AND Andlauer Heathcare Group Inc

TORONTO, Feb. 26, 2025 /CNW/ - Andlauer Healthcare Group Inc. (TSX: AND) ("AHG" or the "Company") today reported its financial results for the three-month period ("Q4 2024") and year ended December 31, 2024 ("Fiscal 2024").

Q4 2024 Summary

• Revenue totaled $168.3 million, compared to $169.1 million for the three-month period ended December 31, 2023 ("Q4 2023");
• Operating income was $26.7 million, compared to $28.0 million in Q4 2023;
• Net income totaled $17.5 million, or $0.44 per share (diluted), compared to $18.6 million, or $0.44 per share (diluted), in Q4 2023;
• EBITDA¹ totaled $43.6 million, compared to $44.8 million in Q4 2023; and
• EBITDA Margin¹ was 25.9%, compared to 26.5% in Q4 2023.

Fiscal 2024 Summary

• Revenue totaled $650.5 million compared to $648.0 million for the year ended December 31, 2023 ("Fiscal 2023");
• Operating income was $94.0 million, compared to $96.1 million in Fiscal 2023;
• Net income totaled $64.5 million, or $1.58 per share (diluted), compared to $66.1 million, or $1.55 per share (diluted) in Fiscal 2023;
• EBITDA¹ totaled $164.6 million, compared to $163.8 million in Fiscal 2023; and
• EBITDA Margin¹ was 25.3%, compared to 25.3% in Fiscal 2023.

"Our results for the quarter and year reflect continued growth in our Canadian specialized transportation network, the improved performance of our logistics and distribution product line in the second half of the year and revenue growth in the fourth quarter for our packaging solutions. This growth was offset by the continued headwinds in our US-based truckload businesses," said Michael Andlauer, Chief Executive Officer of AHG. "Our low debt levels, combined with the strong cash generation of our business provides us with financial flexibility to pursue value-enhancing opportunities. Our share buybacks have been an attractive, accretive path for capital allocation, and we continue to evaluate opportunities to allocate capital towards extending our platform to build further value for our customers and shareholders."   

Selected Consolidated Financial Summary

Q4 2024 Financial Results

Consolidated revenue decreased by 0.5% to $168.3 million, compared with $169.1 million in Q4 2023. The decrease was primarily attributable to the Company's US-based truckload businesses (Boyle Transportation and Skelton USA) and lower fuel surcharge revenue, partially offset by organic growth in the Company's Canadian specialized transportation product lines and healthcare logistics segment.   

Revenue for the healthcare logistics segment totaled $48.7 million, an increase of 10.4% compared with Q4 2023. The increase reflects 9.2% year-over-year growth in the Company's logistics and distribution revenue and 25.2% growth packaging revenue.  The increase in logistics and distribution revenue was attributable to increased revenue from Accuristix and Logistics Support Unit (LSU) Inc. ("LSU") clients, reflecting a combination of higher volumes and planned rate increases taking effect in Q4 2024. The increase in packaging revenue was attributable to higher volumes.  

Revenue in the specialized transportation segment totaled $119.6 million, a decrease of 4.3% compared with Q4 2023. Ground transportation revenue for Q4 2024 was $108.8 million, a decrease of 4.3% compared with Q4 2023. The decrease in ground transportation revenue was attributable to AHG's US-based truckload businesses and lower fuel surcharge revenue, partially offset by organic growth in the Company's Canadian ground transportation network.  Ground transportation revenue, excluding fuel, in the Company's Canadian network increased by approximately 6.3%. Air freight forwarding revenue for Q4 2024 increased by 3.3% compared to Q4 2023, reflecting increased shipments. Dedicated and last mile delivery revenue increased 3.7% compared to Q4 2023, reflecting continued organic growth.

Cost of transportation and services was $83.5 million, or 49.6% of revenue, compared with $85.8 million, or 50.7% of revenue, for Q4 2023. The decrease was in line with revenue and lower fuel costs. In Q4 2024, AHG continued to carry certain idle equipment costs in its US-based truckload businesses arising from a lower volume of truckloads as the Company focused on revenue quality.

