TORONTO, Nov. 9, 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 third quarter ended September 30, 2022.

(All percentage increases are as compared to the third quarter of 2021)

• Revenue increased 37% to $97.4 million from $71.3 million:
• Growth driven primarily by the full quarter contribution of the prior year acquisition of the Long-Term Care Pharmacy Business of Medical Pharmacies Group Limited ("MPGL LTC Pharmacy Business"), which was acquired during the third quarter of 2021, and the contribution of the Long-Term Care Pharmacy Business of Hogan Pharmacy Partners Ltd. (the "Hogan LTC Pharmacy Business") that was acquired on May 30, 2022 as well as organic growth from contracts that were onboarded over the second half of 2021 and first half of 2022.
• Adjusted EBITDA¹ increased 12% to $7.7 million from $6.9 million:
• Growth driven primarily by contributions of the MPGL LTC Pharmacy Business and Hogan LTC Pharmacy Business, as well as from new contracts that were onboarded over the second half of 2021 and first half of 2022.
• Adjusted EBITDA was impacted by the commencement of the offboarding of a large customer contract, which reduced Adjusted EBITDA by $0.5 million in the quarter, consistent with previous expectations. Adjusted EBITDA was also impacted by certain incremental costs associated with a higher than average number of open pharmacy staff positions as a result of the current labour market, including overtime, contract labour and recruitment costs, totaling $0.9 million. These incremental costs are expected to persist for the remainder of 2022 and into 2023.
• Net loss decreased by 55% to $1.8 million from $3.9 million:
• Decrease in net loss was driven primarily by the full quarter contribution of the MPGL LTC Pharmacy Business, and decreases in transaction and restructuring costs and finance costs, partially offset by the commencement of the offboarding of a large customer contract, incremental costs incurred as a result of the current labour market and a lower positive impact from the change in the fair value of derivative financial instruments.
• Signed new long-term agreement with large national customer
• Includes a 5-year extension for over 4,500 beds currently serviced by the Company, including approximately 3,400 beds expected to be acquired by the customer from another existing customer.
• Over 1,200 new beds are expected to be onboarded as a result of the contract renewal.
• Transfer of the 3,400 acquired beds and onboarding of the 1,200 beds not currently serviced will result in this customer being one of the Company's largest going forward.
• Signed multi-year contract to provide pharmacy services to residents in multiple seniors living facilities in Atlantic Canada, initially serving up to 600 residents. CareRx is currently in the process of establishing pharmacy operations in Atlantic Canada and expects to commence servicing homes in the third quarter of 2023.

"Our third quarter results continue to reflect the execution of our organic and acquisitive growth strategy," said David Murphy, President and Chief Executive Officer of CareRx. "Similar to what was experienced in the last quarter, as expected, Adjusted EBITDA continues to be impacted by incremental costs associated with the challenging labour market. We expect these challenges to persist into 2023 and mitigating this impact remains a top priority. We continue to execute in areas that will support our growth in the near- and long-term and during the quarter we signed a new long-term agreement and contract extension with a large national customer which includes the onboarding of over 1,200 new beds. We also announced a significant step in our growth journey with our planned expansion into Atlantic Canada. New growth opportunities such as this, combined with our continued pursuit of acquisition opportunities in what remains a fragmented market, support our confidence in our growth potential in the near- and long-term."

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, 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. 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 third quarter 2022 financial results on Wednesday, November 9, 2022 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 95,000 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