventories
|
842
|
|
Other assets
|
2,852
|
|
Accounts payable and accrued liabilities
|
(2,721)
|
|
Other liabilities
|
(90)
|
|
Net assets
|
$
|
7,514
|
4.
|
Inventories
|
July 31
|
October 31
|
|||
2013
|
2012
|
|||
Raw materials and supplies
|
$
|
37,281
|
$
|
33,843
|
Work-in-process
|
606
|
282
|
||
Finished goods
|
1,494
|
1,031
|
||
39,381
|
35,156
|
|||
Allowance for excess and obsolete inventory
|
(1,138)
|
(1,179)
|
||
Inventories
|
$
|
38,243
|
$
|
33,977
|
5.
|
Other Current Assets
|
6.
|
Restricted Cash
|
7.
|
Property, Plant and Equipment
|
8.
|
Long-Term Investments
|
July 31
|
October 31
|
|||
2013
|
2012
|
|||
Investment in Celerion(a)
|
$
|
1,450
|
$
|
1,450
|
Investment in LCC Legacy Holdings (formerly Lumira Capital Corp.)(b)
|
-
|
-
|
||
Long-term investments
|
$
|
1,450
|
$
|
1,450
|
9.
|
Other Long-Term Assets
|
July 31
|
October 31
|
|||
2013
|
2012
|
|||
Financial instrument pledged as security on long-term debt(a)
|
$
|
38,142
|
$
|
38,989
|
Long-term note receivable(b)
|
7,534
|
14,172
|
||
Goodwill
|
2,457
|
2,526
|
||
Other(c)
|
2,679
|
2,503
|
||
Other long-term assets
|
$
|
50,812
|
$
|
58,190
|
10.
|
Accrued Liabilities
|
July 31
|
October 31
|
|||
2013
|
2012
|
|||
Employee-related accruals
|
$
|
8,901
|
$
|
4,922
|
FDA provision(a)
|
2,638
|
8,321
|
||
Captive insurance liability
|
337
|
2,119
|
||
AECL revenue share and waste disposal
|
1,977
|
3,770
|
||
Restructuring provision (Note 15)
|
1,020
|
3,453
|
||
Other(b)
|
22,512
|
57,737
|
||
Accrued liabilities
|
$
|
37,385
|
$
|
80,322
|
11.
|
Long-Term Debt
|
July 31
|
October 31
|
||||
Maturity
|
2013
|
2012
|
|||
Total long-term debt
|
2013 to 2015
|
$
|
42,306
|
$
|
43,331
|
Current portion of long-term debt
|
(4,027)
|
(4,190)
|
|||
Long-term debt
|
$
|
38,279
|
$
|
39,141
|
12.
|
Earnings Per Share
|
Three months ended
July 31
|
Nine months ended
July 31
|
|||||||
(number of shares in thousands)
|
2013
|
2012
|
2013
|
2012
|
||||
Weighted average number of Common shares outstanding – basic
|
61,909
|
61,967
|
61,909
|
62,064
|
||||
Impact of stock options assumed exercised
|
51
|
1
|
-
|
1
|
||||
Weighted average number of Common shares outstanding – diluted
|
61,960
|
61,968
|
61,909
|
62,065
|
||||
Basic and diluted earnings per share
|
$
|
2.91
|
$
|
0.20
|
$
|
2.92
|
$
|
0.24
|
13.
|
Share Capital
|
Common Shares
|
|||
(number of shares in thousands)
|
Number
|
Amount
|
|
Balance as of October 31, 2012
|
61,909
|
$
|
252,168
|
Repurchased and cancelled
|
-
|
-
|
|
Balance as of July 31, 2013
|
61,909
|
$
|
252,168
|
14.
