CareRx Corporation

Good morning, everyone, and welcome to the CareRx Fourth 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 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 is 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 the answers that may be given to questions, may include forward-looking information, including information constituting a financial outlook under applicable Canadian and securities laws. Apologies, everyone. 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 the date of this presentation. Forward-looking statements and financial outlook 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 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 the company's forward-looking information. For additional information on the risk factors that could 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 the company's MDMA for the 3- and 12-month periods into December 31, 2025 and 2024, and other documents filed on the company's profile on www.cedarplus.ca. I would now like to turn the conference over to Puneet Khanna, President and CEO of CareRx Corporation. Please go ahead, Mr. Khanna.

Thank you and good morning, everyone. Welcome to our fourth quarter 2025 earnings call. With me this morning is our Chief Financial Officer, Suzanne Brand. In the fourth quarter, for the three-month period ending December 31st, 2025, we delivered strong financial and operating performance. We generated revenue of $96.1 million and adjusted EBITDA of $8.8 million, representing an adjusted EBITDA margin of 9.2%. We also delivered net income of $1 million in the quarter after adjusting to remove the effect of a deferred income tax recovery. Average bed service increased to $92,250 in Q4. For the year, we delivered revenue of $370.2 million and adjusted EBITDA of $32.9 million. Adjusted EBITDA margin for the year was 8.9% and we delivered net income of $3.3 million after adjusting to remove the effect of an income tax recovery. We are proud of the financial results of the company as 2025 marks the first full year of positive net income. Our financial performance also reflects the contribution from new beds onboarded throughout the year, combined with the ongoing benefits of our cost savings and efficiency initiatives. I'm very proud of the entire CareX team from coast to coast, those in our pharmacies, our office-based locations, and the teams supporting on-site. within the homes we service. It is the dedication and hard work of the collective team that has enabled us to deliver these results while continuing to provide high quality pharmacy services and programs to our residents and home partners. Turning to our full year highlights. In 2025, we added over 4,500 new beds across our network. and we are well positioned to continue to leverage our operating platform. We grew adjusted EBITDA by 8.7% compared to prior year and expanded our adjusted EBITDA margin by 63 basis points. We also reduced net debt by approximately 24% year over year, reflecting our strong cash generation and disciplined approach to capital allocation. In line with our commitment to returning capital to shareholders, we initiated a quarterly dividend during the year. We also renewed our normal course issuer bid, reinforcing our view that our share price does not fully reflect the fundamental value and long-term growth potential of our business. 2025 was also a year of important strategic milestones. We hosted Natalia Kusundova-Bashta, Ontario's Minister of Long-Term Care at our Oakville pharmacy location, where we showcased the innovative pharmacy services and technologies we use to deliver integrated pharmacy services and programs across the seniors housing spectrum. We also fully transitioned all regional beds in the BC Lower Mainland to our new Burnaby Pharmacy, and we were pleased to host members of the BC Legislative Assembly for a tour of this new facility. This site is a strategic component of our high volume operating platform and further enhances our ability to support growth while maintaining a high standard of service for our home operator partners and residents. Taken together, these achievements highlight the momentum in our business and the strength of our platform as we look ahead. I will now turn the call over to Suzanne, who will discuss our fourth quarter financial results in more detail.

Thank you, Puneet, and good morning, everyone. As Puneet outlined, we delivered solid growth in our key financial metrics in the fourth quarter of 2025. Average beds serviced in the fourth quarter increased to 92,250 from 87,658 in the same period of 2024. Revenue in the fourth quarter grew to 96.1 million compared to 92.2 million in the fourth quarter of 2024. The year-over-year increase in revenue was driven primarily by the increase in the number of average beds serviced. Fourth quarter adjusted EBITDA increased to 8.8 million from 7.6 million in the fourth quarter of 2024. and adjusted EBITDA margin improved to 9.2% from 8.2% a year ago. The increase in adjusted EBITDA and adjusted EBITDA margin was driven by the onboarding of new beds and continued realization of cost savings and efficiency initiatives across our operations. After removing the effects of income tax recoveries, We reported net income of $1 million in the fourth quarter compared to a net loss of $2.2 million in the fourth quarter of 2024. The improvement in net income reflects the higher average number of beds serviced, the impact of our cost savings initiatives, and reduction in finance costs. We are proud to report our first full year of positive net income as CARE-Rx, and specifically positive income in every quarter of 2025. Cash from operations in the quarter was $9.6 million compared to $8.4 million in the fourth quarter of 2024. Cash from operations was influenced primarily by the contribution from the new onboarding and our ongoing cost-saving initiatives. Turning to our balance sheet, As of December 31st, 2025, we had cash of $13.9 million compared to $15.5 million at the end of the third quarter of 2025. Net debt was $27.1 million at quarter end compared to $28.8 million at the end of the third quarter of 2025. The quarter-over-quarter improvement in net debt was driven primarily by repayments to our term loan. Net debt to adjusted EBITDA improved to 0.8 times at the end of the fourth quarter, compared to 0.9 times at the end of the third quarter of 2025. This improvement reflects both the decrease in net debt and the increase in our run rate of adjusted EBITDA. During the quarter, we also paid dividends in the aggregate amount of 1.3 million, consistent with our balanced approach to capital allocation, which prioritizes growth growth investments, balance sheet strength, and returning capital to shareholders. Overall, our financial position remains very strong, and we believe we are well positioned to support continued growth while maintaining a conservative leverage profile. And with that, I'll turn the call back over to Puneet.