CareRx Corporation

Good morning, everyone, and welcome to the CareRx's third quarter 2025 financial results conference call. Please note that this call is being broadcasted live over the internet, and the webcast should be available for beginning approximately one hour following from the completion of the call. Details of how to access the webcast replay are available in 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 has been accompanied by a slide presentation. Those listening on their phones can access the slide presentation from the company's website in the investor section under events and presentations. Certain statements made during today's call, including answers that may be given to questions, may include forward-looking 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 the information available to management as well as their assumptions and expectations as of the date of the presentation. Forward-looking statements and financial outlook on information is given as of the date of this presentation, and 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 laws. Forward-looking information is subject to risk and uncertainty, 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 the company's forward-looking information. For additional information on the risk factors that could cause actual results to differ materially from those contemporary forward-looking information and the factors and assumptions associated from such forward-looking information, please refer to the company's MD&A for the three- and nine-month periods ended September 30, 2025, and 2024. and other documents filed on the company's profile on www.cedarplus.ca. I would now like to turn the call over to Puneet Khanna, President and CEO of CareRx Corporation. Thank you and over to you, sir.

Thank you and good morning, everyone. Welcome to our third quarter 2025 earnings call. With me this morning is our Chief Financial Officer, Suzanne Brand. We achieved growth across all key metrics in the third quarter, both year over year and quarter over quarter. In Q3, we delivered revenue of $93.2 million and adjusted EBITDA of $8.3 million, with our adjusted EBITDA margin expanding once again, now to 9%. Net income in the quarter was $1.6 million, our third consecutive quarter of positive net income. Average bed service grew to $91,000, The tremendous progress we've made in our financial and operating results are a testament to the Carex team's dedication and hard work. I'd like to acknowledge and sincerely thank the teams across the country who every day support the delivery of the best in pharmacy services and continue to deliver exceptional care to our residents and home partners. On September 3rd, KRX hosted Ontario's Minister of Long-Term Care, the Honourable Natalia Kusendova-Bashta, at our Oakville pharmacy location to showcase the innovative pharmacy services and technologies we use to deliver integrated pharmacy services and programs to residents across the seniors' housing spectrum. We also highlighted the critical role our team plays in personalized medication management and enhanced clinical support, helping drive safer, more effective care for Canada's aging population. We continue to have a productive and collaborative relationship with the government, and together with the Ministry, our home partners, and long-term care associations, our team is excited to help shape the future of senior care. As a reflection of the CareRx team's commitment to a disciplined capital allocation strategy, that provides the flexibility to fund growth initiatives while delivering strong return to shareholders. In the third quarter, the company announced its intention to pay a quarterly dividend, and on October 15th, 2025, paid a dividend of two cents per share. This milestone underscores our confidence in our strong financial position, robust operating performance, and the sustainability of our cash flows. Additionally, we renewed our annual normal course issuer bid since we continue to believe that our share price does not adequately reflect the fundamental value in our underlying business and near and long-term growth potential. Through our balanced capital allocation strategy, which includes investments in organic and strategic growth, share buybacks, and now dividends, We are well positioned to drive shareholder value and are optimistic about our momentum. I will now turn the call over to Suzanne, who will discuss our third quarter financial results in more detail. Suzanne?

Thank you, Puneet, and good morning, everyone. As Puneet outlined earlier, we achieved broad-based growth in the quarter, both year-over-year and quarter-over-quarter. Average beds serviced in the third quarter increased to 91,298 from 89,099 in the third quarter of 2024 and from 90,048 in the second quarter of 2025. Revenue of 93.2 million remained consistent from 92.8 million last year and 91.4 million in the second quarter of 2025. The year-over-year revenue comparison reflects a change in the mix of branded and generic pharmaceuticals dispensed, even as the number of average beds serviced increased. Adjusted EBITDA for the third quarter increased year-over-year by over 7% to $8.3 million from $7.8 million in the third quarter of last year, an increase by over 4% from last quarter. Adjusted EBITDA margin increased by 60 basis points year-over-year to 9% and increased 20 basis points quarter-over-quarter. The year-over-year and sequential improvement in adjusted EBITDA and adjusted EBITDA margin was primarily the result of the onboarding of the new beds and improved efficiencies and cost savings initiatives. We delivered our third consecutive quarter of positive net income at $1.6 million compared with a net loss of $360,000 in the third quarter of 2024 and net income of $561,000 last quarter. The growth in our net income was due primarily to new onboards and lower finance and transaction costs. Cash from operations was 10.1 million compared to 12.2 million last year and 3.8 million in the second quarter of 2025. The year-over-year comparison is largely due to changes in non-cash working capital items. Cash at September 30th grew to 15.5 million from 8.7 million at the end of the second quarter which was the primary driver behind the improvement in net debt to $28.8 million compared to $34.8 million last quarter. Net debt to adjusted EBITDA at the end of the third quarter improved to 0.9 times from 1.1 times in the second quarter of 2025. Subsequent to quarter end and following the September 30th National Day for Truth and Reconciliation, the company completed a number of transactions that reduced our quarter-end cash balance. We made a dividend payment of $1.3 million, repaid $2 million of principal and interest on our outstanding debt, and repurchased for cancellation 139,500 shares under our normal course issuer bid at an aggregate cost of approximately $497,000. The initiation of a quarterly dividend and the renewal of our share buyback program are evidence of the confidence we have in the strength of our financial position, our sustained and improving operating performance, and the predictability of our cash flows. And with that, I will turn the call back over to Puneet.