|
Financial Instruments and Financial Risk
|
July 31
|
October 31
|
|||
2013
|
2012
|
|||
Fair Value
|
Fair Value
|
|||
Assets
|
||||
Embedded derivatives(a)
|
$
|
50
|
$
|
10
|
Foreign currency forward contracts under cash flow hedges(b)
|
$
|
159
|
$
|
195
|
Liabilities
|
||||
Embedded derivatives(a)
|
$
|
1,349
|
$
|
814
|
Foreign currency forward contracts under cash flow hedges(b)
|
$
|
402
|
$
|
60
|
Three months ended July 31
|
Nine months ended July 31
|
||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||
Realized loss (gain) on foreign currency forward contracts under cash flow hedges
|
$
|
225
|
$
|
(479)
|
$
|
110
|
$
|
(26)
|
|||
Unrealized loss (gain) on foreign currency forward contracts under cash flow hedges
|
$
|
680
|
$
|
45
|
$
|
488
|
$
|
(214)
|
|||
Realized gain on foreign currency forward contracts not under cash flow hedges
|
$
|
-
|
$
|
207
|
$
|
-
|
$
|
482
|
|||
Unrealized loss (gain) on foreign currency forward contracts not under cash flow hedges
|
$
|
-
|
$
|
(207)
|
$
|
-
|
$
|
79
|
|||
Unrealized loss on embedded derivatives recorded in change in fair value of embedded derivatives
|
$
|
288
|
$
|
1,992
|
$
|
494
|
$
|
8,417
|
As of July 31, 2013
|
||||||||
Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||
Cash equivalents
|
$
|
100
|
$
|
-
|
$
|
-
|
$
|
100
|
Derivative assets (Note 5)
|
$
|
-
|
$
|
50
|
$
|
-
|
$
|
50
|
Derivative liabilities (Note 10(b))
|
$
|
-
|
$
|
1,349
|
$
|
-
|
$
|
1,349
|
As of October 31, 2012
|
||||||||
Description
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||
Cash equivalents
|
$
|
100
|
$
|
-
|
$
|
-
|
$
|
100
|
Derivative assets (Note 5)
|
$
|
-
|
$
|
205
|
$
|
-
|
$
|
205
|
Derivative liabilities (Note 10(b))
|
$
|
-
|
$
|
874
|
$
|
-
|
$
|
874
|
15.
|
Restructuring (Recovery) Charges
|
Expenses
|
Cumulative
Activities
|
Balance
as of
July 31
|
|||||||||||||||
2013
|
2012
|
2011
|
Total
|
Cash
|
Non-Cash
|
2013
|
|||||||||||
Workforce reductions(a)
|
$
|
87
|
$
|
2,557
|
$
|
1,217
|
$
|
3,861
|
$
|
2,775
|
$
|
(66)
|
$
|
1,020
|
|||
Restructuring charges(a)
|
$
|
87
|
$
|
2,557
|
$
|
1,217
|
$
|
3,861
|
$
|
2,775
|
$
|
(66)
|
$
|
1,020
|
16.
|
Other (Income) Expenses, Net
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Research and development
|
$
|
2,078
|
$
|
1,664
|
$
|
6,395
|
$
|
4,652
|
Foreign exchange loss (gain) (a)
|
553
|
(310)
|
(41)
|
(776)
|
||||
Pension settlement loss (Note 21)
|
-
|
-
|
7,003
|
-
|
||||
Settlement of AECL Litigations(b)
|
(24,627)
|
-
|
(24,627)
|
-
|
||||
Other(c)
|
(135)
|
(256)
|
633
|
2,033
|
||||
Other (income) expenses, net
|
$
|
(22,131)
|
$
|
1,098
|
$
|
(10,637)
|
$
|
5,909
|
17.
|
Income Taxes
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Depreciation and amortization
|
$
|
3,071
|
$
|
3,509
|
$
|
9,405
|
$
|
13,847
|
Stock option compensation
|
391
|
388
|
1,223
|
1,159
|
||||
Loss on Celerion note receivable
|
-
|
-
|
218
|
2,411
|
||||
Pension settlement loss
|
-
|
-
|
7,003
|
-
|
||||
Deferred income taxes
|
3,510
|
381
|
3,634
|
(8,009)
|
||||
Change in fair value of embedded derivatives
|
288
|
1,992
|
494
|
8,417
|
||||
Impairment of long lived assets
|
29,201
|
-
|
29,201
|
-
|
||||
Litigation settlement gain
|
(24,627)
|
-
|
(24,627)
|
-
|
||||
Gain on sale of Targeted Therapies
|
(188,870)
|
-
|
(188,870)
|
-
|
||||
Foreign currency transactional loss
|
654
|
(519)
|
2,870
|
3,148
|
||||
Other including foreign currency translation adjustments
|
1,837
|
(3,762)
|
2,049
|
(5,052)
|
||||
$
|
(174,545)
|
$
|
1,989
|
$
|
(157,400)
|
$
|
15,921
|
Three months ended July 31
|
Nine months ended July 31
|
||||||||
2013
|
2012
|
2013
|
2012
|
||||||
Accounts receivable
|
$
|
(13,443)
|
$
|
(14,490)
|
$
|
3,450
|
$
|
(1,255)
|
|
Inventories
|
8,244
|
6,051
|
(5,108)
|
(2,986)
|
|||||
Other current and long term assets
|
(4,450)
|
4,207
|
(310)
|
13,558
|
|||||
Accounts payable and accrued liabilities
|
(7,453)
|
(81)
|
(22,354)
|
(7,987)
|
|||||
Income taxes
|
15,409
|
2,629
|
18,016
|
7,359
|
|||||
Deferred revenue and other long-term obligations
|
(2,473)
|
(668)
|
(6,452)
|
(4,078)
|
|||||
$
|
(4,166)
|
$
|
(2,352)
|
$
|
(12,758)
|
$
|
4,611
|
Risk-free interest rate
|
1.33
|
%
|
|
Expected dividend yield
|
0.00
|
%
|
|
Expected volatility
|
0.38
|
||
Expected time to exercise (years)
|
3.64
|
July 31
|
October 31
|
|||
2013
|
2012
|
|||
Accumulated other comprehensive income, net of income taxes, beginning of period
|
$
|
123,345
|
$
|
164,332
|
Foreign currency translation (loss)
|
(2,649)
|
(2,369)
|
||
Repurchase and cancellation of Common shares
|
-
|
(973)
|
||
Reclassification of realized loss (gain) on derivatives designated as cash flow hedges, net of tax of ($28) and $141, respectively
|
82
|
(420)
|
||
Unrealized (loss) gain on derivatives designated as cash flow hedges, net of tax of $123 and $(160), respectively
|
(365)
|
479
|
||
Pension liability adjustments, net of tax of $1,444 and $12,100, respectively (Note 21)
|
5,747
|
(37,704)
|
||
Accumulated other comprehensive income, net of income taxes, end of period
|
$
|
126,160
|
$
|
123,345
|
21.
