TORONTO, May 11, 2021 /CNW/ - Andlauer Healthcare
Group Inc. (TSX: AND) ("AHG" or the "Company") today reported its
financial results for the three-month period ended March 31, 2021 ("Q1 2021").
Q1 2021 Summary
- Revenue increased 17.3% to $95.8
million, compared to $81.7
million for the three months ended March 31, 2020 ("Q1 2020");
- Operating income increased 34.3% to $16.7 million, compared to $12.4 million in Q1 2020;
- Net income and comprehensive income increased 41.9% to
$11.6 million, compared to
$8.2 million in Q1 2020;
- EBITDA increased 35.6% to $25.5
million, compared to $18.8
million in Q1 2020;
- EBITDA Margin was 26.6%, compared to 23.0% in Q1 2020;
- On March 1, 2021, AHG acquired
100% of Skelton Canada Inc. ("Skelton") and 49% of Skelton
USA Inc. ("Skelton USA") for total aggregate consideration of
approximately $114.7 million, subject
to customary working capital adjustments. Skelton added
approximately $4.1 million of revenue
during Q1 2021;
- AHG continued to maintain service levels across its operations,
while monitoring the safety measures implemented in response to
COVID-19 to prioritize the health and safety of its personnel,
clients, and suppliers; and
- During Q1 2021, AHG provided logistics and distribution,
specialized transportation and packaging solutions to certain of
its manufacturer, third party logistics provider, wholesaler and
government clients that are involved in the Canadian supply of
COVID-19 vaccines and ancillary products. While individually, and
in the aggregate, COVID-19 related revenue was not material to
AHG's results in Q1 2021, the Company believes such revenue may
increase in Q2 2021 as the Government of Canada continues to accelerate its commitments
to procure COVID-19 vaccines from several suppliers.
"Our strong first quarter results were driven by exceptional
performance in our logistics and distribution and ground
transportation product lines, including full quarter contributions
from the acquisitions of TDS Logistics and McAllister Courier, and a one-month contribution
from the Skelton acquisition. We also benefitted from continued
strong growth in our dedicated and last mile delivery, and air
freight forwarding product lines," said Michael Andlauer, Chief Executive Officer of
AHG. "While we're still in the initial stages of integrating
Skelton, it is already clear that they're a great long-term
strategic fit with AHG. We are off to a great start in 2021 and
look forward to maintaining strong performance throughout the year,
while continuing to prioritize the health and safety of our
personnel and owner operators who make it happen."
Selected Consolidated Financial Summary
|
Three months ended
March 31
|
($CAD 000s, except
per share amounts)
|
2021
|
2020
|
Variance
|
Revenue
|
|
|
|
Logistics &
Distribution
|
27,628
|
23,567
|
17.2 %
|
Packaging
Solutions
|
5,651
|
7,344
|
(23.1) %
|
Healthcare Logistics
Segment
|
33,279
|
30,911
|
7.7 %
|
Ground
Transportation
|
53,583
|
46,329
|
15.7 %
|
Air Freight
Forwarding
|
6,601
|
5,265
|
25.4 %
|
Dedicated and Last
Mile Delivery
|
11,218
|
6,267
|
79.0 %
|
Intersegment
Revenue
|
(8,915)
|
(7,122)
|
25.2 %
|
Specialized
Transportation Segment
|
62,487
|
50,739
|
23.2 %
|
Total
revenue
|
95,766
|
81,650
|
17.3 %
|
Operating
expenses
|
79,103
|
69,246
|
14.2 %
|
Operating
income
|
16,663
|
12,404
|
34.3 %
|
Net income and
comprehensive income
|
11,611
|
8,182
|
41.9 %
|
Earnings per share –
basic
|
$ 0.31
|
$ 0.22
|
$ 0.09
|
Earnings per share –
diluted
|
$ 0.30
|
$ 0.22
|
$ 0.08
|
Select financial
metrics
|
|
|
|
EBITDA
|
25,487
|
18,799
|
35.6%
|
EBITDA
Margin
|
26.6%
|
23.0%
|
360 bps
|
Q1 2021 Financial Results
Revenue for Q1 2021 increased by 17.3% to $95.8 million, compared with $81.7 million in Q1 2020. The TDS Logistics Inc.
("TDS"), McAllister Courier Inc. ("MCI") and Skelton acquisitions
accounted for approximately $10.3
million of the $14.1 million
increase, with the remaining increase attributable to organic
growth as described below.
Revenue for the healthcare logistics segment totaled
$33.3 million, an increase of 7.7%
compared with Q1 2020. The increase was primarily attributable to
17.2% growth in the Company's logistics and distribution product
line, generated from greater inbound product volume, storage and
handling activities related to its existing client contracts and
the July 2020 implementation of a
significant new client contract at its 220,000 square-foot facility
in Brampton, Ontario. The increase
was partially offset by a 23.1% revenue decline in the Company's
packaging product line, the result of the temporary reduction in
operating capacity that was necessitated by safety measures
implemented in March 2020 in
connection with the COVID-19 pandemic, including limiting the
number of associates in the Company's operations to allow for
physical distancing in accordance with public health
guidelines.
