TORONTO, March 12, 2020 /CNW/ - Andlauer Healthcare Group
Inc. (TSX: AND) ("AHG" or the "Company") today reported its
financial results for the three-month period ("Q4 2019") and year
ended December 31, 2019.
Q4 2019 Highlights
- Revenue increased 6.3% to $76.6
million, compared to $72.1 in
the fourth quarter of 2018 ("Q4 2018");
- Operating income increased 31.4% to $11.3 million, compared to $8.6 million in Q4 2018;
- Net income and comprehensive income increased 19.5% to
$7.1 million, compared to
$5.9 million in Q4 2018;
- EBITDA(1) increased 19.4% to $17.7 million, compared to $14.9 million in Q4 2018;
- EBITDA margin(1) increased to 23.1% from 20.6% in Q4
2018;
- AHG completed the construction of its new Calgary facilities, expanding its logistics
and distribution footprint by 23,000 square feet and increasing
capacity in its specialty transportation segment;
- AHG secured a lease on a new 220,000 square-foot facility
(commencing July 1, 2020) in the GTA
to service a major new client and to add capacity for future
growth; and
- AHG successfully completed its $172.5
million initial public offering of subordinate voting shares
and commenced trading on the Toronto Stock Exchange.
Fiscal 2019 Highlights
- Revenue increased 4.7% to $290.0
million, compared to $277.0
million in 2018;
- Operating income increased 10.1% to $45.0 million, compared to $40.9 million in 2018;
- Net income and comprehensive income increased 7.7% to
$30.3 million, from $28.2 million in 2018;
- EBITDA(1) increased 9.6% to $70.6 million, compared to $64.4 million in 2018; and
- EBITDA margin(1) increased to 24.3% from 23.2% in
2018.
"Our fourth quarter and full year results demonstrate our
continued success in generating growth by leveraging our unique set
of competitive strengths and national platform to provide
specialized supply-chain solutions to the growing healthcare
industry in Canada," said
Michael Andlauer, Chief Executive
Officer of AHG. "Our successful initial public offering at 2019
year-end has positioned us well to advance our three-part growth
strategy to further strengthen our market-leading position. We
intend to strengthen our clients' connection to our platform by
broadening our service offering, increase our capacity to attract
both new clients and new business, and expand the platform through
acquisitions."
Selected Consolidated Financial Summary
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Three Months
Ended
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Year
Ended
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($CAD
000s)
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December
31,
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December
31,
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2019
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2018
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Variance
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2019
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2018
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Variance
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Revenue
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Logistics &
Distribution
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22,664
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21,046
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7.7%
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|
88,311
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85,125
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3.7%
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Packaging
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4,892
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5,456
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-10.3%
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|
21,307
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21,305
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0.0%
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Healthcare Logistics
Segment
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27,556
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26,502
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4.0%
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|
109,618
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106,430
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3.0%
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Ground
Transportation
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45,685
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42,391
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7.8%
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|
169,040
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160,489
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5.3%
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Air Freight
Forwarding
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5,236
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5,336
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-1.9%
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19,656
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19,332
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1.7%
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Dedicated and Last Mile
Delivery
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4,828
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3,771
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28.0%
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16,689
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13,899
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20.1%
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Intersegment
Eliminations
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(6,704)
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(5,905)
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13.5%
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(25,015)
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(23,140)
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8.1%
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Specialized
Transportation Segment
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49,045
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45,593
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7.6%
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180,370
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170,580
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5.7%
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Total
revenue
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76,601
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72,095
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6.3%
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289,988
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277,010
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4.7%
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Operating
expenses
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65,253
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63,460
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2.8%
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|
244,995
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236,144
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3.7%
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Operating
income
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11,348
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8,635
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31.4%
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44,993
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40,866
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10.1%
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Net income and
comprehensive income
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7,075
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5,919
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19.5%
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30,345
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28,185
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7.7%
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Select financial
metrics
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EBITDA(1)
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17,729
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14,850
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19.4%
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70,554
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64,376
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9.6%
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EBITDA
Margin(1)
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23.1%
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20.6%
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250 bps
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24.3%
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23.2%
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110 bps
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Q4 2019 Financial Results
Revenue for Q4 2019 increased by 6.3% to $76.6 million, compared with Q4 2018. Revenue
growth was led by continued volume growth in ground transportation
and by new contracts in logistics and distribution and dedicated
and last mile delivery, resulting in approximately $4.5 million of incremental revenue. The 10.3%
decline in packaging revenue in Q4 2019 was attributable to the
Company's largest packaging client's deferral of certain projects
until the first quarter of 2020.
Cost of Transportation and Services for Q4 2019 was $32.6 million, or 42.6% of revenue, compared with
$31.4 million, or 43.5% of revenue,
for Q4 2018. The cost of transportation and services operating
ratios for both periods are in line with prior years with no major
fluctuations in costs versus revenue.
