TORONTO, May 4, 2022
/CNW/ - Andlauer Healthcare Group Inc. (TSX: AND) ("AHG" or the
"Company") today reported its financial results for the three-month
period ended March 31, 2022 ("Q1
2022").
Q1 2022 Summary
- Revenue increased 54.9% to $148.4
million, compared to $95.8
million in the three months ended March 31, 2021 ("Q1 2021");
- Operating income increased 45.0% to $24.2 million, compared to $16.7 million in Q1 2021;
- Net income increased 41.9% to $16.5
million, compared to $11.6
million in Q1 2021;
- Total comprehensive income increased to $13.5 million, or $0.39 per share (diluted) compared to
$11.6 million, or $0.30 per share (diluted) in Q1 2021;
- EBITDA1 increased 54.5% to $39.4 million, compared to $25.5 million in Q1 2021;
- EBITDA Margin1 was 26.5%, compared to 26.6% in Q1
2021;
- AHG continued to provide logistics and distribution,
specialized transportation, and packaging solutions to certain of
its manufacturer, 3PL provider, wholesaler and government clients
that are involved in the Canadian supply of COVID-19 vaccines and
ancillary products. In Q1 2022, the Company's COVID-19
pandemic-related revenue comprised approximately 5.1% of total
revenue, compared to approximately 3.9% in Q1 2021; and
- On March 1, 2022, AHG acquired
100% of the issued and outstanding shares of Logistics Support Unit
(LSU) Inc. ("LSU") for consideration of
approximately $30.0 million before
customary working capital adjustments. LSU is a third-party logistics provider offering
specialty pharmacy, warehousing, distribution and order management
services throughout Canada to
national and international companies as well as government clients
in the pharmaceutical, medical and biotechnology sectors. The
purchase price was financed through the issuance of 154,639
subordinate voting shares and cash of approximately $22.5 million provided by a combination of cash
on hand and by drawing on the Company's credit facilities.
"Our strong financial performance in the first quarter,
including year-over-year increases in revenue and
EBITDA1 of greater than 50%, reflects the significant
impact of our acquisitions in 2021 and steady organic growth," said
Michael Andlauer, Chief Executive
Officer of AHG. "We continued to advance our acquisition program in
the first quarter with the purchase of LSU, which further strengthens our healthcare
logistics product line and market presence in Quebec. The recent increase to our quarterly
dividend highlights our strong cash flow generation and positive
business outlook. We look forward to driving continued growth ahead
in both our Canadian and U.S. operations."
Selected Consolidated Financial Summary
|
|
Three months ended
March 31,
|
($CAD 000s, except
per share amounts)
|
|
2022
|
2021
|
Variance
|
Revenue
|
|
|
|
|
Logistics
& Distribution
|
|
33,245
|
27,628
|
20.3
%
|
Packaging
Solutions
|
|
5,758
|
5,651
|
1.9
%
|
Healthcare Logistics
Segment
|
|
39,003
|
33,279
|
17.2
%
|
Ground
Transportation
|
|
97,494
|
53,583
|
81.9
%
|
Air
Freight Forwarding
|
|
7,596
|
6,601
|
15.1
%
|
Dedicated
and Last Mile Delivery
|
|
15,445
|
11,218
|
37.7
%
|
Intersegment Revenue
|
|
(11,187)
|
(8,915)
|
25.5
%
|
Specialized
Transportation Segment
|
|
109,348
|
62,487
|
75.0
%
|
Total
revenue
|
|
148,351
|
95,766
|
54.9
%
|
Operating
expenses
|
|
124,189
|
79,103
|
57.0
%
|
Operating
income
|
|
24,162
|
16,663
|
45.0
%
|
Net
income
|
|
16,471
|
11,611
|
41.9
%
|
Foreign
currency translation adjustment
|
|
(2,967)
|
-
|
N/A
|
Total comprehensive
income
|
|
13,504
|
11,611
|
16.3
%
|
Earnings
per share – basic
|
|
$
0.39
|
$
0.31
|
$
0.08
|
Earnings
per share – diluted
|
|
$
0.39
|
$
0.30
|
$
0.09
|
Select financial
metrics
|
|
|
|
|
EBITDA1
|
|
39,386
|
25,487
|
54.5%
|
EBITDA
Margin1
|
|
26.5%
|
26.6%
|
(0.1%)
|
Q1 2022 Financial Results
Revenue for Q1 2022 increased by 54.9% to $148.4 million, compared with $95.8 million in Q1 2021. The acquisitions of
LSU, Skelton Canada Inc. ("Skelton"),
Skelton USA Inc. ("Skelton
USA") and T.F. Boyle
Transportation, Inc. ("Boyle Transportation") accounted for
approximately $40.5 million of the
$52.6 million increase, with the
remaining increase attributable to organic growth as described
below.
