<\/p>\n
Procaps Group Reports Record Second Quarter 2021 Financial Results<\/b><\/p>\n
Second Quarter 2021 Net Revenues Increased 35% to $97 Million Year-Over-Year with Adjusted EBITDA Up 28% Year-Over-Year <\/i><\/p>\n
Company Reaffirms Revenue and Adjusted EBITDA Growth Trajectory for Full Year 2021<\/i><\/p>\n
BARRANQUILLA, Colombia–(BUSINESS WIRE<\/a>)– Key Second Quarter 2021 Financial Highlights<\/i><\/b><\/p>\n Key Financial Highlights for the Six Months Ended June 30, 2021 <\/b><\/p>\n Management Commentary<\/i><\/b><\/p>\n \n\u201cOur strong financial and operational performance continued in the second quarter of 2021, with net revenue growth of 35% year-over-year,\u201d said Ruben Minski, Procaps Founder, Chairman and Chief Executive Officer. \u201cRapid ramp-up of new product launches, continued roll-out of products into new geographic areas and measured improvements to our inventory rotations contributed to double-digit revenue growth in four out of five of our business units leading to an increase of over 28% in Adjusted EBITDA for the second quarter of 2021 when compared to the first quarter of 2020.\n<\/p>\n \n\u201cOf note, our Procaps Colombia and CASAND business units had the highest growth among our business units as a result of increased demand across the board for a variety of products, including both Rx and OTC products, and new product launches.\n<\/p>\n \n\u201cLikewise, our Diabetrics business unit experienced similar growth in the second quarter of 2021 compared to the previous quarter, benefiting from increased sales from the launch of a new insulin product. In addition, our Clinical Specialties business unit demonstrated growth in sales due to higher demand for anesthetic products from intensive care units in hospitals.\n<\/p>\n \n\u201cAs we look to further our growth initiatives, in our B2B segment, we expect to see growth from both our existing portfolio and product pipeline, with an estimate of over 600 product launches in the next three years. In our B2C segment, we are looking at growth initiatives from our existing portfolio and from new products focused on current therapeutic areas, such as chronic diseases, pain relief, immunology, cardiology, respiratory and dermatology, and the internationalization of our existing portfolio, with on-going efforts to expand our footprint of successful products outside of Colombia.\n<\/p>\n \n\u201cOur internationalization strategy and growth in new markets continues to be one of our primary focuses, highlighted by the recent meeting I participated in as part of the delegation led by the Colombian Vice President and Foreign Minister Marta Luc\u00eda Ram\u00edrez, comprised of a group of government and private-sector officials, with American business and public policy leaders to strengthen commercial ties, investor confidence and relations between Colombia and the United States, which we believe will be a strong driver for sustainable development and long-term growth,\u201d continued Minski.\n<\/p>\n 2021 Financial Guidance <\/b><\/p>\n \n\u201cIn summary, we experienced significant momentum in the first half of 2021, and we intend to continue to invest in working capital to help support future growth across our business units. Furthermore, since product launches typically occur within the first half of the year and as we work diligently to promote these product launches (particularly in our Rx segments), we expect that the results from such product launches will be reflected in the second half of the year. For these reasons, among others, including the improved buying patterns from many of our distributors, we believe we will continue to maintain our strong momentum into the second half of the year. As a result, we reaffirm our full year 2021 guidance of net revenues of approximately $400 million and Adjusted EBITDA of approximately $105 million.\n<\/p>\n \n\u201cFinally, on March 31, 2021, we announced the execution of a definitive business combination agreement with Union Acquisition Corp. II (NASDAQ: LATN), a special purpose acquisition company and Procaps Group along with a fully committed $100 million PIPE financing investment. I am happy to report that everything remains on track, and we expect the business combination to close and listing on the Nasdaq Capital Market to begin at the end of September 2021.