Delivered Third Consecutive Quarter-Over-Quarter Growth in Adjusted EBITDA 

TORONTO, March 7, 2024 /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, 2023.

"In 2023 we made tremendous progress to deliver on our operational optimization program and further strengthen our financial position," said Puneet Khanna, President & Chief Executive Officer of CareRx. "As evidenced by our third consecutive quarter of Adjusted EBITDA growth and the improvement in our Adjusted EBITDA margin, our focus on increasing productivity and driving efficiencies has better positioned CareRx to deliver sustained and accretive growth. Through our industry leadership position, we will continue to generate value for our shareholders, stakeholders and customers by providing exceptional pharmacy services to the rapidly expanding seniors living sector."

Highlights for the Fourth Quarter of 2023

• Revenue for the quarter was $91.1 million as compared to $93.8 million for the third quarter of 2023 and $94.3 million for the fourth quarter of 2022:
  • Decrease compared to the prior quarter was mainly due to a net reduction in the average number of beds serviced; and
  • Decrease compared to the same period in the prior year was primarily driven by a change in the mix of branded and generic pharmaceuticals dispensed, which did not negatively impact the Company's profitability in the quarter.
• Adjusted EBITDA¹ for the quarter was $7.5 million as compared to $7.3 million for the third quarter of 2023 and $7.1 million for the fourth quarter of 2022:
  • Increase to previous quarter and the same period in the prior year was due to certain efficiencies and cost savings initiatives implemented during the second half of 2023.
• Net loss for the quarter was $3.7 million as compared to net loss $1.4 million for the third quarter of 2023 and net loss of $4.7 million for the fourth quarter of 2022:
  • Increase compared to the prior quarter was mainly due to a non-cash adjustment related to loss on financial liability extinguishment recorded as part of the refinancing transaction and a net reduction in the average number of beds serviced; and
  • Decline in net loss as compared to the same period in the prior year was driven primarily by decreases in share-based compensation expense, the loss on the change in fair value of contingent consideration liabilities, and the impact of certain cost savings initiatives implemented during the second half of 2023; partially offset by a lower gain on the change in fair value of derivative financial instruments and intangible assets impairment recorded during the fourth quarter of 2023.
• On December 21, 2023, the Company entered into a comprehensive refinancing transaction led by a Canadian Schedule I chartered bank and arranged and managed by Crown Private Credit Partners Inc. ("CPCP"). Under the terms of the refinancing, CPCP provided a senior secured revolving operating loan of up to $20.0 million (the "Operating Loan") and a $50.0 million senior secured term loan (the "Term Loan", and together with the Operating Loan, the "Credit Facilities"), of which $14.0 million and $47.0 million were advanced, respectively, on December 21, 2023 with future draws on the Term Loan available to fund certain capital expenditures;
• The proceeds from the Credit Facilities, plus available cash on hand, were used to repay $78.0 million of existing debt and to redeem the entire aggregate principal of the Ewing Convertible Debentures that otherwise were set to mature on March 12, 2024.

FINANCIAL RESULTS

Selected Financial Information

Conference Call

The Company will host a conference call, including a slide presentation, to discuss its fourth quarter of 2023 and the full year ended December 31, 2023 financial results on Thursday, March 7, 2024 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/42SSLil 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 approximately 91,000 residents in over 1,500 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 regimens. 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, the Company's exposure to and reliance on government regulation and funding, risks related to employee recruitment and retention, the Company's liquidity and capital requirements, exposure to epidemic or pandemic outbreak, reliance on contracts with key care operators 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.

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, 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, loss 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

SOURCE CareRX Corporation