Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in
the accessibility industry, is pleased to announce its results for
the second quarter of fiscal 2022.
Highlights – Q2 2022 compared to Q2
2021
- Revenue
for the quarter was $192.1M, up $13.4M or 7.5%, mainly due to
organic growth in the Accessibility and Patient Care segments.
- Gross
profit was $65.6M, up $5.7M or 9.5%, representing 34.1% of revenue
compared to 33.5% in Q2 2021.
-
Operating income was $17.7M, up $8.8M or 99.0%, representing 9.2%
of revenue compared to 5.0% in Q2 2021.
- Adjusted
EBITDA was $31.5M, up $4.1M or 14.9%, compared to Q2 2021.
- Adjusted
EBITDA margin stood at 16.4%, up 1.1% compared to 15.3% in Q2
2021.
- Net
earnings for the quarter were $8.1M, or $0.13, per share on a
diluted basis, compared to $2.0M or $0.03 per share on a diluted
basis in Q2 2021.
- Funds available of $118.4M, as of
June 30, 2022, to support working capital, investments and growth
opportunities.
|
|
|
|
|
|
|
in thousands of dollars, except per-share amounts and
percentages |
Q2 |
YTD |
2022 |
2021 |
Change |
2022 |
2021 |
Change |
|
|
(Recast 1) |
|
|
(Recast 1) |
|
Revenue |
$192,061 |
|
$178,621 |
|
7.5 |
% |
$375,597 |
|
$290,696 |
|
29.2 |
% |
Gross profit |
$65,582 |
|
$59,893 |
|
9.5 |
% |
$124,103 |
|
$97,291 |
|
27.6 |
% |
% of revenue |
34.1 |
% |
33.5 |
% |
n/a |
|
33.0 |
% |
33.5 |
% |
n/a |
|
Net earnings |
$8,125 |
|
$2,025 |
|
301.2 |
% |
$13,472 |
|
$5,833 |
|
131.0 |
% |
%
of revenue |
4.2 |
% |
1.1 |
% |
n/a |
|
3.6 |
% |
2.0 |
% |
n/a |
|
Diluted net earnings per share |
$0.13 |
|
$0.03 |
|
333.3 |
% |
$0.21 |
|
$0.10 |
|
110.0 |
% |
Adjusted net earnings * |
$8,890 |
|
$5,225 |
|
70.1 |
% |
$15,656 |
|
$11,622 |
|
34.7 |
% |
%
of revenue |
4.6 |
% |
2.9 |
% |
n/a |
|
4.2 |
% |
4.0 |
% |
n/a |
|
Diluted adjusted net earnings per share * |
$0.14 |
|
$0.08 |
|
75.0 |
% |
$0.24 |
|
$0.20 |
|
20.0 |
% |
Adjusted EBITDA * |
$31,469 |
|
$27,394 |
|
14.9 |
% |
$55,891 |
|
$44,687 |
|
25.1 |
% |
% of revenue |
16.4 |
% |
15.3 |
% |
n/a |
|
14.9 |
% |
15.4 |
% |
n/a |
|
* Non-IFRS measures
are described in sections 3 and 6 of the
MD&A |
1 Refer to Note 2B) -
Adjustments to comparative figures in the interim condensed
consolidated financial statements of Q2 2022. |
|
A Word from the President
“The end of our second quarter marks 16 months since the
acquisition of Handicare in March 2021. I am proud to say that the
collaboration of our worldwide teams has yielded effective
strategies to increase revenue and gain synergies for our
profitability,” said Marcel Bourassa, President and Chief Executive
Officer of Savaria.
“I am happy to report revenue for this quarter of $192.1 million
and gross profit of $65.6 million, representing a gross margin of
34.1%. The increase in revenue over last year of 7.5% is attributed
to strong demand for our products combined with the effects of
price increases made earlier in 2022. Our adjusted EBITDA reached
$31.5 million compared to $27.4 million in the same period last
year, representing an increase of 14.9%. Adjusted EBITDA margin
finished at 16.4% reaching the top of our expected range. These
results were realized in spite of inflationary pressures on our
shipping costs, materials, fuel and labour. Further to that, our
revenue and adjusted EBITDA would have hit even more impressive
heights if it had not been for the negative impacts of foreign
exchange.
“As a prime strategy to increase capacity, our new factory in
Mexico is on track to open in September 2022. The 95,000 square
foot facility will serve our U.S.-based customers with faster lead
times. In our Brampton factory, we are now able to fully fabricate
the rail for the Freecurve stairlift, eliminating the need to ship
this product from one of our European facilities. This provides us
with improved lead times and reduced shipping costs. To combat
parts shortages, we continue to invest in increased parts inventory
evident on our balance sheet and supporting our strong backlog of
elevator products in North America.
“With our proactive measures in place and our healthy bookings,
I remain optimistic about the second half of the year and our
ability to meet our projections made in February 2022. I wish to
thank our worldwide team of employees who continue to deliver great
progression for Savaria,” concluded Mr. Bourassa.
Second Quarter Results
RevenueRevenue reached $192.1M,
up $13.4M or 7.5%, compared to Q2 2021. The growth was mainly due
to strong organic growth of 9.7%.
-
Accessibility segment (71% of Q2-22 revenue):
Revenue was $136.0M, an increase of $5.2M or 4.0%, compared to Q2
2021. Organic revenue growth stood at 6.8%.
- Patient
Care segment (23% of Q2-22 revenue): Revenue was $43.9M,
an increase of $7.8M or 21.5%, compared to Q2 2021. Organic revenue
growth stood at 20.2%.