Direct operating expenses were $27.6 million, or 16.4% of revenue, compared with $25.1 million, or 14.8% of revenue, for Q4 2023. The increase was primarily attributable to growth in AHG's logistics and distribution product line.

Operating income was $26.7 million, a decrease of 4.7% compared with $28.0 million for Q4 2023. The decrease was primarily attributable to lower contributions from the Company's US-based truckload businesses, partially offset by organic growth in the Company's Canadian specialized transportation, logistics and distribution, and packaging product lines.  

Net income was $17.5 million, or $0.44 per share (diluted), compared with $18.6 million, or $0.44 per share (diluted) in Q4 2023. Higher net income for the Company's healthcare logistics segment reflects increased revenue from the Company's logistics and distribution, and packaging clients, partially offset by increased costs related to the implementation of a new warehouse management system for Accuristix. Lower net income before eliminations for AHG's specialized transportation segment reflects lower contributions from Boyle Transportation and Skelton USA, partially offset by organic growth in the Company's Canadian specialized transportation business.    

Total comprehensive income for Q4 2024 was $32.5 million, compared to $13.5 million for Q4 2023. Total comprehensive income differs from net income due to the acquisition of foreign operations (Boyle Transportation and Skelton USA), which resulted in a positive foreign currency translation adjustment of $14.9 million in Q4 2024, compared to a negative foreign currency translation adjustment of $5.0 million in Q4 2023.

Earnings before interest, taxes, depreciation and amortization ("EBITDA")¹ totaled $43.6 million, a decrease of 2.7% from $44.8 million in Q4 2023. The decrease was due to the factors discussed above and primarily reflects lower contributions from AHG's US-based truckload businesses, partially offset by organic growth in the Company's Canadian specialized transportation network and healthcare logistics segment. EBITDA¹ attributable to Boyle Transportation and Skelton USA was approximately $2.5 million lower in Q4 2024 compared to Q4 2023. EBITDA Margin¹ was 25.9% in Q4 2024 compared to 26.5% in Q4 2023.

Fiscal 2024 Financial Results

Consolidated revenue for Fiscal 2024 totaled $650.5 million, an increase of 0.4% compared to $648.0 million in Fiscal 2023. The increase was attributable to organic growth in the Company's Canadian specialized transportation network and healthcare logistics segment, partially offset by a decline in revenue from AHG's US-based truckload businesses and lower fuel surcharge revenue. Revenue generated by Boyle Transportation and Skelton USA was approximately $18.3 million lower in Fiscal 2024 compared to Fiscal 2023. Average fuel prices in Fiscal 2024 were approximately 5% lower compared to Fiscal 2023.

Operating income for Fiscal 2024 was $94.0 million, a decrease of 2.2% compared with $96.1 million for Fiscal 2023. The decrease was attributable to lower revenue and margins in AHG's US-based truckload businesses resulting in a reduction in operating income of $8.5 million attributable to Boyle Transportation and Skelton USA combined, partially offset by organic growth in the Company's Canadian specialized transportation network and healthcare logistics segment.

Net income for Fiscal 2024 totaled $64.5 million, or $1.58 per share (diluted), compared to $66.1 million, or $1.55 per share (diluted), for Fiscal 2023. Lower US-based truckload revenue and related margins in Fiscal 2024 compared to Fiscal 2023 resulted in approximately $5.6 million lower net income in AHG's specialized transportation segment compared with Fiscal 2023. This year-over-year decline was partially offset by organic growth in the Company's Canadian specialized transportation network. Net income for the healthcare logistics segment totaled $14.3 million in Fiscal 2024 compared with $14.1 million in Fiscal 2023, recovering in Q4 2024 from reduced order handling and shipping activities from AHG's consumer healthcare clients in Q1 2024 through Q3 2024.

EBITDA for Fiscal 2024 increased by 0.5% to $164.6 million, from $163.8 million for Fiscal 2023. The increase in EBITDA was due to the factors discussed above. EBITDA attributable to Boyle Transportation and Skelton USA was approximately $9.1 million lower in Fiscal 2024 compared to Fiscal 2023. EBITDA Margin for Fiscal 2024 was 25.3%, which is in line with the Company's pre-pandemic historical range of EBITDA Margins. EBITDA Margin in Fiscal 2023 was also 25.3%.

