LAVAL, Québec, May 11, 2022 (GLOBE NEWSWIRE) -- Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in the accessibility industry, is pleased to announce its results for the first quarter of fiscal 2022.
Highlights – Q1 2022 compared to Q1 2021
- Revenue for the quarter was $183.5M, up $71.5M or 63.8%, mainly due to the acquisition of Handicare in March 2021 and organic growth in the Accessibility and Patient Care segments.
- Gross profit was $58.5M, up $21.1M or 56.5%, representing 31.9% of revenue compared to 33.4% in Q1 2021.
- Operating income was $8.8M, up $2.4M or 38.4%, representing 4.8% of revenue compared to 5.7% in Q1 2021.
- Adjusted EBITDA was $24.4M, up $7.1M or 41.2%.
- Adjusted EBITDA margin stood at 13.3%, down 2.1% compared to 15.4% in Q1 2021.
- Net earnings for the quarter were $5.3M, or $0.08, per share on a diluted basis.
- On January 26, 2022, the Corporation acquired all issued shares of Ultron Technologies Ltd. ("Ultron") for a purchase price of $2.5M (GBP 1.5M). Based in Birmingham, England, Ultron is an electronics technology manufacturer with extensive experience in advanced integrated circuits design, software development, manufacturing and global procurement.
- Funds available of $127.6M to support working capital, investments and growth opportunities as of March 31, 2022.
| in thousands of dollars, except per-share amounts and percentages | Q1 | ||
| 2022 | 2021 | Change | |
| (Recast 1) | |||
| Revenue | $183,536 | $112,075 | 63.8% |
| Gross profit | $58,521 | $37,398 | 56.5% |
| % of revenue | 31.9% | 33.4% | n/a |
| Net earnings | $5,347 | $3,808 | 40.4% |
| % of revenue | 2.9% | 3.4% | n/a |
| Diluted net earnings per share | $0.08 | $0.07 | 14.3% |
| Adjusted net earnings * | $6,766 | $6,397 | 5.8% |
| % of revenue | 3.7% | 5.7% | n/a |
| Diluted adjusted net earnings per share * | $0.10 | $0.12 | (16.7) % |
| Adjusted EBITDA * | $24,422 | $17,293 | 41.2% |
| % of revenue | 13.3% | 15.4% | n/a |
| * Non-IFRS measures are described in sections 3 and 6 of the MD&A | |||
| 1 Refer to Note 4 -Business Acquisition in the interim condensed consolidated financial statements of Q1 2022. | |||
A Word from the President
“The first quarter of 2022 was not without its challenges, but I am pleased to say that our revenue was up 64% over last year, finishing at $183.5 million, with a combined total of 12% organic growth from our three business segments, plus 52% growth attributable to the Handicare acquisition. Our adjusted EBITDA was 13.3% overall, in line with our expectations,” stated Marcel Bourassa, President and Chief Executive Officer of Savaria.
“We saw the recent waves of COVID-19 cause lost production hours, particularly in our key factories, including Brampton, St. Louis and Heerhugowaard (Netherlands), affecting approximately 7% of available production hours. Although we did increase our prices for many products, the positive effects from customer shipments will be seen more in the second quarter.
“As we continue to seek efficiencies across all our factory operations, the successful closing of Ultron in January provides us with improved vertical integration for electronics manufacturing, namely printed circuit boards and softwares used in many of our products.
“On April 29, we signed a letter of intent to lease a building in Querétaro, Mexico. This new operation will be modelled after our Huizhou, China facility and is planned to provide sub-assembly for our core accessibility products. Our strong bookings warrant expanded capacity closer to our North American customers. This new factory of 95,000 square feet is expected to commence operations in September of this year and is anticipated to improve lead times and reduce overseas shipping costs.
“I feel confident in our 2,250 employees and our leadership team as we push forward to hit our forecasted $775 million of revenue in 2022. Throughout the many challenges presented by the pandemic, our Savaria family has demonstrated dedication and teamwork to deliver growth towards our goals,” concluded Mr. Bourassa.