Revenue in the specialized transportation segment totaled
$62.5 million, an increase of 23.2%
compared with Q1 2020. The increase was attributable to: 15.7%
growth in the Company's ground transportation product line driven
by incremental revenue from the MCI and Skelton acquisitions of
approximately $5.3 million, with the
remainder attributable to higher volume from the Company's existing
client base, partially offset by lower fuel costs; and
year-over-year growth in AHG's air freight forwarding and dedicated
and last mile delivery product lines of 25.4% and 79.0%,
respectively. Growth in air freight forwarding was primarily
attributable to volume increases, as customers continued to adjust
to varying levels of national demand while provincial governments
attempted to manage changing conditions related to the pandemic.
Growth in dedicated and last mile delivery was primarily
attributable to incremental revenue from the acquisition of
TDS.
Cost of transportation and services was $41.3 million, or 43.1% of revenue, compared with
$33.5 million, or 41.1% of revenue,
for Q1 2020. The higher cost of transportation and services and
related operating ratio for Q1 2021 reflects the addition of the
TDS and MCI cost profiles, partially offset by lower fuel costs in
line with the decrease in revenue related to fuel, and savings
achieved by the Company's effective management of its variable
costs as volume increased by approximately 5.0% compared to Q1
2020.
Direct operating expenses were $20.6
million, or 21.6% of revenue, compared with $21.6 million, or 26.5% of revenue, for Q1 2020.
AHG incurred certain incremental costs in connection with its
COVID-19 response measures, including additional cleaning
activities for its facilities and equipment, expenses for personal
protective equipment, and other measures impacting productivity;
however, these incremental costs were mitigated through effective
productivity management and other cost controls. During Q1 2021,
AHG continued to qualify for the Canada Emergency Wage Subsidy ("CEWS") program
in connection with its packaging operations. A total of
$0.5 million was recognized as a
reduction of direct operating expenses for Q1 2021 as a result of
support received from the CEWS program ($nil in Q1 2020).
Selling, General and Administrative ("SG&A") expenses were
$8.7 million, or 9.1% of revenue,
compared with $7.7 million, or 9.5%
of revenue, for Q1 2020. SG&A expenses for Q1 2021 include
share-based compensation arrangements of approximately $0.5 million, compared to $0.8 million in Q1 2020. These share-based
compensation arrangements relate to the initial stock option grants
to AHG's directors and senior management team and deferred share
unit grants made to its board of directors, which are intended to
provide further alignment with shareholders. A further $0.8 million is included in Q1 2021 SG&A
expenses for incremental costs associated with the acquisition of
Skelton and 49% of Skelton USA.
Operating income for was $16.7
million, an increase of 34.3% compared to Q1 2020, primarily
reflecting the growth in total revenue, which exceeded the 14.2%
increase in total operating expenses.
Net income and comprehensive income increased by 41.9% to
$11.6 million, or $0.30 per share (diluted), from $8.2 million, or $0.22 per share (diluted), in Q1 2020. The
increase reflects higher segment net income before eliminations
from both the Company's healthcare logistics and specialized
transportation operating segments.
Earnings before interest, taxes, depreciation and amortization
("EBITDA")(1increased by 35.6% to $25.5 million, from $18.8
million in Q1 2020. EBITDA
margin(1) improved to 26.6% from 23.0% in Q1 2020.
Certain SG&A expenses related to the Company's initial public
offering and higher costs related to becoming a public company
contributed to lower EBITDA margins in Q1 2020, but the performance
of AHG's two operating segments continued to result in strong and
stable EBITDA margins at the higher end of the Company's historical
range. Further, the Skelton acquisition has a margin profile in
line with the specialized transportation segment which positively
impacts AHG's overall margin. Approximately 0.5% of the higher Q1
2021 EBITDA margin is attributed to the CEWS program.
Dividend
The Company paid a dividend (encompassing the period from
January 1, 2021 to March 31, 2021) in the amount of $0.05 per subordinate voting share and multiple
voting share on April 15, 2021.
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 $0.05 per subordinate voting share and multiple
voting share on an ongoing basis.
Shares Outstanding
As at March 31, 2021, there were
13,357,379 subordinate voting shares and 25,100,000 multiple voting
shares outstanding.
Financial Statements
AHG's unaudited interim condensed consolidated financial
statements and related Management's Discussion & Analysis
("MD&A") for Q1 2021 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, May 12, 2021
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: 122352 #. The replay will be available
until May 19, 2021. The webcast will
be archived on the Company's website following conclusion of the
call.
Virtual Annual Meeting of Shareholders
AHG's Annual Meeting of shareholders (the "Meeting") will be
held virtually via live audio webcast on Wednesday, May 12, 2021 at 11:00 a.m. (ET) at
www.virtualshareholdermeeting.com/AND2021. Shareholders will
be able to listen to the Meeting live, submit questions and submit
their vote while the Meeting is being held. Please refer to
the Company's management information circular for further details
on the Meeting agenda and how to participate.
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, 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, the Company strives to
accommodate the full range of its clients' specialized supply chain
needs on an integrated and efficient basis. 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 timing, completion and anticipated
benefits of the proposed Skelton acquisitions, the Company's
expectations of future results, performance, achievements, facility
expansions, leases, platform expansions, acquisitions, public
company costs, 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 year ended March
31, 2021. 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 February 24, 2021, 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.
For quantitative reconciliations of net income and
comprehensive income to EBITDA for Q1 2021 and Q1 2020, please see
"Reconciliation of Non-IFRS Measures" in the Company's MD&A for
the three-month period ended March 31,
2021, available on the Company's profile on SEDAR
(www.sedar.com), or the Company's website
(www.andlauerhealthcare.com).
SOURCE Andlauer Healthcare Group Inc.