\n<\/p>\n \n\u201cToday, we encompass a proprietary, innovative portfolio of branded Rx and OTC products and services sold, distributed and provided to over 50 markets. As we look out over the next 12 months and beyond, we will continue to strategically position Procaps to achieve our near-term and mid-term goals, as well as our growth objectives. We look forward to sharing more next week at our first investor and analyst day introducing select senior leadership team members, along with key strategic growth initiatives,\u201d concluded Minski.\n<\/p>\n Key Second Quarter 2021 Operational Highlights<\/i><\/b><\/p>\n Expected Milestones to Completion of Business Combination Include:<\/i><\/p>\n Product Development and Intellectual Property<\/i><\/p>\n Commercialization<\/i><\/p>\n Growth Strategy<\/i><\/p>\n Team<\/i><\/p>\n Environmental, Social & Governance (ESG)<\/i><\/p>\n Second Quarter 2021 Financial Results<\/i><\/b><\/p>\n \nNet revenues for the second quarter of 2021 totaled $97.0 million, compared to net revenues of $71.9 million for the second quarter of 2020, representing a growth of 35% year-over-year. Net revenue by strategic business unit (\u201cSBU\u201d) is shown below.\n<\/p>\n Net Revenue by SBU for US$mm<\/b><\/p>\n<\/td>\n 2020<\/b><\/p>\n<\/td>\n 2021<\/b><\/p>\n<\/td>\n % \na.\n<\/p>\n<\/td>\n \nProcaps Colombia\n<\/p>\n<\/td>\n \n$24.3\n<\/p>\n<\/td>\n \n$41.0\n<\/p>\n<\/td>\n 69%<\/b><\/p>\n<\/td>\n<\/tr>\n \nb.\n<\/p>\n<\/td>\n \nNextgel\n<\/p>\n<\/td>\n \n24.6\n<\/p>\n<\/td>\n \n26.8\n<\/p>\n<\/td>\n 9%<\/b><\/p>\n<\/td>\n<\/tr>\n \nc.\n<\/p>\n<\/td>\n \nCAN\n<\/p>\n<\/td>\n \n11.2\n<\/p>\n<\/td>\n \n10.8\n<\/p>\n<\/td>\n -4%<\/b><\/p>\n<\/td>\n<\/tr>\n \nd.\n<\/p>\n<\/td>\n \nCASAND\n<\/p>\n<\/td>\n \n6.6\n<\/p>\n<\/td>\n \n11.7\n<\/p>\n<\/td>\n 78%<\/b><\/p>\n<\/td>\n<\/tr>\n \ne.\n<\/p>\n<\/td>\n \nDiabetrics\n<\/p>\n<\/td>\n \n5.3\n<\/p>\n<\/td>\n \n6.7\n<\/p>\n<\/td>\n 27%<\/b><\/p>\n<\/td>\n<\/tr>\n Total<\/b><\/p>\n<\/td>\n \n$71.9\n<\/p>\n<\/td>\n \n$97.0\n<\/p>\n<\/td>\n 35%<\/b><\/p>\n<\/td>\n<\/tr>\n Net Revenue by SBU for US$mm<\/b><\/p>\n<\/td>\n 2020<\/b><\/p>\n<\/td>\n 2021<\/b><\/p>\n<\/td>\n % \na.\n<\/p>\n<\/td>\n \nProcaps Colombia\n<\/p>\n<\/td>\n \n$43.0\n<\/p>\n<\/td>\n \n$67.9\n<\/p>\n<\/td>\n 58%<\/b><\/p>\n<\/td>\n<\/tr>\n \nb.\n<\/p>\n<\/td>\n \nNextgel\n<\/p>\n<\/td>\n \n44.5\n<\/p>\n<\/td>\n \n53.9\n<\/p>\n<\/td>\n 21%<\/b><\/p>\n<\/td>\n<\/tr>\n \nc.\n<\/p>\n<\/td>\n \nCAN\n<\/p>\n<\/td>\n \n18.7\n<\/p>\n<\/td>\n \n19.2\n<\/p>\n<\/td>\n 3%<\/b><\/p>\n<\/td>\n<\/tr>\n \nd.\n<\/p>\n<\/td>\n \nCASAND\n<\/p>\n<\/td>\n \n14.8\n<\/p>\n<\/td>\n \n23.6\n<\/p>\n<\/td>\n 60%<\/b><\/p>\n<\/td>\n<\/tr>\n \ne.\n<\/p>\n<\/td>\n \nDiabetrics\n<\/p>\n<\/td>\n \n10.1\n<\/p>\n<\/td>\n \n12.9\n<\/p>\n<\/td>\n 28%<\/b><\/p>\n<\/td>\n<\/tr>\n Total<\/b><\/p>\n<\/td>\n \n$131.0\n<\/p>\n<\/td>\n \n$177.5\n<\/p>\n<\/td>\n 35%<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nThe increase in net revenue was attributed to growth across all SBUs.\n<\/p>\n \nGross profit increased by 33% to $56.1 million for the second quarter of 2021, compared to $42.3 million for the second quarter of 2020. The increase in gross profit for the second quarter of 2021 was primarily attributable to strong topline growth.\n<\/p>\n \nTotal operating expenses increased by 51% to $44.4 million for the second quarter of 2021, compared to $29.4 million for the second quarter of 2020. The increase in operating expenses was partly related to transaction-related expenses of approximately $5.5 million incurred in the quarter.\n<\/p>\n \nAdjusted EBITDA increased by 28% to $23.9 million for the second quarter of 2021, compared to $18.6 million for the second quarter of 2020. This increase was driven by strong demand across our CDMO, branded Rx and OTC businesses from both our existing products as well as from our continued rollout of new product launches.\n<\/p>\n \nSee below under the heading \u201cUse of Non-IFRS Financial Information\u201d for a discussion of Adjusted EBITDA and a reconciliation of net income, which the Company believes is the most comparable IFRS measure, to Adjusted EBITDA.\n<\/p>\n \nTotal net debtas of June 30, 2021 totaled $214 million, of which approximately 59% consisted of long-term obligations. Net Debt-to-LTM Adjusted EBITDA ratio as of June 30, 2021 was 2.2x.