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.
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in thousands of dollars, except per-share amounts and
percentages |
Q1 |
2022 |
2021 |
Change |
|
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(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 |
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1 Refer to Note 4 -Business Acquisition in the interim condensed
consolidated financial statements of Q1 2022. |
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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
RevenueRevenue 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)
254-3590Webcast (EN):
https://produceredition.webcasts.com/starthere.jsp?ei=1546240&tp_key=2a0bc248a3link
to the replay of the webcast will be available on the Corporation’s
website at www.savaria.com
For further information: |
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Marcel BourassaChairman, President and Chief Executive
Officer1.800.661.5112mbourassa@savaria.com |
Stephen Reitknecht, CPA, CAChief Financial Officer1.800.661.5112,
ext. 3370sreitknecht@savaria.com |
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www.savaria.comFacebook :
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).
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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. |
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