Achieved Second Consecutive
Quarter-Over-Quarter Growth in Adjusted EBITDA
TORONTO, Nov. 8, 2023
/CNW/ - CareRx Corporation ("CareRx" or the "Company") (TSX: CRRX),
Canada's leading provider of
pharmacy services to seniors living and other congregate care
communities, today reported its financial results for the third
quarter ended September 30, 2023.
"Our third quarter results were in line with our expectations,
and our quarter-over-quarter improvement in Adjusted EBITDA
reflects early progress from our team's exceptional work in
improving our efficiencies and managing the cost challenges that we
have been facing in the healthcare labour market," said
Puneet Khanna, President & Chief
Executive Officer of CareRx. "Through enhancements in our
technological and operational capabilities, as well as an
organizational focus on margin-enhancing initiatives, we intend to
further leverage our industry leadership position in order to drive
profitable growth as we continue to provide value-added service to
the expanding seniors living sector."
Highlights for the Third Quarter of 2023
- Revenue for the quarter was $93.8
million as compared to $94.5
million for the second quarter of 2023 and $97.4 million for the third quarter of 2022:
- Decrease compared to the prior quarter was primarily due to a
small net reduction in the average number of beds serviced;
and
- Decrease compared to the same period in the prior year was
primarily driven by a change in the mix of branded and generic
pharmaceuticals dispensed, which did not negatively impact the
Company's profitability in the quarter.
- Adjusted EBITDA1 for the quarter was $7.3 million as compared to $7.0 million for the second quarter of 2023
and $7.7 million for the third
quarter of 2022:
- Increase compared to the prior quarter was due to certain cost
savings and margin-enhancing initiatives implemented during the
third quarter of 2023; and
- Decrease compared to the same period in the prior year was
primarily the result of incremental costs associated with continued
challenges in the healthcare labour market.
- Net loss for the quarter was $1.4
million as compared to net income of $1.9 million for the second quarter of 2023 and
net loss of $1.8 million for the
third quarter of 2022:
- Net loss in the quarter compared to net income generated in the
second quarter of 2023 was primarily due to a non-recurring income
tax recovery that was recorded during the second quarter of 2023;
and
- Decline in net loss as compared to the same period in the prior
year was driven primarily by decreases in share-based compensation
expense, transaction and restructuring costs, finance costs and the
loss on the change in fair value of contingent consideration
liabilities.
- On September 7, 2023, the Company
launched a normal course issuer bid to repurchase for cancellation
up to 1,000,000 of the Company's common shares during the period
from September 7, 2023 to
September 6, 2024, subject to certain
daily limitations.
1 See
"Non-IFRS Measures" below
|
FINANCIAL RESULTS
Selected Financial Information
|
For the three month
periods
ended September 30,
|
For the nine month
periods
ended September 30,
|
(Thousands of
Canadian dollars except per
share amounts and percentages)
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
$
|
$
|
$
|
$
|
$
|
$
|
Revenue
|
93,760
|
97,353
|
71,267
|
279,649
|
287,408
|
165,780
|
|
|
|
|
|
|
|
EBITDA1
|
7,022
|
6,943
|
5,450
|
19,211
|
(5,404)
|
4,538
|
Adjusted
EBITDA1
|
7,309
|
7,710
|
6,862
|
21,168
|
25,123
|
15,286
|
Per share -
Basic
|
$0.13
|
$0.16
|
$0.19
|
$0.37
|
$0.53
|
$0.48
|
Adjusted EBITDA
Margin1
|
7.8 %
|
7.9 %
|
9.6 %
|
7.6 %
|
8.7 %
|
9.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(1,437)
|
(1,782)
|
(3,928)
|
(1,705)
|
(29,673)
|
(18,283)
|
Per share - Basic and
Diluted
|
($0.02)
|
($0.04)
|
($0.11)
|
($0.03)
|
($0.63)
|
($0.58)
|
|
|
|
|
|
|
|
Cash provided by
operations
|
8,218
|
13,298
|
11,997
|
18,613
|
8,143
|
4,571
|
|
|
|
|
|
|
|
Total
Assets
|
264,705
|
255,580
|
284,131
|
264,705
|
255,580
|
284,131
|
Total
Liabilities
|
186,017
|
196,721
|
205,006
|
186,017
|
196,721
|
205,006
|
1 See
"Non-IFRS Measures" below.
|
Conference Call
The Company will host a conference call, including a slide
presentation, to discuss its third quarter of 2023 financial
results on Wednesday, November 8,
2023 at 8:30 a.m. Eastern Time
(ET).
Telephone Dial-In Access Information
To join the conference call without operator assistance, you may
register and enter your phone number at
https://emportal.ink/497U2on to receive an instant automated
call.
To dial direct and enter the call through an operator, dial
416-764-8659 or 1-888-664-6392. Please connect approximately 15
minutes prior to the beginning of the call to ensure participation.
Those participating in the conference call by telephone can view
the slide presentation by accessing the online webcast (see
instructions below) and choosing the Non-Streaming Audio
option.
Webcast Access Information
A live webcast of the conference call, including the slide
presentation, will be available on the Events and Presentations
page of the Investors section of the Company's website
(https://carerx.ca/presentations/). Please connect at least 15
minutes prior to the conference call to ensure adequate time for
any software download that may be required to join the webcast. To
view the webcast presentation with slides, please choose either the
Real Streaming Audio or Windows Streaming Audio option.