Direct Operating Expenses for Q4 2019 were $18.6 million, or 24.3% of revenue, compared with
$19.2 million, or 26.7% of revenue,
for Q4 2018. During Q4 2019, AHG incurred increased direct
operating expenses as it expanded its ATS branch capacity in
Calgary, Alberta and relocated its
Accuristix distribution centre to a new and larger facility in
Calgary. These additional expenses
were offset by improved efficiencies and the recovery of costs in
connection with AHG's Calgary
relocation from logistics and distribution clients.
Selling, General and Administrative ("SG&A") expenses for Q4
2019 were $7.5 million, or 9.8% of
revenue, compared with $6.7 million,
or 9.3% of revenue, for Q4 2018. SG&A expenses in Q4 2019
include initial public offering transaction costs of approximately
$1.0 million, or 1.2% of revenue. A
further $1.4 million, or 1.8% of
revenue, was expensed in connection with the Company's share-based
payment arrangements. The Company expects approximately
$2.0 million of incremental annual
costs to be incurred as a result of being a public company in 2020
and each year thereafter, as compared to its prior costs as a
private company.
Operating Income for Q4 2019 increased by 31.4% to $11.3 million, compared with $8.6 million for Q4 2018. The increase was
primarily attributable to growth in revenue and improved operating
efficiencies. Net Income and comprehensive income for Q4 2019
increased by 19.5% to $7.1 million,
from $5.9 million in Q4 2018.
Earnings before interest, taxes, depreciation and amortization
("EBITDA")¹ for Q4 2019 increased by 19.4% to $17.7 million, from $14.9
million for Q4 2018. EBITDA margin¹ for Q4 2019 improved to
23.1% from 20.6% for Q4 2018. Operating leverage was created for Q4
2019 versus the prior year as increases in the Company's two most
significant operating costs (cost of transportation and services,
and direct operating expenses) were lower than the increases in
revenue growth.
2019 Financial Results
Revenue for 2019 increased 4.7% to $290.0
million, compared with 2018. The increase was primarily
attributable to volume growth and price increases in ground
transportation, new contracts in logistics and distribution, and
higher project volumes in packaging. All product lines demonstrated
year-on-year growth for 2019.
Operating expenses for 2019 totaled $245.0 million, an increase of 3.7% compared with
2018. The increase in operating expenses was primarily attributable
to increases in: SG&A expenses (including initial public
offering transaction costs and share-based payment arrangements),
cost of transportation and services, and depreciation and
amortization expenses, in line with the Company's growth. These
cost increases were partially offset by a decline in direct
operating expenses reflecting improved efficiencies through
productivity gains and revenue growth, and increased capacity
utilization of the Company's branch facilities.
Operating income for 2019 totaled $45.0
million, an increase of 10.1% compared with 2018. Net
Income and comprehensive income for 2019 increased by 7.7% to
$30.3 million, from $28.2 million in 2018. Operating income and net
income increased over the prior year due to the factors discussed
above.
Dividend
The Board of Directors today approved the payment of the
Company's 2020 first quarter shareholder dividend (encompassing the
period from December 11, 2019, the
closing date of the Company's initial public offering, to
March 31, 2020) of $0.06087 per subordinate voting share and
multiple voting share. Payment will be made on April 15, 2020 to shareholders of record as at
March 31, 2020. The dividend to be
paid to the holders of subordinate voting shares is designated as
an "eligible dividend" for Canadian income tax purposes and the
Company expects that, until further notice, all such future
dividends will be designated as "eligible dividends" for Canadian
income tax purposes.
Shares Outstanding
As at December 31, 2019, there
were 12,500,000 subordinate voting shares and 25,100,000 multiple
voting shares outstanding.
Financial Statements
AHG's audited consolidated financial statements and related
Management's Discussion & Analysis ("MD&A") for the year
ended December 31, 2019 are available
on the Company's website at www.andlauerhealthcare.com and on the
Company's profile on SEDAR at www.sedar.com.
Conference call
Michael Andlauer, Chief Executive
Officer, and Peter Bromley, Chief
Financial Officer, will host a conference call for analysts and
investors on Friday, March 13, 2020
at 8:30 a.m. (ET). The dial-in
numbers for the conference call are (416) 764-8650 or
1-888-664-6383. A live webcast of the call is available at:
www.andlauerhealthcare.com/presentations-events.
To listen to a replay of the conference call, dial (416)
764-8677 or (888) 390-0541, passcode: 361031 #. The replay will be
available until March 20, 2020. The
webcast will be archived on the Company's website following
conclusion of the call.