\n<\/p>\n Use of Non-IFRS Financial Measures <\/b><\/p>\n \nOur management uses and discloses EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA, LTM Adjusted EBITDA margin and Net Debt-to-LTM Adjusted EBITDA ratio, which are non-IFRS financial information to assess our operating performance across periods and for business planning purposes. We believe the presentation of these non-IFRS financial measures is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provide additional insight and transparency on how we evaluate our business. These non-IFRS measures are not meant to be considered in isolation or as a substitute for financial information presented in accordance with International Financial Reporting Standards (\u201cIFRS\u201d) issued by the International Accounting Standards Board and should be viewed as supplemental and in addition to our financial information presented in accordance with IFRS.\n<\/p>\n \nWe define EBITDA as profit (loss) for the period before interest expense, net, income tax expense and depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to exclude certain isolated costs incurred as a result of the COVID-19 pandemic, transaction expenses related to the business combination with Union Acquisition Corp. II, certain costs related to business transformation initiatives, certain foreign currency translation adjustments and certain other finance costs adjustments. We also report Adjusted EBITDA as a percentage of net revenue as an additional measure so investors may evaluate our Adjusted EBITDA margins. None of EBITDA, Adjusted EBITDA or Adjusted EBITDA margin are presented in accordance with generally accepted accounting principles (\u201cGAAP\u201d) or IFRS and are non-IFRS financial measures.\n<\/p>\n \nWe use EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA and Net Debt-to-LTM Adjusted EBITDA ratio for operational and financial decision-making and believe these measures are useful in evaluating our performance because they eliminate certain items that we do not consider indicators of our operating performance. EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA and Net Debt-to-Adjusted EBITDA ratio are also used by many of our investors and other interested parties in evaluating our operational and financial performance across reporting periods. We believe that the presentation of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA and Net Debt-to-LTM Adjusted EBITDA ratio provides useful information to investors by allowing an understanding of key measures that we use internally for operational decision-making, budgeting, evaluating acquisition targets, and assessing our operating performance.\n<\/p>\n \nEBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA and Net Debt-to-LTM Adjusted EBITDA ratio are not recognized terms under IFRS and should not be considered as a substitute for net income (loss), cash flows from operating activities, or other income or cash flow statement data. These measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under IFRS. We strongly encourage investors to review our financial statements in their entirety and not to rely on any single financial measure.\n<\/p>\n \nBecause non-IFRS financial measures are not standardized, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, LTM Adjusted EBITDA and Net Debt-to-LTM Adjusted EBITDA ratio, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use these non-IFRS financial measures with those used by other companies.\n<\/p>\n \nThe following table contains a reconciliation of profit for the period to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin for the periods presented. The Company is unable to present a reconciliation of its second quarter 2021 net revenue and Adjusted EBITDA guidance because management cannot reliably predict all of the necessary components of such measures. Accordingly, investors are cautioned not to place undue reliance on this information.