TORONTO, March 17, 2022
/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 fourth
quarter ended December 31, 2021.
Highlights for the Fourth Quarter of 2021
(All
percentage increases are as compared to the fourth quarter of
2020)
- Revenue from continuing operations increased 109% to
$96.9 million from $46.4 million:
-
- Growth driven primarily by contributions of the SmartMeds,
Rexall LTC Pharmacy and Medical Pharmacies Group Limited ("MPGL")
LTC Pharmacy businesses acquired (the "Acquired Businesses") during
the year and;
- Growth also driven by new contracts, including over 3,000 beds
onboarded throughout the third and fourth quarters of 2021.
- Adjusted EBITDA1 from continuing operations
increased 86% to $7.6 million from
$4.1 million:
-
- Growth driven primarily by contributions of the Acquired
Businesses and from new contracts that were onboarded throughout
the third and fourth quarters of 2021; and
- Growth was partially offset by non-recurring costs that were
incurred during the quarter that reduced Adjusted
EBITDA1 by $1.1
million.
- Excluding the $1.1 million in
non-recurring costs, Adjusted EBITDA1 from continuing
operations was $8.7 million.
- Net loss from continuing operations increased by 47% to
$4.4 million from $3.0 million:
-
- Primarily due to an increase in finance costs, as a result of
the increase in the Company's borrowings, transaction and
restructuring costs related to the MPGL LTC Pharmacy Business
acquisition and non-cash adjustments including changes in the fair
values of derivative financial instruments.
- Cash provided by operating activities increased to $7.3 million for the year ended December 31, 2021 from $0.2 million for the year ended December 31, 2020.
- Continued integration of MPGL LTC Pharmacy Business as
planned:
-
- Five locations were consolidated during the year with five
additional pharmacy site consolidations expected to be completed in
2022;
- Integration projects expected to be substantially complete by
the end of the third quarter of 2022; and
- Total annual cost savings synergies of approximately
$5.0 million expected to be realized
upon the completion of the integration.
- Signed lease to build a new, innovative high-volume fulfillment
centre in Burlington, Ontario,
expected to open in April 2022, which
will be the first pharmacy in Canada to use BD RowaTM Dose
technology, enabling higher prescription volumes without additional
labour costs, while improving safety and reducing medication
packaging errors and waste.
1 See
"Non-IFRS Measures" below.
|
Highlights Subsequent to the End of the Fourth Quarter of
2021
- Secured extensions with two largest customers, representing
approximately 15,000 total beds serviced, for an average of 5.5
years from the end of 2021.
- Ontario Ministry of Health announced that it postponed
previously scheduled changes to long-term care pharmacy funding for
a further year.
- Expanded scope of medical supplies business under new brand,
Revicare™, offering significantly increased assortment of medical
supplies.
"The fourth quarter was a strong finish to an exceptional year
that saw our bed count and revenue double as a result of the
successful execution of our growth strategy," said David Murphy, President and Chief Executive
Officer of CareRx. "During the fourth quarter, we made considerable
progress on the integration of the MPGL LTC Pharmacy Business,
acquired in August, such that we are on track to substantially
complete the integration projects by the end of the third quarter
this year, and remain firmly on track to realize $5.0 million of annualized costs savings
synergies. Next month, we will open our new state-of-the-art,
high-volume fulfillment centre in Burlington – marking an important first step
in the transformation and modernization of our fulfillment network
that will allow us to realize enhanced scale and efficiency
benefits while delivering an institutional pharmacy services
offering that is unmatched in Canada."
"The recent long-term contract extensions with our two largest
home operator partners are further evidence of the value we provide
in supporting our customers in the delivery of outstanding care to
residents. For many home operators, the pandemic has highlighted
the importance of their pharmacy partnership. We have built, and
continue to strengthen, a differentiated offering that we believe
makes us the ideal partner for their pharmacy needs. With the
accelerated expansion of the seniors living sector in the months
and years ahead, we are well positioned to grow with our customers
and play a significant role in improving healthcare for the most
vulnerable Canadians."
