Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in
the accessibility industry, is pleased to announce its results for
the second quarter ended June 30, 2021.
Highlights - Q2 2021 vs Q2
2020
- Revenue
was $178.6M, up $94M or 111%, mainly due to the acquisition of
Handicare;
- Gross
profit was $65.2M, up $36M or 122.9%, representing 36.5% of revenue
compared to 34.6% in Q2 2020;
- Adjusted
EBITDA was $27.4M, up $12.9M or 89.3%;
- Adjusted
EBITDA margin stood at 15.3%, compared to 17.1% in Q2 2020;
- Net earnings
were $6.6M or $0.10 per share on a diluted basis. Adjusted net
earnings were $9.5M or $0.15 per share on a diluted basis, up $3.2M
or 51.7%;
- Funds available
in excess of $125 million to support working capital, investments
and growth opportunities;
- Savaria
now holds 100% of the shares of Handicare.
|
Q2 |
YTD |
in thousands of dollars, except per-share amounts and
percentages |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
Revenue |
$178,621 |
$84,668 |
111.0% |
|
|
$290,696 |
$173,087 |
67.9% |
Gross profit |
$65,227 |
$29,269 |
122.9% |
|
|
$104,167 |
$59,411 |
75.3% |
% of revenue |
36.5% |
34.6% |
n/a |
|
|
35.8% |
34.3% |
n/a |
Net earnings |
$6,590 |
$6,107 |
7.9% |
|
|
$12,216 |
$11,622 |
5.1% |
% of revenue |
3.7% |
7.2% |
n/a |
|
|
4.2% |
6.7% |
n/a |
Diluted net earnings per share |
$0.10 |
$0.12 |
(16.7)% |
|
|
$0.20 |
$0.23 |
(13.0)% |
Adjusted net earnings (1) |
$9,492 |
$6,257 |
51.7% |
|
|
$17,426 |
$13,437 |
29.7% |
% of revenue |
5.3% |
7.4% |
n/a |
|
|
6.0% |
7.8% |
n/a |
Diluted adjusted net earnings per share (1) |
$0.15 |
$0.12 |
25.0% |
|
|
$0.29 |
$0.26 |
11.5% |
Adjusted EBITDA(1) |
$27,394 |
$14,470 |
89.3% |
|
|
$44,687 |
$26,827 |
66.6% |
% of revenue |
15.3% |
17.1% |
n/a |
|
|
15.4% |
15.5% |
n/a |
(1) Non-IFRS measures are described in section 3 of the
MD&A |
|
|
|
|
|
|
|
|
|
A Word from the President
"The second quarter was important for Savaria as it benefited
from the first full quarter of Handicare. I feel enthusiastic about
the progress of our integration efforts. Revenue met our
expectations at $179 million, with a gross profit margin of 36.5%,
exceeding the gross profit margin of 34.6% excluding Handicare in
the same period last year. Our combined adjusted EBITDA was $27.4
million, or a margin of 15.3%. The accessibility segment –
representing 85% of total adjusted EBITDA and 73% of total revenue
– reached an adjusted EBITDA margin of 17.9%. We have in excess of
$125 million in funds available to invest in a marketing push for
cross-selling opportunities, to expand into new markets, to
purchase new equipment to accelerate robotics in our production and
to make strategic tuck-in acquisitions.
"Of note, legacy Savaria in the accessibility segment benefited
from 12% of organic growth over the same period in 2020. Our strong
product portfolio now reaches over 40 countries, serving over 1.7
billion people with a growing need for mobility products. The aging
population requires access to another floor in their home or public
buildings and we manufacture the products that fill these needs,
with more distribution points than ever before.
"The VP Sales at Handicare, Clare Brophy, shares the excitement
of the whole team regarding the significant cross-selling
opportunities and the momentum of our collaborative teams in all
markets to grow the business.
