Andlauer Healthcare Group Reports 2020 Second Quarter Financial Results

August 12, 2020

TORONTO, Aug. 12, 2020 /CNW/ – Andlauer Healthcare Group Inc. (TSX: AND) (“AHG” or the “Company”) today reported its financial results for the three and six-month periods ended June 30, 2020 (“Q2 2020” and “YTD 2020”, respectively).

Q2 2020 Summary

  • Revenue was $70.3 million for Q2 2020, a decrease of 1.3% compared to $71.1 million for the three months ended June 30, 2019 (“Q2 2019”);
  • Operating income was $11.1 million for Q2 2020, a decrease of 2.8% to compared to $11.4 million in Q2 2019;
  • Net income and comprehensive income was $7.1 million, compared to $8.0 million in Q2 2019;
  • EBITDA(1) increased 1.2% to $18.0 million, compared to $17.7 million in Q2 2019, despite the absorption of approximately $1.4 million of incremental costs related to share-based compensation arrangements and the transition to a public company;
  • EBITDA Margin(1) was 25.6% in Q2 2020, compared to 24.9% in Q2 2019;
  • The Company successfully implemented its new state-of-the-art 220,000 square foot logistics and distribution facility in Brampton, Ontario which began operations in July 2020;
  • The Company declared its second dividend as a public company on June 22, 2020 for shareholders of record as at June 30, 2020; and,
  • AHG continued to maintain client service levels in the quarter without disruption, while proactively implementing measures across its operations in response to COVID-19 to prioritize the health and safety of its personnel, clients, and suppliers.

“As expected, we experienced a slight decline in revenue for Q2 2020 due, in part, to the accelerated purchasing behaviour of our clients’ customers in late Q1 2020 due to COVID-19. We also generated lower fuel-related revenue primarily from our ground transportation operations, and experienced a significant reduction in revenue from our packaging operations as we have temporarily limited the number of associates in our facilities to allow for appropriate social distancing due to COVID-19. Strong growth in our air freight forwarding and dedicated and last mile delivery product lines partially offset these declines,” said Michael Andlauer, Chief Executive Officer of AHG. “On a year-to-date basis, revenue in both our healthcare logistics and specialized transportation segments is ahead of last year, and our EBITDA Margin remains strong. We look forward to continued growth ahead, supported by the recent opening of our new state-of-the-art 220,000 square-foot logistics and distribution facility in the Greater Toronto Area.”

Selected Consolidated Financial Summary

Three Months Ended

Six months Ended

($CAD 000s)

June 30,

June 30,








Logistics & Distribution







Packaging Solutions







Healthcare Logistics Segment







Ground Transportation







Air Freight Forwarding







Dedicated and Last Mile Delivery







Intersegment Eliminations







Specialized Transportation Segment







Total revenue







Operating expenses







Operating income







Net income and comprehensive income







Select financial metrics








EBITDA Margin(1)



70 bps



(30 bps)

Q2 2020 Financial Results

Revenue for Q2 2020 totaled $70.3 million, a decrease of 1.3% compared with Q2 2019. Revenue was impacted by the cancellation of certain healthcare activities such as elective surgical procedures; closures of clinics which use certain products of AHG’s clients, such as dental clinics, optometric clinics, animal health clinics and veterinary hospitals; and the accelerated purchasing activities of AHG’s client’s customers late in Q1 2020 in response to the COVID-19 pandemic. This resulted in lower volume in Q2 2020 for the Company’s logistics and distribution, and ground transportation product lines, as health care providers managed inventories down. AHG’s air freight forwarding and dedicated and last mile delivery product lines generated year-over-year growth of 18.2% and 48.7%, respectively, driving 3.0% overall growth in the Company’s specialized transportation segment. Growth in air freight forwarding is primarily attributable to an increase in volume of expedited orders due to COVID-19, and growth in dedicated and last mile delivery reflects the Company’s continued expansion of routes for existing clients. The 27.3% decline in packaging solutions revenue in Q2 2020 resulted primarily from AHG’s decision to limit the numbers of its associates in its operations to allow for social distancing in accordance with public health guidelines, which has temporarily reduced operating capacity. Following the decline in ground transportation volume in April and May 2020 due to unusually high volumes in March 2020, AHG experienced accelerated ground transportation activity in June 2020.

