Centric Health Announces 2019 Fourth Quarter and Year End Results

86.7% growth in Q4 Specialty Pharmacy Adjusted EBITDA

TORONTO, March 26, 2020 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), one of Canada's leading healthcare services companies, today reported its financial results for the fourth quarter and year ended December 31, 2019.

Highlights for the Fourth Quarter of 2019

  • Specialty Pharmacy revenue from continuing operations increased 7.9% to $32.2 million;
  • Average number of beds serviced increased 6.0% to 31,457;
  • Specialty Pharmacy Adjusted EBITDA1 increased 86.7% to $4.0 million - contributing to a 62.7% increase to $15.0 million for the full year;
  • Specialty Pharmacy Adjusted EBITDA margin increased to 12.3% vs. 7.1% in Q4 of 2018;
  • Completed a private placement for gross proceeds of $35.2 million; and
  • Closed the sale of the Company's Surgical and Medical Centres business for gross proceeds of $35.0 million.

Highlights Subsequent to Quarter-End

  • On March 23, 2020, the Company signed a definitive agreement to acquire Remedy Holdings Inc. and the Remedy'sRx Specialty Pharmacy business ("Remedy's) for a total purchase price of up to $44.0 million;
  • Entered into binding commitment letters with Crown Capital Partners Inc. ("Crown Capital") and Yorkville Asset Management Inc. for and on behalf of certain managed funds to refinance the Company's existing credit facilities and to finance the acquisition of Remedy's.

"In the fourth quarter, much like the rest of the year, our financial results reflected the consistent and successful execution of our business plan," said David Murphy, President and Chief Executive Officer of Centric Health. "We continued to grow our Specialty Pharmacy business by increasing the average number of residents serviced, which in turn contributed higher revenue and Adjusted EBITDA. After a transformative period for our company, we ended 2019 with significantly improved operating margins and a substantially deleveraged balance sheet, setting the stage for the next phase of our growth strategy."

"We expect to carry this momentum through 2020, with the recently announced Remedy's acquisition. This transaction, which we expect to close in the second quarter, will bring together two great teams to create a market leader. I am confident that as a combined company we will accelerate growth, further enhance our service offering to customers, and deliver superior value to shareholders."

COVID-19 Update

As a provider of pharmacy services, Centric Health's operations are an essential service. During the COVID-19 pandemic, the Company continues to play a vital role in ensuring the safe and timely delivery of medications to seniors in the homes it services. The Company's pharmacy locations remain fully operational and its team is working with both suppliers and home operator partners to minimize disruptions. To date, the COVID-19 pandemic has had no material effect on the Company's financial performance.

"I am grateful to our team for their dedication and incredible efforts during these challenging times," said Mr. Murphy. "We all are all acutely aware of the heightened importance of the services we provide during this pandemic, and the team is working tirelessly to ensure that our customers and their residents can depend on us. We would also like to thank home operators across the country, including their front-line care workers, for all they are doing to keep our seniors safe and well."


Selected Financial Information

(Thousands of Canadian dollars except per share
amounts and percentages)

For the three month periods ended
December 31,

For the years ended
December 31,









Revenue from Specialty Pharmacy





Adjusted EBITDA1 from Specialty Pharmacy





Adjusted EBITDA Margin from Specialty





Corporate office costs





Adjusted EBITDA from continuing operations





Adjusted EBITDA Margin from continuing





Adjusted EBITDA





Per share - Basic2 and diluted2





Adjusted EBITDA Margin





Net loss





Per share - Basic and diluted





Cash provided by (used in) operations





Total Assets





Total Liabilities






See "Non-IFRS Measures" below.


Basic and diluted earnings per share is based on the profit or loss attributable to shareholders of Centric Health Corporation. 