The webcast with slide presentation will be archived for 90 days
on the Events and Presentations page of the Investors section of
the Company's website (https://carerx.ca/presentations/).
About CareRx Corporation
CareRx is Canada's leading
provider of pharmacy services to seniors living communities. We
serve approximately 94,000 residents in over 1,500 seniors and
other congregate care communities (long-term care homes, retirement
homes, assisted living facilities, and group homes). We are a
national organization with a large network of pharmacy fulfillment
centres strategically located across the country. This allows us to
deliver medications in a timely and cost-effective manner and
quickly respond to routine changes in medication management. We use
best-in-class technology that automates the preparation and
verification of multi-dose compliance packaging of medication,
providing the highest levels of safety and adherence for
individuals with complex medication regimes. We take an active role
in working with our home operator partners to promote resident
health, staff education, and medication system quality and
efficiency.
Forward-Looking Statements
This press release contains statements that may constitute
"forward-looking statements" within the meaning of applicable
Canadian securities legislation. These forward-looking statements
include, among others, statements regarding the Company's business
strategy, plans and other expectations, beliefs, goals, objectives,
information and statements about possible future events.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate" or similar expressions
suggesting future outcomes or events. Such forward-looking
statements reflect management's current beliefs and are based on
information currently available to management.
Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
contemplated by such statements. Factors that could cause such
differences include the Company's general business risks, exposure
to and reliance on government regulation and funding, the Company's
liquidity and capital requirements, exposure to epidemic or
pandemic outbreak, reliance on contracts with key customers and
other risk factors described from time to time in the reports and
disclosure documents filed by the Company with Canadian securities
regulatory agencies and commissions. These and other factors should
be considered carefully and readers should not place undue reliance
on the Company's forward-looking statements. As a result of the
foregoing and other factors, no assurance can be given as to any
such future results, levels of activity or achievements and neither
the Company nor any other person assumes responsibility for the
accuracy and completeness of these forward-looking statements. The
factors underlying current expectations are dynamic and subject to
change.
Non-IFRS Measures
This press release includes certain measures which have not been
prepared in accordance with IFRS such as "EBITDA", "Adjusted
EBITDA", "Adjusted EBITDA Margin" and "Adjusted EBITDA per share".
These non-IFRS measures are not recognized under IFRS and,
accordingly, shareholders are cautioned that these measures should
not be construed as alternatives to net income determined in
accordance with IFRS. The non-IFRS measures presented are unlikely
to be comparable to similar measures presented by other
issuers.
The Company defines "EBITDA" as earnings before depreciation and
amortization, finance costs, net, and income tax expense
(recovery). "Adjusted EBITDA" is defined as EBITDA before
transaction, start-up, restructuring and other costs, change in
fair value of contingent consideration liability, impairments,
change in fair value of derivative financial instruments, change in
fair value of investment, gain on disposal of property and
equipment and share-based compensation expense. "Adjusted EBITDA
Margin" is defined as Adjusted EBITDA divided by revenue. "Adjusted
EBITDA per share" is defined as Adjusted EBITDA divided by the
weighted average outstanding shares. The Company believes that
Adjusted EBITDA is a meaningful financial metric as it measures
cash generated from operations which the Company can use to fund
working capital requirements, service interest and principal debt
repayments and fund future growth initiatives. The Company's
agreements with lenders are also structured with certain financial
performance covenants which includes Adjusted EBITDA as a key
component of the covenant calculation. EBITDA and Adjusted EBITDA
are not recognized measures under IFRS.
Reconciliation of Non-IFRS Measures
|
For the three
month
periods ended
September 30,
|
For the nine
month
periods ended
September 30,
|
|
2023
|
2022
|
2023
|
2022
|
(Thousands of
Canadian Dollars except per share
amounts)
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Net
loss
|
(1,437)
|
(1,782)
|
(1,705)
|
(29,673)
|
Depreciation and
amortization
|
4,938
|
5,018
|
15,030
|
14,844
|
Finance costs,
net
|
3,521
|
4,186
|
9,903
|
11,435
|
Income tax
recovery
|
—
|
(479)
|
(4,017)
|
(2,010)
|
EBITDA
|
7,022
|
6,943
|
19,211
|
(5,404)
|
Transaction, start-up,
restructuring and other costs
|
—
|
580
|
812
|
4,301
|
Change in fair value of
contingent consideration liability
|
15
|
577
|
212
|
1,331
|
Goodwill and intangible
assets impairment
|
—
|
—
|
—
|
24,330
|
Share-based
compensation expense
|
285
|
814
|
1,022
|
2,967
|
Change in fair value of
derivative financial instruments
|
(13)
|
(1,249)
|
(281)
|
(5,355)
|
Change in fair value of
investment
|
—
|
—
|
—
|
2,713
|
Loss on disposal of
assets
|
—
|
45
|
192
|
240
|
Adjusted
EBITDA
|
7,309
|
7,710
|
21,168
|
25,123
|
|
|
|
|
|
Weighted average number
of shares - basic and diluted
(in thousands)
|
57,731
|
47,466
|
56,916
|
47,019
|
Adjusted EBITDA per
share - basic
|
$0.13
|
$0.16
|
$0.37
|
$0.53
|
SOURCE CareRX Corporation