Highlights for the Second Quarter of 2021
(All percentage increases are as compared to the second quarter of 2020)
- Revenue from continuing operations increased 25% to
$49.7 million from$39.7 million: - Driven primarily by the acquisition of the Remedy'sRx
Specialty Pharmacy business ("Remedy's") partway through the second quarter of 2020 and the acquisition ofSmartMeds Pharmacy ("SmartMeds") onApril 1, 2021 ; - Partially offset by a temporary COVID-19-related reduction in the average number of beds serviced during the quarter, which has improved since the peak impact in January, but has not yet returned to pre-COVID-19 levels;
- Adjusted EBITDA1 from continuing operations increased 54% to
$4.3 million from$2.8 million: - Driven by the acquisition of Remedy's, including the quarterly contribution of over
$3.0 million in annualized cost saving synergies, as well as the acquisition of SmartMeds; - Entered a definitive agreement to acquire the
Long-Term Care Pharmacy Division of Medical Pharmacies Group Limited (the "MPGL Acquisition"), which is expected to close bymid-September 2021 : - Comprised of 18 facilities and approximately 36,000 beds;
- Expected to contribute run-rate annualized revenue and Adjusted EBITDA of approximately
$150.0 million and$10.0 to 12.0 million, respectively, and minimum additional cost savings synergies of$5.0 million ; - Purchase price to be financed from
$63.3 million of gross proceeds raised through brokered and non-brokered private placements of subscription receipts that were completed onMay 19, 2021 and through incremental debt of$39.0 million with the Company's lenders; - Completed the acquisition of the Long-Term Care Pharmacy Services business of Rexall Health Solutions ("Rexall LTC Pharmacy Business") on
June 21, 2021 : - Adds approximately 4,000 beds across
Ontario andNorthern Alberta and expected to contribute run-rate annualized revenue of approximately$14.0 million and nominal Adjusted EBITDA, prior to any integration synergies; and - Completed the acquisition of SmartMeds:
- Adds over 2,400 beds in
Ontario and expected to contribute annualized run-rate revenue of$13.0 million and Adjusted EBITDA of$1.5 million , prior to any integration synergies.
"Our second quarter results reflect the continued execution of our growth strategy, with a 25% year-over-year increase in revenue and 54% increase in Adjusted EBITDA as we realized the contribution and synergies from the Remedy's and SmartMeds acquisitions," said
FINANCIAL RESULTS
Selected Financial Information
(Thousands of Canadian dollars except per share amounts and percentages) | For the three month | For the six month periods | ||||
2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |
$ | $ | $ | $ | $ | $ | |
Revenue from continuing operations | 49,656 | 39,749 | 31,490 | 94,513 | 70,175 | 61,023 |
Operating loss from continuing operations | (1,908) | (8,072) | (1,128) | (2,327) | (10,353) | (2,626) |
(Loss) income from continuing operations before interest expense and income taxes | (4,225) | (9,774) | 671 | (7,418) | (12,349) | (1,552) |
EBITDA1 from continuing operations | (991) | (7,241) | 2,956 | (1,092) | (7,502) | 2,941 |
Adjusted EBITDA1 from continuing operations | 4,338 | 2,825 | 2,242 | 8,424 | 4,870 | 4,101 |
Per share - Basic and Diluted2 | ||||||
Adjusted EBITDA Margin from continuing operations | 8.7% | 7.1% | 7.1% | 8.9% | 6.9% | 6.7% |
Adjusted EBITDA1 | 4,338 | 2,825 | 3,548 | 8,424 | 4,870 | 6,688 |
Per share - Basic and Diluted2 | ||||||
Adjusted EBITDA Margin | 8.7% | 7.1% | 8.3% | 8.9% | 6.9% | 8.0% |
Net loss | (8,489) | (14,148) | (1,596) | (14,355) | (8,834) | (6,867) |
Per share - Basic and Diluted 2 | ( | ( | ( | ( | ( | ( |
Cash provided by (used in) operations | (5,721) | (2,665) | 93 | (7,426) | (4,115) | 2,640 |
Total Assets | 165,222 | 151,759 | 132,783 | 165,222 | 151,759 | 132,783 |
Total Liabilities | 144,655 | 153,356 | 148,738 | 144,655 | 153,356 | 148,738 |
1 | See "Non-IFRS Measures" below. |
2 | Basic and diluted earnings per share is based on the profit or loss attributable to shareholders of |
Revenue from continuing operations for the second quarter of 2021 increased by 25% to
Adjusted EBITDA for the second quarter of 2021, increased by 54% to
Conference Call
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For further information, please visit https://www.carerx.ca.
About
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 exposure to and reliance on government regulation and funding, the Company's liquidity and capital requirements, exposure to epidemic or pandemic outbreak, the highly competitive nature of the Company's industry, 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 (income), net, and income tax expense (recovery). Adjusted EBITDA is defined as EBITDA before transaction and restructuring 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 stock-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 on both a basic and diluted basis. 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 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.
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