"With these latest results, and our early indicators of the
successful integration efforts with Handicare, I remain confident
in our ability to achieve in excess of $100 million of Adjusted
EBITDA for 2021.
"We continue to follow COVID-19 prevention protocols, including
ongoing on-site testing in our Brampton manufacturing plant. While
we have experienced some disruptions to our business, including
increased material costs, labour shortages and delays in both
supply shipments and construction activities, we have preserved and
maintained our backlog in our accessibility segment. Our employees
have been steadfast in their dedication to safety, and I thank them
for their hard work," concluded Mr. Bourassa.
Second Quarter Results
RevenueRevenue reached $178.6M,
up $94M or 111%, compared to Q2 2020. The growth is mainly due to
the acquisition of Handicare. Organic revenue growth is a
consequence of the recovery from the economic slowdown caused by
the global pandemic impacting the entirety of Q2 2020. The growth
was partially offset by a negative foreign exchange impact.
-
Accessibility segment (73% of Q2-21 revenue):
Revenue was $130.8M, an increase of $70.5M or 117.2%, compared to
Q2 2020. Acquisition growth stood at 109.6% and organic revenue
growth stood at 12.4%;
-
Patient Handling segment (20% of Q2-21 revenue):
Revenue was $36.1M, an increase of $14.8M or 69.7%, compared to Q2
2020. Acquisition growth stood at 77.3% and organic revenue growth
stood at 0.1%;
-
Adapted Vehicles segment (7% of Q2-21 revenue):
Revenue was $11.7M in Q2 2021, an increase of $8.6M or 270.7%,
compared to Q2 2020.
Adjusted EBITDATotal Q2 2021
adjusted EBITDA and adjusted EBITDA margin, both before head office
costs, stood at $29.3M and 16.4%, respectively, compared to $15M
and 17.7% for Q2 2020. The Corporation’s Accessibility, Patient
Handling and Adapted Vehicles segments had variations in adjusted
EBITDA margin versus prior year due to the Handicare acquisition
and cost containment efforts, partially offset by a reduction in
the COVID-19 employment retention government of Canada subsidy.
Across all segments, overall dollar results are increased due to
the acquisition of Handicare.
-
Accessibility segment: Adjusted EBITDA and
adjusted EBITDA margin, both before head office costs, stood at
$23.4M and 17.9%, respectively, compared to $12.3M and 20.4% for Q2
2020.
- Patient
Handling segment: Adjusted EBITDA and adjusted EBITDA
margin, both before head office costs, stood at $4.7M and 12.9%,
respectively, compared to $2.8M and 13% for Q2 2020.
- Adapted
Vehicles segment: Adjusted EBITDA and adjusted EBITDA
margin, both before head office costs, stood at $1.3M and 11.2%,
respectively, compared to negligible amounts for Q2 2020.
Net Earnings and Adjusted Net
Earnings
Net earnings were $6.6M or $0.10 per share on a diluted basis,
compared to $6.1M or $0.12 per share for the same period in
2020.
Adjusted net earnings stood at $9.5M, or $0.15 per share,
compared to $6.3M or $0.12 per share in Q2 2020. The increase was
due to the acquisition of Handicare.
Six-Month Results
Revenue
For the six-month period ended June 30, 2021,
the Corporation generated revenue of $290.7M, up $117.6M or 67.9%,
compared to the same period in 2020. The growth is largely due to
the acquisition of Handicare. Organic revenue growth is a
consequence of the recovery from the economic slowdown caused by
the global pandemic impacting all of Q2 2020. The growth was
partially offset by a negative foreign exchange impact.
Adjusted EBITDA
For the six-month period ended June 30, 2021,
adjusted EBITDA and adjusted EBITDA margin, both before head office
costs, stood at $47.6M and 16.4%, respectively, compared to $27.8M
and 16.1% for the same period ended June 30, 2020.