About AHG
AHG is a leading and growing supply chain management company
offering a robust platform of customized third-party logistics
("3PL") and specialized transportation solutions for the healthcare
sector. The Company's 3PL services include customized logistics,
distribution and packaging solutions for healthcare manufacturers
across Canada. AHG's specialized
transportation services, including air freight forwarding, ground
transportation, dedicated delivery and last mile services, provide
a one-stop shop for clients' healthcare transportation needs.
Through its complementary service offerings, available across a
coast-to-coast distribution network, the Company strives to
accommodate the full range of its clients' specialized supply chain
needs on an integrated and efficient basis. For more information on
AHG, please visit: www.andlauerhealthcare.com
Forward-looking Information
This news 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 the Company's future
financial outlook and anticipated events or results and may include
information regarding the Company's financial position, business
strategy, growth strategies, addressable markets, budgets,
operations, financial results, taxes, dividend policy, plans and
objectives. Particularly, information regarding the Company's
expectations of future results, performance, achievements, facility
expansions, leases, platform expansions, acquisitions, public
company costs, payment of dividends, prospects, financial targets
or outlook, intentions or opportunities is forward-looking
information. In some cases, forward-looking information can be
identified by the use of forward-looking terminology such as
"plans", "targets", "expects", "budget", "scheduled", "estimates",
"outlook", "forecasts", "projection", "prospects", "strategy",
"intends", "anticipates", "believes", "commencing" 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. Such forward-looking statements are
qualified in their entirety by the inherent risks, uncertainties
and changes in circumstances surrounding future expectations which
are difficult to predict and many of which are beyond the control
of the Company.
Forward-looking information is necessarily based on a number
of opinions, estimates and assumptions, including but not limited
to those assumptions described under the heading "Cautionary Note
Regarding Forward-Looking Information" in the MD&A for the year
ended December 31, 2019.
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 factors
discussed under the heading "Risk Factors" in the Company's annual
information form dated March 12,
2020, which is available, together with the MD&A, on the
Company's profile on SEDAR at www.sedar.com. If any of these risks
or uncertainties materialize, or if the opinions, estimates or
assumptions underlying the forward-looking information prove
incorrect, actual results or future events might vary materially
from those anticipated in the forward-looking information.
Accordingly, investors should not place undue reliance on
forward-looking information, which speaks only as of the date made.
The forward-looking information contained in this news release
represents the Company's expectations as of the date of this news
release, and are subject to change after such date and 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.
(1) Non-IFRS Financial Measures
This news release contains certain non-IFRS measures. These
measures are not recognized measures under IFRS, do not have a
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to
complement those IFRS measures by providing further
understanding of the Company's results of operations from
management's perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of the
Company's financial information reported under IFRS. AHG uses
non-IFRS measures including "EBITDA", "EBITDA Margin", "EBITDA less
Leases and CAPEX" and "EBITDA less Leases and CAPEX Conversion" and
"EBITDA less Leases and CAPEX Margin". These non-IFRS measures are
used to provide investors with supplemental measures of the
Company's operating performance and thus highlight trends in its
core business that may not otherwise be apparent when relying
solely on IFRS financial measures. AHG also believes that
securities analysts, investors and other interested parties
frequently use non-IFRS measures in the evaluation of issuers. AHG
management also uses non-IFRS measures in order to facilitate
operating performance comparisons from period to period, to prepare
annual operating budgets and to determine components of management
compensation.
EBITDA
AHG defines EBITDA as net income (loss) and comprehensive
income (loss) for the period before: (i) income tax (recovery)
expense; (ii) interest income; (iii) interest expense; and (iv)
depreciation and amortization.
AHG believes EBITDA is a useful measure to assess the
Company's financial performance because it provides a more relevant
picture of operating results by excluding the effects of expenses
that are not reflective of the Company's underlying business
performance.
EBITDA Margin
AHG defines EBITDA Margin as EBITDA divided by revenue.
EBITDA Margin represents a measure of the Company's profitability
expressed as a percentage of revenue.
AHG believes EBITDA Margin is a useful measure to assess the
Company's financial performance because it helps quantify the
Company's ability to convert revenues generated from clients into
EBITDA.
For a description of how AHG defines the other non-IFRS
Measures it uses and an explanation of why the non-IFRS measures
provide useful information to investors, please see "How We Assess
the Performance of Our Business – Non-IFRS Measures" in the
Company's MD&A for the year ended December 31, 2019, available on the Company's
profile on SEDAR (www.sedar.com), or the Company's
website (www.andlauerhealthcare.com).
For quantitative reconciliations of net income and
comprehensive income to EBITDA and EBITDA less Leases and CAPEX for
Q4 2019 and Q4 2018; and the years ended December 31, 2019 and 2018, please see
"Reconciliation of Non-IFRS Measures" in the Company's MD&A for
the year ended December 31, 2019,
available on the Company's profile on SEDAR
(www.sedar.com), or the Company's website
(www.andlauerhealthcare.com).
SOURCE Andlauer Healthcare Group Inc.