GREY WOLF ANIMAL HEALTH REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

Revenue for the quarter up 17.2% year over year

TORONTO, May 29, 2023 /CNW/ - Grey Wolf Animal Health Corp. (TSXV: WOLF) ("Grey Wolf" or the "Company"), a Canadian diversified animal health company, today announced financial results for the three months ended March 31, 2023.

Highlights

• Revenue for the quarter increased year over year by 17.2% to $6.0 million.
• Gross profit increased year over year by 21.9% to $3.2 million for the quarter.
• Adjusted EBITDA¹ increased year over year by 11% to $0.9 million compared to $0.8m.

"The first quarter of 2023 was another strong quarter for Grey Wolf as we saw revenues grow to $6.0 million, a 17.2% year over year growth.  The growth continues to be driven by organic growth from established and compounded products as well as new products introduced last year.  Gross margins were slightly higher over the same period last year due to the product mix sold in our Animal Health and Pharmacy businesses during the first quarter of 2023.  We are pleased that Adjusted EBITDA1 increased year-over-year, despite the addition of costs associated with a public entity." said Angela Cechetto, Chief Executive Officer. 

Key Financial Data and Comparative Results

	Three months ended
	Mar 31, 2023	Mar 31, 2022
Revenue	6,044,596	5,157,295
Gross profit	3,175,782	2,606,161
Gross profit %	52.5 %	50.5 %
Total operating expenses	2,656,388	2,569,333
Operating income for the period	519,394	36,828
Income tax recovery	(29,893)	(39,615)
Net income (loss) for the period	410,463	(1,009,772)
Earnings (loss) per share
Basic and diluted	0.013	(0.069)
EBITDA	864,969	209,191
Adjusted EBITDA	938,316	846,048
	Mar 31, 2023	Dec 31, 2022
Total assets	38,645,342	39,309,105
Total liabilities	13,929,345	15,061,717

Results of Operations for the First Quarter-ended March 31, 2023

Revenue for the three-month period ended March 31, 2023, increased 17.2% to $6.0 million over the same period in 2022. These increases were mainly due to organic revenue growth from the Animal Health and Pharmacy business units.

Gross margins for the three-month period ended March 31, 2023, increased to 52.5% compared to 50.5% over the same period in 2022. Gross margins were impacted by the product mix in both the Animal Health and Pharmacy business units. 

Total expenses for the three-month period ended March 31, 2023 increased 3.4% to $2.7 million over the same period in 2022. The increase is related to operational growth as well as the resumption of in-person sales and marketing activities that did not occur in the first quarter of 2022. Finally, there was also an increase in professional fees and outside services related to corporate costs associated with the company now operating as a public entity, which were offset by costs associated with the qualifying transaction over the same period in 2022.

Adjusted EBITDA¹ increased to $0.9 million in the first quarter 2023 versus $0.8 million in the prior year's quarter, or an increase of 11%.

Cash and cash equivalents were $6.1 million at March 31, 2023 compared to $6.9 million at December 31, 2022.  The Company used cash from operations of $0.5 million primarily as a result of a decrease in accounts payable and accrued liabilities, offset by revenue growth from both the Animal Health and Pharmacy business units.  As at March 31, 2023, the Company had outstanding borrowings of $9.9 million, of which $1.1 million are current and $8.8 million are non-current. The Company's debt is a fixed rate term loan with an average interest rate of 4.7% until September 2026. 

Grey Wolf's financial statements and accompanying Management Discussion and Analysis for the three months ended March 31, 2023 are available under the Company's profile on www.sedar.com.

¹Non-IFRS Measures

Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance of the Company's operations. These Non-IFRS Measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other companies. The Non-IFRS Measures referenced in this press release includes Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings before financing and special transaction costs (including, for greater certainty, fees related to the Magen Transaction), interest income, interest and accretion expenses, income taxes, depreciation of property and equipment, depreciation of right of use assets, amortization of intangible assets, share-based compensation, change in fair value of embedded derivatives, foreign exchange gains or losses, and other income. The Company considers Adjusted EBITDA as an additional metric in assessing business performance and an important measure of operating performance and cash flow, providing useful information to help analyze and compare profitability between companies for investors and analysts.

The following table provides a summary of the differences between Grey Wolf's consolidated IFRS and Non-IFRS financial measures, which are reconciled below:

EBITDA and Adjusted EBITDA

	Three months ended
	Mar 31, 2023	Mar 31, 2022
Net income (loss) for the period	410,463	(1,009,772)
Interest income	(31,748)	-
Interest and accretion expense	155,371	792,006
Income taxes	(29,893)	(39,615)
Depreciation of property and equipment	68,122	69,648
Depreciation of right of use assets	48,904	44,841
Amortization of intangible assets	243,750	352,083
EBITDA	864,969	209,191
Adjustments
Share-based compensation	58,146	47,711
Change in fair value of embedded derivatives	-	317,744
Foreign exchange loss (gain)	15,201	(13,535)
Other income	-	(10,000)
Financing and special transaction costs	-	294,937
Adjusted EBITDA	938,316	846,048

About Grey Wolf Animal Health Corp.‎

Grey Wolf Animal Health Corp., headquartered in Toronto, Canada, is a diversified animal health ‎company founded by a veterinarian to bring to market a broad portfolio of products that meets the ‎unmet needs of veterinarians, clinics and pets.  The Company's strategy is to in-license, acquire or develop innovative prescription and non-prescription products for commercialization in the veterinarian channel ‎in Canada. For additional information, please visit: www.greywolfah.com.‎

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward Looking Statements

Certain information included in this press release contains forward-looking information with the meaning of applicable Canadian securities laws. This information includes statements concerning the Company's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events or the negative thereof. Such forward-looking information reflects management's beliefs and is based on information currently available. All forward-looking information in this press release is qualified by the following cautionary statements.

Forward-looking information necessarily involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the Company's control, affect the operations, performance and results of the Company and its subsidiaries, and cause actual results to differ materially from current expectations of estimated or anticipated events or results.

A more detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the Risk Factors section of Grey Wolf's Management Discussion and Analysis for the three months ended March 31, 2023. The forward-looking information included in this press release is made as of the date hereof and should not be relied upon as representing the Company's views as of any date subsequent to the date hereof. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

SOURCE Grey Wolf Animal Health Corp.

Angela Cechetto, Chief Executive Officer, E-mail: [email protected]