Andlauer Healthcare Group Reports First Quarter 2021 Results

May 11, 2021

TORONTO, May 11, 2021 /CNW/ – Andlauer Healthcare Group Inc. (TSX: AND) (“AHG” or the “Company”) today reported its financial results for the three-month period ended March 31, 2021 (“Q1 2021”).

Q1 2021 Summary

  • Revenue increased 17.3% to $95.8 million, compared to $81.7 million for the three months ended March 31, 2020 (“Q1 2020”);
  • Operating income increased 34.3% to $16.7 million, compared to $12.4 million in Q1 2020;
  • Net income and comprehensive income increased 41.9% to $11.6 million, compared to $8.2 million in Q1 2020;
  • EBITDA increased 35.6% to $25.5 million, compared to $18.8 million in Q1 2020;
  • EBITDA Margin was 26.6%, compared to 23.0% in Q1 2020;
  • On March 1, 2021, AHG acquired 100% of Skelton Canada Inc. (“Skelton”) and 49% of Skelton USA Inc. (“Skelton USA“) for total aggregate consideration of approximately $114.7 million, subject to customary working capital adjustments. Skelton added approximately $4.1 million of revenue during Q1 2021;
  • AHG continued to maintain service levels across its operations, while monitoring the safety measures implemented in response to COVID-19 to prioritize the health and safety of its personnel, clients, and suppliers; and
  • During Q1 2021, AHG provided logistics and distribution, specialized transportation and packaging solutions to certain of its manufacturer, third party logistics provider, wholesaler and government clients that are involved in the Canadian supply of COVID-19 vaccines and ancillary products. While individually, and in the aggregate, COVID-19 related revenue was not material to AHG’s results in Q1 2021, the Company believes such revenue may increase in Q2 2021 as the Government of Canada continues to accelerate its commitments to procure COVID-19 vaccines from several suppliers.

“Our strong first quarter results were driven by exceptional performance in our logistics and distribution and ground transportation product lines, including full quarter contributions from the acquisitions of TDS Logistics and McAllister Courier, and a one-month contribution from the Skelton acquisition. We also benefitted from continued strong growth in our dedicated and last mile delivery, and air freight forwarding product lines,” said Michael Andlauer, Chief Executive Officer of AHG. “While we’re still in the initial stages of integrating Skelton, it is already clear that they’re a great long-term strategic fit with AHG. We are off to a great start in 2021 and look forward to maintaining strong performance throughout the year, while continuing to prioritize the health and safety of our personnel and owner operators who make it happen.”

Selected Consolidated Financial Summary

Three months ended March 31

($CAD 000s, except per share amounts)





Logistics & Distribution



17.2 %

Packaging Solutions



(23.1) %

Healthcare Logistics Segment



7.7 %

Ground Transportation



15.7 %

Air Freight Forwarding



25.4 %

Dedicated and Last Mile Delivery



79.0 %

Intersegment Revenue



25.2 %

Specialized Transportation Segment



23.2 %

Total revenue



17.3 %

Operating expenses



14.2 %

Operating income



34.3 %

Net income and comprehensive income



41.9 %

Earnings per share – basic

$ 0.31

$ 0.22

$ 0.09

Earnings per share – diluted

$ 0.30

$ 0.22

$ 0.08

Select financial metrics








360 bps

Q1 2021 Financial Results

Revenue for Q1 2021 increased by 17.3% to $95.8 million, compared with $81.7 million in Q1 2020. The TDS Logistics Inc. (“TDS”), McAllister Courier Inc. (“MCI”) and Skelton acquisitions accounted for approximately $10.3 million of the $14.1 million increase, with the remaining increase attributable to organic growth as described below.

Revenue for the healthcare logistics segment totaled $33.3 million, an increase of 7.7% compared with Q1 2020. The increase was primarily attributable to 17.2% growth in the Company’s logistics and distribution product line, generated from greater inbound product volume, storage and handling activities related to its existing client contracts and the July 2020 implementation of a significant new client contract at its 220,000 square-foot facility in Brampton, Ontario. The increase was partially offset by a 23.1% revenue decline in the Company’s packaging product line, the result of the temporary reduction in operating capacity that was necessitated by safety measures implemented in March 2020 in connection with the COVID-19 pandemic, including limiting the number of associates in the Company’s operations to allow for physical distancing in accordance with public health guidelines.

Revenue in the specialized transportation segment totaled $62.5 million, an increase of 23.2% compared with Q1 2020. The increase was attributable to: 15.7% growth in the Company’s ground transportation product line driven by incremental revenue from the MCI and Skelton acquisitions of approximately $5.3 million, with the remainder attributable to higher volume from the Company’s existing client base, partially offset by lower fuel costs; and year-over-year growth in AHG’s air freight forwarding and dedicated and last mile delivery product lines of 25.4% and 79.0%, respectively. Growth in air freight forwarding was primarily attributable to volume increases, as customers continued to adjust to varying levels of national demand while provincial governments attempted to manage changing conditions related to the pandemic. Growth in dedicated and last mile delivery was primarily attributable to incremental revenue from the acquisition of TDS.

