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TORONTO, ONTARIO – August 21, 2024 – Grey Wolf Animal Health Corp. (TSX-V: WOLF) (“Grey Wolf” or the “Company”), a Canadian diversified animal health company, today announced financial results for the three- and six-months ended June 30, 2024.
“Q2 2024 represented our strongest historical quarter for both revenue and Adjusted EBITDA1. Total revenues for the second quarter of 2024 were $7.2 million, an increase of 7.7% compared to the same period last year, with revenues in our Animal Health business up 10.7% to $3.1 million during the quarter. Our Pharmacy business continued to deliver growth year over year with revenues up 5.5% to $4.1 million in the second quarter. Adjusted EBITDA1 increased by 28.9% for the quarter as a result of higher revenue and gross margins combined with a modest 1.9% increase in operating expenses. Notwithstanding the ongoing softness in the market and inter-quarterly variability, we continue to invest in our sales and marketing efforts to ensure growth over the long-term and plan to launch two new products before the year-end.” said Angela Cechetto, Chief Executive Officer.
Kevin Palmer, Chief Financial Officer commented, “During the second quarter our cash position increased to $6.8 million which was up $1.2 million over March 31, 2024 as a result of our increased operating income and improved working capital balances while continuing to pay down our term loan”
Results of Operations for the Three and Six Months ended June 30, 2024
Revenue for the three- and six- month period ended June 30, 2024 increased 7.7% to $7.2 million and 4.1% to $13.2 million, respectively, compared to the same period in 2023. Revenue in the Animal Health business unit grew year over year by 10.7% to $3.1 million and 2.9% to $6.1 million, respectively, in the quarter and first six months of 2024 driven by organic growth in existing products. In the Pharmacy business unit, revenue grew year over year by 5.5% to $4.1 million and 5.1% to $7.2 million respectively, in the quarter and first six months of 2024 due to organic growth in sales of compounded products.
Gross margins for the three- and six-month period ended June 30, 2024 increased to 52.5% from 50.5% and 52.0% from 51.4% compared to the same period in 2023. Gross margins were impacted by increased margins in the Pharmacy business unit and product mix in the Animal Health business unit.
Total operating expenses for the three- and six-month period ended June 30, 2024 increased 1.9% to $2.8 million and increased 4.0% to $5.6 million over the same period in 2023. During the three-month period, there was a decrease in sales and marketing expenses, offset by an increase in general and administration expenses. During the six-month period, excluding one-time employee settlement costs incurred, total expenses decreased 0.5% to $5.3 million over the same period in 2023. Advertising and promotional expenses and conference costs decreased in the first half of 2024 as the company focused spending on key products in its portfolio, offset by 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. These costs are now reported in distribution expenses compared to previously being reported in depreciation, amortization and interest expenses.
Adjusted EBITDA1 for the three- and six-month period ended June 30, 2024 increased 28.9% to $1.4 million and 11.3% to $2.2 million compared to the same period in 2023. The increase in Adjusted EBITDA1 was mainly due to increased net income compared to the prior year.
Cash and cash equivalents were $6.8 million at June 30, 2024 compared to $7.8 million at December 31, 2023. Cash increased $1.2 million compared to March 31, 2024 as a result of increased operating income and an improvement in working capital balances quarter over quarter. For the 6-month period, the Company used cash from operations of $0.2 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 June 30, 2024, the Company had outstanding borrowings of $8.7 million, of which $1.1 million are current and $7.6 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 $0.5 million since December 31, 2023.
Grey Wolf’s financial statements and accompanying Management Discussion and Analysis for the three- and six-months ended June 30, 2024 are available under the Company’s profile on www.sedarplus.ca.
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 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.
For further information, please contact:
Angela Cechetto
Chief Executive Officer
E-mail: investors@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.
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- and six-months ended June 30, 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.
