Andlauer Healthcare Group Reports Second Quarter 2021 Results

August 11, 2021

TORONTO, Aug. 11, 2021 /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, 2021 (“Q2 2021” and “YTD 2021”, respectively).

Q2 2021 Summary

  • Revenue increased 52.5% to $107.1 million, compared to $70.3 million for the three months ended June 30, 2020 (“Q2 2020”);
  • Operating income increased 69.5% to $18.8 million, compared to $11.1 million in Q2 2020;
  • Net income and comprehensive income increased 84.7% to $13.1 million, compared to $7.1 million in Q2 2020;
  • EBITDA¹ increased 66.7% to $30.0 million, compared to $18.0 million in Q2 2020;
  • EBITDA Margin¹ was 28.0%, compared to 25.6% in Q2 2020;
  • On March 1, 2021, AHG acquired 100% of Skelton Canada Inc. (“Skelton”) and 49% of Skelton USA Inc. (“Skelton USA“) and an option to acquire the remaining 51% of Skelton USA for total aggregate consideration of approximately $114.7 million, subject to customary working capital adjustments. Skelton contributed approximately $10.5 million of revenue during Q2 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
  • AHG continued to provide 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. AHG’s COVID-19 vaccine-related revenue comprised approximately 5.0% of total revenue in Q2 2021, as the Canadian government secured additional supply of vaccines throughout the quarter. AHG expects to continue to support the supply chain for COVID-19 vaccines, however it is not clear whether the level of activity experienced in Q2 2021 will be sustained throughout the remainder of 2021.

“We had exceptional performance in both our healthcare logistics and specialized transportation operating segments during the quarter, supported by growth in all of our product lines and a full quarter contribution from our acquisition of Skelton. We are very pleased with the strategic fit of Skelton, which has proven to be a highly complementary addition to our business,” said Michael Andlauer, Chief Executive Officer of AHG. “We continued to support the distribution of COVID-19 vaccines and ancillary products to Canadians in the quarter, with activity ramping up significantly as the Canadian government secured more supply. We are proud to be a trusted service provider for this critical mandate and our team’s success in providing specialized solutions to our clients involved in the supply of COVID-19 vaccines further demonstrates the commitment to excellence throughout our operations.”

Selected Consolidated Financial Summary

Three months

 ended June 30,

Six months
ended June 30,

($CAD 000s, except per share amounts)








Logistics & Distribution



34.6 %



25.5 %

Packaging Solutions



44.5 %



0.2 %

Healthcare Logistics Segment



36.1 %



20.5 %

Ground Transportation



57.6 %



35.0 %

Air Freight Forwarding



19.4 %



22.3 %

Dedicated and Last Mile Delivery



116.6 %



97.7 %

Intersegment Revenue



53.0 %



38.3 %

Specialized Transportation Segment



61.8 %



41.3 %

Total revenue



52.5 %



33.6 %

Operating expenses



49.3 %



30.4 %

Operating income



69.5 %



50.9 %

Net income and comprehensive income



84.7 %



61.7 %

Earnings per share – basic

$ 0.34

$ 0.19

$ 0.15

$ 0.65

$ 0.41

$ 0.24

Earnings per share – diluted

$ 0.33

$ 0.18

$ 0.15

$ 0.63

$ 0.40

$ 0.23

Select financial metrics




66.9 %



50.9 %

EBITDA Margin¹

28.0 %

25.6 %

240 bps

27.3 %

24.2 %

310 bps

Q2 2021 Financial Results

Revenue for Q2 2021 increased by 52.5% to $107.1 million, compared with $70.3 million in Q2 2020. The TDS Logistics Inc. (“TDS”), McAllister Courier Inc. (“MCI”) and Skelton acquisitions accounted for approximately $17.7 million of the $36.9 million increase, with the remaining increase attributable to organic growth as described below.

