Mr. Marcel Bourassa reports

SAVARIA ANNOUNCES ITS STRONGEST QUARTER EVER

Savaria Corp. has released its results for the third quarter of fiscal 2023.

Highlights -- Q3 2023 compared with Q3 2022

• Revenue was $210.1-million, compared with $201.4-million in 2022, an increase of 4.3 per cent due to organic growth of 4.1 per cent and a positive foreign exchange impact of 4.7 per cent, partially offset by the divestiture of the Norway operations:
  • Accessibility organic growth stood at 5.1 per cent, including 9.0-per-cent growth coming from North America.
  • Patient Care organic growth was relatively flat.
• Gross profit was $72.6-million, up $8.5-million or 13.3 per cent, representing 34.5 per cent of revenue compared with 31.8 per cent in Q3 2022.
• Operating income was $20.6-million, up $3.1-million or 17.6 per cent, representing 9.8 per cent of revenue compared with 8.7 per cent in Q3 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $33.6-million, up $2.6-million or 8.3 per cent compared with Q3 2022.
• Adjusted EBITDA margin stood at 16.0 per cent, up 60 basis points compared with 15.4 per cent in Q3 2022.
• Net earnings were $12.1-million or 18 cents per share on a diluted basis, compared with $10.6-million or 16 cents in Q3 2022.
• On Sept. 15, 2023, the corporation issued 6,346,850 common shares via a public offering and a concurrent private placement for net proceeds of $87.4-million, which were used to reimburse long-term debt. The ratio of net debt to adjusted EBITDA now stands at 2.28 in comparison with 3.07 as at Dec. 31, 2022.
• Available funds were $203.4-million as of Sept. 30, 2023, to support working capital, investments and growth opportunities.

A word from the president

"This third quarter is the best-ever quarter presented by Savaria. Revenue reached $210-million, an $8.7-million increase over the same period last year, fuelled by 9-per-cent growth in North America accessibility. Gross profit was $72.6-million, representing a 34.5-per-cent gross margin, also a record for us. We presented a record adjusted EBITDA of $33.6-million for the quarter. Without costs of $900,000 associated with the Savaria One project, the business would have delivered an adjusted EBITDA of $34.5-million. These strong metrics are the result of excellent work by our employees, in spite of global volatility," said Marcel Bourassa, president and chief executive officer.

"We successfully raised $92-million of gross proceeds via a public offering and concurrent private placement with Caisse de depot et placement du Quebec in September, reducing our leverage ratio to 2:28 as at Sept. 30. This adds flexibility for Savaria to seize smaller opportunities such as tuck-in acquisitions in our quest to add products or markets to our global growth plans.

"We remain confident in our plan to reach $1-billion in revenue at the end of 2025. As the world continues to face a myriad of challenges, Savaria feels fortunate to provide products that make a positive difference in peoples' lives. I have our 2,250 employees and our global dealer network to thank for their continued support," concluded Mr. Bourassa.

Third quarter results -- Q3 2023 compared with Q3 2022

Revenue

Revenue reached $210.1-million, up $8.7-million or 4.3 per cent. The increase was due to organic growth of 4.1 per cent and a positive foreign exchange impact of 4.7 per cent, partially offset by the divestiture of the Norway operations:

• Accessibility segment (79 per cent of Q3 2023 revenue): Revenue was $166.3-million, an increase of $7.7-million or 4.8 per cent. Organic growth stood at 5.1 per cent.
• Patient care segment (21 per cent of Q3 2023 revenue): Revenue was $43.8-million, an increase of $1.0-million or 2.4 per cent. Organic growth was relatively flat.

Operating income

Operating income was $20.6-million, up $3.1-million or 17.6 per cent, representing an operating margin of 9.8 per cent compared with 8.7 per cent in Q3 2022.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin stood at $33.6-million and 16.0 per cent, respectively, compared with $31.0-million and 15.4 per cent for Q3 2022:

• Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin stood at $29.9-million and 18.0 per cent, respectively, compared with $26.9-million and 17.0 per cent for Q3 2022.
• Patient care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $6.1-million and 14.0 per cent, respectively, compared with $5.9-million and 13.8 per cent for Q3 2022.

