TORONTO, May 10, 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 first
quarter ended March 31, 2023.
Highlights for the First Quarter of 2023
(All
percentage increases are as compared to the first quarter of
2022)
- Revenue decreased by 2% to $91.4
million from $93.2
million:
-
- Decline was driven by the offboarding of a large customer
contract which was substantially completed in the fourth quarter of
2022. This contract loss was partially offset by the contribution
of new beds onboarded throughout 2022 and the first quarter of
2023; and
- Decline was also the result of a change in the mix of branded
and generic pharmaceuticals dispensed during the first quarter of
2023. This change did not negatively impact the Company's
profitability in the quarter.
- Adjusted EBITDA1 decreased by 21% to $6.8 million from $8.6
million:
-
- Decline was partially driven by the offboarding of a large
customer contract which was substantially completed in the fourth
quarter of 2022;
- Decline was also the result of 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 and the first quarter of 2023.
- Net loss decreased by 22% to $2.1
million from $2.8
million:
-
- Decrease in net loss was driven primarily by lower transaction
and restructuring costs, share-based compensation expense and
finance costs, which were partially offset by the impact of the
customer offboarding, incremental costs incurred as a result of the
current labour market, and a lower gain on the change in fair value
of derivative financial instruments.
- Closed a public offering and private placement of common shares
for total gross proceeds of approximately $16.1 million.
- Subsequent to the end of the first quarter, the Company
announced that David Murphy will
step down as President and Chief Executive Officer and as a member
of the Board of Directors effective May 31,
2023 to pursue another employment opportunity; and
-
- Puneet Khanna, the Company's
current Chief Operating Officer, will assume the role of President
and Chief Executive Officer on the same date and will be nominated
as part of the slate of directors to be elected at the upcoming
annual general meeting of shareholders to be held on June 6, 2023 (the "AGM").
- Matt Hills, a Director of CareRx since 2019, will not be
standing for re-election; Jeff
Watson, the former CEO of Apotex Inc., has been nominated as
part of the slate of directors to be elected at the upcoming
AGM.
"Our first quarter results were in line with our expectations,
and reflect our team's exceptional work improving our business
performance and managing the challenges we've been facing in the
healthcare labour market." said David
Murphy, President and Chief Executive Officer of CareRx.
"Together, we have grown CareRx into the leading national
congregate care pharmacy provider, delivering critical services to
our most vulnerable populations. I'm proud of what we have built
and am extremely confident about the next chapter of CareRx's
growth under Puneet's leadership."
"We remain focused on optimizing CareRx's business operations as
we continue to create a best-in-class, standardized operating model
and leverage our scale and technology." said Puneet Khanna, Chief Operating Officer and
incoming President and Chief Executive Officer. "This
standardization of our operations through the implementation of
innovative technologies and workflows will allow us to address some
of our ongoing healthcare labour market challenges while providing
the framework to drive growth in the near-and long-term."
1 See "Non-IFRS Measures"
below
FINANCIAL RESULTS
Selected Financial Information
|
For the three month
periods ended March 31,
|
(Thousands of
Canadian dollars except per share
amounts and percentages)
|
2023
|
2022
|
2021
|
$
|
$
|
$
|
Revenue
|
91,404
|
93,176
|
44,857
|
|
|
|
|
EBITDA1
|
5,774
|
5,521
|
(101)
|
Adjusted
EBITDA1
|
6,819
|
8,616
|
4,086
|
Per share -
Basic
|
$0.12
|
$0.19
|
$0.15
|
Adjusted EBITDA
Margin1
|
7.5 %
|
9.2 %
|
9.1 %
|
|
|
|
|
|
|
|
|
Net
loss
|
(2,149)
|
(2,762)
|
(5,866)
|
Per share - Basic and
Diluted
|
($0.04)
|
($0.06)
|
($0.21)
|
|
|
|
|
Cash provided by
(used in) operations
|
5,066
|
(1,176)
|
(1,705)
|
|
|
|
|
Total
Assets
|
271,936
|
285,041
|
170,624
|
Total
Liabilities
|
193,957
|
203,247
|
143,934
|
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, start-up, 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, gain 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
March 31,
|
|
2023
|
2022
|
(Thousands of
Canadian Dollars except per share amounts)
|
$
|
$
|
|
|
|
Net
loss
|
(2,149)
|
(2,762)
|
Depreciation and
amortization
|
4,775
|
4,699
|
Finance costs,
net
|
3,148
|
3,674
|
Income tax
recovery
|
—
|
(90)
|
EBITDA
|
5,774
|
5,521
|
Transaction, start-up,
restructuring and other costs
|
258
|
2,688
|
Change in fair value of
contingent consideration liability
|
181
|
96
|
Share-based
compensation expense
|
701
|
1,330
|
Change in fair value of
derivative financial instruments
|
(177)
|
(1,126)
|
Loss on disposal of
assets
|
82
|
107
|
Adjusted
EBITDA
|
6,819
|
8,616
|
|
|
|
Weighted average number
of shares - basic and diluted (in
thousands)
|
55,331
|
46,504
|
Adjusted EBITDA per
share - basic
|
$0.12
|
$0.19
|
Conference Call
The Company will host a conference call, including a slide
presentation, to discuss its first quarter 2023 financial results
on Wednesday May 10, 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/44axGjO 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