FINANCIAL RESULTS
Selected Financial Information
(Thousands of
Canadian dollars except per share amounts and
percentages)
|
For the three
month periods
ended December 31,
|
For the years
ended
December 31,
|
|
2021
|
2020
|
2019
|
2021
|
2020
|
2019
|
|
$
|
$
|
$
|
$
|
$
|
$
|
Revenue from
continuing operations
|
96,850
|
46,388
|
32,206
|
262,630
|
162,196
|
124,626
|
|
|
|
|
|
|
|
EBITDA1
from continuing operations
|
4,596
|
3,924
|
(8,264)
|
8,954
|
(3,891)
|
(3,024)
|
Adjusted
EBITDA1 from continuing operations
|
7,583
|
4,066
|
2,470
|
22,869
|
12,776
|
9,378
|
Per share - Basic
and Diluted2
|
$0.17
|
$0.17
|
$0.20
|
$0.66
|
$0.63
|
$0.85
|
Adjusted EBITDA
Margin from continuing operations
|
7.8%
|
8.8%
|
7.7%
|
8.7%
|
7.9%
|
7.5%
|
|
|
|
|
|
|
|
Adjusted
EBITDA1
|
7,583
|
4,066
|
3,313
|
22,869
|
12,776
|
12,691
|
|
|
|
|
|
|
|
Per share - Basic
and Diluted2
|
$0.17
|
$0.17
|
$0.27
|
$0.66
|
$0.63
|
$1.16
|
Adjusted EBITDA
Margin
|
7.8%
|
8.8%
|
8.4%
|
8.7%
|
7.9%
|
7.8%
|
|
|
|
|
|
|
|
Net
loss
|
(4,447)
|
(3,021)
|
(18,939)
|
(22,730)
|
(18,262)
|
(29,307)
|
Per share - Basic
and Diluted 2
|
($0.10)
|
($0.12)
|
($1.56)
|
($0.65)
|
($0.90)
|
($2.67)
|
|
|
|
|
|
|
|
Cash provided by
operations
|
2,698
|
2,819
|
1,393
|
7,269
|
229
|
6,355
|
|
|
|
|
|
|
|
Total
Assets
|
282,816
|
156,110
|
87,083
|
282,816
|
156,110
|
87,083
|
Total
Liabilities
|
200,529
|
144,807
|
107,044
|
200,529
|
144,807
|
107,044
|
|
1 See "Non-IFRS
Measures" below.
|
2
Basic and diluted earnings per share is based on the profit or
loss attributable to shareholders of CareRx
Corporation.
|
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 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 December
31,
|
For the years
ended
December 31,
|
|
2021
|
2020
|
2021
|
2020
|
(thousands of
Canadian Dollars)
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Net loss from
continuing operations
|
(4,447)
|
(3,021)
|
(22,730)
|
(18,183)
|
Depreciation and
amortization
|
5,281
|
3,962
|
15,393
|
11,458
|
Finance costs,
net
|
3,802
|
3,305
|
17,296
|
2,952
|
Income tax
recovery
|
(40)
|
(322)
|
(1,005)
|
(118)
|
EBITDA from
continuing operations
|
4,596
|
3,924
|
8,954
|
(3,891)
|
Transaction and
restructuring costs
|
1,586
|
1,057
|
8,064
|
11,396
|
Change in fair value
of contingent consideration liability
|
6
|
(24)
|
889
|
(253)
|
Share-based
compensation expense
|
608
|
1,148
|
2,665
|
2,522
|
Change in fair value
of derivative financial instruments
|
815
|
(374)
|
2,243
|
4,041
|
Change in fair value
of investment
|
—
|
(763)
|
—
|
(763)
|
(Gain) loss on
disposal of assets
|
(28)
|
(902)
|
54
|
(276)
|
Adjusted EBITDA
from continuing operations
|
7,583
|
4,066
|
22,869
|
12,776
|
Adjusted EBITDA from
discontinued operations
|
—
|
—
|
—
|
—
|
Adjusted
EBITDA
|
7,583
|
4,066
|
22,869
|
12,776
|
|
|
|
|
|
Weighted average
number of shares - basic and diluted (in thousands)
|
44,771
|
24,621
|
34,858
|
20,266
|
Adjusted EBITDA
per share from continuing operations - basic and
diluted
|
$0.17
|
$0.17
|
$0.66
|
$0.63
|
Conference Call
The Company will host a conference call, including a slide
presentation, to discuss its fourth quarter and year end 2021
financial results tomorrow, Friday, March
18, 2021 at 8:30 a.m. Eastern
Time (ET).
Telephone Dial-In Access Information
To access the conference call by telephone, 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 over 96,000 residents in over 1,600 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 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.
SOURCE CareRx Corporation