Revenue for the healthcare logistics segment totaled $34.7 million, an increase of 36.1% compared with Q2 2020. The increase was primarily attributable to the 34.6% year-over-year growth in the Company’s logistics and distribution product line in Q2 2021 generated from greater inbound product volume, storage and handling activities related to its existing client contracts, the July 2020 implementation of a significant new client contract and its 220,000 square-foot facility in Brampton, Ontario. AHG’s packaging solutions also contributed to growth in the healthcare logistics segment, with revenue totaling $5.6 million in Q2 2021, an increase of 44.5% compared to Q2 2020. The increase was partially attributable to the near-complete restoration of operating capacity to pre-pandemic levels as AHG was able to gradually and safely ease limitations on the number of its associates in its operations in accordance with public health guidelines. The increase also reflects retailers restoring their previously deferred orders for certain consumer healthcare products in connection with travel restrictions to vacation destinations.

Revenue in the specialized transportation segment totaled $72.4 million, an increase of 61.8% compared with Q2 2020. The increase was attributable to: 57.6% growth in the Company’s ground transportation product line driven by incremental revenue from the MCI and Skelton acquisitions of approximately $11.9 million, higher volume from the Company’s existing client base and higher fuel costs passed on to customers as a component of pricing; and year-over-year growth in AHG’s air freight forwarding and dedicated and last mile delivery product lines of 19.4% and 116.6%, respectively. Growth in air freight forwarding was attributable to volume increases and increased fuel revenue related to higher fuel costs. Growth in dedicated and last mile delivery was primarily attributable to incremental revenue of approximately $5.8 million from the acquisition of TDS, with the remainder attributable to route expansion in Western Canada and increases in fuel costs passed on to customers.

Cost of transportation and services was $47.3 million, or 44.1% of revenue, compared with $28.5 million, or 40.6% of revenue, for Q2 2020. The higher cost of transportation and services for Q2 2021 reflects an approximate 20% increase in volume in AHG’s ATS Healthcare business compared to Q2 2020, the acquisitions of TDS, MCI and Skelton, and higher fuel costs in line with the increases in revenue related to fuel prices. The increase in the operating ratio for Q2 2021 reflects the addition of TDS and MCI cost profiles, partially offset by savings achieved through the effective management of variable costs with the increased volumes.

Direct operating expenses were $21.6 million, or 20.1% of revenue, compared with $17.0 million, or 24.2% of revenue, for Q2 2020. The increase was primarily attributable to the acquisitions of TDS, MCI and Skelton, however these acquisitions – which are included in AHG’s specialized transportation segment – have lower facility-related costs in relation to AHG’s healthcare logistics segment, which results in a lower direct operating expense operating ratio in Q2 2021 as compared to Q2 2020. AHG has incurred certain incremental costs in connection with its COVID-19 response measures, but these incremental costs were mitigated through effective productivity management and other cost controls.

Selling, General and Administrative (“SG&A”) expenses were $9.2 million, or 8.6% of revenue, compared with $6.8 million, or 9.6% of revenue, for Q2 2020. SG&A expenses for Q2 2021 include share-based compensation arrangements of approximately $0.5 million, compared to $0.8 million in Q2 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 directors, which are intended to provide further alignment with shareholders.

Operating income for Q2 2021 was $18.8 million, an increase of 69.5% compared to Q2 2020, primarily reflecting the growth in total revenue, which exceeded the 49.3% increase in total operating expenses.

Net income and comprehensive income increased by 84.7% to $13.1 million, or $0.33 per share (diluted), from $7.1 million, or $0.18 per share (diluted), in Q2 2020. The increase reflects higher segment net income before eliminations from both the Company’s healthcare logistics and specialized transportation operating segments, and a $0.8 million contribution from AHG’s 49% interest in Skelton USA.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”)¹ increased by 66.7% to $30.0 million, from $18.0 million in Q2 2020, reflecting the factors discussed above and incremental contributions from the TDS, MCI and Skelton acquisitions. EBITDA margin¹ improved to 28.0% from 25.6% in Q2 2020. 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, Skelton’s higher margin profile has positively impacted AHG’s overall margin.


The Company paid a dividend (encompassing the period from April 1, 2021 to June 30, 2021) in the amount of $0.05 per subordinate voting share and multiple voting share on July 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 June 30, 2021, there were 13,375,379 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 Q2 2021 and YTD 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 Thursday, August 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: 357629 #. The replay will be available until August 19, 2021. 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 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 and six–month periods ended June 30, 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 Q2 2021, YTD 2021, Q2 2020 and YTD 2020 please see “Reconciliation of Non-IFRS Measures” in the Company’s MD&A for the three and six-month periods ended June 30, 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