\n<\/p>\n Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin<\/b><\/p>\n<\/td>\n<\/tr>\n for the Three Months Ended June 30, 2020 and 2021<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n Three Months Ended June 30<\/b><\/p>\n<\/td>\n % Change<\/b><\/p>\n<\/td>\n<\/tr>\n Unaudited Financial Information<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 2020<\/b><\/p>\n<\/td>\n 2021<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (in millions of U.S. dollars except percentages)<\/b><\/p>\n<\/td>\n<\/tr>\n Profit (loss) for the period<\/b><\/p>\n<\/td>\n (1.5<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n (3.6<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n \n(132\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nInterest expense, net\n<\/p>\n<\/td>\n \n13.5\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13.8\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n \nIncome tax expense\n<\/p>\n<\/td>\n \n0.6\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n0.4\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(37\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nDepreciation and amortization\n<\/p>\n<\/td>\n \n3.6\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n5.6\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n56\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n EBITDA<\/b><\/p>\n<\/td>\n 16.1<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 16.2<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n —<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nCOVID-19 impact adjustments(1)<\/sup><\/p>\n<\/td>\n \n1.6\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n0.7\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(60\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nTransaction-related expenses(2)<\/sup><\/p>\n<\/td>\n \n—\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n5.5\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \nNA\n<\/p>\n<\/td>\n \nBusiness transformation initiatives(3)<\/sup><\/p>\n<\/td>\n \n0.8\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n—\n<\/p>\n<\/td>\n \n(100\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nForeign currency translation adjustments(4)<\/sup><\/p>\n<\/td>\n \n(0.9\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n1.4\n<\/p>\n<\/td>\n \nNA\n<\/p>\n<\/td>\n \nOther finance costs adjustments(5)<\/sup><\/p>\n<\/td>\n \n1.0\n<\/p>\n<\/td>\n \n0.1\n<\/p>\n<\/td>\n \n(85\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n Adjusted EBITDA<\/b><\/p>\n<\/td>\n 18.6<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 23.9<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 28<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n<\/tr>\n Adjusted EBITDA margin<\/b><\/p>\n<\/td>\n 25.9<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n 24.6<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n(1)\n<\/p>\n<\/td>\n \nCOVID-19 impact adjustments primarily include: (i) expenses incurred for safety pre-cautions during the pandemic, such as office and production infrastructure adaptation to practice social distancing, as well as vaccinations for employees, in order to maintain a safe work and production environment for the employees, (ii) operating and production expenses incurred in connection with hiring of additional employees and costs paid to third party agencies for such hiring, contractors and production sub-contractors in order to mitigate any decrease in production and operating capabilities of Procaps as a result of employees absenteeism or attrition as a result of the COVID-19 pandemic, (iii) expense incurred for certain logistic arrangements to minimize Procaps employees\u2019 exposure to COVID-19 through arranging transportation from home to work, lodgings, face masks and PPE, (iv) additional costs incurred to acquire certain raw materials that are essential to production due to the lockdowns of suppliers\u2019 factories and ports of entry worldwide, and additional logistic costs due to delays, (v) expenses of certain one-time financial discounts that Procaps provided to its customers, such as medicine distributors, during the COVID-19 pandemic due to financial and liquidity difficulties and customers\u2019 inability to settle invoices as a result of the effects of the COVID-19 pandemic and governmental restrictions such as lockdowns, and (vi) other miscellaneous expenses resulted from COVID-19 pandemic.\n<\/p>\n<\/td>\n<\/tr>\n \n(2)\n<\/p>\n<\/td>\n \nTransaction-related adjustments include expenses related to the business combination with Union Acquisition Corp. II (NASDAQ: LATN).\n<\/p>\n<\/td>\n<\/tr>\n \n(3)\n<\/p>\n<\/td>\n \nBusiness transformation initiatives consists of costs and expenses in connection with severance payments made to separate employees from Procaps for certain business transformation initiatives implemented during the three months ended June 30, 2020.