TORONTO, ONTARIO – May 29, 2023 – 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 months ended March 31, 2023.
“The first quarter of 2023 was another strong quarter for Grey Wolf as we saw revenues grow to $6.0 million, a 17.2% year over year growth. The growth continues to be driven by organic growth from established and compounded products as well as new products introduced last year. Gross margins were slightly higher over the same period last year due to the product mix sold in our Animal Health and Pharmacy businesses during the first quarter of 2023. We are pleased that Adjusted EBITDA1 increased year-over-year, despite the addition of costs associated with a public entity.” said Angela Cechetto, Chief Executive Officer.
Revenue for the three-month period ended March 31, 2023, increased 17.2% to $6.0 million over the same period in 2022. These increases were mainly due to organic revenue growth from the Animal Health and Pharmacy business units.
Gross margins for the three-month period ended March 31, 2023, increased to 52.5% compared to 50.5% over the same period in 2022. Gross margins were impacted by the product mix in both the Animal Health and Pharmacy business units.
Total expenses for the three-month period ended March 31, 2023 increased 3.4% to $2.7 million over the same period in 2022. The increase is related to operational growth as well as the resumption of in-person sales and marketing activities that did not occur in the first quarter of 2022. Finally, there was also an increase in professional fees and outside services related to corporate costs associated with the company now operating as a public entity, which were offset by costs associated with the qualifying transaction over the same period in 2022.
Adjusted EBITDA1 increased to $0.9 million in the first quarter 2023 versus $0.8 million in the prior year’s quarter, or an increase of 11%.
Cash and cash equivalents were $6.1 million at March 31, 2023 compared to $6.9 million at December 31, 2022. The Company used cash from operations of $0.5 million primarily as a result of a decrease in accounts payable and accrued liabilities, offset by revenue growth from both the Animal Health and Pharmacy business units. As at March 31, 2023, the Company had outstanding borrowings of $9.9 million, of which $1.1 million are current and $8.8 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.
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 Magen 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:
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.
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 twelve months ended December 31, 2022. 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.