The Company's 2019 financial results include the impact of IFRS 16, a substantial change to lease accounting standards, effective January 1, 2019. Centric Health adopted IFRS 16 using the modified retrospective approach and the Company's comparative information was not restated.  As a result, the comparability of the Company's 2019 Adjusted EBITDA to periods prior to January 1, 2019 is impacted.

Revenue from Specialty Pharmacy for the fourth quarter increased 7.9% to $32.2 million compared to the same period in the prior year as a result of continued growth in the average number of beds serviced during the quarter.

Adjusted EBITDA from Specialty Pharmacy increased 86.7% to $4.0 million for the fourth quarter compared to the same period in the prior year. The increase was due to higher revenue, the impact of the Business Re-Engineering Plan, and operational efficiencies resulting from increased scale as a higher average number of beds were serviced compared to the prior period. The impact of IFRS 16 for the quarter was an increase to Adjusted EBITDA from Specialty Pharmacy of $0.5 million. Adjusted EBITDA margin from Specialty Pharmacy was 12.3% for the quarter (10.8% excluding the impact of IFRS 16).

Corporate office expenses were flat at $1.5 million compared to the same period in the prior year.

Adjusted EBITDA from continuing operations was $2.5 million for the fourth quarter. The overall impact to Adjusted EBITDA from continuing operations from the adoption of IFRS 16 was an increase of $0.6 million for the quarter.


During the year ended December 31, 2019, the Company divested the operating assets of its retail pharmacy operations in Grande Prairie, Alberta and Medicine Hat, Alberta, and the Company's Surgical and Medical Centres business. The results of these operations have been included as part of discontinued operations on the consolidated statements of income and comprehensive income. As required under IFRS, the Company classified its Performance Orthotics business as assets held for sale and have presented its current and prior year results as discontinued operations. Revenue and Adjusted EBITDA from discontinued operations were $7.0 million and $0.8 million, for the three-month period ended December 31, 2019, and $38.0 million and $3.3 million, for the year ended December 31, 2019, respectively. The impact of the transition to IFRS 16 in discontinued operations was an increase to Adjusted EBITDA of $0.3 million and $1.5 million for the three-month period and year ended December 31, 2019, respectively.


Centric Health will host a conference call, including a slide presentation, to discuss its fourth quarter and 2019 full year financial results on Friday, March 27, 2020 at 8:30 a.m. ET.

Telephone Dial-In Access Information

To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. 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 Centric Health's corporate web site at http://www.centrichealth.ca/investors/events-and-presentations.html. 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.

Archive Access Information

The conference call will be archived for replay by telephone until Thursday, April 2, 2020 at midnight. To access the archived conference call, dial 416-849-0833 or 1-855-859-2056 and enter the reservation number 3386707.

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 web site (http://www.centrichealth.ca/investors/events-and-presentations.html).

For further information, please refer to the Company's complete filings at https://sedar.com.


Centric Health's vision is to be the leading provider of pharmacy and other healthcare services to Canadian seniors. The Company is one of Canada's leading, and most trusted providers of comprehensive Specialty Pharmacy services and solutions to seniors. We operate a large national network of pharmacy fulfilment centres that deliver high-volume solutions for the cost-effective supply of chronic medication and other specialty clinical pharmacy services, serving more than 31,000 residents in over 460 seniors communities (long-term care, retirement homes, and assisted living facilities) nationally.

With services that address the growing demand within the Canadian healthcare system, Centric Health's unparalleled national care delivery platform provides significant potential for future expansion and growth.


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 liquidity and capital requirements, government regulation and funding, 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.


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, amortization of lease incentives, 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, 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 senior lenders are structured with certain financial performance covenants which includes Adjusted EBITDA as a key component of the covenant calculations. EBITDA and Adjusted EBITDA are not recognized measures under IFRS.

SOURCE Centric Health Corporation

For further information: David Murphy, President and Chief Executive Officer, Centric Health Corporation, 416-927-8400; Andrew Mok, Chief Financial Officer, Centric Health Corporation, 416-927-8400