GREY WOLF ANIMAL HEALTH REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
Canada NewsWire
TORONTO, Nov. 21, 2024
TORONTO, Nov. 21, 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- and nine-months ended September 30, 2024.
Highlights
-- Revenue for the quarter increased year over year by 5.7% to $6.9 million.
Revenue increased by 4.6% to $20.1 million for the first nine months of
the year.
-- Gross profit increased year over year by 9.2% to $3.5 million for the
quarter and 6.5% to $10.4 million for the first nine months of the year.
-- Adjusted EBITDA1 increased year over year by 22.2% to $1.2 million for
the quarter and 14.8% to $3.4 million for the first nine months of the
year.
"Q3 2024 was another solid quarter for both revenue and Adjusted EBITDA(1) as highlighted above. Our growth came from both the Animal Health and Pharmacy businesses, which had increased revenue of 5.5% to $3.1 million and 5.9% to $3.8 million, respectively. Adjusted EBITDA(1) increased by 22.2% for the quarter to $1.2 million and year to date is now up 14.8% to $3.4 million." said Angela Cechetto, Chief Executive Officer. "In addition, this fall we launched two new products including Sileo$(R)$ and MicroSilver+ Shampoo. Sileo is the first-and-only Health Canada approved product for the alleviation of acute anxiety and fear associated with noise in dogs. MicroSilver+ Shampoo is a new dermatology product to help maintain a healthy skin barrier for optimal skin integrity. Both products are exciting additions to our product portfolio as we continue to support the health and wellbeing of pet patients."
Key Financial Data and Comparative Results
Three months ended Nine months ended
Sep 30, 2024 Sep 30, 2023 Sep 30, 2024 Sep 30, 2023
Revenue $6,899,201 $6,527,122 $20,142,780 $19,252,899
Gross profit 3,508,291 3,211,376 10,398,581 9,758,391
Gross profit % 50.9 % 49.2 % 51.6 % 50.7 %
Total operating
expenses 2,706,100 2,664,678 8,301,807 8,042,806
Operating income for
the period 802,191 546,698 2,096,774 1,715,585
Income tax expense 225,480 136,729 604,950 435,566
Net income for the
period 502,151 282,509 1,205,770 893,464
Earnings per share
Basic and diluted $0.02 $0.01 $0.04 $0.03
EBITDA 1,155,277 896,203 3,095,156 2,775,292
Adjusted EBITDA 1,184,618 969,252 3,418,807 2,977,143
Sep 30, 2024 Dec 31, 2023
Total assets $40,748,254 $41,411,092
Total liabilities 14,407,341 16,321,538
Results of Operations for the Three and Nine Months ended September 30, 2024
Revenue for the three- and nine- month period ended September 30, 2024 increased 5.7% to $6.9 million and 4.6% to $20.1 million, respectively, compared to the same period in 2023. Revenue in the Animal Health business unit grew year over year by 5.5% to $3.1 million and 3.8% to $9.2 million, respectively, in the quarter and first nine months of 2024 driven by organic growth in existing products. In the Pharmacy business unit, revenue grew year over year by 5.9% to $3.8 million and 5.4% to $11.0 million respectively, in the quarter and first nine months of 2024 due to organic growth in sales of compounded products.
Gross margins for the three- and nine-month period ended September 30, 2024 increased to 50.9% from 49.2% and 51.6% from 50.7% compared to the same period in 2023. Gross margins were impacted by improved margins in the Pharmacy business unit and product mix in the Animal Health business unit.
Total expenses for the three- and nine-month period ended September 30, 2024, increased 1.6% to $2.7 million and 3.2% to $8.3 million, respectively, over the same period in 2023. In the first nine months of 2024, excluding one-time employee settlement costs incurred, total expenses remained consistent at $8.1 million over the same period in 2023. Advertising and promotional expenses and conference costs decreased in the first nine months of 2024 as the company focused spending on key products in its portfolio, offset by an increase in salary, bonus and benefits to continue to support the growth in both the Animal Health and Pharmacy businesses and in distribution expenses as a result of transitioning our warehouse and logistics to a third-party provider in the fourth quarter of 2023. These costs are now reported in distribution expenses compared to previously being reported in depreciation, amortization and interest expenses.
Adjusted EBITDA(1) for the three- and nine-month period ended September 30, 2024 increased 22.2% to $1.2 million and 14.8% to $3.4 million compared to the same period in 2023. The increase in Adjusted EBITDA(1) was mainly due to increased net income compared to the prior year.
Cash and cash equivalents were $7.1 million at September 30, 2024 compared to $7.8 million at December 31, 2023. Cash increased $0.2 million compared to June 30, 2024 as a result of increased operating income and an improvement in working capital balances quarter over quarter. For the nine-month period, cash provided from operations was $0.6 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, inventories, and accounts payable and accrued liabilities.
As at September 30, 2024, the Company had outstanding borrowings of $8.5 million, of which $1.1 million are current and $7.4 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. The Company repaid borrowings of $0.3 million in the quarter and $0.8 million since December 31, 2023.
Grey Wolf's financial statements and accompanying Management Discussion and Analysis for the three- and nine-months ended September 30, 2024 are available under the Company's profile on www.sedarplus.ca.
(1) Non-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
Three months ended Nine months ended
Sep 30, 2024 Sep 30, 2023 Sep 30, 2024 Sep 30, 2023
Net income for the
period $502,151 $282,509 $1,205,770 $893,464
Interest income (52,766) (35,382) (156,614) (95,855)
Interest and accretion
expense 133,450 147,939 410,354 454,997
Income taxes 225,480 136,729 604,950 435,566
Depreciation of
property and
equipment 81,282 71,754 233,656 209,159
Depreciation of right
of use assets 21,930 48,904 65,790 146,711
Amortization of
intangible assets 243,750 243,750 731,250 731,250
EBITDA 1,155,277 896,203 3,095,156 2,775,292
Adjustments
Share-based
compensation 35,465 58,146 45,589 174,438
Foreign exchange
(gain) loss (6,124) 14,903 32,314 27,413
Settlement costs - - 245,748 -
Adjusted EBITDA 1,184,618 969,252 3,418,807 2,977,143
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
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