Q3 2023 Summary
- Revenue totaled
$156.8 million , a decline of 4.9% from$164.9 million for the three-month period endedSeptember 30, 2022 ("Q3 2022"); - Operating income was
$21.7 million , compared to$27.9 million in Q3 2022; - Net income totaled
$15.3 million , or$0.36 per share (diluted), compared to$19.0 million , or$0.44 per share (diluted), in Q3 2022; - Total comprehensive income was
$20.1 million , compared to$32.9 million in Q3 2022; - EBITDA totaled
$39.0 million , compared to$44.1 million in Q3 2022; and - EBITDA Margin was 24.9%, compared to 26.7% in Q3 2022.
"Our results for the quarter reflect a return to a more normalized operating environment. Specifically, we are no longer benefitting from certain pandemic-related tailwinds, including temporarily inflated
Selected Consolidated Financial Summary
Three months ended | Nine months ended | |||||
($CAD 000s, except per share amounts) | 2023 | 2022 | Variance | 2023 | 2022 | Variance |
Revenue | ||||||
Logistics & distribution | 38,356 | 42,574 | (9.9) % | 118,317 | 117,664 | 0.6 % |
Packaging solutions | 3,746 | 5,443 | (31.2) % | 13,492 | 17,365 | (22.3) % |
Healthcare Logistics segment | 42,102 | 48,017 | (12.3) % | 131,809 | 135,029 | (2.4) % |
Ground transportation | 103,856 | 105,353 | (1.4) % | 315,567 | 309,180 | 2.1 % |
Air freight forwarding | 7,362 | 7,704 | (4.4) % | 22,582 | 26,834 | (15.8) % |
Dedicated and last mile delivery | 17,027 | 16,980 | 0.3 % | 50,497 | 49,540 | 1.9 % |
Intersegment revenue | (13,593) | (13,156) | 3.3 % | (41,570) | (37,932) | 9.6 % |
Specialized Transportation segment | 114,652 | 116,881 | (1.9) % | 347,076 | 347,622 | (0.2) % |
Total revenue | 156,754 | 164,898 | (4.9) % | 478,885 | 482,651 | (0.8) % |
Operating expenses | 135,030 | 137,038 | (1.5) % | 410,876 | 400,472 | 2.6 % |
Operating income | 21,724 | 27,860 | (22.0) % | 68,009 | 82,179 | (17.2) % |
Net income | 15,335 | 18,995 | (19.3) % | 47,579 | 56,451 | (15.7) % |
Foreign currency translation adjustment | 4,812 | 13,907 | N/A | (427) | 17,515 | N/A |
Total comprehensive income | 20,147 | 32,902 | (38.8) % | 47,152 | 73,966 | (36.3) % |
Earnings per share – basic | ( | ( | ||||
Earnings per share – diluted | $ 0.36 | $ 0.44 | ( | $ 1.11 | $ 1.32 | ( |
Select financial metrics | ||||||
EBITDA¹ | 39,011 | 44,072 | (11.5) % | 119,020 | 129,785 | (8.3) % |
EBITDA Margin¹ | 24.9 % | 26.7 % | (180 bps) | 24.9 % | 26.9 % | (200 bps) |
Q3 2023 Financial Results
Revenue for Q3 2023 decreased by 4.9% to
Revenue for the healthcare logistics segment totaled
The decrease in logistics and distribution revenue was due to lower outbound order handling activities for Accuristix and reduced transportation billings impacted by fuel surcharge programs from carriers, which are passed on to customers. The decrease is also partially attributable to
Revenue in the specialized transportation segment totaled
The decrease in ground transportation revenue in the quarter was primarily attributable to lower fuel costs passed on to customers as a component of pricing, and a decline in US-based truckload rates, as opportunities to obtain rate premiums in Fiscal 2022 due to pandemic-related equipment and driver shortages have diminished. The Company believes that its US-based ground transportation revenue and related margins have returned to more normalized levels in YTD 2023, and it does not foresee a return to the premium rates achieved in Fiscal 2022. AHG's ground transportation revenue, excluding fuel, in its Canadian network increased by approximately 6.0% in the quarter, partially offsetting the factors discussed above.
The
Cost of transportation and services was $79.6 million, or 50.8% of revenue, compared with $81.0 million, or 49.1% of revenue, for Q3 2022. The decrease in costs was primarily attributable to lower fuel costs in line with the decreases in revenue related to fuel prices. The increased operating ratio is attributable to lower pricing in the Company's US-based truckload operations, as discussed above.
Direct operating expenses were
Selling, general and administrative ("SG&A") expenses were
Operating income totaled
Net income was
Total comprehensive income was
Earnings before interest, taxes, depreciation and amortization ("EBITDA")¹ totaled
Dividend
The Company paid a dividend (encompassing the period from
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 $0.09 per subordinate voting share and multiple voting share on an ongoing basis.
Shares Outstanding
On
As at
Financial Statements
AHG's unaudited interim condensed consolidated financial statements and related Management's Discussion & Analysis ("MD&A") for Q3 2023 are available on the Company's website at www.andlauerhealthcare.com and on the Company's profile on SEDAR+ at www.sedarplus.ca
Conference call and webcast
To join the conference call without operator assistance, you may register and enter your phone number at: https://emportal.ink/45g4KGl to receive an instant automated call back. Alternatively, you can dial (416) 764-8650 or (888) 664-6383 to reach a live operator that will join you into the call.
You can access a live webcast of the call under the Presentations & Events section of AHG's investor website at: www.andlauerhealthcare.com/andlauer-healthcare-presentations-events
To access a replay of the conference call, dial 416-764-8677 or (888) 390-0541, passcode: 155065 #. The replay will be available until
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
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 expectations with respect to COVID-19. Particularly, information regarding the Company's growth expectations, performance, achievements, payment of dividends, prospects, potential acquisitions, financial targets or outlook 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, targets, 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 Q3 2023. 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, 2023, which is available on the Company's profile on SEDAR at www.sedarplus.ca. 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 for the period before: (i) income tax expense (recovery); (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 | Nine Months Ended | |||
2023 | 2022 | 2023 | 2022 | ||
Net income | 15,335 | 18,995 | 47,579 | 56,451 | |
Income tax expense | 5,583 | 6,969 | 17,282 | 20,549 | |
Interest expense | 1,889 | 1,746 | 5,731 | 4,991 | |
Interest income | (1,044) | (86) | (2,400) | (203) | |
Depreciation and amortization | 17,248 | 16,448 | 50,828 | 47,997 | |
EBITDA1 | 39,011 | 44,072 | 119,020 | 129,785 |
SOURCE
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