CareRx Corporation

Good morning, everyone, and welcome to CareRx's first quarter 2026 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 answers that may be given to questions, may include forward-looking information, including information constituting a financial outlook under applicable Canadian securities 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 and statements regarding changes in long-term care capitation funding for Pharmacy Services Ontario, in Ontario, including the impact of such funding changes on the company's 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 including statements containing a financial outlook, are 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 forelooking statements or financial outlooks 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 financial outlook and the factors and assumptions associated with such forward-looking information, please refer to the company's MD&A for the three months ended March 31st 2026, and 2025, and other documents filed on the company's profile on www.cedarplus.ca. I would now like to turn the call over to Mr. Puneet Khanna, President and CEO of Care R-Access Corporation. Please go ahead, Mr. Khanna.

Thank you, Mike, and good morning, everyone. Welcome to our first quarter 2026 earnings call. With me this morning is our Chief Financial Officer, Suzanne Brand. In the first quarter, for the three-month period ending March 31st, 2026, we delivered strong financial and operating performance. We generated revenue of $93.9 million and adjusted EBITDA of $8.4 million, representing an adjusted EBITDA margin of 9%. we also delivered net income of $1.2 million in the quarter. Average beds serviced was 92,036 in Q1. Our financial performance reflects the contribution from new beds onboarded throughout the last year, combined with ongoing benefits of our cost savings and efficiency initiatives. Over the past three years, We've been focused on developing a high-performance team and a culture of providing quality care for the residents we serve. Our approach is not only what we do, but how we do it. And I'm proud to share that in the quarter, the CareX team was honoured with external validation of the impact we are making. We awarded the Public Protector Award from Pharmacy Practice and Business, part of the Canadian Health Network in recognition of our unwavering commitment to caring for seniors across Canada and responding quickly in complex situations, even during emergencies and natural disasters. This achievement reflects our relentless pursuit of delivering the highest level of care and the strength of collaboration across our entire organization. CareX was also named to the Globe and Mail's 2026 Women Lead Here list, recognizing Canadian organizations with strong representation of women in executive leadership. With a diverse workforce at CareX comprised of 74% women, it is important that 77% of our people leader are women or from underrepresented groups. Thank you to our team for helping build an inclusive workplace where diverse leadership can grow and thrive. We are also pleased to continue our engagement with government and welcomed both Ron Weeb, MLA for Grand Prairie Wapiti and Brad Wilsey, Registrar of the Alberta College of Pharmacy to our CareRx Grand Prairie Pharmacy, where they learned about the specialized pharmacy services we provide to seniors and care settings across the region. Finally, Subsequent to the end of Q1, the Ontario Ministry of Health announced that the current annual long-term care pharmacy capitation rate of $1,500 per licensed bed will be maintained and that the Ministry will not implement the previously scheduled reductions in the fee per bed rate. This is a significant milestone that we have been advocating for over the past few years. and this provides us long-term stability and funding visibility. In addition, the Ministry announced the removal of funding for unoccupied licensed ward beds. We estimate that the removal of funding for unoccupied ward beds will result in an approximate reduction of up to $2 million in capitation fees in 2026. However, the financial impact remains uncertain. At its as it is dependent on several factors, including the pace and extent of bed redevelopment by LTC operators. We are actively evaluating mitigation strategies to offset the net impact of these changes to capitation funding in Ontario. We are also in discussion with our home partners to understand their construction schedules and the additional LTC home bed capacities at these redeveloped sites. We remain focused on continuing to work collaboratively with the Ontario government and sector partners on shared priorities in enhancing long-term care. I will now turn over the call to Suzanne, who will discuss our first quarter financial results in more detail. Suzanne?

Thank you, Puneet, and good morning, everyone. As Puneet outlined, we delivered solid growth in our key financial metrics in the first quarter of 2026. Average beds serviced in the first quarter increased to 92,036 beds from 87,675 beds in the same period of 2025. Revenue in the first quarter grew to 93.9 million compared to 89.6 million in the first quarter of 2025. This year-over-year increase in revenue was driven primarily by the increase in the number of average beds serviced. The modest quarter-over-quarter decline in revenue compared to the fourth quarter of 2025 was driven by typical seasonality, including the effect of fewer working days in the quarter, and by slightly lower bed count due to some normal churn. The first quarter of 2026 adjusted EBITDA increased to $8.4 million from $7.8 million in the first quarter of 2025. And the adjusted EBITDA margin improved to 9% from 8.7% a year ago. We reported net income of $1.2 million in the first quarter compared to net income of $0.2 million in the first quarter of 2025. The increase in adjusted EBITDA, adjusted EBITDA margin, And that income was driven by the onboarding of new beds and the continued realization of cost savings and efficiency initiatives across our operations. Cash from operations in the quarter was $6.9 million compared to $7.4 million in the first quarter of 2025. Cash from operations was influenced primarily by changes in non-cash working capital items. Turning to our balance sheet. As of March 31, 2026, we had cash of $14.8 million compared to $13.9 million at the end of the fourth quarter of 2025. Net debt was $25 million at quarter end compared to $27.1 million at the end of the fourth quarter of 2025. The quarter-over-quarter improvement in net debt was driven by a higher cash balance and the repayment of our term loan. Net debt to adjusted EBITDA was 0.8 times at the end of the first quarter and in line with 0.8 times at the end of the fourth quarter of 2025. 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 strengths, 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 conservative leverage profile. And with that, I will turn the call back over to Puneet.