\n<\/p>\n<\/td>\n<\/tr>\n \n(4)\n<\/p>\n<\/td>\n \nForeign currency translation adjustments represent the reversal of exchange losses recorded by Procaps due to foreign currency translation of monetary balances of certain of its subsidiaries\u2019 from U.S. dollars into the functional currency of those subsidiaries as of June 30, 2021 and 2020.\n<\/p>\n<\/td>\n<\/tr>\n \n(5)\n<\/p>\n<\/td>\n \nOther finance costs adjustments represent non-operating expenses incurred by Procaps, primarily including additional interests incurred by Procaps due to the withholding tax obligations of certain financial institutions outside of Colombia.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin<\/b><\/p>\n<\/td>\n<\/tr>\n for the Six Months Ended June 30, 2020 and 2021<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n Six Months Ended June 30<\/b><\/p>\n<\/td>\n % Change<\/b><\/p>\n<\/td>\n<\/tr>\n Unaudited Financial Information<\/b><\/p>\n<\/td>\n 2020<\/b><\/p>\n<\/td>\n 2021<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (in millions of U.S. dollars except percentages)<\/b><\/p>\n<\/td>\n<\/tr>\n Profit (loss) for the period<\/b><\/p>\n<\/td>\n (17.7<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n (14.8<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n \n17\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n \nInterest expense, net\n<\/p>\n<\/td>\n \n25.2\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n28.6\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n \nIncome tax expense\n<\/p>\n<\/td>\n \n0.7\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n0.4\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(43\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nDepreciation and amortization\n<\/p>\n<\/td>\n \n6.9\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n8.7\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n26\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n EBITDA<\/b><\/p>\n<\/td>\n 15.1<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 22.9<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 52<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n<\/tr>\n \nCOVID-19 impact adjustments(1)<\/sup><\/p>\n<\/td>\n \n1.6\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1.5\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(8\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nTransaction-related adjustments(2)<\/sup><\/p>\n<\/td>\n \n—\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n8.1\n<\/p>\n<\/td>\n \nNA\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nBusiness transformation initiatives(3)<\/sup><\/p>\n<\/td>\n \n0.8\n<\/p>\n<\/td>\n \n—\n<\/p>\n<\/td>\n \n(100\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nForeign currency translation adjustments(4)<\/sup><\/p>\n<\/td>\n \n2.8\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1.4\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(52\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n \nOther finance costs adjustments(5)<\/sup><\/p>\n<\/td>\n \n1.0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n0.1\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(85\n<\/p>\n<\/td>\n \n%)\n<\/p>\n<\/td>\n<\/tr>\n Adjusted EBITDA<\/b><\/p>\n<\/td>\n 21.2<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 34.0<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n 60<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n<\/tr>\n Adjusted EBITDA margin<\/b><\/p>\n<\/td>\n 16.2<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n 19.1<\/b><\/p>\n<\/td>\n %<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n(1)\n<\/p>\n<\/td>\n \nCOVID-19 impact adjustments primarily include: (i) expenses incurred for safety pre-cautions during the pandemic, such as office and production infrastructure adaptation to practice social distancing, as well as vaccinations for employees, in order to maintain a safe work and production environment for the employees, (ii) operating and production expenses incurred in connection with hiring of additional employees and costs paid to third party agencies for such hiring, contractors and production sub-contractors in order to mitigate any decrease in production and operating capabilities of Procaps as a result of employees absenteeism or attrition as a result of the COVID-19 pandemic, (iii) expense incurred for certain logistic arrangements to minimize Procaps employees\u2019 exposure to COVID-19 through arranging transportation from home to work, lodgings, face masks and PPE, (iv) additional costs incurred to acquire certain raw materials that are essential to production due to the lockdowns of suppliers\u2019 factories and ports of entry worldwide, and additional logistic costs due to delays, (v) expenses of certain one-time financial discounts that Procaps provided to its customers, such as medicine distributors, during the COVID-19 pandemic due to financial and liquidity difficulties and customers\u2019 inability to settle invoices as a result of the effects of the COVID-19 pandemic and governmental restrictions such as lockdowns, and (vi) other miscellaneous expenses resulted from COVID-19 pandemic.