|
Employee Benefits
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
973
|
$
|
692
|
$
|
2,969
|
$
|
2,090
|
Interest cost
|
2,951
|
3,176
|
9,004
|
9,569
|
||||
Expected return on plan assets
|
(3,460)
|
(3,820)
|
(10,555)
|
(11,510)
|
||||
Recognized actuarial loss
|
1,230
|
33
|
3,754
|
96
|
||||
Net periodic benefit cost
|
$
|
1,694
|
$
|
81
|
$
|
5,172
|
$
|
245
|
22.
|
Segmented Information
|
Three months ended July 31, 2013
|
||||||||||||||||||||
Sterilization Technologies
|
Medical Isotopes
|
Targeted Therapies
|
Corporate
and Other
|
Total
|
||||||||||||||||
Revenues
|
$
|
36,543
|
$
|
24,032
|
$
|
11,134
|
$
|
-
|
$
|
71,709
|
||||||||||
Direct cost of revenues
|
14,627
|
13,947
|
3,450
|
-
|
32,024
|
|||||||||||||||
Selling, general and administration(a)
|
4,241
|
4,106
|
5,479
|
3,798
|
17,624
|
|||||||||||||||
Other (income) expenses, net(b)
|
(119)
|
64
|
1,661
|
890
|
2,496
|
|||||||||||||||
Segment earnings (loss)
|
$
|
17,794
|
$
|
5,915
|
$
|
544
|
$
|
(4,688)
|
$
|
19,565
|
||||||||||
Depreciation and amortization
|
1,117
|
1,677
|
277
|
-
|
3,071
|
|||||||||||||||
Restructuring charges, net
|
35
|
|||||||||||||||||||
AECL arbitration and legal costs
|
(93)
|
|||||||||||||||||||
Gain on sale of Targeted Therapies business
|
(188,870)
|
|||||||||||||||||||
Impairment of long lived assets
|
29,201
|
|||||||||||||||||||
Litigation settlement gain (Note 10)
|
(24,627)
|
|||||||||||||||||||
Internal investigation costs (Note 23)
|
1,157
|
|||||||||||||||||||
Strategic review costs
|
340
|
|||||||||||||||||||
Change in fair value of embedded derivatives
|
288
|
|||||||||||||||||||
Operating income
|
$
|
199,063
|
(a)
|
excludes internal investigation costs of $1.2 million, strategic review costs of $0.3 million and AECL arbitration and legal costs of ($0.1) million
|
(b)
|
excludes litigation settlement of $24.6 million
|
Three months ended July 31, 2012
|
|||||||||||||||||
Sterilization Technologies
|
Medical Isotopes
|
Targeted Therapies
|
Corporate
and Other
|
Total
|
|||||||||||||
Revenues
|
32,145
|
$
|
21,972
|
$
|
13,024
|
$
|
-
|
$
|
67,141
|
||||||||
Direct cost of revenues
|
14,066
|
12,993
|
3,325
|
-
|
30,384
|
||||||||||||
Selling, general and administration(a)
|
3,539
|
3,625
|
4,371
|
3,516
|
15,051
|
||||||||||||
Other (income) expenses, net
|
137
|
782
|
992
|
(813)
|
1,098
|
||||||||||||
Segment earnings (loss)
|
14,403
|
$
|
4,572
|
$
|
4,336
|
$
|
(2,703)
|
$
|
20,608
|
||||||||
Depreciation and amortization
|
1,096
|
2,207
|
206
|
-
|
3,509
|
||||||||||||
Restructuring recovery, net
|
(46)
|
||||||||||||||||
AECL arbitration and legal costs
|
955
|
||||||||||||||||
Internal investigation costs
|
1,356
|
||||||||||||||||
Change in fair value of embedded derivatives
|
1,992
|
||||||||||||||||
Operating income
|
$
|
12,842
|
(a)
|
excludes AECL arbitration and legal costs of $1.0 million and internal investigation costs of $1.4 million
|
Nine months ended July 31, 2013
|
||||||||||||||
