TORONTO, March 9,
2023 /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,
2022.
Highlights for the Fourth Quarter of 2022
(All
percentage increases are as compared to the fourth quarter of
2021)
- Revenue decreased 3% to $94.3
million from $96.9
million:
-
- Decline was driven primarily by the offboarding of a large
customer contract which was substantially completed by the end of
the year. This contract loss was partially offset by the
contribution of new beds onboarded throughout 2022.
- Adjusted EBITDA1 decreased 6% to $7.1 million from $7.6
million:
-
- Decline was partially driven by the offboarding of a large
customer contract which was substantially completed by the end of
the year;
- Decline was also driven by certain incremental costs associated
with continued challenges in the healthcare labour market related
to scarcity and increased competition for certain pharmacy
positions, which has resulted in a higher number of open positions
and a longer time to fill these vacancies; and
- The impact of the customer offboarding and incremental labour
costs was partially offset by the contribution of new beds
onboarded throughout 2022.
- Net loss increased by 5% to $4.7
million from $4.4
million:
-
- Increase in net loss was driven primarily by the commencement
of the customer offboarding, incremental costs incurred as a result
of the current labour market, higher share-based compensation
expense, the loss on the change in fair value of contingent
consideration liabilities and income tax expense, which were
partially offset by decreases in finance costs and transaction and
restructuring costs and the gain on the change in fair value of
derivative financial instruments.
- Signed multi-year contract to provide pharmacy services to
residents in multiple seniors living facilities in Atlantic Canada, initially serving up to 600
residents, and expect to commence servicing homes in the third
quarter of 2023.
- Subsequent to the end of the fourth quarter, closed a public
offering and private placement of common shares for total gross
proceeds of approximately $16.1
million.
1 See "Non-IFRS Measures"
below
"Our 2022 results reflect the exceptional progress we have made in
growing our national presence and expanding our leadership position
over the past three years," said David
Murphy, President and Chief Executive Officer of CareRx.
"During that period, we have more than tripled our revenue and
Adjusted EBITDA. With long-term contract extensions now in place
with our largest home operator partners, and our geographic
expansion plans well underway, we are very well positioned to
continue this robust growth trajectory as the leading pharmacy
partner to the rapidly expanding seniors living sector."
"While challenges in the healthcare labour market continue to
impact the sector and put short-term strain on our operations and
cost structure, we are confident in our long-term ability to
leverage our scale and capabilities to provide superior service,
drive efficiencies and margin expansion, and create exceptional
value for all of our stakeholders."
FINANCIAL RESULTS
Selected Financial Information
|
For the three month
periods
ended December 31,
|
For the years
ended
December 31,
|
(Thousands of
Canadian dollars except per
share amounts and percentages)
|
2022
|
2021
|
2020
|
2022
|
2021
|
2020
|
$
|
$
|
$
|
$
|
$
|
$
|
Revenue
|
94,319
|
96,850
|
46,388
|
381,727
|
262,630
|
162,196
|
|
|
|
|
|
|
|
EBITDA1
|
4,516
|
4,596
|
3,924
|
(888)
|
8,954
|
(3,891)
|
Adjusted
EBITDA1
|
7,144
|
7,583
|
4,066
|
32,267
|
22,869
|
12,776
|
Per share -
Basic
|
$0.15
|
$0.17
|
$0.17
|
$0.68
|
$0.66
|
$0.63
|
Adjusted EBITDA
Margin1
|
7.6 %
|
7.8 %
|
8.8 %
|
8.5 %
|
8.7 %
|
7.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(4,680)
|
(4,447)
|
(3,021)
|
(34,353)
|
(22,730)
|
(18,262)
|
Per share - Basic and
Diluted
|
($0.10)
|
($0.10)
|
($0.12)
|
($0.72)
|
($0.65)
|
($0.90)
|
|
|
|
|
|
|
|
Cash provided by
operations
|
14,190
|
2,698
|
2,819
|
22,333
|
7,269
|
229
|
|
|
|
|
|
|
|
Total
Assets
|
264,535
|
282,816
|
156,110
|
264,535
|
282,816
|
156,110
|
Total
Liabilities
|
200,078
|
200,529
|
144,807
|
200,078
|
200,529
|
144,807
|
1 See
"Non-IFRS Measures" below.
|
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, 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. 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,
|
|
2022
|
2021
|
2022
|
2021
|
(Thousands of
Canadian Dollars except per
share amounts)
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Net
loss
|
(4,680)
|
(4,447)
|
(34,353)
|
(22,730)
|
Depreciation and
amortization
|
5,221
|
5,281
|
20,065
|
15,393
|
Finance costs,
net
|
3,508
|
3,802
|
14,943
|
17,296
|
Income tax expense
(recovery)
|
467
|
(40)
|
(1,543)
|
(1,005)
|
EBITDA
|
4,516
|
4,596
|
(888)
|
8,954
|
Transaction and
restructuring costs
|
697
|
1,586
|
4,998
|
8,064
|
Change in fair value of
contingent consideration
liability
|
541
|
6
|
1,872
|
889
|
Goodwill and intangible
assets impairment
|
—
|
—
|
24,330
|
—
|
Share-based
compensation expense
|
1,602
|
608
|
4,569
|
2,665
|
Change in fair value of
derivative financial
instruments
|
(221)
|
815
|
(5,576)
|
2,243
|
Change in fair value of
investment
|
—
|
—
|
2,713
|
—
|
Loss (gain) on disposal
of assets
|
9
|
(28)
|
249
|
54
|
Adjusted
EBITDA
|
7,144
|
7,583
|
32,267
|
22,869
|
|
|
|
|
|
Weighted average number
of shares - basic
and diluted (in thousands)
|
49,257
|
44,771
|
47,596
|
34,858
|
Adjusted EBITDA per
share - basic
|
$0.15
|
$0.17
|
$0.68
|
$0.66
|
Conference Call
The Company will host a conference call, including a slide
presentation, to discuss its fourth quarter 2022 financial results
on Thursday, March 9, 2023 at
8:30 a.m. Eastern Time (ET).
Telephone Dial-In Access Information
To join the conference call without operator assistance, you may
register and enter your phone number at
https://emportal.ink/3Y6lLz2 to receive an instant automated
call
To dial direct and enter the call through an operator, 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 94,000 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 general business risks, exposure
to and reliance on government regulation and funding, the Company's
liquidity and capital requirements, exposure to epidemic or
pandemic outbreak, 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