Cost of transportation and services was $41.3 million, or 43.1% of revenue, compared with $33.5 million, or 41.1% of revenue, for Q1 2020. The higher cost of transportation and services and related operating ratio for Q1 2021 reflects the addition of the TDS and MCI cost profiles, partially offset by lower fuel costs in line with the decrease in revenue related to fuel, and savings achieved by the Company’s effective management of its variable costs as volume increased by approximately 5.0% compared to Q1 2020.

Direct operating expenses were $20.6 million, or 21.6% of revenue, compared with $21.6 million, or 26.5% of revenue, for Q1 2020. 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, and other measures impacting productivity; however, these incremental costs were mitigated through effective productivity management and other cost controls. During Q1 2021, AHG continued to qualify for the Canada Emergency Wage Subsidy (“CEWS”) program in connection with its packaging operations. A total of $0.5 million was recognized as a reduction of direct operating expenses for Q1 2021 as a result of support received from the CEWS program ($nil in Q1 2020).

Selling, General and Administrative (“SG&A”) expenses were $8.7 million, or 9.1% of revenue, compared with $7.7 million, or 9.5% of revenue, for Q1 2020. SG&A expenses for Q1 2021 include share-based compensation arrangements of approximately $0.5 million, compared to $0.8 million in Q1 2020. These share-based compensation arrangements relate to the initial stock option grants to AHG’s directors and senior management team and deferred share unit grants made to its board of directors, which are intended to provide further alignment with shareholders. A further $0.8 million is included in Q1 2021 SG&A expenses for incremental costs associated with the acquisition of Skelton and 49% of Skelton USA.

Operating income for was $16.7 million, an increase of 34.3% compared to Q1 2020, primarily reflecting the growth in total revenue, which exceeded the 14.2% increase in total operating expenses.

Net income and comprehensive income increased by 41.9% to $11.6 million, or $0.30 per share (diluted), from $8.2 million, or $0.22 per share (diluted), in Q1 2020. The increase reflects higher segment net income before eliminations from both the Company’s healthcare logistics and specialized transportation operating segments.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”)(1increased by 35.6% to $25.5 million, from $18.8 million in Q1 2020. EBITDA margin(1) improved to 26.6% from 23.0% in Q1 2020. Certain SG&A expenses related to the Company’s initial public offering and higher costs related to becoming a public company contributed to lower EBITDA margins in Q1 2020, but the performance of AHG’s two operating segments continued to result in strong and stable EBITDA margins at the higher end of the Company’s historical range. Further, the Skelton acquisition has a margin profile in line with the specialized transportation segment which positively impacts AHG’s overall margin. Approximately 0.5% of the higher Q1 2021 EBITDA margin is attributed to the CEWS program.


The Company paid a dividend (encompassing the period from January 1, 2021 to March 31, 2021) in the amount of $0.05 per subordinate voting share and multiple voting share on April 15, 2021.

Subject to financial results, capital requirements, available cash flow, corporate law requirements and any other factors that AHG’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 March 31, 2021, there were 13,357,379 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 Q1 2021 are available on the Company’s website at and on the Company’s profile on SEDAR at

Conference call and webcast

Michael Andlauer, Chief Executive Officer, and Peter Bromley, Chief Financial Officer, will host a conference call for analysts and investors on Wednesday, May 12, 2021 at 8:30 a.m. (ET). The dial-in numbers for participants are (416) 764-8650 or (888) 664-6383. The call will be webcast live at:

To access a replay of the conference call dial (416) 764-8677 or (888) 390-0541, passcode: 122352 #. The replay will be available until May 19, 2021. The webcast will be archived on the Company’s website following conclusion of the call.

Virtual Annual Meeting of Shareholders

AHG’s Annual Meeting of shareholders (the “Meeting”) will be held virtually via live audio webcast on Wednesday, May 12, 2021 at 11:00 a.m. (ET) at  Shareholders will be able to listen to the Meeting live, submit questions and submit their vote while the Meeting is being held.  Please refer to the Company’s management information circular for further details on the Meeting agenda and how to participate.

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 timing, completion and anticipated benefits of the proposed Skelton acquisitions, 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 Company’s MD&A for the three-month period year ended March 31, 2021. 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 February 24, 2021, which is available 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 Q1 2021 and Q1 2020, please see “Reconciliation of Non-IFRS Measures” in the Company’s MD&A for the three-month period ended March 31, 2021, 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