Sterilization Technologies
|
Medical Isotopes
|
Targeted Therapies
|
Corporate
and Other
|
Total
|
||||||||||
Revenues
|
$
|
73,167
|
$
|
71,973
|
$
|
36,322
|
$
|
-
|
$
|
181,462
|
||||
Direct cost of revenues
|
32,475
|
40,566
|
10,999
|
-
|
84,040
|
|||||||||
Selling, general and administration(a)
|
12,988
|
12,866
|
16,827
|
9,384
|
52,065
|
|||||||||
Other (income) expenses, net(b)
|
(21)
|
513
|
5,460
|
331
|
6,283
|
|||||||||
Segment earnings (loss)
|
$
|
27,725
|
$
|
18,028
|
$
|
3,036
|
$
|
(9,715)
|
$
|
39,074
|
||||
Depreciation and amortization
|
2,775
|
5,606
|
1,024
|
-
|
9,405
|
|||||||||
Restructuring charges, net
|
87
|
|||||||||||||
AECL arbitration and legal costs
|
540
|
|||||||||||||
Gain on sale of Targeted Therapies business
|
(188,870)
|
|||||||||||||
Impairment of long lived assets
|
29,201
|
|||||||||||||
Litigation settlement gain (Note 10 and 24)
|
(23,327)
|
|||||||||||||
Loss on Celerion note receivable (Note 9(b))
|
218
|
|||||||||||||
Pension settlement loss (Note 21)
|
7,003
|
|||||||||||||
Recovery from previously written off investments
|
(814)
|
|||||||||||||
Internal investigation costs (Note 23)
|
9,791
|
|||||||||||||
Strategic review costs
|
956
|
|||||||||||||
Change in fair value of embedded derivatives
|
494
|
|||||||||||||
Operating income
|
$
|
194,390
|
(a)
|
excludes internal investigation costs of $9.8 million, strategic review costs of $1.0 million and AECL arbitration and legal costs of $0.5 million
|
(b)
|
excludes litigation settlement gain of $23.3 million, pension settlement loss of $7.0 million, loss on Celerion note receivable of $0.2 million and recovery from previously written off investments of $0.8 million
|
Nine months ended July 31, 2012
|
||||||||||||||||||
Sterilization Technologies
|
Medical Isotopes
|
Targeted Therapies
|
Corporate
and Other
|
Total
|
||||||||||||||
Revenues
|
63,123
|
$
|
70,618
|
$
|
36,428
|
$
|
-
|
$
|
170,169
|
|||||||||
Direct cost of revenues
|
29,900
|
39,852
|
10,676
|
-
|
80,428
|
|||||||||||||
Selling, general and administration(a)
|
10,635
|
10,704
|
11,725
|
8,794
|
41,858
|
|||||||||||||
Other (income) expenses, net(b)
|
227
|
1,874
|
2,758
|
(1,361)
|
3,498
|
|||||||||||||
Segment earnings (loss)
|
22,361
|
$
|
18,188
|
$
|
11,269
|
$
|
(7,433)
|
$
|
44,385
|
|||||||||
Depreciation and amortization
|
4,105
|
8,340
|
1,402
|
-
|
13,847
|
|||||||||||||
Restructuring recovery, net
|
(699)
|
|||||||||||||||||
AECL arbitration and legal costs
|
4,774
|
|||||||||||||||||
Loss on Celerion note receivable
|
2,411
|
|||||||||||||||||
Internal investigation costs
|
1,356
|
|||||||||||||||||
Change in fair value of embedded derivatives
|
8,417
|
|||||||||||||||||
Operating income
|
$
|
14,279
|
(a)
|
excludes AECL arbitration and legal costs of $4.8 million and internal investigation costs of $1.4 million
|
(b)
|
excludes loss on Celerion note receivable of $2.4 million
|
23.
|
Commitments and Contingencies
|
24.
|
Litigation
|
25.
|
Subsequent Events
|
26.