Net Earnings and Adjusted Net
Earnings
For the six-month period ended June 30, 2021,
the Corporation’s net earnings stood at $12.2M, or $0.20 per share
on a diluted basis, compared to $11.6M, or $0.23 per share for the
same period in 2020. The Corporation’s adjusted net earnings stood
at $17.4M, or $0.29 per share, compared to $13.4M or $0.26 per
share, respectively, compared to the same period in 2020.
Liquidity and Capital
Resources
Savaria generated $42,3M of cash from operations which was
primarily used to reduce debt, invest in capital projects and pay
dividends. This amount includes a consideration payable of $19.7M
related to the acquisition of Handicare.
As at June 30, 2021, the Corporation had a net interest-bearing
debt position of $279.1M.
Outlook
The uncertainty around the future impact of the ongoing global
pandemic makes it difficult to predict future performance, however,
considering its financial performance year-to-date, coupled with
current backlog levels, and the Corporation’s confidence in the
strategic integration plan with Handicare which is underway,
Savaria remains optimistic it will achieve its previously stated
goal of generating an Adjusted EBITDA in excess of $100M(1) during
fiscal 2021.
(1) See section 14 “Outlook” of Q2 Management Discussion &
Analysis for detail on the assumptions supporting this amount.
About Savaria Corporation
Savaria Corporation (savaria.com) is a global leader in the
accessibility industry. It provides accessibility solutions for the
physically challenged to increase their comfort, their mobility and
their independence. Its product line is one of the most
comprehensive on the market. Savaria designs, manufactures,
distributes and installs accessibility equipment, such as
stairlifts for straight and curved stairs, vertical and inclined
wheelchair lifts and elevators for home and commercial use. It also
manufactures and markets a comprehensive selection of pressure
management products for the medical market, medical beds for the
long-term care market, as well as an extensive line of medical
equipment and solutions for the safe handling of patients,
including ceiling lifts and slings. In addition, Savaria converts
and adapts vehicles for personal and commercial uses. The
Corporation operates a sales network of dealers worldwide and
direct sales offices in North America, Europe (UK, Netherlands,
Switzerland, Italy, Germany, Poland and Czech Republic), Australia
and China. Savaria employs approximately 2300 people globally and
its plants are located across Canada, the United States, Europe and
China.
Compliance with International Financial Reporting
Standards (“IFRS”)
The information appearing in this press release has been
prepared in accordance with IFRS. However, Savaria uses EBITDA,
adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA per share,
adjusted net earnings and adjusted net earnings per share for
analysis purposes to measure its financial performance. These
measures have no standardized definitions in accordance with IFRS
and are therefore regarded as non-IFRS measures. These measures may
therefore not be comparable to similar measures reported by other
companies. Additional details for these non-IFRS measures can be
found in Savaria’s MD&A, which is posted on Savaria’s website
at www.savaria.com, and filed with SEDAR at www.sedar.com.
Reconciliation between net earnings and adjusted net earnings,
adjusted EBITDA and adjusted EBITDA per share is presented in the
section below.
Forward-Looking Statements
This press release includes certain statements that are
“forward-looking statements” within the meaning of the securities
laws of Canada. Any statement in this press release that is not a
statement of historical fact may be deemed to be a forward-looking
statement. When used in this press release, the words “believe”,
“could”, “should”, “intend”, “expect”, “estimate”, “assume” and
other similar expressions are generally intended to identify
forward-looking statements. It is important to know that the
forward-looking statements in this document describe the
Corporation’s expectations as at the date hereof, which are not
guarantees of future performance of Savaria or its industry,and
involve known and unknown risks and uncertainties that may cause
Savaria’s or the industry’s outlook, actual results or performance
to be materially different from any future results or performance
expressed or implied by such statements. The Corporation’s actual
results could be materially different from its expectations if
known or unknown risks affect its business, or if its estimates or
assumptions turn out to be inaccurate.
