Accretive Acquisitions Continue to Drive Double-Digit Revenue and Adjusted EBITDA Growth
"Neighbourly's third quarter results continue to demonstrate the effectiveness of our acquisition and integration strategy," stated
"The rise of the Omicron variant once again highlighted our pharmacy teams' devotion to their communities," concluded
Third Quarter 2022 Highlights
- Revenue for the third quarter 2022 increased by 27.3% to
$139.2 million , driven by the addition of 41 pharmacies over the prior four quarters. - Adjusted EBITDA1 for the third quarter 2022 increased by 11.6% to
$14.5 million , primarily due to the incremental profitability of pharmacies added to the Company's network. - Net Loss for the third quarter 2022 was
$0.7 million , compared to$112.0 million for the third quarter 2021. - Same-store sales2 for the third quarter 2022 increased by 2.2%, primarily due to a normalization of business volumes following the impact of COVID-19.
- Pro-Forma Revenue3 of
$488.3 million . - Pro-Forma Adjusted EBITDA4 of
$58.7 million . - Acquired 26 pharmacies and signed an agreement to acquire one additional pharmacy, bringing the total locations acquired to date in Fiscal 2022 to 41.
- Implemented operational synergies through the consolidation of two properties in
Alberta , including centralizing all compounding within the province.
______________________________ |
1 Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" and the reconciliation to the most directly comparable IFRS measure at the conclusion of this news release. |
2Same-store sales represents sales from stores that were owned and operated by the Company for the entirety of both periods and is a supplementary financial measure that is commonly used in the industry. Neighbourly calculates same-store sales using revenue determined in accordance with IFRS. |
3 Pro-Forma Revenue is a non-IFRS measure. See "Non-IFRS Measures" and the reconciliation to the most directly comparable IFRS measure at the conclusion of this news release. |
4Pro-Forma Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" and the reconciliation to the most directly comparable IFRS measure at the conclusion of this news release. |
Third Quarter 2022 Financial Results
Third Quarter Year to date in 000's 2022 2021 2022 2021 Store count 170 131 170 95 Total Prescriptions 2,311 1,828 5,352 3,993 Same-store prescription growth (%) 2.7% 3.1% 1.4% 5.2% Revenue $ 139,180 $ 109,371 $ 315,192 $ 223,221 Same-store sales growth (%)1 2.2% 5.5% 3.4% 4.1% Pharmacy revenue as a % of revenue 78.4% 75.3% 77.9% 76.6% Corporate, general & administrative ("CG&A") costs2 $ 5,456 $ 3,886 $ 11,835 $ 8,103 CG&A as a % of revenue 3.9% 3.6% 3.8% 3.6% Adjusted EBITDA3 $ 14,470 $ 12,961 $ 34,589 $ 26,127 Adjusted EBITDA margin (%) 10.4% 11.9% 11.0% 11.7% Pro-Forma Adjusted EBITDA for the 52 weeks ended4 $ 58,660 Pro-Forma Revenue for the 52 weeks ended5 $ 488,253 _____________ 1Same-store sales represents sales from stores that were owned and operated by the Company for the entirety of both periods and is a 2Corporate, general & administrative costs represents costs incurred at the corporate level (as opposed to costs incurred at the store level) 3Adjusted EBITDA is a non-IFRS financial measure and does not have any standard meaning under IFRS. Refer to "Reconciliation of 4Pro-Forma Adjusted EBITDA is a non-IFRS financial measure and does not have any standard meaning under IFRS. Refer to "Reconciliation 5Pro-Forma Revenue is a non-IFRS financial measure and does not have any standard meaning under IFRS. Refer to "Reconciliation of
supplementary financial measure that is commonly used in the industry. Neighbourly calculates same-store sales using revenue
determined in accordance with IFRS.
and is component of Operating, general and administrative expenses. See reconciliation in the "Results of Operations".