Revenue for the healthcare logistics segment totaled
$39.0 million, an increase of 17.2%
compared with Q1 2021. The increase was primarily attributable to
the 20.3% year-over-year growth in the Company's logistics and
distribution product line in Q1 2022, reflecting greater outbound
order handling activities and the acquisition of LSU. AHG's packaging solutions also contributed to
growth in the healthcare logistics segment, with revenue totaling
$5.8 million in the quarter, an
increase of 1.9% compared to Q1 2021.
Revenue in the specialized transportation segment totaled
$109.3 million, an increase of 75.0%
compared with Q1 2021. The increase was attributable to: 81.9%
growth in the Company's ground transportation product line driven
by incremental revenue from the Skelton, Skelton USA and Boyle Transportation acquisitions of
approximately $38.3 million, higher
volume from the Company's existing client base, and higher fuel
costs passed on to customers as a component of pricing, as well as
year-over-year growth in AHG's air freight forwarding and dedicated
and last mile delivery product lines of 15.1% and 37.7%,
respectively. Growth in air freight
forwarding was attributable to increased
fuel costs passed on to customers and an increase in weight
shipped of approximately 1.7%, and growth in dedicated and last
mile delivery was attributable to incremental revenue from route
expansion in Western Canada and
increases in fuel costs passed on to customers.
Cost of transportation and services
was $72.7 million,
or 49.0% of revenue, compared
with $41.3 million, or 43.1% of revenue, for Q1 2021. The
higher cost of transportation and services for Q1 2022 was
primarily attributable to the acquisitions of Skelton, Skelton
USA and Boyle Transportation, and
higher fuel costs in line with the increases in revenue related to
fuel prices. The increase in the operating ratio for Q1 2022
reflects the Skelton, Skelton USA
and Boyle Transportation acquisitions, which have increased the
relative proportion of the specialized transportation segment as a
percentage of AHG's total consolidated revenue and cost
profiles.
Direct operating expenses
were $24.8 million,
or 16.7% of revenue, compared
with $20.6 million, or 21.6% of revenue, for Q1
2021. The increase was primarily attributable to growth in the
Accuristix logistics and distribution operations, and the
acquisition of LSU. AHG's specialized
transportation acquisitions (Skelton, Skelton USA and Boyle Transportation) have lower
facility-related costs compared to the healthcare logistics
segment, which resulted in a lower direct operating expense
operating ratio in Q1 2022 as compared to Q1 2021.
Selling, general and administrative ("SG&A") expenses were
$11.2 million, or 7.6% of revenue,
compared with $8.7 million, or 9.1%
of revenue, for Q1 2021. Increased SG&A
expenses for Q1 2022 were attributable to
the acquisitions of LSU, Skelton,
Skelton USA and Boyle
Transportation, partially offset by a $0.5
million reduction in transaction costs associated with
acquisitions. The decrease in SG&A expenses as a percentage of
revenue reflects operating leverage generated within SG&A
functions compared to revenue growth.
Operating income for Q1 2022 was $24.2
million, an increase of 45.0% compared to $16.7 million for Q1 2021. Approximately
$5.4 million of the increase was
attributable to the acquisitions of LSU, Skelton, Skelton USA and Boyle Transportation, with the
remainder attributable to organic growth.
