TORONTO, May 23, 2024
/CNW/ - Grey Wolf Animal Health Corp. (TSXV: WOLF) ("Grey Wolf" or
the "Company"), a Canadian diversified animal health company, today
announced financial results for the three months ended March 31, 2024.
Highlights
- Revenue for the quarter of $6.0
million was flat year over year.
- Gross profit remained consistent at $3.1
million for the quarter compared to $3.2 million for the same period in 2023.
- Adjusted EBITDA1 remained consistent at $0.9 million for the quarter compared to
$0.9 million for the same period in
2023.
"During the first quarter of 2024, the Animal Health business
saw solid sell-through of our pharmaceutical, nutraceutical and
consumable products to veterinary clinics with double digit sales
growth year over year. However, sales of these products to buying
groups were flat as our customers tightened inventory levels, which
when combined with a decrease in commission and other revenue
resulted in a 4.3% decrease in our Animal Health business revenue
in the first quarter compared to the same period in 2023. Our
Pharmacy business continued to deliver growth year over year with
revenues up 4.5% to $3.1 million in
the first quarter.
To support the long-term growth of Grey Wolf, we have been
investing in our sales and marketing team to drive sales force
effectiveness and strategy. As part of this initiative, we incurred
a one-time employee settlement cost of $0.2
million in the first quarter. Excluding these costs, our
total expenses decreased 3.1% to $2.6
million over the same period in 2023 as we continue to
balance spend to ensure continued growth over the long-term. We
remain optimistic on the value of our product portfolio for the
health and wellbeing of patients while we experience a softening in
the market as a result of inflationary pressures across the broader
economy" said Angela Cechetto, Chief
Executive Officer.
Key Financial Data and Comparative
Results
Grey Wolf Animal
Health Inc.
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Results of
Operations
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Y/E December 31,
2024
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Three months
ended
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Mar 31,
2024
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Mar 31,
2023
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Revenue
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$6,046,505
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$6,044,596
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Gross profit
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3,112,159
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3,175,782
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Gross profit
%
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51.5 %
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52.5 %
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Total operating
expenses
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2,821,010
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2,656,388
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Operating income for
the period
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291,149
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519,394
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Income tax expense
(recovery)
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53,771
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(29,893)
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Net income for the
period
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126,072
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410,463
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Earnings per
share
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Basic and
diluted
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$0.004
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$0.013
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EBITDA
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606,961
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864,969
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Adjusted
EBITDA
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855,231
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938,316
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Mar 31,
2024
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Dec 31,
2023
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Total assets
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$38,139,554
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$39,632,440
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Total
liabilities
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12,946,529
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14,542,886
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Results of Operations for the
First Quarter-ended March 31,
2024
Total revenue for the three-month period ended March 31, 2024 was flat at $6.0 million compared to the same period in
2023. Revenue in the Animal Health business unit decreased by
4.3% to $2.9 million from
$3.1 million due to a decline in
commission and other revenue. This decline in the Animal Health
business unit was offset by an increase in revenue in the Pharmacy
business unit by 4.5% to $3.1 million
from $3.0 million due to an increase
in sales of compounded products.
Gross margins for the three-month period ended March 31, 2024 were 51.5% compared to 52.5% for
the same period in 2023. Gross margins were impacted by reduced
margins in the Pharmacy business unit and offset by slightly higher
margins in the Animal Health business unit related to product
mix.
Total expenses for the three-month period ended March 31, 2024 increased 6.2% to $2.8 million over the same period in 2023.
Excluding one-time employee settlement costs incurred during the
three-month period ended March 31,
2024, total expenses decreased 3.1% to $2.6 million over the same period in 2023. During
the three-month period, there was a decrease in salary, bonus, and
benefits related to headcount changes as compared to the same
period in 2023. Advertising and promotional expenses also decreased
in the first quarter of 2024 as the company focused spend on key
products in its portfolio. Finally, there was an increase in
distribution expenses as a result of transitioning our warehouse
and logistics to a third-party provider in the fourth quarter of
2023. Due to accounting measures, these costs are now reported in
distribution expenses compared to previously being reported in
depreciation and amortization and interest expenses.
Adjusted EBITDA1 was $0.9
million in the first quarter 2024 compared to $0.9 million in the same period in 2023, mainly
due to decreased net income for the period after adjusting for the
one-time employee settlement costs.
Cash and cash equivalents were $5.6
million at March 31, 2024
compared to $7.8 million at
December 31, 2023. The Company
used cash from operations of $1.8
million, which was primarily impacted by net income for the
current period offset by changes in non-cash working capital items,
most significantly the change in trade and other receivables and
accounts payable and accrued liabilities. Trade and other
receivables were impacted by the timing of the Easter holiday as
our customer payments generally fall on the last day of the month
and since this was a banking holiday these payments were not
recognized until after the quarter end.