Dividend

The Company paid a dividend (encompassing the period from October 1, 2024 to December 31, 2024) in the amount of $0.11 per subordinate voting share and multiple voting share on January 15, 2025.

Subject to financial results, capital requirements, available cash flow, corporate law requirements and any other factors that AHG's Board of Directors may consider relevant, it is the Company's intention to declare a quarterly dividend of $0.12 per subordinate voting share and multiple voting share on an ongoing basis.

Shares Outstanding

On March 29, 2023, AHG commenced its first normal course issuer bid (the "NCIB 2023"). The Company purchased and cancelled 634,090 subordinate voting shares, or approximately 3% of its public float, pursuant to the NCIB 2023. The NCIB 2023 terminated on March 28, 2024.  

On June 20, 2024, AHG completed a substantial issuer bid ("SIB") under which the Company purchased and cancelled 2,000,000 subordinate voting shares for a total consideration of $90 million. Andlauer Management Group Inc. participated in the SIB and converted 1,032,045 multiple voting shares to subordinate voting shares, which were taken up by AHG pursuant to the SIB.

On July 2, 2024, the Company commenced its second normal course issuer bid for up to a maximum of 1,770,429 of its subordinate voting shares, or approximately 10% of its public float as of June 26, 2024, over the following 12-month period. As of December 31, 2024, a total of 266,534 subordinate voting shares, for a total of approximately $10.4 million, have been purchased and cancelled pursuant to the Company's current NCIB.

As at December 31, 2024, there were 18,443,497 subordinate voting shares and 20,807,955 multiple voting shares issued and outstanding.

Financial Statements

AHG's audited consolidated financial statements and related Management's Discussion & Analysis ("MD&A") for Fiscal 2024 are available on the Company's website at www.andlauerhealthcare.com and under AHG's profile on SEDAR+ at www.sedarplus.ca.

Appointment of Executive Vice President

AHG has appointed Mr. Bryan McMahon as the Company's Executive Vice President, Commercial and Specialty Solutions. Mr. McMahon will continue to drive our enterprise growth leading our commercial activities and will take on our Specialty Solutions and ATS Dedicated divisions, reporting to Sandro Caccaro. Mr. McMahon joined ATS Healthcare in 2003 after serving as Vice President – Sales & Marketing with a large, national courier company.  Mr. McMahon started at AHG as Vice President – Healthcare Logistics with the responsibility for all sales and customer service activities for ATS Healthcare.

Conference call and webcast

Michael Andlauer, Chief Executive Officer, and Peter Bromley, Chief Financial Officer, will host a conference call for analysts and investors on Thursday, February 27, 2025 at 8:30 a.m. (ET). To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/40mprQB to receive an instant automated call back. Alternatively, you can dial (416) 945-7677 or (888) 699-1199 to reach a live operator that will join you into the call.

You can access a live webcast of the call under the Presentations & Events section of AHG's investor website at: 

https://andlauerhealthcare.com/andlauer-healthcare-presentations-events/  

To access a replay of the conference call, dial (289) 819-1450 or (888) 660-6345, passcode: 16346 #. The replay will be available until March 6, 2025. The webcast will be archived on the Company's website following the 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 in Canada, 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, AHG strives to accommodate the full range of its clients' specialized supply chain needs on an integrated and efficient basis. The Company also provides specialized ground transportation services, primarily to the healthcare sector, across the 48 contiguous U.S. states. 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, objectives and expectations. Particularly, information regarding the Company's growth expectations, performance, achievements, payment of dividends, activity under the normal course issuer bid, prospects, potential acquisitions, financial targets or outlook 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, targets, 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 Company's MD&A for Fiscal 2024. 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 February 26, 2025, which is available on the Company's profile on SEDAR+ at www.sedarplus.ca. 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" and "EBITDA 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 for the period before: (i) income tax expense (recovery); (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.

Reconciliation of EBITDA

SOURCE Andlauer Healthcare Group Inc.