|
Comparative Figures
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||
(thousands of U.S. dollars, except per share amounts)
|
2013
|
2012
|
2013
|
2012
|
||||
Revenues
|
||||||||
Sterilization Technologies
|
||||||||
Cobalt
|
35,375
|
31,841
|
70,843
|
61,382
|
||||
Sterilization - Other
|
1,168
|
304
|
2,324
|
1,741
|
||||
36,543
|
32,145
|
73,167
|
63,123
|
|||||
Medical Isotopes
|
||||||||
Reactor
|
16,115
|
14,496
|
53,671
|
52,617
|
||||
Cyclotron
|
5,411
|
5,203
|
12,085
|
11,911
|
||||
Contract Manufacturing
|
2,506
|
2,273
|
6,217
|
6,090
|
||||
24,032
|
21,972
|
71,973
|
70,618
|
|||||
Targeted Therapies
|
||||||||
TheraSphere
|
$
|
11,134
|
$
|
13,024
|
$
|
36,322
|
$
|
36,428
|
Consolidated segment revenues
|
$
|
71,709
|
$
|
67,141
|
$
|
181,462
|
$
|
170,169
|
Segment earnings (loss)
|
||||||||
Sterilization Technologies
|
17,794
|
14,403
|
27,725
|
22,361
|
||||
Medical Isotopes
|
5,915
|
4,572
|
18,028
|
18,188
|
||||
Targeted Therapies
|
$
|
544
|
$
|
4,336
|
$
|
3,036
|
$
|
11,269
|
Corporate and Other
|
(4,688)
|
(2,703)
|
(9,715)
|
(7,433)
|
||||
Total segment earnings
|
$
|
19,565
|
$
|
20,608
|
$
|
39,074
|
$
|
44,385
|
Depreciation and amortization
|
3,071
|
3,509
|
9,405
|
13,847
|
||||
Restructuring (recovery) charges
|
35
|
(46)
|
87
|
(699)
|
||||
AECL arbitration and legal costs
|
(93)
|
955
|
540
|
4,774
|
||||
Internal investigation costs
|
1,157
|
1,356
|
9,791
|
1,356
|
||||
Strategic review costs
|
340
|
-
|
956
|
-
|
||||
Gain on sale of Targeted Therapies
|
(188,870)
|
-
|
(188,870)
|
-
|
||||
Impairment of long lived assets
|
29,201
|
-
|
29,201
|
-
|
||||
Litigation settlement gain
|
(24,627)
|
(23,327)
|
||||||
Pension settlement loss
|
-
|
-
|
7,003
|
-
|
||||
Loss on Celerion note receivable
|
-
|
-
|
218
|
2,411
|
||||
Recovery from previously written off investments
|
-
|
-
|
(814)
|
-
|
||||
Change in fair value of embedded derivatives
|
288
|
1,992
|
494
|
8,417
|
||||
Consolidated operating income
|
$
|
199,063
|
$
|
12,842
|
$
|
194,390
|
$
|
14,279
|
Basic earnings per share
|
$
|
2.91
|
$
|
0.20
|
$
|
2.92
|
$
|
0.24
|
Cash and cash equivalents
|
$
|
281,947
|
$
|
81,896
|
$
|
281,947
|
$
|
81,896
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||||||
(thousands of U.S. dollars)
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
||||
Revenues
|
$
|
71,709
|
100%
|
$
|
67,141
|
100%
|
$
|
181,462
|
100%
|
$
|
170,169
|
100%
|
Costs and expenses
|
||||||||||||
Direct cost of revenues
|
32,024
|
45%
|
30,384
|
45%
|
84,040
|
46%
|
80,428
|
47%
|
||||
Selling, general and
administration
|
19,028
|
26%
|
17,362
|
26%
|
63,352
|
35%
|
47,988
|
28%
|
||||
Depreciation and
amortization
|
3,071
|
4%
|
3,509
|
5%
|
9,405
|
5%
|
13,847
|
8%
|
||||
Restructuring charges (recovery), net
|
35
|
-
|
(46)
|
-
|
87
|
-
|
(699)
|
-
|
||||
Change in fair value of embedded derivatives
|
288
|
-
|
1,992
|
3%
|
494
|
-
|
8,417
|
5%
|
||||
Gain on sale of Targeted Therapies
|
(188,870)
|
(263%)
|
(188,870)
|
(104%)
|
||||||||
Impairment of long lived assets
|
29,201
|
41%
|
29,201
|
16%
|
||||||||
Other (income) expenses, net
|
(22,131)
|
(31%)
|
1,098
|
2%
|
(10,637)
|
(6%)
|
5,909
|
4%
|
||||
Operating income
|
$
|
199,063
|
278%
|
$
|
12,842
|
19%
|
$
|
194,390
|
107%
|
$
|
14,279
|
8%
|
Interest expense
|
(896)
|
(1%)
|
(1,197)
|
(2%)
|
(3,112)
|
(2%)
|
(3,489)
|
(2%)
|
||||
Interest income
|
1,070
|
1%
|
1,335
|
2%
|
3,924
|
2%
|
4,610
|
3%
|
||||
Income tax expense
|
(18,813)
|
(26%)
|
(678)
|
(1%)
|
(14,316)
|
(8%)
|
(764)
|
-
|
||||
Net income
|
$
|
180,424
|
252%
|
$
|
12,302
|
18%