\n<\/p>\n<\/td>\n<\/tr>\n \n(2)\n<\/p>\n<\/td>\n \nTransaction-related adjustments include expenses related to the business combination with Union Acquisition Corp. II (NASDAQ: LATN).\n<\/p>\n<\/td>\n<\/tr>\n \n(3)\n<\/p>\n<\/td>\n \nBusiness transformation initiatives consists of costs and expenses in connection with severance payments made to separate employees from Procaps for certain business transformation initiatives implemented during the three months ended June 30, 2020.\n<\/p>\n<\/td>\n<\/tr>\n \n(4)\n<\/p>\n<\/td>\n \nForeign currency translation adjustments represent the reversal of exchange losses recorded by Procaps due to foreign currency translation of monetary balances of certain of its subsidiaries\u2019 from U.S. dollars into the functional currency of those subsidiaries as of June 30, 2021 and 2020.\n<\/p>\n<\/td>\n<\/tr>\n \n(5)\n<\/p>\n<\/td>\n \nOther finance costs adjustments represent non-operating expenses incurred by Procaps, primarily including additional interests incurred by Procaps due to the withholding tax obligations of certain financial institutions outside of Colombia.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n About the Proposed Business Combination with Union Acquisition Corp. II<\/b><\/p>\n \nCompletion of the business combination, which is expected to close in the third quarter of 2021, is subject to approval by LATN shareholders and other customary closing conditions, including the Registration Statement being declared effective by the SEC. The combined company will be led by Ruben Minski, Procaps Group Founder, Chairman & CEO. Upon closing of the business combination (assuming none of the LATN shareholders redeem any of their LATN ordinary shares in connection with the approval of the business combination and including the redemption of certain shares held by IFC), existing Procaps Group shareholders are expected to hold approximately 76% of the combined company, which shares will be subject to certain lock-up arrangements.\n<\/p>\n \nInstitutional investors have committed to an upsized private investment in public equity (\u201cPIPE\u201d) of $100 million in ordinary shares of LATN, which will be converted into ordinary shares of the combined company upon the closing of the business combination. The PIPE will close concurrently with the business combination. Subject to any redemptions by LATN shareholders, there is approximately $136.9 million in cash currently held in LATN\u2019s trust account. It is anticipated that the combined company will have approximately $236.9 million in gross cash proceeds (before transaction-related expenses and the redemption of certain shares held by IFC) to fund organic growth through capacity expansion, plant improvements, working capital investments, e-Health platform improvements and R&D expenses, inorganic growth via accretive acquisitions and the redemption of certain shares from IFC.\n<\/p>\n \nWhile the Registration Statement has not yet become effective and the information contained therein is subject to change, it provides important information about Procaps Group\u2019s business and operations, proposed business combination with Union Acquisition Corp. II and the proposals to be considered by the LATN shareholders.\n<\/p>\n \nAdditional information about the transaction including the Registration Statement on Form F-4 can be viewed here: https:\/\/investor.procapsgroup.com<\/a>.\n<\/p>\n Proposed Business Combination Highlights<\/b><\/p>\n
\nProcaps Group, a leading integrated international healthcare and pharmaceutical company, today announced its financial results for the second quarter ended June 30, 2021.\n<\/p>\n\n
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the Three Months Ended June 30<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n \n \n \n \n \n \n
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