CareRx Corporation

Good morning everyone and welcome to Carex's second quarter 2026 financial results conference call. Please note 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 on 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.carex.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 law. Forward-looking information, including financial outlook information, includes For more information, visit www.fema.gov assumes no obligation to update any forward-looking information as a result of new information or future events, except as required under applicable securities law. Forward-looking information, including statements containing a financial outlook, are 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 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 financial outlook, and the factors and assumptions associated with such forward-looking information, please refer to the company's MD&A for the three- and six-month period ended June 30, 2026 and 2025. and other documents filed on the company's profile on www.cdipos.ca. I would now like to turn the call over to Puneet Khanna, President and CEO of Carex Corporation. Please go ahead, Mr. Khanna.

Thank you, Ashya, and good morning, everyone. Welcome to our second quarter 2026 earnings call. With me this morning is our Chief Financial Officer, Suzanne Brand. In the second quarter, for the three-month period ending June 30, 2026, we delivered consistent financial and operating performance. We generated revenue of $93.6 million and adjusted EBITDA of $8 million, representing an adjusted EBITDA margin of 8.6%. We also delivered net income of approximately $400,000 in the quarter. Average beds serviced was 91,719 in Q2. Our financial performance reflects the contribution from new beds onboarded throughout last year, combined with the ongoing benefits of our cost-saving and efficiency initiatives, offset by the changes to the funding for ward beds in Ontario. In the second quarter, we signed a new long-term agreement with a national seniors home operator We expect this contract will bring approximately 3,000 new beds into our network once onboarded. These retirement communities will begin transitioning to Carerex in the third quarter of 2026. Winning this new home operator customer is an important milestone for Carerex and demonstrates our differentiated value proposition with respect to exceptional service quality clinical expertise, resident safety and innovative technologies. We continue to see an encouraging pipeline of new business and we look forward to updating you on our progress. Also in the quarter, we closed our St. Catharines, Ontario pharmacy location and relocated the service beds to our Oakville Fulfillment Centre. This was an opportunity to utilize the operational efficiencies of the Oakville Hub while continuing to deliver exceptional services to residents and our home partners. Finally, I'm pleased to share that the company's board of directors approved a 10% increase in the quarterly dividend rate to 2.2 cents per common share. This increase reflects our commitment to a disciplined capital allocation strategy that provides the flexibility to fund growth initiatives while delivering strong returns to shareholders. 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. As Puneet outlined, we delivered consistent results in the second quarter of 2026. Average beds serviced in the second quarter increased to 91,719 from 90,048 in the same period of 2025. Revenue in the second quarter grew to $93.6 million compared to $91.4 million in the second quarter of 2025. The year-over-year increase in revenue was driven primarily by the increase in the number of average beds serviced, partially offset by changes to funding for certain unoccupied ward beds in Ontario, which we outlined last quarter. Second quarter 2026 adjusted EBITDA of $8 million was consistent with the second quarter of 2025. An adjusted EBITDA margin declined slightly to 8.6% from 8.8% a year ago. We reported net income of approximately $400,000 in the second quarter compared to net income of $600,000 in the second quarter of 2025. The slight decrease in adjusted EBITDA margin and net income was primarily attributable to the changes in funding for the certain unoccupied ward beds in Ontario, partially offset by an increase in bed service and cost savings initiatives. Cash from operations in the quarter was $3.7 million compared to $3.8 million in the second quarter of 2025. Turning to our balance sheets. As at June 30th, 2026, we had cash of $9.6 million compared to $14.8 million at the end of the first quarter of 2026. Decrease in cash is related to the timing of capital expenditures and debt repayment. Net debt was $29.1 million at quarter end compared to $25 million at the end of the first quarter of 2026. Net debt to adjusted EBITDA was 0.9 times at the end of the second quarter compared to 0.8 times at the end of the first quarter of 2026. Net debt to adjusted EBITDA increased due to the decrease in the run rate of adjusted EBITDA and decrease in cash and partially offset by the repayment of the term loan. Subsequent to the end of the second quarter, we paid dividends in the aggregate amount of $1.3 million. And consistent with our balanced approach to capital allocation, which prioritizes growth investments, balance sheet strengths, and returning capital to shareholders, the Board of Directors approved an increase in the quarterly dividend rate to 2.2 cents per common share, payable October 8, 2026, to holders of record of common shares as of the closing of business on September 15th, 2026. 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.