TORONTO, May 10, 2023 /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 first quarter ended March 31, 2023.
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 effective May 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 on June 6, 2023 (the "AGM").
- Matt Hills, a Director of CareRx since 2019, will not be standing for re-election; Jeff Watson, the former CEO of Apotex 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 David Murphy, President and Chief Executive Officer of CareRx. "Together, we have grown CareRx into the leading national congregate care pharmacy provider, delivering critical services to our most vulnerable populations. I'm proud of what we have built and am extremely confident about the next chapter of CareRx's growth under Puneet's leadership."
"We remain focused on optimizing CareRx's business operations as we continue to create a best-in-class, standardized operating model and leverage our scale and technology." said Puneet Khanna, Chief Operating Officer and incoming President and Chief Executive Officer. "This standardization of our operations through the implementation of innovative technologies and workflows will allow us to address some of our ongoing healthcare labour market challenges while providing the framework to drive growth in the near-and long-term."
1 See "Non-IFRS Measures" below
Selected Financial Information
For the three month periods ended March 31,
(Thousands of Canadian dollars except per share
amounts and percentages)
Per share - Basic
Adjusted EBITDA Margin1
Per share - Basic and Diluted
Cash provided by (used in) operations
1 See "Non-IFRS Measures" below.
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
(Thousands of Canadian Dollars except per share amounts)
Depreciation and amortization
Finance costs, net
Income tax recovery
Transaction, start-up, restructuring and other costs
Change in fair value of contingent consideration liability
Share-based compensation expense
Change in fair value of derivative financial instruments
Loss on disposal of assets
Weighted average number of shares - basic and diluted (in
Adjusted EBITDA per share - basic
The Company will host a conference call, including a slide presentation, to discuss its first quarter 2023 financial results on Wednesday May 10, 2023 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/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 CareRx Corporation
CareRx is Canada's leading provider of pharmacy services to seniors living communities. We serve over 94,000 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.
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 CareRX Corporation
For further information: Andrew Mok, Chief Financial Officer, CareRx Corporation, 416-927-8400; Neil Weber, Investor Relations, LodeRock Advisors, 647-222-0574, email@example.com