CareRx Reports Results for the First Quarter of 2025

Rhea-AI Summary

CareRx Corporation, Canada's leading provider of pharmacy services to seniors living communities, reported its Q1 2025 financial results. Revenue was $89.6 million, slightly down from Q4 2024's $92.2 million due to fewer business days. The company achieved net income of $0.2 million, improving from net losses in previous quarters. Adjusted EBITDA increased to $7.8 million with an improved margin of 8.7%. Notable developments include opening a new state-of-the-art pharmacy in North Burnaby and the Ontario Ministry of Health's pause on planned long-term care pharmacy funding reductions. The company's strategic focus on operational efficiency and cost discipline has strengthened its financial foundation for sustainable growth.

Positive

• Achieved net income of $0.2 million, turning around from previous quarter's loss of $2.2 million
• Improved Adjusted EBITDA to $7.8 million, up from $7.4 million in Q1 2024
• Enhanced Adjusted EBITDA margin to 8.7% from 8.3% year-over-year
• Ontario Ministry of Health paused planned reduction in pharmacy funding fees
• Successfully opened new state-of-the-art pharmacy facility in North Burnaby

Negative

• Revenue decreased to $89.6 million from $92.2 million in Q4 2024
• Cash provided by operations declined to $7.4 million from $9.3 million year-over-year
• Total assets decreased to $223.5 million from $231.9 million year-over-year

Return to Growth

Toronto, Ontario--(Newsfile Corp. - May 7, 2025) - CareRx Corporation (TSX: CRRX) ("CareRx" or the "Company"), Canada's leading provider of pharmacy services to seniors living and other congregate care communities, today reported its financial results for the first quarter ended March 31, 2025.

"Over the past several quarters, we have made meaningful progress in strengthening our financial and operational foundation," said Puneet Khanna, President and Chief Executive Officer of CareRx. "Through focused investments, the Company has enhanced its ability for scalable, sustainable growth while maintaining cost discipline, resulting in improved margin performance and a stronger balance sheet. As we enter a new growth phase, we remain committed to delivering long-term value for all stakeholders."

Highlights for the First Quarter of 2025

• Revenue for the quarter was $89.6 million compared to $92.2 million for the fourth quarter of 2024 and $89.7 million for the first quarter of 2024:
  • The Company's revenue decrease compared to the fourth quarter of 2024 was primarily due to the first quarter having two fewer business days; and
  • Revenue was stable compared to the same period in the prior year primarily due to a change in the mix of branded and generic pharmaceuticals dispensed.
• Adjusted EBITDA¹ for the quarter was $7.8 million compared to $7.6 million for the fourth quarter of 2024 and $7.4 million for the first quarter of 2024:
  • Increase compared to the prior quarter due to non-recurring adjustments in other operating expenses that occurred in that period; and
  • Increase compared to the first quarter of 2024 was primarily due to certain efficiencies and cost savings initiatives.
• Net income for the quarter was $0.2 million compared to a net loss of $2.2 million for the fourth quarter of 2024 and net loss of $0.5 million for the first quarter of 2024:
  • Net income was generated primarily due to decrease in finance costs, lower share-based compensation expense and lower loss on disposal of assets as compared to the fourth quarter of 2024; and
  • Elimination of net loss compared to the same period in the prior year was driven primarily by decreases in finance costs, and depreciation and amortization expenses, partially offset by increase in transaction, restructuring and other costs and reduced favourable adjustment in fair value of contingent consideration liability.
• In December 2024, the Company opened a new state-of-the-art pharmacy in North Burnaby, British Columbia, and subsequently completed the consolidation of its existing Burnaby and Vancouver pharmacy operations into this new location during the first quarter of 2025.
• In April 2025, the Ontario Ministry of Health issued an Executive Officer Notice announcing a pause in the previously scheduled changes to long-term care pharmacy funding. These changes, which were scheduled to go into effect on April 1, 2025, would have reduced the fixed professional fee under the fee-per-bed capitation model from an annual amount of $1,500 to $1,400 per bed, with further annual decreases of $100 until reaching $1,200 per bed.

¹ See "Non-IFRS Measures" below

FINANCIAL RESULTS

Selected Financial Information

	For the three month periods ended March 31,
(Thousands of Canadian dollars except per share amounts and percentages)	2025	2024	2023
	$	$	$
Revenue	89,550	89,729	91,404
EBITDA1	6,730	6,758	5,774
Adjusted EBITDA1	7,779	7,445	6,819
Per share - Basic	$0.12	$0.12	$0.12
Adjusted EBITDA Margin1	8.7%	8.3%	7.5%
Net income (loss)	227	(517)	(2,149)
Per share - Basic and Diluted	$0.00	($0.01)	($0.04)
Cash provided by operations	7,374	9,278	5,066
Total Assets	223,513	231,893	271,936
Total Liabilities	137,114	150,367	193,957

 

¹ See "Non-IFRS Measures" below.

Conference Call

The Company will host a conference call, including a slide presentation, to discuss its first quarter of 2025 financial results on Wednesday, May 7, 2025, at 10:30 a.m. Eastern Time (ET).

Telephone Dial-In Access Information

To dial direct and enter the call through an operator, dial 647-484-8814 or 1-844-763-8274. 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/). You may also access the webcast with the attached link https://www.gowebcasting.com/14021 to access the live webcast. 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 88,000 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.

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 neil.weber@loderockadvisors.com

 

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 March 31,
	2025	2024
(Thousands of Canadian Dollars except per share amounts)	$	$
Net income (loss)	227	(517)
Depreciation and amortization	4,758	4,817
Finance costs, net	1,745	2,458
EBITDA	6,730	6,758
Transaction, restructuring and other costs	517	392
Change in fair value of contingent consideration liability	30	(188)
Share-based compensation expense	422	489
Loss on disposal of assets	80	(6)
Adjusted EBITDA	7,779	7,445
Weighted average number of shares - basic (in thousands)	62,729	59,865
Adjusted EBITDA per share - basic	$0.12	$0.12
Weighted average number of shares - diluted (in thousands)	65,186	59,865
Adjusted EBITDA per share - diluted	$0.12	$0.12

 

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/251074

FAQ

What was CareRx's (CHHHF) revenue in Q1 2025?

CareRx reported revenue of $89.6 million in Q1 2025, slightly down from $92.2 million in Q4 2024 primarily due to fewer business days in the quarter.

How much profit did CareRx make in Q1 2025?

CareRx reported a net income of $0.2 million in Q1 2025, improving from a net loss of $2.2 million in Q4 2024 and a net loss of $0.5 million in Q1 2024.

What was CareRx's Adjusted EBITDA margin in Q1 2025?

CareRx's Adjusted EBITDA margin was 8.7% in Q1 2025, an improvement from 8.3% in Q1 2024.

What major operational changes did CareRx make in Q1 2025?

CareRx opened a new state-of-the-art pharmacy in North Burnaby, British Columbia, and consolidated its existing Burnaby and Vancouver pharmacy operations into this new location.

How did the Ontario Ministry of Health's decision affect CareRx?

The Ontario Ministry of Health paused previously scheduled reductions in long-term care pharmacy funding, which would have reduced the fixed professional fee from $1,500 to $1,400 per bed annually, with further planned decreases.