CareRx Reports Results for the Third Quarter of 2024

Continued Expansion of Adjusted EBITDA and EBITDA Margin

TORONTO, Nov. 8, 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 third quarter ended September 30, 2024.

"Over the past 18 months, we have been deeply committed to strengthening our business by modernizing our operating platform, reducing net debt, enhancing service levels, and further solidifying our position as the leading pharmacy services provider to the seniors living sector," said Puneet Khanna, President and Chief Executive Officer of CareRx. "Our disciplined approach to resource allocation, and prioritizing profitable beds, have resulted in five consecutive quarters of EBITDA growth. With an enhanced operating platform, a strong growth pipeline and confirmed bed wins for 2025, we are now well-positioned to capitalize on the next wave of growth in the senior care sector."

Highlights for the Third Quarter of 2024

• Revenue for the quarter was $92.8 million as compared to $92.0 million for the second quarter of 2024 and $93.8 million for the third quarter of 2023:
  • Despite a slight net reduction in the average number of beds serviced, the Company's revenue increased as compared to the second quarter of 2024 as a result of an increase in branded pharmaceutical prices during the third quarter of 2024; and
  • Decrease as compared to the third quarter of 2023 was primarily due to a net reduction in the average number of beds serviced, partially offset by an increase in branded pharmaceutical prices during the third quarter of 2024.
• Adjusted EBITDA¹ for the quarter was $7.8 million as compared to $7.5 million for the second quarter of 2024 and $7.3 million for the third quarter of 2023:
  • Increase as compared to the prior quarter was due to the full quarter benefit of improved supply terms as a result of the amendment to the existing agreement with the Company's principal pharmaceutical wholesaler effective April 1, 2024; 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 and improved supply terms as a result of the amendment to the existing agreement with the Company's principal pharmaceutical wholesaler effective April 1, 2024.
• Net loss for the quarter was $0.4 million as compared to a net loss of $1.4 million for the second quarter of 2024 and net loss of $1.4 million for the third quarter of 2023:
  • Decrease in net loss compared to the prior quarter was primarily due to the full quarter benefit of improved supply terms as a result of the amendment to the existing agreement with the Company's principal pharmaceutical wholesaler effective April 1, 2024; and
  • Decrease in net loss as compared to the same period in the prior year was driven primarily by decreases in finance costs, in addition to the impact of certain cost savings initiatives that commenced during the second half of 2023.
• On September 3, 2024, the TSX approved the renewal of the Company's normal course issuer bid to repurchase for cancellation up to 1,500,000 of its common shares during the period from September 7, 2024 to September 6, 2025.
• On October 1, 2024, Suzanne Brand, a highly accomplished executive bringing a wealth of financial, healthcare and leadership experience, joined the Company in the role of Chief Financial Officer.
• On October 1, 2024, the Company announced that it will be opening a new state-of-the-art pharmacy in North Burnaby, British Columbia, designed to enhance service delivery for the homes and residents serviced by the Company throughout the B.C. lower mainland, while improving the employee experience, through optimized workflows, streamlined operations and leading-edge medication packaging technology. With this expansion, the Company will be consolidating its existing Burnaby and Vancouver pharmacy operations into the new North Burnaby location, commencing in early December 2024. The transition is expected to be completed by the end of the first quarter of 2025.

¹ See "Non-IFRS Measures" below

FINANCIAL RESULTS

Selected Financial Information

	For the three month periods ended September 30,			For the nine month periods ended September 30,
(Thousands of Canadian dollars except per share amounts and percentages)	2024	2023	2022	2024	2023	2022
	$	$	$	$	$	$
Revenue	92,836	93,760	97,353	274,533	279,649	287,408
EBITDA^1	6,612	7,022	6,943	19,154	19,211	(5,404)
Adjusted EBITDA^1	7,775	7,309	7,710	22,737	21,168	25,123
Per share - Basic	$0.13	$0.13	$0.16	$0.38	$0.37	$0.53
Per share - Diluted	$0.13	$0.13	$0.16	$0.38	$0.37	$0.53
Adjusted EBITDA Margin^1	8.4 %	7.8 %	7.9 %	8.3 %	7.6 %	8.7 %
Net loss	(360)	(1,437)	(1,782)	(2,256)	(1,705)	(29,673)
Per share - Basic and Diluted	($0.01)	($0.02)	($0.04)	($0.04)	($0.03)	($0.63)
Cash provided by operations	12,240	8,218	13,298	29,590	18,613	8,143
Total Assets	219,517	264,705	255,580	219,517	264,705	255,580
Total Liabilities	139,465	186,017	196,721	139,465	186,017	196,721

¹ See "Non-IFRS Measures" below.

Conference Call

The Company will host a conference call, including a slide presentation, to discuss its third quarter of 2024 financial results on Friday, November 8, 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/4gXoyoU to receive an instant automated call.

To dial direct and enter the call through an operator, dial 416-945-7677 or 1-888-699-1199. 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 89,000 residents in approximately 1,450 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 September 30,		For the nine month periods ended September 30,
	2024	2023	2024	2023
(Thousands of Canadian Dollars except per share amounts)	$	$	$	$
Net loss	(360)	(1,437)	(2,256)	(1,705)
Depreciation and amortization	4,768	4,938	14,406	15,030
Finance costs, net	2,204	3,521	7,004	9,903
Income tax recovery	—	—	—	(4,017)
EBITDA	6,612	7,022	19,154	19,211
Transaction, restructuring and other costs	728	—	1,183	812
Change in fair value of contingent consideration   liability	29	15	(142)	212
Goodwill and intangible assets impairment	—	—	764	—
Share-based compensation expense	475	285	1,337	1,022
Change in fair value of derivative financial   instruments	—	(13)	—	(281)
Loss on disposal of assets	(69)	—	441	192
Adjusted EBITDA	7,775	7,309	22,737	21,168
Weighted average number of shares - basic (in thousands)	60,087	57,731	60,028	56,916
Adjusted EBITDA per share - basic	$0.13	$0.13	$0.38	$0.37

SOURCE CareRx Corporation

For additional information, please contact: Puneet Khanna, President & Chief Executive Officer, CareRx Corporation, 416-927-8400; Suzanne Brand, Chief Financial Officer, CareRx Corporation, 416-927-8400; Neil Weber, Investor Relations, LodeRock Advisors, 647-222-0574, [email protected]