2021 Q3 Results

Savaria Presents Q3 2021 Results: Revenue up 99%, Adjusted EBITDA up 56%

2021-11-10

Laval, Québec, Canada – November 10, 2021 - Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in the accessibility industry, is pleased to announce its results for the third quarter ended September 30, 2021.


Highlights - Q3 2021 vs Q3 2020 

Revenue was $180.8M, up $90.0M or 99.1%, mainly due to the acquisition of Handicare;

  • Gross profit was $58.5M, up $25.9M or 79.6%, representing 32.4% of revenue compared to 35.9% in Q3 2020;
  • Adjusted EBITDA was $26.3M, up $9.4M or 55.6%;
  • Adjusted EBITDA margin stood at 14.6%, compared to 18.6% in Q3 2020; 
  • Net earnings were $9.1M or $0.15 per share on a diluted basis. Adjusted net earnings were $9.6M or $0.15 per share on a diluted basis, up $1.3M or 16.3%;
  • Funds available of $138.0M to support working capital, investments and growth opportunities;
  • Savaria has now paid for 100% of the shares of Handicare. 



A Word from the President

" I am very pleased with our third-quarter results for 2021, given that we delivered strong bookings and sales year-over-year in a challenging environment. Our adjusted EBITDA for the quarter was negatively impacted by inflationary pressures, including soaring freight costs, and without these challenges, adjusted EBITDA would have exceeded $30 million. The good news is that we witnessed a decrease in exorbitant freight costs more recently. Our adjusted EBITDA margin, meanwhile, attained 14.6% in the third quarter, but without the incremental costs, it would have hit approximately 17%.

" On the business side, we are on track to start producing the Handicare Freecurve stairlift in Ontario by the end of the year, providing us with a competitive advantage in production and shipping lead times for our North American dealer network. There is also encouraging data for Savaria in terms of new home construction with heightened sales expectations for new homes in the upcoming six months due to U.S. homebuilding confidence rising in October. 

" Looking ahead, the price increase we announced this summer will positively affect our results beginning in the fourth quarter. Based on ongoing strength in bookings and our current backlog, I remain confident that adjusted EBITDA will exceed $100 million for fiscal 2021. 

“ In closing, I would like to thank our 2,300 employees around the world as they work together to share innovations and efficiencies to always improve client safety," concluded Mr. Bourassa.
 

Third Quarter Results

Revenue

Revenue reached $180.8M, up $90.0M or 99.1%, compared to Q3 2020. The growth was mainly due to the acquisition of Handicare. Organic revenue growth was 3.5% in the quarter and was partially offset by a negative foreign currency exchange impact.

  • Accessibility segment(75% of Q3-21 revenue): Revenue was $135.7M, an increase of $67.1M or 97.9%, compared to Q3 2020. Acquisition growth stood at 97.7% and organic revenue growth stood at 2.7%; 
  • Patient Handling segment(19% of Q3-21 revenue): Revenue was $34.8M, an increase of $17.4M or 100.5%, compared to Q3 2020. Acquisition growth stood at 93.1% and organic revenue growth stood at 11.0%;
  • Adapted Vehicles segment (6% of Q3-21 revenue): Revenue was $10.3M in Q3 2021, an increase of $5.4M or 110%, compared to Q3 2020. Acquisition growth stood at 121.5% and organic contraction stood at 11.5%.


Adjusted EBITDA

Q3 2021 adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $28.4M and 15.7%, respectively, compared to $17.6M and 19.4% for Q3 2020. The Corporation’s Accessibility and Patient Handling segments adjusted EBITDA margins decreased versus prior year due to additional costs related to the supply chain, including shipping costs and also due to reduction of subsidies from the COVID-19 employment retention government of Canada program. These impacts were partially offset by the Handicare acquisition’s positive impact and cost containment efforts. Across all segments, increases in absolute dollars reflect the acquisition of Handicare.

  • Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $24.7M and 18.2%, respectively, compared to $15.3M and 22.3% for Q3 2020. 
  • Patient Handling segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $3.1M and 8.8%, respectively, compared to $2.0M and 11.7% for Q3 2020
  • Adapted Vehicles segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $0.6M and 6.1%, respectively, compared to $0.3M and 5.8% for Q3 2020. 
     

Net Earnings and Adjusted Net Earnings

Net earnings were $9.1M or $0.15 per share on a diluted basis, compared to $8.1M or $0.16 per share for the same period in 2020

Adjusted net earnings stood at $9.6M, or $0.15 per share, compared to $8.2M or $0.17 per share in Q3 2020. The increase was due to the acquisition of Handicare. 
 

Nine-Month Results

Revenue

For the nine-month period ended September 30, 2021, the Corporation generated revenue of $471.5M, up $207.6M or 78.7%, compared to the same period in 2020. The growth is largely due to the acquisition of Handicare. Organic revenue growth of 3.0% was fully offset by a negative foreign exchange impact.


Adjusted EBITDA

For the nine-month period ended September 30, 2021, adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $75.9M and 16.1%, respectively, compared to $45.5M and 17.2% for the same in 2020.  
 