|
$
|
180,886
|
99%
|
$
|
14,636
|
9%
|
Gross margin
|
55%
|
55%
|
54%
|
53%
|
||||||||
Capital expenditures
|
$
|
470
|
$
|
1,172
|
$
|
1,423
|
$
|
5,828
|
||||
Total assets
|
$
|
550,360
|
$
|
435,365
|
$
|
550,360
|
$
|
435,365
|
||||
Long term financial
obligations
|
$
|
42,306
|
$
|
44,453
|
$
|
42,306
|
$
|
44,453
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||||||
(thousands of U.S. dollars)
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
||||
Revenues
|
||||||||||||
Cobalt
|
$
|
35,375
|
97%
|
$
|
31,841
|
99%
|
$
|
70,843
|
97%
|
$
|
61,382
|
97%
|
Sterilization - Other
|
1,168
|
3%
|
304
|
1%
|
2,324
|
3%
|
1,741
|
3%
|
||||
36,543
|
100%
|
32,145
|
100%
|
73,167
|
100%
|
63,123
|
100%
|
|||||
Costs and expenses
|
||||||||||||
Direct cost of revenues
|
14,627
|
40%
|
14,066
|
44%
|
32,475
|
44%
|
29,900
|
47%
|
||||
Selling, general and administration
|
4,241
|
12%
|
3,539
|
11%
|
12,988
|
18%
|
10,635
|
16%
|
||||
Other (income) expenses, net
|
(119)
|
-
|
137
|
-
|
(21)
|
-
|
227
|
-
|
||||
Segment earnings
|
$
|
17,794
|
48%
|
$
|
14,403
|
45%
|
$
|
27,725
|
38%
|
$
|
22,361
|
35%
|
Three months ended July 31
|
Nine months ended July 31
|
||||||||||||
(thousands of U.S. dollars)
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
|||||
Revenues
|
|||||||||||||
Reactor
|
$
|
16,115
|
67%
|
$
|
14,496
|
66%
|
$
|
53,671
|
74%
|
$
|
52,617
|
74%
|
|
Cyclotron
|
5,411
|
23%
|
5,203
|
24%
|
12,085
|
17%
|
11,911
|
17%
|
|||||
Contract Manufacturing
|
2,506
|
10%
|
2,273
|
10%
|
6,217
|
9%
|
6,090
|
9%
|
|||||
24,032
|
100%
|
21,972
|
100%
|
71,973
|
100%
|
70,618
|
100%
|
||||||
Costs and expenses
|
|||||||||||||
Direct cost of revenues
|
13,947
|
58%
|
12,993
|
59%
|
40,566
|
56%
|
39,852
|
56%
|
|||||
Selling, general and administration(a)
|
4,106
|
17%
|
3,625
|
16%
|
12,866
|
18%
|
10,704
|
15%
|
|||||
Other (income) expenses, net
|
64
|
-
|
782
|
4%
|
513
|
1%
|
1,874
|
3%
|
|||||
Segment earnings
|
$
|
5,915
|
25%
|
$
|
4,572
|
21%
|
$
|
18,028
|
25%
|
$
|
18,188
|
26%
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||||||
(thousands of U.S. dollars)
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
2013
|
% of
revenues
|
2012
|
% of
revenues
|
||||
Revenues
|
||||||||||||
TheraSphere
|
$
|
11,134
|
100%
|
$
|
13,024
|
100%
|
$
|
36,322
|
100%
|
$
|
36,428
|
100%
|
Costs and expenses
|
||||||||||||
Direct cost of revenues
|
3,450
|
31%
|
3,325
|
26%
|
10,999
|
30%
|
10,676
|
29%
|
||||
Selling, general and administration
|
5,479
|
49%
|
4,371
|
34%
|
16,827
|
46%
|
11,725
|
32%
|
||||
Other (income) expenses, net
|
1,661
|
15%
|
992
|
8%
|
5,460
|
15%
|
2,758
|
8%
|
||||
Segment earnings
|
$
|
544
|
5%
|
$
|
4,336
|
33%
|
$
|
3,036
|
8%
|
$
|
11,269
|
31%
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||
(thousands of U.S. dollars)
|
2013
|
2012
|
2013
|
2012
|
||||
Costs and expenses
|
||||||||
Selling, general and administration(a)
|
$
|
3,798
|
$
|
3,516
|
$
|
9,384
|
$
|
8,794
|
Other (income) expenses, net(b)
|
890
|
(813)
|
331
|
(1,361)
|
||||
Segment loss
|
$
|
(4,688)
|
$
|
(2,703)
|
$
|
(9,715)
|
$
|
(7,433)
|
(thousands of U.S. dollars, except per share amounts)
|
Trailing four
quarters
|
July 31
2013
|
April 30 2013
|
January 31
2013
|
October 31
2012
|
|||||
Revenues
|
||||||||||
Cobalt
|
101,863
|
35,375
|
20,100
|
15,368
|
31,020
|
|||||
Sterilization-other
|
3,615
|
1,168
|
94
|
1,062
|
1,291
|
|||||
Sterilization Technologies
|
105,478
|
36,543
|
20,194
|
16,430
|
32,311
|
|||||
Reactor
|
78,464
|
16,115
|
17,150
|
20,406
|
24,793
|
|||||
Cyclotron
|
15,652
|
5,411
|