A change affecting an assumption can also have an impact on
other interrelated assumptions, which could increase or diminish
the effect of the change. As a result, the Corporation cannot
guarantee that any forward-looking statement will materialize and,
accordingly, the reader is cautioned not to place undue reliance on
these forward-looking statements. Forward-looking statements do not
take into account the effect that transactions or special items
announced or occurring after the statements are made may have on
the Corporation’s business. For example, they do not include the
effect of sales of assets, monetizations, mergers, acquisitions,
other business combinations or transactions, asset write-downs or
other charges announced or occurring after forward-looking
statements are made.
Unless otherwise required by applicable securities laws, Savaria
disclaims any intention or obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise. The foregoing risks and uncertainties
include the risks set forth under “Risks and Uncertainties” in
Savaria’s latest Annual MD&A as well as other risks detailed
from time to time in reports filed by Savaria with securities
regulators in Canada.
Results Webcast and conference call on
August 12, 2021, at 8:30 a.m. (ET)
Savaria will host a conference call on Thursday,
August 12, 2021 at 8:30 a.m. Eastern Time with financial analysts
to discuss results of the quarter ended June 30, 2021. Investors
and members of the media are invited to participate on a
listen-only basis.
Conference call access:
Local Dial-in Numbers: (647) 792-1241 or (514)
669-6115
North American Toll Free Number: 1 (866)
248-8441Webcast (EN):
https://produceredition.webcasts.com/starthere.jsp?ei=1486118&tp_key=851d198974link
to the replay of the webcast will be available on the Corporation’s
website at www.savaria.com
For further information: |
|
|
Marcel BourassaChairman, President and Chief Executive
Officer1.800.661.5112 |
Stephen Reitknecht, CPA, CAChief Financial Officer1.800.661.5112,
ext. 3370sreitknecht@savaria.com |
Nicolas Rimbert, CFAVice President, Corporate
Development1.800.931.5655, ext. 239nrimbert@savaria.com |
|
|
|
Pierre BoucherMaisonBrison
Communications514-731-0000pierre@maisonbrison.com |
Chris MakuchMaisonBrison
Communications416-953-3337chris@maisonbrison.com |
|
www.savaria.comFacebook :
www.facebook.com/savariabettermobilityTwitter:
twitter.com/Mobilityforlife
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|
Reconciliation of adjusted net earnings and
adjusted EBITDA with net earnings |
|
Q2 |
YTD |
in thousands of
dollars, except per-share |
2021 |
2020 |
2021 |
2020 |
Net earnings |
$6,590 |
$6,107 |
|
|
$12,216 |
11,622 |
Other expenses |
3,212 |
$192 |
|
|
5,735 |
2,325 |
Income taxes related to other expenses |
(310) |
(42) $ |
|
|
(525) |
(510) |
Adjusted net earnings (1) |
$9,492 |
$6,257 |
|
|
$17,426 |
$13,437 |
Diluted adjusted net earnings per share (1) |
$0.15 |
$0.12 |
|
|
$0.29 |
$0.26 |
Income taxes related to other expenses |
310 |
42 |
|
|
525 |
510 |
Income tax expense |
2,683 |
1,798 |
|
|
4,161 |
3,366 |
Depreciation of fixed assets |
1,856 |
1,363 |
|
|
3,325 |
2,690 |
Depreciation of right-of-use assets |
2,551 |
1,000 |
|
|
4,037 |
2,032 |
Amortization of intangible assets |
4,713 |
2,044 |
|
|
7,683 |
3,825 |
Net finance costs |
5,433 |
1,541 |
|
|
6,910 |
259 |
Stock-based compensation |
356 |
425 |
|
|
620 |
708 |
Adjusted EBITDA(1) |
$27,394 |
$14,470 |
|
|
$44,687 |
$26,827 |
Diluted weighted
average number of shares |
64,374,782 |
50,907,620 |
|
|
59,814,505 |
50,893,896 |
(1) Non-IFRS measures are described in section 3 of
the MD&A |
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