Net Earnings and Adjusted Net Earnings

For the nine-month period ended September 30, 2021, the Corporation’s net earnings stood at $21.3M, or $0.35 per share on a diluted basis, compared to $19.7M, or $0.39 per share for the same period in 2020. The Corporation’s adjusted net earnings stood at $27.0M, or $0.44 per share, compared to $21.7M or $0.43 per share, respectively, compared to the same period in 2020. 
 

Liquidity and Capital Resources

Savaria generated $50.1M of cash from operations which were primarily used to invest in capital projects, repay debt and interests and pay dividends.

As at September 30, 2021, the Corporation had a net interest-bearing debt position of $307.4M.


Outlook

The uncertainty around the future impact of the ongoing global pandemic makes it difficult to predict future performance, however, considering its financial performance year-to-date, coupled with current backlog levels, and the Corporation’s confidence in the strategic integration plan with Handicare which is underway, Savaria remains optimistic it will achieve its previously stated goal of generating an adjusted EBITDA in excess of $100M(1) during fiscal 2021. 
(1) See section 13 “Outlook” of Q3 Management Discussion & Analysis for detail on the assumptions supporting this amount.
 

About Savaria Corporation

Savaria Corporation (savaria.com) is a global leader in the accessibility industry. It provides accessibility solutions for the physically challenged to increase their comfort, their mobility and their independence. Its product line is one of the most comprehensive on the market. Savaria designs, manufactures, distributes and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts and elevators for home and commercial use. It also manufactures and markets a comprehensive selection of pressure management products for the medical market, medical beds for the long-term care market, as well as an extensive line of medical equipment and solutions for the safe handling of patients, including ceiling lifts and slings. In addition, Savaria converts and adapts vehicles for personal and commercial uses. The Corporation operates a sales network of dealers worldwide and direct sales offices in North America, Europe (UK, Netherlands, Switzerland, Italy, Germany, Poland and Czech Republic), Australia and China. Savaria employs approximately 2,300 people globally and its plants are located across Canada, the United States, Europe and China.


Compliance with International Financial Reporting Standards (“IFRS”)

The information appearing in this press release has been prepared in accordance with IFRS. However, Savaria uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA per share, adjusted net earnings and adjusted net earnings per share for analysis purposes to measure its financial performance. These measures have no standardized definitions in accordance with IFRS and are therefore regarded as non-IFRS measures. These measures may therefore not be comparable to similar measures reported by other companies. Additional details for these non-IFRS measures can be found in Savaria’s MD&A, which is posted on Savaria’s website at www.savaria.com, and filed with SEDAR at sedar.com. Reconciliation between net earnings and adjusted net earnings, adjusted EBITDA and adjusted EBITDA per share is presented in the section below.


Forward-Looking Statements

This press release includes certain statements that are “forward-looking statements” within the meaning of the securities laws of Canada. Any statement in this press release that is not a statement of historical fact may be deemed to be a forward-looking statement. When used in this press release, the words “believe”, “could”, “should”, “intend”, “expect”, “estimate”, “assume” and other similar expressions are generally intended to identify forward-looking statements. It is important to know that the forward-looking statements in this document describe the Corporation’s expectations as at the date hereof, which are not guarantees of future performance of Savaria or its industry, and involve known and unknown risks and uncertainties that may cause Savaria’s or the industry’s outlook, actual results or performance to be materially different from any future results or performance expressed or implied by such statements. The Corporation’s actual results could be materially different from its expectations if known or unknown risks affect its business, or if its estimates or assumptions turn out to be inaccurate.

A change affecting an assumption can also have an impact on other interrelated assumptions, which could increase or diminish the effect of the change. As a result, the Corporation cannot guarantee that any forward-looking statement will materialize and, accordingly, the reader is cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements do not take into account the effect that transactions or special items announced or occurring after the statements are made may have on the Corporation’s business. For example, they do not include the effect of sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made.

Unless otherwise required by applicable securities laws, Savaria disclaims any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing risks and uncertainties include the risks set forth under “Risks and Uncertainties” in Savaria’s latest Annual MD&A as well as other risks detailed from time to time in reports filed by Savaria with securities regulators in Canada.


-30-


Results Webcast and conference call on November 11, 2021, at 8:30 a.m. (ET) 

Savaria will host a conference call on Thursday, November 11, 2021 at 8:30 a.m. Eastern Time with financial analysts to discuss results of the quarter ended September 30, 2021. Investors and members of the media are invited to participate on a listen-only basis.  

Conference call access: 

Local Dial-in Numbers: (647) 792-1241 or (514) 669-6115
North American Toll Free Number: 1 (866) 248-8441
Webcast (EN)

A link to the replay of the webcast will be available on the Corporation’s website at savaria.com
 

For further information:

Marcel Bourassa
Chairman, President and Chief Executive Officer
1.800.661.5112
 

Stephen Reitknecht, CPA, CA
Chief Financial Officer
1.800.661.5112, ext. 3370
sreitknecht@savaria.com

Nicolas Rimbert, CFA
Vice President, Corporate Development
1.800.931.5655, ext. 239
nrimbert@savaria.com

 

Pierre Boucher
MaisonBrison Communications
514.731.0000
pierre@maisonbrison.com

Chris Makuch
MaisonBrison Communications
416.953.3337
chris@maisonbrison.com 

 

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Financials Q3 2021

IMPORTANT: Safety notice for current owners of Savaria residential elevators