3,820
|
2,854
|
3,567
|
|||||
Contract Manufacturing
|
8,194
|
2,506
|
1,775
|
1,936
|
1,977
|
|||||
Medical Isotopes
|
102,310
|
24,032
|
22,745
|
25,196
|
30,337
|
|||||
TheraSphere
|
$
|
48,345
|
$
|
11,134
|
$
|
13,150
|
$
|
12,038
|
$
|
12,023
|
Targeted Therapies
|
48,345
|
11,134
|
13,150
|
12,038
|
12,023
|
|||||
$
|
256,133
|
$
|
71,709
|
$
|
56,089
|
$
|
53,664
|
$
|
74,671
|
|
Segment earnings (loss)
|
||||||||||
Sterilization Technologies
|
44,401
|
17,794
|
6,415
|
3,516
|
16,676
|
|||||
Medical Isotopes
|
29,279
|
5,915
|
5,174
|
6,939
|
11,251
|
|||||
Targeted Therapies
|
5,845
|
544
|
1,062
|
1,430
|
2,809
|
|||||
Corporate and Other
|
(10,988)
|
(4,688)
|
(2,210)
|
(2,817)
|
(1,273)
|
|||||
$
|
68,537
|
$
|
19,565
|
$
|
10,441
|
$
|
9,068
|
$
|
29,463
|
|
Net income (loss)
|
$
|
137,381
|
$
|
180,424
|
$
|
731
|
$
|
(269)
|
$
|
(43,505)
|
Basic and diluted earnings (loss) per share
|
$
|
2.22
|
$
|
2.91
|
$
|
0.01
|
$
|
-
|
$
|
(0.70)
|
(thousands of U.S. dollars, except per share amounts)
|
Trailing four
quarters
|
July 31
2012
|
April 30
2012
|
January 31
2012
|
October 31
2011
|
|||||
Revenues from continuing operations
|
||||||||||
Cobalt
|
89,507
|
31,841
|
13,860
|
15,681
|
28,125
|
|||||
Sterilization-other
|
6,083
|
304
|
982
|
455
|
4,342
|
|||||
Sterilization Technologies
|
95,590
|
32,145
|
14,842
|
16,136
|
32,467
|
|||||
Reactor
|
74,533
|
14,496
|
17,179
|
20,942
|
21,916
|
|||||
Cyclotron
|
15,161
|
5,203
|
3,610
|
3,098
|
3,250
|
|||||
Contract Manufacturing
|
11,573
|
2,273
|
1,990
|
1,827
|
5,483
|
|||||
Medical Isotopes
|
101,267
|
21,972
|
22,779
|
25,867
|
30,649
|
|||||
TheraSphere
|
$
|
47,312
|
$
|
13,024
|
$
|
12,392
|
$
|
11,012
|
$
|
10,884
|
Targeted Therapies
|
47,312
|
13,024
|
12,392
|
11,012
|
10,884
|
|||||
$
|
244,169
|
$
|
67,141
|
$
|
50,013
|
$
|
53,015
|
$
|
74,000
|
|
Segment earnings (loss)
|
||||||||||
Sterilization Technologies
|
36,841
|
14,403
|
3,504
|
4,454
|
14,480
|
|||||
Medical Isotopes
|
29,599
|
4,572
|
5,905
|
7,711
|
11,411
|
|||||
Targeted Therapies
|
13,465
|
4,336
|
3,820
|
3,113
|
2,196
|
|||||
Corporate and Other
|
(7,760)
|
(2,703)
|
(2,815)
|
(1,915)
|
(327)
|
|||||
$
|
72,145
|
$
|
20,608
|
$
|
10,414
|
$
|
13,363
|
$
|
27,760
|
|
Income from continuing operations
|
$
|
21,135
|
$
|
12,302
|
$
|
3,221
|
$
|
(887)
|
$
|
6,499
|
(Loss) income from discontinued operations,
net of income taxes
|
402
|
-
|
-
|
-
|
402
|
|||||
Net income (loss)
|
$
|
21,537
|
$
|
12,302
|
$
|
3,221
|
$
|
(887)
|
$
|
6,901
|
Basic and diluted (loss) earnings per share
|
||||||||||
- from continuing operations
|
$
|
0.34
|
$
|
0.20
|
$
|
0.05
|
$
|
(0.01)
|
$
|
0.10
|
- from discontinued operations
|
0.01
|
-
|
-
|
-
|
0.01
|
|||||
Basic and diluted (loss) earnings per share
|
$
|
0.35
|
$
|
0.20
|
$
|
0.05
|
$
|
(0.01)
|
$
|
0.11
|
·
|
Results for the quarter ended October 31, 2012 included a $3.6 million embedded derivative loss driven by changes in our estimate for the notional supply amount and fluctuations in the foreign exchange rate; and a $2.5 million restructuring charge primarily due to our strategic realignment.
|
·
|
Results for the quarter ended January 31, 2012 included a $6.3 million embedded derivative loss driven by changes in our estimate for the notional supply amount and fluctuations in the foreign exchange rate; and a $2.4 million loss on Celerion note receivable.
|
·
|
Results for the quarter ended October 31, 2011 included a $13 million embedded derivative loss driven by changes in our estimate for the notional supply amount and fluctuations in the foreign exchange rate; and $1.0 million in restructuring charges.