Net income for Q1 2022 was $16.5 million, an increase of 41.9% compared to
$11.6 million for Q1 2021. Higher
segment net income before eliminations for both the healthcare
logistics and specialized transportation operating segments
contributed to the increased profitability in Q1 2022 on a
consolidated basis.
Total comprehensive income for Q1 2022 was $13.5 million, or $0.39 per share (diluted), compared to
$11.6 million, or $0.30 per share (diluted) in Q1 2021. Total
comprehensive income differs from net income due to the acquisition
of foreign operations (Skelton USA
and Boyle Transportation), which resulted in a negative foreign
currency translation adjustment of $3.0
million in the quarter.
Earnings before interest, taxes, depreciation and amortization
("EBITDA")¹ increased by 54.5% to $39.4
million, from $25.5 million in
Q1 2021. The increase was due to the factors discussed above and
reflects the incremental contributions from acquisitions and
organic growth in both of AHG's operating segments. EBITDA Margin¹
was 26.5%, compared to 26.6% in Q1 2021. The performance of AHG's
two operating segments continued to result in strong
and stable EBITDA1 margins. Inter-segment
eliminations have increased with the Skelton and LSU acquisitions, which has also contributed to our
EBITDA Margin1.
Dividend
The Company paid a dividend (encompassing the period from
January 1, 2022 to March 31, 2022) in the amount of $0.06 per subordinate voting share and multiple
voting share on April 19, 2022.
Subject to financial results, capital requirements, available
cash flow, corporate law requirements and any other factors that
AHG's Board of Directors may consider relevant, it is the Company's
intention to declare a quarterly dividend of $0.06 per subordinate voting share and multiple
voting share on an ongoing basis.
Shares Outstanding
As at March 31, 2022, there were
18,223,429 subordinate voting shares and 23,600,000 multiple voting
shares outstanding.
Financial Statements
AHG's unaudited interim condensed consolidated financial
statements and related Management's Discussion & Analysis
("MD&A") for Q1 2022 are available on the Company's website at
www.andlauerhealthcare.com and on the Company's profile on
SEDAR at www.sedar.com.
Conference call and webcast
Michael Andlauer, Chief Executive
Officer, and Peter Bromley, Chief
Financial Officer, will host a conference call for analysts and
investors on Thursday, May 5, 2022 at
8:30 a.m. (ET). The dial-in numbers
for participants are (416) 764-8650 or (888) 664-6383.
The call will be webcast live at:
www.andlauerhealthcare.com/presentations-events.
To access a replay of the conference call dial (416)
764-8677 or (888) 390-0541, passcode: 596601 #.
The replay will be available until May 12,
2022. The webcast will be archived on the Company's website
following conclusion of the call.
About AHG
AHG is a leading and growing supply chain management company
offering a robust platform of customized third-party logistics
("3PL") and specialized transportation solutions for the healthcare
sector. The Company's 3PL services include customized logistics,
distribution and packaging solutions for healthcare manufacturers
across Canada. AHG's specialized
transportation services in Canada,
including air freight forwarding, ground transportation, dedicated
delivery and last mile services, provide a one-stop shop for
clients' healthcare transportation needs. Through its complementary
service offerings, available across a coast-to-coast distribution
network, AHG strives to accommodate the full range of its clients'
specialized supply chain needs on an integrated and efficient
basis. The Company also provides specialized ground transportation
services, primarily to the healthcare sector, across the 48
contiguous U.S. states. For more information on AHG, please
visit: www.andlauerhealthcare.com.