Non-IFRS Measures" of this MD&A for additional information including a reconciliation to the most comparable IFRS measure.
of Non-IFRS Measures" of this MD&A for additional information including a reconciliation to the most comparable IFRS measure.
Non-IFRS Measures" of this MD&A for additional information including a reconciliation to the most comparable IFRS measure.
Impact of COVID-19
In
As a result of this policy and the subsequent normalization of both prescription counts and average prescription value, the Company's same-store sales for the third quarter 2022 increased by 2.2%, compared to an increase of 5.5% for the third quarter 2021, while same-store prescription count increased by 2.7% for the third quarter 2022, compared to an increase of 3.1% for the third quarter 2021. While the future impact of the pandemic is unknown, the variability in same-store sales has largely normalized.
More recently, with the onset of the more virulent Omicron variant during the third quarter, the spike in COVID infections and exposures created staffing shortages across our network. These shortages were exacerbated by the accelerated pace of vaccinations and booster shots, both of which are particularly labour-intensive. These shortages are expected to subside as Omicron cases subside, however are expected to persist through the conclusion of Fiscal 2022.
Declaration of Dividend
Neighbourly announced today that a quarterly dividend will be paid on April 12, 2022, to the Company's common shareholders of record as of
Conference Call and Webcast Information
A conference call will be held at
The conference call will also be available via webcast on the Investor section of Neighbourly's website at https://investors.neighbourlypharmacy.ca/events-and-presentations.
Neighbourly's unaudited consolidated financial statements and accompanying notes, and Management's Discussion and Analysis for the third quarter 2022 are available on the Company's website at www.neighbourlypharmacy.ca and on SEDAR at www.sedar.com.
About
Neighbourly is
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures, such as Adjusted EBITDA, Pro-Forma Adjusted EBITDA, and Pro-Forma Revenue. Refer to the Company's Management's Discussion and Analysis dated
Key-Performance Indicators
This press release makes reference to certain key performance indicators, such as Same-store sales and corporate, general & administrative costs. We monitor key performance indicators to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. These key performance indicators are also used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use industry metrics in the evaluation of issuers. Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.
Forward-Looking Statements
This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information may relate to our future financial results and may include information regarding our financial position, business strategy, growth strategies, financial results, taxes, dividend policy, plans and objectives. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "estimates", "outlook", "forecasts", "projection", "prospects", "intends", "anticipates", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances.
Forward-looking information in this news release includes, among other things, statements relating to the expected completion of probable acquisitions and timing thereof, the expected impact of probable acquisitions on the Company's financial results and expected accretion, statements relating to the acceleration of our growth, the pursuit of accretive acquisitions at a similar pace to historical levels, the payment of dividends, same-store sales improvements and the expected impacts of the ongoing COVID-19 pandemic on our results of operation.
Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that the Company considered appropriate and reasonable as of the date such statements are made in light of its experience and perception of historical trends, current conditions and expected future developments.Such estimates and assumptions include the satisfaction of all conditions of closing and the successful completion of probable acquisitions within the anticipated timeframe, including receipt of regulatory approvals. Further, forward-looking information is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks and uncertainties related to probable acquisitions, including the failure to receive or delay in receiving regulatory approvals or otherwise satisfy the conditions to the completion such acquisitions, in a timely manner, or at all, and the reliance on information provided by the relevant sellers, as well as other factors discussed or referred to in the Company's Management's Discussion and Analysis for the sixteen-weeks ended
Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents the Company's expectations as of the date of this press release (or as the date they are otherwise stated to be made) and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events, or otherwise, except as required under applicable securities laws in
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
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Acquisition, transaction and integration costs | |||||
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Impairment loss | |||||
Operating (loss) income | ( | ||||
Finance costs (income), net | ( | ||||
Change in fair value of financial liabilities | |||||
Loss before income taxes | ( | ( | ( | ||
Income taxes expense | |||||
Net loss for the period | ( | ( | ( | ( | |
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Shareholders of the Company | ( | ( | ( | ( | |
Non-controlling Interest | |||||
( | ( | ( | ( | ||
Loss per share | ( | ( | ( | ( |
Condensed Consolidated Statements of Financial Position
in 000's Assets Current Cash Trade and other receivables Inventory Prepaid expenses and deposits Assets held for sale Total current assets Property and equipment, net Right-of-use assets Intangible assets, net Goodwill Deferred tax assets Other assets Total non-current assets Total assets Liabilities and shareholders' equity Current Accounts payable and accrued liabilities Promissory notes payable Current portion of long term borrowings Current portion of mortgages payable Current portion of lease liabilities Preferred shares liability Total current liabilities Long-term borrowings Mortgages payable Lease liabilities Deferred tax liabilities Warrant liability Total non-current liabilities Total liabilities Shareholders' equity Share capital Contibuted Surplus Deficit ( ( Non-controlling interest Total shareholders' equity ( Total liabilities and shareholders' equity
Condensed Consolidated Statements of Cash Flows
Third quarter ended Year to date in 000's Operating Net loss for the year ( ( ( ( Adjustments to net income for non-cash items Depreciation and amortization Impairment loss Share based compensation Gain on disposal of property and equipment ( Finance (income) costs, net ( Change in fair value of financial liabilities Income tax expense Lease renewals and modifications ( ( ( Expected credit loss expense Income taxes recovered (paid) ( ( ( ( Change in non-cash operating working capital ( Net cash from operating activities Financing Proceeds from issuance of common shares, net of issuance costs Proceeds from issuance of preferred shares, net of issuance costs Repayment of promissory notes payable ( Proceeds from long-term borrowings Proceeds from promissory notes payable Repayment of long-term borrowings ( ( ( Transaction costs related to long-term borrowings ( ( ( Repayment of mortgage payable ( ( ( ( Interest paid ( ( ( ( Dividends and distributions paid ( ( ( ( Payment of lease liabilities ( ( ( ( Proceeds from exercise of stock options Proceeds from exercise of warrants Net cash from financing activities Investing Acquisition of property and equipment ( ( ( ( Acquisition of intangible assets ( ( ( ( Acquisition of other assets ( ( Business combinations, net of cash acquired ( ( ( ( Restricted cash, net ( Interest received Net cash from investing activities ( ( ( ( Net change in cash ( ( Cash, beginning of period Cash, end of period
Reconciliation from IFRS to Non-IFRS Measures
The following table provides a reconciliation of loss and comprehensive loss to Adjusted EBITDA and Pro-Forma Adjusted EBITDA, and of Revenue to Pro-Forma Revenue, for the periods indicated:
16 weeks ended 40 weeks ended 12 weeks ended in 000's 2022 2021 2022 2021 2021 Loss and comprehensive loss for the period - - - - Income tax expense (recovery) Finance (income) costs, net - Fair value changes of financial liabilities - - Depreciation and amortization Impairment loss - - Acquisition, transaction and integration costs Share-based compensation Adjusted EBITDA Revenue Adjusted EBITDA margin 10.4% 11.9% 11.0% 11.7% 10.8% Pro-Forma Adjusted EBITDA Adjusted EBITDA for the 40 weeks ended Adjusted EBITDA for the 12 weeks ended Incremental Adjusted EBITDA for new stores acquired after Incremental Adjusted EBITDA for stores acquired, or to be acquired on or after Adjustment for professional, other fees and COVID-related for the 40 weeks ended Adjustment for professional, other fees and COVID-related for the 12 weeks ended Pro-forma Adjusted EBITDA for the 52 weeks ended Pro-Forma Revenue Revenue for the 40 weeks ended Revenue for the 12 weeks ended Incremental Revenue for new stores acquired after Incremental Revenue for stores acquired, or to be acquired on or after Pro-forma Revenue for the 52 weeks ended
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