TORONTO, Nov. 8, 2022
/CNW/ - Andlauer Healthcare Group Inc. (TSX: AND) ("AHG" or
the "Company") today reported its financial results for the three
and nine-month periods ended September 30,
2022 ("Q3 2022" and "YTD 2022", respectively).
Q3 2022 Summary
- Revenue increased 58.3% to $164.9
million, compared to $104.2
million for the three months ended September 30, 2021 ("Q3 2021");
- Operating income increased 65.9% to $27.9 million, compared to $16.8 million in Q3 2021;
- Net income increased 55.9% to $19.0
million, compared to $12.2
million in Q3 2021;
- Diluted earnings per share increased to $0.44 per share, compared to $0.31 per share in Q3 2021
- Total comprehensive income increased to $32.9 million compared to $12.2 million in Q3 2021;
- EBITDA1 increased 57.3% to $44.1 million, compared to $28.0 million in Q3 2021;
- EBITDA Margin1 was 26.7% compared with 26.9% in Q3
2021; and
- AHG continued to provide logistics and distribution,
specialized transportation, and packaging solutions to certain of
its manufacturer, 3PL provider, wholesaler and government clients
that are involved in the Canadian supply of COVID-19 vaccines and
ancillary products. In Q3 2022, the Company's COVID-19
vaccine-related revenue comprised approximately 2.8% of total
revenue, compared to approximately 2.5% in Q3 2021.
"Our strong growth in revenue and profitability in the quarter
and year-to-date reflects the significant impact of our recent
acquisitions in both our healthcare logistics and specialized
transportation segments, as well as continued organic growth, net
of fuel surcharge revenue," said Michael
Andlauer, Chief Executive Officer of AHG. "We're finishing
the year with solid earnings momentum and a strong balance sheet,
and we look forward to seizing further opportunities to expand our
North American platform and build value for our stakeholders."
Selected Consolidated Financial Summary
|
Three months
ended Sept. 30,
|
|
|
Nine
months ended Sept.
30,
|
|
|
|
($CAD 000s, except
per share amounts)
|
2022
|
2021
|
Variance
|
2022
|
2021
|
Variance
|
Revenue
|
|
|
|
|
|
|
Logistics &
distribution
|
42,574
|
28,953
|
47.0 %
|
117,664
|
85,734
|
37.2 %
|
Packaging
solutions
|
5,443
|
4,504
|
20.8 %
|
17,365
|
15,721
|
10.5 %
|
Healthcare Logistics
segment
|
48,017
|
33,457
|
43.5 %
|
135,029
|
101,455
|
33.1 %
|
Ground
transportation
|
105,353
|
60,750
|
73.4 %
|
309,180
|
176,602
|
75.1 %
|
Air freight
forwarding
|
7,704
|
6,155
|
25.2 %
|
26,834
|
19,190
|
39.8 %
|
Dedicated and last
mile delivery
|
16,980
|
13,348
|
27.2 %
|
49,540
|
37,978
|
30.4 %
|
Intersegment
revenue
|
(13,156)
|
(9,511)
|
38.3 %
|
(37,932)
|
(28,135)
|
34.8 %
|
Specialized
Transportation segment
|
116,881
|
70,742
|
65.2 %
|
347,622
|
205,635
|
69.0 %
|
Total
revenue
|
164,898
|
104,199
|
58.3 %
|
482,651
|
307,090
|
57.2 %
|
Operating
expenses
|
137,038
|
87,403
|
56.8 %
|
400,472
|
254,839
|
57.1 %
|
Operating
income
|
27,860
|
16,796
|
65.9 %
|
82,179
|
52,251
|
57.3 %
|
Net
income
|
18,995
|
12,188
|
55.9 %
|
56,451
|
36,850
|
53.2 %
|
Foreign currency
translation adjustment
|
13,907
|
-
|
N/A
|
17,515
|
-
|
N/A
|
Total
comprehensive income
|
32,902
|
12,188
|
170.0 %
|
73,966
|
36,850
|
100.7 %
|
Earnings per share –
basic
|
$ 0.45
|
$ 0.32
|
$ 0.13
|
$ 1.35
|
$ 0.96
|
$ 0.39
|
Earnings per share –
diluted
|
$ 0.44
|
$ 0.31
|
$ 0.13
|
$ 1.32
|
$ 0.94
|
$ 0.38
|
Select financial
metrics
|
|
|
|
|
|
|
EBITDA¹
|
44,072
|
28,026
|
57.3 %
|
129,785
|
83,486
|
55.5 %
|
EBITDA
Margin¹
|
26.7 %
|
26.9 %
|
(0.2 %)
|
26.9 %
|
27.2 %
|
(0.3 %)
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2022 Financial Results
Revenue for Q3 2022 increased by 58.3% to $164.9 million, compared with $104.2 million in Q3 2021. The acquisitions of
Logistics Support Unit (LSU) Inc.
("LSU"), Skelton USA Inc.
("Skelton USA") and T.F. Boyle
Transportation, Inc. ("Boyle Transportation") accounted for
approximately $43.4 million of the $60.7 million
increase, with the remaining growth attributable to
organic growth and fuel surcharge revenue as described below.