|
Three months ended July 31
|
Nine months ended July 31
|
|||||||
(thousands of U.S. dollars)
|
2013
|
2012
|
2013
|
2012
|
||||
Cash provided by operating activities
|
$
|
1,713
|
$
|
11,939
|
$
|
10,728
|
$
|
35,168
|
Cash provided by (used in) investing activities
|
200,262
|
(377)
|
163,982
|
(4,567)
|
||||
Cash used in financing activities
|
-
|
(6,366)
|
-
|
(22,323)
|
||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(1,562)
|
(1,100)
|
(2,123)
|
(449)
|
||||
Net increase in cash and cash equivalents during the period
|
$
|
200,413
|
$
|
4,096
|
$
|
172,587
|
$
|
7,829
|
·
|
$3.4 million in internal investigation costs;
|
·
|
$3.1 million in pension plan solvency funding and current service contributions; and
|
·
|
$1.1 million in tax payouts;
|
(thousands of U.S. dollars)
|
July 31
2013
|
October 31
2012
|
Change
|
||
Cash and cash equivalents
|
$
|
281,947
|
$
|
109,360
|
158%
|
Current ratio
|
6.1
|
2.0
|
205%
|
·
|
augmenting technical accounting and tax resources with external support from professional accounting firms other than our independent registered public accounting firm;
|
·
|
the hiring of additional tax specialists into our tax group;
|
·
|
the development and implementation of a plan to review the historical tax positions and exposures for all legal entities in a complete and effective manner and in light of a lower reporting materiality;
|
·
|
working with various taxation authorities to expedite their audits of our open tax years;
|
·
|
the consideration of enhancements to the level of automation in our tax accounting and working paper preparation; and,
|
·
|
further strengthening of the design of internal controls over complex and non-routine transactions.
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together the “interim filings”) of Nordion Inc., (the “issuer”) for the interim period ended July 31, 2013;
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings
|
4.
|
Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings
|
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time period specified in securities legislation; and
|
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2
|
ICFR -- material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period
|
(c)
|
the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.
|
|
|
5.3
|
Limitation on scope of design: N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on May 1, 2013 and ended on July 31, 2013 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|
Date: September 4, 2013
|
_/s/ Steve West_____________
Steve West
Chief Executive Officer
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together the “interim filings”) of Nordion Inc., (the “issuer”) for the interim period ended July 31, 2013;
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings
|
4.
|
Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings
|
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time period specified in securities legislation; and
|
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2
|
ICFR -- material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period
|
(c)
|
the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.
|
|
|
5.3
|
Limitation on scope of design: N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on May 1, 2013 and ended on July 31, 2013 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|
Date: September 4, 2013
|
__/s/ Peter Dans_________________
G. Peter Dans
Chief Financial Officer
|
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