TORONTO, March 17, 2022 /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, 2021.

Highlights for the Fourth Quarter of 2021
(All percentage increases are as compared to the fourth quarter of 2020)

• Revenue from continuing operations increased 109% to $96.9 million from $46.4 million:
• Growth driven primarily by contributions of the SmartMeds, Rexall LTC Pharmacy and Medical Pharmacies Group Limited ("MPGL") LTC Pharmacy businesses acquired (the "Acquired Businesses") during the year and;
• Growth also driven by new contracts, including over 3,000 beds onboarded throughout the third and fourth quarters of 2021.
• Adjusted EBITDA¹ from continuing operations increased 86% to $7.6 million from $4.1 million:
• Growth driven primarily by contributions of the Acquired Businesses and from new contracts that were onboarded throughout the third and fourth quarters of 2021; and
• Growth was partially offset by non-recurring costs that were incurred during the quarter that reduced Adjusted EBITDA¹ by $1.1 million.
• Excluding the $1.1 million in non-recurring costs, Adjusted EBITDA¹ from continuing operations was $8.7 million.
• Net loss from continuing operations increased by 47% to $4.4 million from $3.0 million:
• Primarily due to an increase in finance costs, as a result of the increase in the Company's borrowings, transaction and restructuring costs related to the MPGL LTC Pharmacy Business acquisition and non-cash adjustments including changes in the fair values of derivative financial instruments.
• Cash provided by operating activities increased to $7.3 million for the year ended December 31, 2021 from $0.2 million for the year ended December 31, 2020.
• Continued integration of MPGL LTC Pharmacy Business as planned:
• Five locations were consolidated during the year with five additional pharmacy site consolidations expected to be completed in 2022;
• Integration projects expected to be substantially complete by the end of the third quarter of 2022; and
• Total annual cost savings synergies of approximately $5.0 million expected to be realized upon the completion of the integration.
• Signed lease to build a new, innovative high-volume fulfillment centre in Burlington, Ontario, expected to open in April 2022, which will be the first pharmacy in Canada to use BD Rowa^TM Dose technology, enabling higher prescription volumes without additional labour costs, while improving safety and reducing medication packaging errors and waste.

Highlights Subsequent to the End of the Fourth Quarter of 2021

• Secured extensions with two largest customers, representing approximately 15,000 total beds serviced, for an average of 5.5 years from the end of 2021.
• Ontario Ministry of Health announced that it postponed previously scheduled changes to long-term care pharmacy funding for a further year.
• Expanded scope of medical supplies business under new brand, Revicare™, offering significantly increased assortment of medical supplies.

"The fourth quarter was a strong finish to an exceptional year that saw our bed count and revenue double as a result of the successful execution of our growth strategy," said David Murphy, President and Chief Executive Officer of CareRx. "During the fourth quarter, we made considerable progress on the integration of the MPGL LTC Pharmacy Business, acquired in August, such that we are on track to substantially complete the integration projects by the end of the third quarter this year, and remain firmly on track to realize $5.0 million of annualized costs savings synergies. Next month, we will open our new state-of-the-art, high-volume fulfillment centre in Burlington – marking an important first step in the transformation and modernization of our fulfillment network that will allow us to realize enhanced scale and efficiency benefits while delivering an institutional pharmacy services offering that is unmatched in Canada."

"The recent long-term contract extensions with our two largest home operator partners are further evidence of the value we provide in supporting our customers in the delivery of outstanding care to residents. For many home operators, the pandemic has highlighted the importance of their pharmacy partnership. We have built, and continue to strengthen, a differentiated offering that we believe makes us the ideal partner for their pharmacy needs. With the accelerated expansion of the seniors living sector in the months and years ahead, we are well positioned to grow with our customers and play a significant role in improving healthcare for the most vulnerable Canadians."

FINANCIAL RESULTS

Selected Financial Information

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 (income), 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 on both a basic and diluted basis. 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

Conference Call

The Company will host a conference call, including a slide presentation, to discuss its fourth quarter and year end 2021 financial results tomorrow, Friday, March 18, 2021 at 8:30 a.m. Eastern Time (ET).

Telephone Dial-In Access Information

To access the conference call by telephone, 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 96,000 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 exposure to and reliance on government regulation and funding, the Company's liquidity and capital requirements, exposure to epidemic or pandemic outbreak, the highly competitive nature of the Company's industry, 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