CareRx Reports Results for the First Quarter of 2024

Delivers Continued Growth in Adjusted EBITDA Margin

TORONTO, May 10, 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 first quarter ended March 31, 2024.

"Our first quarter results were in line with our expectations, and the continued growth in Adjusted EBITDA margin reflects the ongoing progress from our team's exceptional work in improving our efficiencies and managing costs," said Puneet Khanna, President & Chief Executive Officer of CareRx. "Coupled with enhancements to our technological and operational capabilities, we will continue to seek opportunities to drive profitable growth while remaining committed to providing exceptional pharmacy services to the rapidly expanding seniors living sector."

Highlights for the First Quarter of 2024

• Revenue for the quarter was $89.7 million as compared to $91.1 million for the fourth quarter of 2023 and $91.4 million for the first quarter of 2023:
  • Decrease was primarily due to a net reduction in the average number of beds serviced.
• Adjusted EBITDA¹ for the quarter was $7.4 million as compared to $7.5 million for the fourth quarter of 2023 and $6.8 million for the first quarter of 2023:
  • Slight decrease as compared to the prior quarter was due to a net reduction in the average number of beds serviced; and
  • Increase as compared to the same period in the prior year was due to certain efficiencies and cost savings initiatives that commenced during the second half of 2023.
• Net loss for the quarter was $0.5 million as compared to $3.7 million for the fourth quarter of 2023 and $2.1 million for the first quarter of 2023:
  • Decrease compared to the prior quarter was mainly due to lower finance costs and the non-recurring intangible assets impairment recorded during the fourth quarter of 2023; and
  • Decline in net loss as compared to the same period in the prior year was driven primarily by decreases in finance costs, share-based compensation expense, and the impact of certain cost savings initiatives that commenced during the second half of 2023.
• In March 2024, the Ontario Ministry of Health issued an Executive Officer Notice announcing the postponement of the previously scheduled changes to long-term care pharmacy funding for a further year. These changes, which were scheduled to go into effect on April 1, 2024, would have reduced the fixed professional fee under the fee-per-bed capitation model from an annual amount of $1,500 dollars per bed to $1,400 dollars per bed on April 1, 2024.
• On March 27, 2024, the Company entered into an automatic share purchase plan with a designated broker to allow for the purchase of shares under the normal course issuer bid during pre-determined times when the Company would ordinarily not be permitted to purchase shares due to regulatory restrictions and customary blackout periods.

¹ See "Non-IFRS Measures" below

FINANCIAL RESULTS

Selected Financial Information

	For the three month periods ended March 31,
(Thousands of Canadian dollars except per share amounts and percentages)	2024	2023	2022
	$	$	$
Revenue	89,729	91,404	93,176
EBITDA^1	6,758	5,774	5,521
Adjusted EBITDA^1	7,445	6,819	8,616
Per share - Basic	$0.12	$0.12	$0.19
Adjusted EBITDA Margin^1	8.3 %	7.5 %	9.2 %
Net loss	(517)	(2,149)	(2,762)
Per share - Basic and Diluted	($0.01)	($0.04)	($0.06)
Cash provided by (used in) operations	9,278	5,066	(1,176)
Total Assets	228,032	271,936	285,041
Total Liabilities	146,534	193,957	203,247

¹ See "Non-IFRS Measures" below.

Conference Call

The Company will host a conference call, including a slide presentation, to discuss its first quarter of 2024 financial results on Thursday, May 10, 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/3Wdyjrk 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, (gain) 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

	For the three month periods ended March 31,
	2024	2023
(Thousands of Canadian Dollars except per share amounts)	$	$
Net loss	(517)	(2,149)
Depreciation and amortization	4,817	4,775
Finance costs, net	2,458	3,148
Income tax expense (recovery)	—	—
EBITDA	6,758	5,774
Transaction, restructuring and other costs	392	258
Change in fair value of contingent consideration liability	(188)	181
Share-based compensation expense	489	701
Change in fair value of derivative financial instruments	—	(177)
(Gain) loss on disposal of assets	(6)	82
Adjusted EBITDA	7,445	6,819
Weighted average number of shares - basic and diluted (in thousands)	59,865	55,331
Adjusted EBITDA per share - basic	$0.12	$0.12

SOURCE CareRX Corporation

Puneet Khanna, President & Chief Executive Officer, CareRx Corporation, 416-927-8400; Andrew Mok, Chief Financial Officer, CareRx Corporation, 416-927-8400; Neil Weber, Investor Relations, LodeRock Advisors, 647-222-0574, [email protected]