First Quarter Results
Revenue
Revenue reached $183.5M, up $71.5M or 63.8%, compared to Q1 2021. The growth was mainly due to the acquisition of Handicare and strong organic growth of 12.0%.
- Accessibility segment (71% of Q1-22 revenue): Revenue was $130.3M, an increase of $49.8M or 61.7%, compared to Q1 2021. Acquisition growth stood at 53.4% and organic revenue growth stood at 8.7%.
- Patient Care segment (23% of Q1-22 revenue): Revenue was $41.7M, an increase of $16.2M or 63.5%, compared to Q1 2021. Acquisition growth stood at 41.5% and organic revenue growth stood at 22.2%.
- Adapted Vehicles segment (6% of Q1-22 revenue): Revenue was $11.5M, an increase of $5.5M or 92.2%, compared to Q1 2021. Acquisition growth stood at 83.6% and organic growth stood at 12.9%.
Adjusted EBITDA
Q1 2022 adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $26.4M and 14.4%, respectively, compared to $18.2M and 16.3% for Q1 2021.
- Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $20.5M and 15.7%, respectively, compared to $13.9M and 17.2% for Q1 2021.
- Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $5.3M and 12.8%, respectively, compared to $3.7M and 14.5% for Q1 2021.
- Adapted Vehicles segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $0.6M and 4.9%, respectively, compared to $0.6M and 10.4% for Q1 2021.
Net Earnings and Adjusted Net Earnings
Net earnings for the quarter were $5.3M or $0.08 per share on a diluted basis, compared to $3.8M or $0.07 per share for the same period in 2021.
Adjusted net earnings stood at $6.8M, or $0.10 per share, compared to $6.4M or $0.12 per share in Q1 2021.
Outlook
Savaria expects to generate revenue in excess of $775M with adjusted EBITDA in the range of $120M to $130M in fiscal 2022, based on the following assumptions:
- Considering Handicare acquisition date of March 4, 2021, Handicare will be consolidated for a period of 12 months in fiscal 2022 compared to 10 months in fiscal 2021.
- Organic growth coming from the Accessibility and Patient Care segments is expected to continue due to strong demand.
- The integration and anticipated synergies of Handicare are progressing in-line with management’s plan.
- Management’s ability to continue to effectively manage supply chain challenges, including higher freight costs and availability, as well as overall inflation costs.
- This outlook excludes the financial contribution from any new acquisition.
Environmental, Social and Governance (“ESG”) Values
As a global leader within the accessibility industry, Savaria is committed to minimizing its environmental footprint and upholding the highest social and governance standards. We believe that promoting environmentally and socially responsible behaviour across our organization is key to achieving sustainable growth and long-term value creation. As such, we have dedicated resources to advancing our ESG strategy in 2022 and look forward to sharing further details on these initiatives with the investment community during the year.
About Savaria Corporation
Savaria Corporation (savaria.com) is a global leader in the accessibility industry. It provides accessibility solutions for the physically challenged to increase their comfort, their mobility and their independence. Its product line is one of the most comprehensive on the market. Savaria designs, manufactures, distributes and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts and elevators for home and commercial use. It also manufactures and markets a comprehensive selection of pressure management products for the medical market, medical beds for the long-term care market, as well as an extensive line of medical equipment and solutions for the safe handling of patients, including ceiling lifts and slings. In addition, Savaria converts and adapts vehicles for personal and commercial uses. The Corporation operates a sales network of dealers worldwide and direct sales offices in North America, Europe (UK, Netherlands, Switzerland, Italy, Germany, Poland and Czech Republic), Australia and China. Savaria employs approximately 2,250 people globally and its plants are located across Canada, the United States, Europe and China.
Compliance with International Financial Reporting Standards (“IFRS”)
The information appearing in this press release has been prepared in accordance with IFRS. However, Savaria uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA per share, adjusted net earnings and adjusted net earnings per share for analysis purposes to measure its financial performance. These measures have no standardized definitions in accordance with IFRS and are therefore regarded as non-IFRS measures. These measures may therefore not be comparable to similar measures reported by other companies. Additional details for these non-IFRS measures can be found in section 3 and 6 of Savaria’s MD&A, which is posted on Savaria’s website at www.savaria.com, and filed with SEDAR at www.sedar.com. Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is presented in the section below.