Cost of transportation and services for Q2 2020 was $28.5 million, or 40.6% of revenue, compared with $29.5 million, or 41.5% of revenue, for Q2 2019. The lower cost of transportation and services operating ratios for Q2 2020 reflect lower fuel costs in line with the decrease in revenue related to fuel, savings achieved by the Company’s effective management of its variable costs in response to reduced volume in April and May 2020, and the successful management of costs as volume ramped up in June 2020.

Direct operating expenses for Q2 2020 were $17.0 million, or 24.2% of revenue, compared with $18.6 million, or 26.2% of revenue, for Q2 2019. AHG incurred certain incremental costs in connection with its COVID-19 response measures, including additional cleaning activities for its facilities and equipment, expenses for personal protective equipment for its associates, and other measures impacting productivity. These incremental costs were mitigated through operating leverage arising from incremental volume in June 2020, productivity management and other cost controls. During Q2 2020, the Company qualified for government assistance under the Canada Emergency Wage Subsidy (“CEWS”) program in connection with its packaging operations. A total of $0.8 million was recognized as a reduction of direct operating expense for Q2 2020 as a result of the CEWS program.

Selling, General and Administrative (“SG&A”) expenses for Q2 2020 were $6.8 million, or 9.6% of revenue, compared with $5.2 million, or 7.4% of revenue, for Q2 2019. SG&A expenses for Q2 2020 include share-based compensation arrangements of approximately $0.8 million, or 1.1% of revenue, which are incremental to the Company’s historical SG&A expenses. These share-based compensation arrangements relate to the initial option grants to AHG’s senior management team and deferred share unit grants made to the Company’s board of directors, which are intended to provide further alignment with shareholders. A further $0.6 million, or 0.9% of revenue, is included in Q2 2020 SG&A expenses for incremental costs associated with being a public company. Approximately $0.2 million of the public company SG&A expenses reflected in Q2 2020 were one-time in nature.

Operating income for Q2 2020 was $11.1 million, a decrease of 2.8%, compared with $11.4 million for Q2 2019. Net income and comprehensive income for Q2 2020 decreased by 11.3% to $7.1 million, from $8.0 million for Q2 2019.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”)(1)  for Q2 2020 increased by 1.2% to $18.0 million, from $17.7 million for Q2 2019 and reflects the absorption of approximately $1.4 million of incremental costs related to share-based compensation arrangements and other public company costs not incurred in Q2 2019, as referenced above. EBITDA Margin(1) for Q2 2020 was 25.6% compared with 24.9% for Q2 2019, as operating ratios for AHG’s two most significant operating costs (cost of transportation and services and direct operating expenses) were lower in Q2 2020 versus Q2 2019, notwithstanding slightly lower revenue.

Q2 2020 Dividend

The Company paid a dividend (encompassing the period from April 1, 2020 to June 30, 2020) in the amount of $0.05 per subordinate voting share and multiple voting share on July 15, 2020 to shareholders of record as at June 30, 2020.

Subject to financial results, capital requirements, available cash flow, corporate law requirements and any other factors that the Company’s Board of Directors may consider relevant, it is the Company’s intention to declare a quarterly dividend of $0.05 per subordinate voting share and multiple voting share on an ongoing basis.

Shares Outstanding

As at June 30, 2020, there were 12,500,000 subordinate voting shares and 25,100,000 multiple voting shares outstanding.