Revenue for the healthcare logistics segment totaled
$48.0 million, an increase of 43.5%,
or approximately $14.6 million,
compared with Q3 2021. The increase was primarily attributable to
the 47.0% year-over-year growth in the Company's logistics and
distribution product line revenue, reflecting greater outbound
order handling activities for Accuristix, increases in
transportation billings impacted by fuel surcharge programs from
carriers, which are passed on to customers, and $8.9 million in incremental revenue from the
acquisition of LSU. AHG's packaging
solutions also contributed to this segment's revenue growth, with a
20.8% year-over-year increase in revenue.
Revenue in the specialized transportation segment totaled
$116.9 million, an increase of 65.2%
compared with Q3 2021. The increase was attributable to: 73.4%
growth in the Company's ground transportation product line driven
by incremental revenue from the Skelton USA and Boyle Transportation acquisitions of
approximately $34.5 million, organic
growth, 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 25.2% and 27.2%, respectively. Growth
in air freight forwarding was primarily
attributable to higher fuel costs passed on to customers as a
component of pricing. Growth in dedicated and last mile delivery
was attributable to incremental revenue from ongoing route
expansion and increases in fuel costs passed on
to customers.
Cost of transportation and services
was $81.0
million, or 49.1% of revenue, compared
with $47.5 million, or 45.6% of revenue, for Q3 2021. The
higher cost of transportation and services for Q3 2022 was
primarily attributable to the acquisitions of 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 Q3 2022 reflects
the 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 $28.3 million, or 17.1% of revenue, compared with
$21.4 million, or 20.5% of revenue,
for Q3 2021. The increase was primarily attributable to outbound
volume growth for Accuristix and the acquisition of LSU. AHG's specialized transportation acquisitions
(Skelton USA and Boyle
Transportation)
have lower facility-related costs compared to the Company's
healthcare logistics segment, which resulted
in the lower direct operating expense
operating ratio in Q3 2022.
Selling, general and administrative ("SG&A") expenses were
$11.3 million, or 6.8% of revenue,
compared with $8.3 million,
or 7.9% of revenue, for Q3
2021. Increased SG&A
expenses for Q3 2022 reflect the acquisitions
of LSU, Skelton USA and Boyle Transportation. 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 totaled $27.9
million, an increase of $11.1
million, or 65.9%, compared to $16.8
million for Q3 2021. Approximately $4.8 million of the increase was attributable to
the acquisitions of LSU, Skelton
USA and Boyle Transportation, with
the remainder attributable to organic growth.
Net income was $19.0
million, or $0.44 per share
(diluted), compared with $12.2
million, or $0.31 per share
(diluted), in Q3 2021. Higher segment net income before
eliminations for both the Company's healthcare logistics and
specialized transportation operating segments contributed to the
increased profit on a consolidated basis.
Total comprehensive income was $32.9
million, compared to $12.2
million in Q3 2021. Total comprehensive income differs from
net income due to the acquisition of foreign operations (Skelton
USA and Boyle Transportation),
which resulted in a positive foreign currency translation
adjustment of $13.9 million in Q3
2022.
Earnings before interest, taxes, depreciation and amortization
("EBITDA")¹ increased 57.3% to $44.1
million, from $28.0 million
for Q3 2021. The increase is due to the factors discussed above and
reflects the incremental contributions from acquisitions and
organic growth in both of the Company's operating segments. EBITDA
Margin¹ was 26.7%, compared to 26.9% in Q3 2021. Approximately 1.0%
of EBITDA margin in Q3 2021 was attributable to the impact of the
share of profit of Skelton USA,
which was accounted for as an equity investee during that
period.
Dividend
The Company paid a dividend (encompassing the period from
July 1, 2022 to September 30, 2022) in the amount of $0.07 per subordinate voting share and multiple
voting share on October 17, 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 $0.07 per subordinate voting share and multiple voting share on an ongoing
basis.
Shares Outstanding
As at September 30, 2022, there
were 18,257,283 subordinate voting shares and 23,600,000 multiple
voting shares issued and outstanding.
Financial Statements
AHG's unaudited interim condensed consolidated financial
statements and related Management's Discussion & Analysis
("MD&A") for Q3 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 Wednesday, November 9,
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:
https://andlauerhealthcare.com/andlauer-healthcare-presentations-events
To access a replay of the conference call dial 416-764-8677 or
(888) 390-0541, passcode: 866537 #. The replay will be available
until November 16, 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 and six-month periods ended June 30, 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)
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
Sept. 30,
|
Nine Months
Ended
Sept. 30,
|
|
2022
|
2021
|
2022
|
2021
|
Net
income
|
18,995
|
12,188
|
56,451
|
36,850
|
Income tax
expense
|
6,969
|
4,043
|
20,549
|
13,115
|
Interest
expense
|
1,746
|
1,570
|
4,991
|
4,654
|
Interest
income
|
(86)
|
(25)
|
(203)
|
(166)
|
Depreciation and
amortization
|
16,448
|
10,250
|
47,997
|
29,033
|
EBITDA1
|
44,072
|
28,026
|
129,785
|
83,486
|
SOURCE Andlauer Healthcare Group Inc.