CareRx Corporation

Good morning everyone and welcome to the CareRx second quarter 2025 financial results conference call. Please note that this call is being broadcast live over the internet and the webcast will be available for replay beginning approximately one hour following the completion of the call. Details of how to access the webcast replay are available on today's news release announcing the company's financial results as well as on the company's website at www.carerx.ca. Today's call is accompanied By slide presentation, those listening on their phones can access a slide presentation from the company's website in the investor section under events and presentation by loading the webcast and choosing the non-streaming audio option. Certain statements made during today's call including answers that may be given to questions may include forward look information, including information constituting a financial outlook under applicable Canadian security laws. Forward-looking information, including financial outlook information, includes statements regarding future events, conditions, or results, including the company's future plans, strategies, objectives, and expectations. Forward-looking information and financial outlooks are based on information available to management. as well as their assumptions and expectations as of date of this presentation. The company assumes no obligation to update any forward-looking information as a result of new information or future events, except as required under applicable law. Forward-looking information is subject to risks and uncertainties, some of which may be unknown to management or beyond the control of the company, which could cause actual results to differ materially from those contemplated by the forward-looking statements or financial outlook provided today. Given these risks and uncertainties, investors are cautioned not to place undue reliance on companies' forward-looking information. additional information on the risk factor that would cause actual results to differ materially from those contemplated by the forward-looking information, and the factors and assumptions associated with such forward-looking information, please refer to Companies MD&A for the three- and six-month period ended June 30, 2025 and 2024, and other documents filed on the company's profile on www.cedarplus.cn. I would now like to turn the call over to Puneet Khanna, President and CEO of CareRx Corporation. Please go ahead.

Thank you, and good morning, everyone. Welcome to our second quarter 2025 earnings call. With me this morning is our Chief Financial Officer, Suzanne Brand. In the second quarter, ending June 30th, 2025, we delivered revenue of $91.4 million. and adjusted EBITDA of $8 million. The 3,000 new beds we recently secured have now fully been onboarded, and we expect the full revenue contribution of these beds will start to be realized in the third quarter. I would like to acknowledge and sincerely thank all of the members of the Carex team who are supporting the delivery of the best in pharmacy services and programs to these new residents and homes. as well as those who continue to deliver exceptional care to our existing residents and home partners. I will now turn the call over to Suzanne, who will discuss our second quarter financial results in more detail. Suzanne?

Thank you, Puneet, and good morning, everyone. Revenue for the second quarter of 2025 of $91.4 million was essentially in line with the second quarter of 2024 and increased from 89.6 million in the first quarter of 2025. The quarter-over-quarter revenue increase was due to an increase in the average number of beds serviced. As Puneet mentioned, we expect the full revenue contribution from the new beds we recently onboarded to occur in the third quarter. Adjusted EBITDA for the second quarter increased by 7% to 8 million, from $7.5 million in the second quarter of last year and increased by 3% from last quarter. Adjusted EBITDA margin increased by 60 basis points year-over-year to 8.8% and increased 10 basis points quarter-over-quarter. The year-over-year improvement in adjusted EBITDA was primarily the result of efficiencies and cost savings initiatives. We generated net income of $561,000 in the second quarter compared with a net loss of $1.4 million in the second quarter of 2024 and net income of $227,000 in the first quarter. The year-over-year elimination of the net loss was driven primarily by a non-cash adjustment related to an intangible asset impairment recorded during Q2 of 2024 as a result of the sale of a non-core pharmacy location. And decreases in finance costs, depreciation, and amortization expense were partially offset by increase in transaction, restructuring, and other costs. Cash at June 30th was $8.7 million compared with $11.2 million at the end of the first quarter. Net debt increased by $1.4 million to $34.8 million compared to $33.4 million last quarter. The quarter-over-quarter decrease in our cash balance and increase in net debt was due to the retirement of a vendor take-back loan and the timing of certain working capital items. Net debt to adjusted EBITDA at the end of the second quarter was 1.1 times and in line with the first quarter of 2025. We continue to remain committed to returning capital to shareholders through our active share buyback program under the normal course issuer bid supported by our strong capital position and the belief that our share price does not adequately reflect the fundamental value in our underlying business and our near and long-term growth potential. Finally, I will reiterate what we have stated in prior quarters, which is that CareRx operates exclusively within Canada, serving only Canadian customers, and we source our medications and equipment almost exclusively from Canadian suppliers. As a result, based on the information currently available to us, we believe we are highly insulated from the threat of tariffs. And with that, I will turn the call back over to Puneet.