As at March 31, 2024, the Company
had outstanding borrowings of $9.0
million, of which $1.1 million
are current and $7.9 million are
non-current. The Company's debt is a fixed rate term loan with an
average interest rate of 4.7% until September 2026.
Grey Wolf's financial statements and accompanying Management
Discussion and Analysis for the three months ended March 31, 2024 are available under the Company's
profile on www.sedar.com.
1Non-IFRS
Measures
Management uses both IFRS and Non-IFRS Measures to assess the
financial and operating performance of the Company's operations.
These Non-IFRS Measures are not recognized measures under IFRS, do
not have a standardized meaning under IFRS and are unlikely to be
comparable to similar measures presented by other companies. The
Non-IFRS Measures referenced in this press release includes
Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings
before financing and special transaction costs (including, for
greater certainty, fees related to the Qualifying Transaction),
interest income, interest and accretion expenses, income taxes,
depreciation of property and equipment, depreciation of right of
use assets, amortization of intangible assets, share-based
compensation, change in fair value of embedded derivatives, foreign
exchange gains or losses, and other income. The Company considers
Adjusted EBITDA as an additional metric in assessing business
performance and an important measure of operating performance and
cash flow, providing useful information to help analyze and compare
profitability between companies for investors and analysts.
The following table provides a summary of the differences
between Grey Wolf's consolidated IFRS and Non-IFRS financial
measures, which are reconciled below:
EBITDA and Adjusted EBITDA
Grey Wolf Animal
Health Inc.
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Adjusted
EBITDA
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Y/E December 31,
2024
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Three months
ended
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Mar 31,
2024
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Mar 31,
2023
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Net income for the
period
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$126,072
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$410,463
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Interest
income
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(54,067)
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(31,748)
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Interest and accretion
expense
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140,250
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155,371
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Income taxes
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53,771
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(29,893)
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Depreciation of
property and equipment
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75,255
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68,122
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Depreciation of right
of use assets
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21,930
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48,904
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Amortization of
intangible assets
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243,750
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243,750
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EBITDA
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606,961
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864,969
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Adjustments
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Share-based
compensation
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(22,601)
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58,146
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Foreign exchange (gain)
loss
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25,123
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15,201
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Settlement
costs
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245,748
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-
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Adjusted
EBITDA
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855,231
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938,316
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About Grey Wolf Animal Health
Corp.
Grey Wolf Animal Health Corp., headquartered in Toronto, Canada, is a diversified animal
health company founded by a veterinarian to bring to market a
broad portfolio of products that meets the unmet needs of
veterinarians, clinics and pets. The Company's strategy is to
in-license, acquire or develop innovative prescription and
non-prescription products for commercialization in the veterinarian
channel in Canada. For additional
information, please visit: www.greywolfah.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Forward Looking Statements
Certain information included in this press release contains
forward-looking information with the meaning of applicable Canadian
securities laws. This information includes statements concerning
the Company's objectives, its strategies to achieve those
objectives, as well as statements with respect to management's
beliefs, plans, estimates, and intentions, and similar statements
concerning anticipated future events, results, circumstances,
performance or expectations that are not historical facts.
Forward-looking information generally can be identified by the use
of forward-looking terminology such as "outlook", "objective",
"may", "will", "would", "expect", "intend", "estimate",
"anticipate", "believe", "should", "plan", "continue", or similar
expressions suggesting future outcomes or events or the negative
thereof. Such forward-looking information reflects management's
beliefs and is based on information currently available. All
forward-looking information in this press release is qualified by
the following cautionary statements.
Forward-looking information necessarily involve known and
unknown risks and uncertainties, which may be general or specific
and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, assumptions may not be correct and objectives,
strategic goals and priorities may not be achieved. A variety of
factors, many of which are beyond the Company's control, affect the
operations, performance and results of the Company and its
subsidiaries, and cause actual results to differ materially from
current expectations of estimated or anticipated events or
results.
A more detailed assessment of the risks that could cause
actual results to materially differ than current expectations is
contained in the Risk Factors section of Grey Wolf's Management
Discussion and Analysis for the three months ended March 31, 2024. The forward-looking information
included in this press release is made as of the date hereof and
should not be relied upon as representing the Company's views as of
any date subsequent to the date hereof. Management undertakes no
obligation, except as required by applicable law, to publicly
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise.
SOURCE Grey Wolf Animal Health Corp.