Forward-Looking Statements
This press release includes certain statements that are “forward-looking statements” within the meaning of the securities laws of Canada. Any statement in this press release that is not a statement of historical fact may be deemed to be a forward-looking statement. When used in this press release, the words “believe”, “could”, “should”, “intend”, “expect”, “estimate”, “assume” and other similar expressions are generally intended to identify forward-looking statements. It is important to know that the forward-looking statements in this document describe the Corporation’s expectations as at the date hereof, which are not guarantees of future performance of Savaria or its industry, and involve known and unknown risks and uncertainties that may cause Savaria’s or the industry’s outlook, actual results or performance to be materially different from any future results or performance expressed or implied by such statements. The Corporation’s actual results could be materially different from its expectations if known or unknown risks affect its business, or if its estimates or assumptions turn out to be inaccurate.
A change affecting an assumption can also have an impact on other interrelated assumptions, which could increase or diminish the effect of the change. As a result, the Corporation cannot guarantee that any forward-looking statement will materialize and, accordingly, the reader is cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements do not take into account the effect that transactions or special items announced or occurring after the statements are made may have on the Corporation’s business. For example, they do not include the effect of sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made.
Unless otherwise required by applicable securities laws, Savaria disclaims any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing risks and uncertainties include the risks set forth under “Risks and Uncertainties” in Savaria’s latest Annual MD&A as well as other risks detailed from time to time in reports filed by Savaria with securities regulators in Canada.
Results webcast and conference call on May 12, 2022 at 8:30 a.m. (EDT)
Savaria will host a conference call on Thursday, May 12 at 8:30 a.m. Eastern Daylight Time with financial analysts to discuss results of the quarter and fiscal year ended March 31, 2022. Investors and members of the media are invited to participate on a listen-only basis.
Conference call access:
Local Dial-in Numbers: (647) 794-4605 or (514) 669-6113
North American Toll Free Number: 1 (888) 254-3590
Webcast (EN): https://produceredition.webcasts.com/starthere.jsp?ei=1546240&tp_key=2a0bc248a3
link to the replay of the webcast will be available on the Corporation’s website at www.savaria.com
For further information: | ||
| Marcel Bourassa Chairman, President and Chief Executive Officer 1.800.661.5112 mbourassa@savaria.com | Stephen Reitknecht, CPA, CA Chief Financial Officer 1.800.661.5112, ext. 3370 sreitknecht@savaria.com | |
www.savaria.com
Facebook : www.facebook.com/savariabettermobility
Twitter: twitter.com/Mobilityforlife
Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is provided below. Complete financial statements and the management’s report for Q1 2022 will be available shortly on Savaria’s website and on SEDAR (www.sedar.com).
| Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings | ||
| in thousands of dollars, except per-share | Q1 | |
| 2022 | 2021 | |
| (Recast 1) | ||
| Net earnings | $5,347 | $3,808 |
| Other expenses | 1,839 | 2,881 |
| Income taxes related to other expenses * | (420) | (292) |
| Adjusted net earnings * | $6,766 | $6,397 |
| Diluted adjusted net earnings per share * | $0.10 | $0.12 |
| Income taxes related to other expenses * | 420 | 292 |
| Income tax expense | 2,107 | 1,095 |
| Depreciation of fixed assets | 1,799 | 1,428 |
| Depreciation of right-of-use assets | 2,632 | 1,504 |
| Amortization of intangible assets | 8,903 | 4,836 |
| Net finance costs | 1,375 | 1,477 |
| Stock-based compensation | 420 | 264 |
| Adjusted EBITDA* | $24,422 | $17,293 |
| Diluted weighted average number of shares | 64,522,496 | 54,927,519 |
| * Non-IFRS measures are described in sections 3 and 6 of the MD&A | ||
| 1 Refer to Note 4 -Business Acquisition in the interim condensed consolidated financial statements of Q1 2022. | ||