Financial Statements

AHG’s unaudited interim condensed consolidated financial statements and related Management’s Discussion & Analysis (“MD&A”) for Q2 2020 are available on the Company’s website at and on the Company’s profile on SEDAR at

Conference call

Michael Andlauer, Chief Executive Officer, and Peter Bromley, Chief Financial Officer, will host a conference call for analysts and investors on Thursday, August 13, 2020 at 8:30 a.m. (ET). The dial-in numbers for the conference call are (416) 764-8650 or (888) 664-6383. A live webcast of the call is available at:

To listen to a replay of the conference call, dial (416) 764-8677 or (888) 390-0541, passcode: 338000 #. The replay will be available until August 20, 2020. The webcast will be archived on the Company’s website following conclusion of the call.

About AHG

AHG is a leading and growing supply chain management company offering a robust platform of customized third-party logistics (“3PL”) and specialized transportation solutions for the healthcare sector. The Company’s 3PL services include customized logistics, distribution and packaging solutions for healthcare manufacturers across Canada. AHG’s specialized transportation services, including air freight forwarding, ground transportation, dedicated delivery and last mile services, provide a one-stop shop for clients’ healthcare transportation needs. Through its complementary service offerings, available across a coast-to-coast distribution network, the Company strives to accommodate the full range of its clients’ specialized supply chain needs on an integrated and efficient basis. For more information on AHG, please visit:

Forward-looking Information

This news release contains forward-looking information and forward-looking statements (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may relate to the Company’s future financial outlook and anticipated events or results and may include information regarding the Company’s financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans, objectives and responses to the outbreak of COVID-19. Particularly, information regarding the Company’s expectations of future results, performance, achievements, facility expansions, leases, platform expansions, acquisitions, public company costs, payment of dividends, prospects, financial targets or outlook, intentions, opportunities or the potential impact of, and response measures to be taken with respect to, COVID-19 is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “believes”, “commencing” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Such forward-looking statements are qualified in their entirety by the inherent risks, uncertainties and changes in circumstances surrounding future expectations which are difficult to predict and many of which are beyond the control of the Company.

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions, including but not limited to those assumptions described under the heading “Cautionary Note Regarding Forward-Looking Information” in the MD&A for Q2 2020. Forward-looking information is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to factors discussed under the heading “Risk Factors” in the Company’s annual information form dated March 12, 2020, which is available, together with the Q2 2020 MD&A, on the Company’s profile on SEDAR at If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Accordingly, investors should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company’s expectations as of the date of this news release, and are subject to change after such date and the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

(1) Non-IFRS Financial Measures

This news release contains certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. AHG uses non-IFRS measures including “EBITDA”, and “EBITDA Margin”. These non-IFRS measures are used to provide investors with supplemental measures of the Company’s operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. AHG also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. AHG management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation.


AHG defines EBITDA as net income (loss) and comprehensive income (loss) for the period before: (i) income tax (recovery) expense; (ii) interest income; (iii) interest expense; and (iv) depreciation and amortization.

AHG believes EBITDA is a useful measure to assess the Company’s financial performance because it provides a more relevant picture of operating results by excluding the effects of expenses that are not reflective of the Company’s underlying business performance.


AHG defines EBITDA Margin as EBITDA divided by revenue. EBITDA Margin represents a measure of the Company’s profitability expressed as a percentage of revenue.

AHG believes EBITDA Margin is a useful measure to assess the Company’s financial performance because it helps quantify the Company’s ability to convert revenues generated from clients into EBITDA.

For quantitative reconciliations of net income and comprehensive income to EBITDA for Q2 2020 and Q2 2019, please see “Reconciliation of Non-IFRS Measures” in the Company’s MD&A for Q2 2020, available on the Company’s profile on SEDAR (, or the Company’s website (

SOURCE Andlauer Healthcare Group Inc.

For further information: Peter Bromley, Chief Financial Officer, Tel: (416) 744-4900; Bruce Wigle, Investor Relations, Tel: (647) 496-7856