Delivered Third Consecutive
Quarter-Over-Quarter Growth in Adjusted EBITDA
TORONTO, March 7,
2024 /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,
2023.
"In 2023 we made tremendous progress to deliver on our
operational optimization program and further strengthen our
financial position," said Puneet
Khanna, President & Chief Executive Officer of CareRx.
"As evidenced by our third consecutive quarter of Adjusted EBITDA
growth and the improvement in our Adjusted EBITDA margin, our focus
on increasing productivity and driving efficiencies has better
positioned CareRx to deliver sustained and accretive growth.
Through our industry leadership position, we will continue to
generate value for our shareholders, stakeholders and customers by
providing exceptional pharmacy services to the rapidly expanding
seniors living sector."
Highlights for the Fourth Quarter of 2023
- Revenue for the quarter was $91.1
million as compared to $93.8
million for the third quarter of 2023 and $94.3 million for the fourth quarter of 2022:
- Decrease compared to the prior quarter was mainly due to a net
reduction in the average number of beds serviced; and
- Decrease compared to the same period in the prior year was
primarily driven by a change in the mix of branded and generic
pharmaceuticals dispensed, which did not negatively impact the
Company's profitability in the quarter.
- Adjusted EBITDA1 for the quarter was $7.5 million as compared to $7.3 million for the third quarter of 2023
and $7.1 million for the fourth
quarter of 2022:
- Increase to previous quarter and the same period in the prior
year was due to certain efficiencies and cost savings initiatives
implemented during the second half of 2023.
- Net loss for the quarter was $3.7
million as compared to net loss $1.4
million for the third quarter of 2023 and net loss of
$4.7 million for the fourth quarter
of 2022:
- Increase compared to the prior quarter was mainly due to a
non-cash adjustment related to loss on financial liability
extinguishment recorded as part of the refinancing transaction and
a net reduction in the average number of beds serviced; and
- Decline in net loss as compared to the same period in the prior
year was driven primarily by decreases in share-based compensation
expense, the loss on the change in fair value of contingent
consideration liabilities, and the impact of certain cost savings
initiatives implemented during the second half of 2023; partially
offset by a lower gain on the change in fair value of derivative
financial instruments and intangible assets impairment recorded
during the fourth quarter of 2023.
- On December 21, 2023, the Company
entered into a comprehensive refinancing transaction led by a
Canadian Schedule I chartered bank and arranged and managed by
Crown Private Credit Partners Inc. ("CPCP"). Under the terms of the
refinancing, CPCP provided a senior secured revolving operating
loan of up to $20.0 million (the
"Operating Loan") and a $50.0 million
senior secured term loan (the "Term Loan", and together with the
Operating Loan, the "Credit Facilities"), of which $14.0 million and $47.0
million were advanced, respectively, on December 21, 2023 with future draws on the Term
Loan available to fund certain capital expenditures;
- The proceeds from the Credit Facilities, plus available cash on
hand, were used to repay $78.0
million of existing debt and to redeem the entire aggregate
principal of the Ewing Convertible Debentures that otherwise were
set to mature on March 12, 2024.
1 See "Non-IFRS Measures"
below
|
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)
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
$
|
$
|
$
|
$
|
$
|
$
|
Revenue
|
91,097
|
94,319
|
96,850
|
370,746
|
381,727
|
262,630
|
|
|
|
|
|
|
|
EBITDA1
|
5,486
|
4,516
|
4,596
|
24,697
|
(888)
|
8,954
|
Adjusted
EBITDA1
|
7,505
|
7,144
|
7,583
|
28,673
|
32,267
|
22,869
|
Per share -
Basic
|
$0.13
|
$0.15
|
$0.17
|
$0.50
|
$0.68
|
$0.66
|
Adjusted EBITDA
Margin1
|
8.2 %
|
7.6 %
|
7.8 %
|
7.7 %
|
8.5 %
|
8.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(3,700)
|
(4,680)
|
(4,447)
|
(5,405)
|
(34,353)
|
(22,730)
|
Per share - Basic and
Diluted
|
($0.06)
|
($0.10)
|
($0.10)
|
($0.09)
|
($0.72)
|
($0.65)
|
|
|
|
|
|
|
|
Cash provided by
operations
|
8,762
|
14,190
|
2,698
|
27,375
|
22,333
|
7,269
|
|
|
|
|
|
|
|
Total
Assets
|
231,893
|
264,535
|
282,816
|
231,893
|
264,535
|
282,816
|
Total
Liabilities
|
150,367
|
200,078
|
200,529
|
150,367
|
200,078
|
200,529
|
1 See "Non-IFRS Measures"
below.
|
Conference Call
The Company will host a conference call, including a slide
presentation, to discuss its fourth quarter of 2023 and the full
year ended December 31, 2023
financial results on Thursday, March 7,
2024 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/42SSLil 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 approximately 91,000 residents in over 1,500 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 regimens. 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, the
Company's exposure to and reliance on government regulation and
funding, risks related to employee recruitment and retention, the
Company's liquidity and capital requirements, exposure to epidemic
or pandemic outbreak, reliance on contracts with key care operators
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.
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, restructuring and other costs, change in fair value of
contingent consideration liability, impairments, change in fair
value of derivative financial instruments, change in fair value of
investment, loss on disposal of property and equipment and
share-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,
|
|
2023
|
2022
|
2023
|
2022
|
(Thousands of
Canadian Dollars except per share
amounts)
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Net
loss
|
(3,700)
|
(4,680)
|
(5,405)
|
(34,353)
|
Depreciation and
amortization
|
4,946
|
5,221
|
19,976
|
20,065
|
Finance costs,
net
|
4,413
|
3,508
|
14,316
|
14,943
|
Income tax expense
(recovery)
|
(173)
|
467
|
(4,190)
|
(1,543)
|
EBITDA
|
5,486
|
4,516
|
24,697
|
(888)
|
Transaction,
restructuring and other costs
|
633
|
697
|
1,445
|
4,998
|
Change in fair value of
contingent consideration liability
|
18
|
541
|
230
|
1,872
|
Goodwill and intangible
assets impairment
|
710
|
—
|
710
|
24,330
|
Share-based
compensation expense
|
449
|
1,602
|
1,471
|
4,569
|
Change in fair value of
derivative financial instruments
|
—
|
(221)
|
(281)
|
(5,576)
|
Change in fair value of
investment
|
—
|
—
|
—
|
2,713
|
Loss on disposal of
assets
|
209
|
9
|
401
|
249
|
Adjusted
EBITDA
|
7,505
|
7,144
|
28,673
|
32,267
|
|
|
|
|
|
Weighted average number
of shares - basic and diluted
(in thousands)
|
58,636
|
49,257
|
57,350
|
47,596
|
Adjusted EBITDA per
share - basic
|
$0.13
|
$0.15
|
$0.50
|
$0.68
|
SOURCE CareRX Corporation