Nine-month results -- YTD (year to date) 2023 compared with YTD 2022

Revenue

The corporation generated revenue of $620.1-million, up $43.1-million or 7.5 per cent. The increase is mainly due to organic growth of 6.9 per cent and a positive foreign exchange impact of 3.6 per cent. The growth was partially offset by the aforementioned divestiture.

Operating income

Operating income was $52.3-million, up $8.2-million or 18.6 per cent, representing an operating margin of 8.4 per cent compared with 7.6 per cent in 2022.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin stood at $93.8-million and 15.1 per cent, respectively, compared with $86.9-million and 15.1 per cent in 2022.

Liquidity and capital resources

Savaria generated $41.5-million of cash from operations, which were primarily used to invest in capital projects, pay interest and dividends.

As at Sept. 30, 2023, the corporation had a net debt position of $290.2-million and a ratio of net debt to adjusted EBITDA of 2.28, compared with 3.07 as of Dec. 31, 2022.

Outlook

Savaria is expecting revenue growth of approximately 8 to 10 per cent, when normalizing for the impact of the Norwegian auto division divestiture, with an adjusted EBITDA margin of approximately 16 per cent in fiscal 2023, based on the following assumptions:

• Organic growth coming from both the accessibility and patient care segments is expected to continue due to a combination of high backlog levels, cross-selling initiatives and strong demand;
• Successful integration of Handicare and progress toward achieving the next strategic phase of synergies in line with management's plan;
• Management's ability to continue to effectively manage supply chain challenges.

This outlook excludes the financial contribution from any new acquisition.

Environmental, social and governance (ESG) values

As a global leader within the accessibility industry, Savaria is committed to minimizing its environmental footprint and upholding the highest social and governance standards. The company believes that promoting environmentally and socially responsible behaviour across its organization is key to achieving sustainable growth and long-term value creation.

Following the completion of its first ESG materiality assessment, Savaria undertook a project to measure, baseline and better understand its global energy consumption through a comprehensive carbon footprint calculation of its scope 1 and scope 2 greenhouse gas emissions. The data gleaned from this study will help guide future energy efficiency initiatives.

Moreover, Savaria is also in the process of finalizing its ESG governance structure and has formed an executive management committee responsible for steering the firm's overall ESG strategy. To that end, the committee has engaged external consultants to help it design and implement a global ESG KPI (key performance indicator) reporting structure and system for Savaria. As part of this mandate, the committee will develop an action plan to identify and close any gaps in assessing Savaria's preparedness to meet its ESG reporting obligations ahead of potential upcoming regulations.

Savaria 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 (the United Kingdom, Netherlands, Switzerland, Italy, Germany, Poland and Czech Republic), Australia and China. Savaria employs approximately 2,250 people globally and its plants are located across Canada, the United States, Mexico, Europe and China.

Compliance with international financial reporting standards (IFRS)

The information appearing in this news release has been prepared in accordance with IFRS. However, Savaria uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net earnings, adjusted net earnings per share, available funds, net debt and ratio of net debt to adjusted EBITDA 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 with similar measures reported by other companies. Additional details for these non-IFRS measures can be found in sections 3, 6 and 8 of Savaria's management's discussion and analysis (MD&A), which is posted on Savaria's website and filed with SEDAR+. Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is presented in this news release.

Results webcast and conference call on Nov. 2, 2023, at 8:30 a.m. Eastern Standard Time

Savaria will host a conference call on Thursday, Nov. 2, 2023, at 8:30 a.m. Eastern Standard Time, with financial analysts to discuss results of the period ended Sept. 30, 2023. Investors and members of the media are invited to participate on a listen-only basis.

Conference call access

Register on-line.

A webcast will be available.

A link to the replay of the webcast will be available on the corporation's website.

A reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is provided in an attached table. Complete financial statements and the management's report for Q3 2023 will be available shortly on Savaria's website and on SEDAR+.

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