- Adapted
Vehicles segment (6% of Q2-22 revenue): Revenue was
$12.2M, an increase of $0.5M or 4.0%, compared to Q2 2021. Organic
revenue growth stood at 10.1%.
Adjusted EBITDA
Q2 2022 adjusted EBITDA and adjusted EBITDA margin, both before
head office costs, stood at $33.2M and 17.3%, respectively,
compared to $29.3M and 16.4% for Q2 2021.
-
Accessibility segment: Adjusted EBITDA and
adjusted EBITDA margin, both before head office costs, stood at
$25.9M and 19.1%, respectively, compared to $23.4M and 17.9% for Q2
2021.
- Patient
Care segment: Adjusted EBITDA and adjusted EBITDA margin,
both before head office costs, stood at $6.7M and 15.3%,
respectively, compared to $4.7M and 12.9% for Q2 2021.
- Adapted
Vehicles segment: Adjusted EBITDA and adjusted EBITDA
margin, both before head office costs, stood at $0.6M and 5.0%,
respectively, compared to $1.3M and 11.2% for Q2 2021.
Net Earnings and Adjusted Net
Earnings
Net earnings for the quarter were $8.1M or $0.13 per share on a
diluted basis, compared to $2.0M or $0.03 per share for the same
period in 2021.
Adjusted net earnings stood at $8.9M, or $0.14 per share,
compared to $5.2M or $0.08 per share in Q2 2021.
Six-Month Results
Revenue
The Corporation generated revenue of $375.6M, up
$84.9M or 29.2%, compared to the same period in 2021. The growth is
largely due to the acquisition of Handicare in 2021 and organic
revenue growth of 10.6%. The growth was partially offset by a
negative foreign exchange impact.
Adjusted EBITDA
Adjusted EBITDA and adjusted EBITDA margin, both
before head office costs, stood at $59.6M and 15.9%, respectively,
compared to $47.6M and 16.4% for the same period in 2021.
Net Earnings and Adjusted Net
Earnings
The Corporation’s net earnings stood at $13.5M
or $0.21 per share on a diluted basis, compared to $5.8M or $0.10
per share for the same period in 2021. Adjusted net earnings were
$15.7M or $0.24 per share on a diluted basis, compared to $11.6M or
$0.20 in 2021, up 34.7% and $0.04, respectively.
Liquidity and Capital
Resources
Savaria generated $27.7M of cash from operations which were
primarily used to invest in capital projects, repay debt, and pay
interest and dividends.
As at June 30, 2022, the Corporation had a net debt position of
$380.1M.
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 we advance an ESG strategy that will positively impact our
company and the communities in which we operate, our first step is
to identify the ESG risks and opportunities that are critical to
our business. To that end, and with the support of external
consultants, we are preparing our first materiality assessment to
survey and validate the most important ESG issues prioritized by
our stakeholders. The results of this assessment will help narrow
our focus and our guide decision-making.
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 before
head office costs, adjusted EBITDA margin before head office costs,
adjusted net earnings, adjusted net earnings per share and net debt
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
August 11, 2022, at 8:30 a.m. (EDT)
Savaria will host a conference call on Thursday,
August 11 at 8:30 a.m. Eastern Daylight Time with financial
analysts to discuss results of the quarter and fiscal year ended
June 30, 2022. Investors and members of the media are invited to
participate on a listen-only basis.
Conference call access:
Local Dial-in Number: 1 (855) 669-9657North
American Toll Free Number: 1 (877) 870-4263Webcast (EN):
https://app.webinar.net/LNxmjrkOpYALink to the replay of the
webcast will be available on the Corporation’s website at
www.savaria.com
For further information: |
|
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 |
|
|
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 Q2 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 |
Q2 |
YTD |
2022 |
2021 |
2022 |
2021 |
|
|
(Recast 1) |
|
(Recast 1) |
Net earnings |
$8,125 |
|
$2,025 |
|
$13,472 |
|
5,833 |
|
Other expenses |
1,025 |
|
3,591 |
|
2,864 |
|
6,472 |
|
Income taxes related to other expenses * |
(260 |
) |
(391 |
) |
(680 |
) |
(683 |
) |
Adjusted net earnings * |
$8,890 |
|
$5,225 |
|
$15,656 |
|
$11,622 |
|
Diluted adjusted net earnings per share * |
$0.14 |
|
$0.08 |
|
$0.24 |
|
$0.20 |
|
Income taxes related to other expenses * |
260 |
|
391 |
|
680 |
|
683 |
|
Income tax expense |
3,177 |
|
1,457 |
|
5,284 |
|
2,552 |
|
Depreciation of fixed assets |
2,182 |
|
1,809 |
|
3,981 |
|
3,237 |
|
Depreciation of right-of-use assets |
2,562 |
|
2,533 |
|
5,194 |
|
4,037 |
|
Amortization of intangible assets |
7,493 |
|
10,190 |
|
16,396 |
|
15,026 |
|
Net finance costs |
6,436 |
|
5,433 |
|
7,811 |
|
6,910 |
|
Stock-based compensation |
469 |
|
356 |
|
889 |
|
620 |
|
Adjusted EBITDA* |
$31,469 |
|
$27,394 |
|
$55,891 |
|
$44,687 |
|
Diluted weighted average number of shares |
64,489,238 |
|
64,374,782 |
|
64,510,442 |
|
59,814,505 |
|
* Non-IFRS measures are described in sections 3 and 6 of the
MD&A |
1 Refer to Note 2B) - Adjustments to comparative figures in the
interim condensed consolidated financial statements of Q2
2022. |
|
|
|
|
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