Forward-looking Information
This news release contains forward-looking information and
forward-looking statements (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward-looking information may relate to the Company's future
financial outlook and anticipated events or results and may include
information regarding the Company's financial position, business
strategy, growth strategies, addressable markets, budgets,
operations, financial results, taxes, dividend policy, plans,
objectives and responses to the outbreak of COVID-19. Particularly,
information regarding the Company's growth expectations,
performance, achievements, payment of dividends, prospects,
financial targets or outlook, intentions, opportunities or the
potential impact of, and response measures to be taken with respect
to, COVID-19 is forward-looking information. In some cases,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "targets", "expects",
"budget", "scheduled", "estimates", "outlook", "forecasts",
"projection", "prospects", "strategy", "intends", "anticipates",
"believes", "commencing" or variations of such words and phrases or
statements that certain actions, events or results "may", "could",
"would", "might", "will", "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
intentions, projections or other characterizations of future events
or circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts but
instead represent management's expectations, estimates and
projections regarding future events or circumstances. Such
forward-looking statements are qualified in their entirety by the
inherent risks, uncertainties and changes in circumstances
surrounding future expectations which are difficult to predict and
many of which are beyond the control of the Company.
Forward-looking information is necessarily based on a number
of opinions, estimates and assumptions, including but not limited
to those assumptions described under the heading "Cautionary Note
Regarding Forward-Looking Information" in the Company's MD&A
for the three-month period ended March 31,
2022. Forward-looking information is subject to known and
unknown risks, uncertainties, assumptions and other factors that
may cause the actual results, level of activity, performance or
achievements to be materially different from those expressed or
implied by such forward-looking information, including but not
limited to factors discussed under the heading "Risk Factors" in
the Company's annual information form dated March 2, 2022, which is available on the
Company's profile on SEDAR at www.sedar.com. If any of
these risks or uncertainties materialize, or if the opinions,
estimates or assumptions underlying the forward-looking information
prove incorrect, actual results or future events might vary
materially from those anticipated in the forward-looking
information. Accordingly, investors should not place undue reliance
on forward-looking information, which speaks only as of the date
made. The forward-looking information contained in this news
release represents the Company's expectations as of the date of
this news release, and are subject to change after such date and
the Company disclaims any intention or obligation or undertaking to
update or revise any forward-looking information whether as a
result of new information, future events or otherwise, except as
required under applicable securities laws.
(1) Non-IFRS Financial Measures
This news release contains
certain non-IFRS measures. These measures are not recognized measures under
IFRS, do not have a standardized meaning prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented
by other companies. Rather, these measures are provided as
additional information to complement those IFRS measures by
providing further understanding of the Company's results of
operations from management's perspective. Accordingly, these
measures should not be considered in isolation nor as a substitute
for analysis of the Company's financial information reported under
IFRS. AHG uses non-IFRS measures including "EBITDA" and "EBITDA
Margin". These non-IFRS measures are used to provide investors with
supplemental measures of the Company's operating performance and
thus highlight trends in its core business that may not otherwise
be apparent when relying solely on IFRS financial measures. AHG
also believes that securities analysts, investors and other
interested parties frequently use non-IFRS measures in the
evaluation of issuers. AHG management also uses non-IFRS measures
in order to facilitate operating performance comparisons from
period to period, to prepare annual operating budgets and to
determine components of management compensation.
EBITDA
AHG defines EBITDA as net income (loss) and
comprehensive income (loss) for the period before: (i) income tax
(recovery) expense; (ii) interest income; (iii) interest expense;
and (iv) depreciation and amortization.
AHG believes EBITDA is a useful measure to assess the
Company's financial performance because it provides a more relevant
picture of operating results by excluding the effects of expenses
that are not reflective of the Company's underlying business
performance.
EBITDA Margin
AHG defines EBITDA Margin as EBITDA divided by revenue.
EBITDA Margin represents a measure of the Company's
profitability expressed as a percentage of revenue.
AHG believes EBITDA Margin is a useful measure to assess the
Company's financial performance because it helps
quantify the Company's ability to convert revenues generated from
clients into EBITDA.
Reconciliation of EBITDA
($CAD
000s)
|
Three Months
Ended
March 31,
|
|
2022
|
2021
|
Net
income
|
16,471
|
11,611
|
Income tax
expense
|
5,982
|
4,173
|
Interest
expense
|
1,544
|
1,368
|
Interest
income
|
(102)
|
(105)
|
Depreciation & amortization
|
15,491
|
8,440
|
EBITDA
|
39,386
|
25,487
|
SOURCE Andlauer Healthcare Group Inc.