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 effectiveMay 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 onJune 6, 2023 (the "AGM").Matt Hills , a Director ofCareRx since 2019, will not be standing for re-election;Jeff Watson , the former CEO ofApotex 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
"We remain focused on optimizing
1 See "Non-IFRS Measures" below
FINANCIAL RESULTS
Selected Financial Information
For the three month periods ended | |||
(Thousands of Canadian dollars except per share | 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 | |||
Adjusted EBITDA Margin1 | 7.5 % | 9.2 % | 9.1 % |
Net loss | (2,149) | (2,762) | (5,866) |
Per share - Basic and Diluted | ( | ( | ( |
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 | ||
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 | 55,331 | 46,504 |
Adjusted EBITDA per share - basic |
Conference Call
The Company will host a conference call, including a slide presentation, to discuss its first quarter 2023 financial results on
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
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
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