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Grey Wolf Animal Health Corp
Symbol WOLF
Shares Issued 31,032,222
Close 2023-08-28 C$ 0.75
Market Cap C$ 23,274,167
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Grey Wolf earns $200,492 in Q2

2023-08-28 12:44 ET - News Release

Ms. Angela Cechetto reports

GREY WOLF ANIMAL HEALTH REPORTS SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2023 FINANCIAL RESULTS

Grey Wolf Animal Health Corp. has released its financial results for the quarter and six months ended June 30, 2023.

Highlights:

  • Revenue for the quarter increased year over year by 8.8 per cent to $6.7-million. Revenue increased by 12.6 per cent to $12.7-million for the first six months of the year.
  • Gross profit increased year over year by 5.5 per cent to $3.4-million for the quarter and 12.9 per cent to $6.5-million for the first six months of the year.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) was $1.1-million for the quarter, compared with $1.1-million for the same period in 2022. Adjusted EBITDA (1) for the first six months of the year was $2.0-million, compared with $2.0-million in the prior year.

"The second quarter of 2022 was a continuation of what we experienced in the first quarter. We saw revenue grow by 8.8 per cent to $6.7-million, driven by organic growth within our product portfolio as well as new products launched in 2022. Gross margins have remained consistent with previous quarters due to the product mix sold in our animal health and pharmacy businesses during the first six months of 2023. In addition, even as we absorb the additional costs associated with operating a public entity, our adjusted EBITDA (1) has remained steady," said Angela Cechetto, chief executive officer.

Results of operations for the three and six months ended June 30, 2023

Revenue for the three- and six-month periods ended June 30, 2023, increased 8.8 per cent to $6.7-million and 12.6 per cent to $12.7-million, respectively, over the same periods in 2022. These increases were due to organic revenue growth from the animal health and pharmacy business units.

Gross margins for the three- and six-month periods ended June 30, 2023, decreased to 50.5 per cent, compared with 52.0 per cent, and remained consistent at 51.4 per cent and 51.3 per cent, respectively, over the same period in 2022. Gross margins were impacted by the product mix in both the animal health and pharmacy business units.

Total expenses for the three- and six-month periods ended June 30, 2023, decreased 20.6 per cent to $2.7-million and 10.3 per cent to $5.4-million, respectively, over the same period in 2022. The decrease in total expenses was largely related to costs associated with the qualifying transaction during the same periods in 2022, offset by costs noted below. During the three-month period, there was an increase in salary, bonus and benefits related to operational growth, as compared with the same period in 2022. Travel, meals and business expenses increased in 2023 as the sales and marketing team increased attendance at conventions, trade shows and customer visits. Finally, there was an increase in professional fees and outside services related to corporate costs as the company now operates as a public entity.

Adjusted EBITDA (1) was $1.1-million and $2.0-million for the three- and six-month periods ended June 30, 2023, consistent with the same periods in 2022, as the company absorbed costs associated with operating as a public entity in 2023.

Cash and cash equivalents were $6.7-million as at June 30, 2023, compared with $6.9-million at Dec. 31, 2022. The company generated cash from operations of $500,000 in the first half of 2023, primarily as a result of net income for the current period, offset by changes in trade and other receivables, inventories, and accounts payable and accrued liabilities. As at June 30, 2023, the company had outstanding borrowings of $9.7-million, of which $1.1-million are current and $8.6-million are non-current. The company's debt is a fixed rate term loan with an average interest rate of 4.7 per cent until September, 2026. In addition, the company repaid borrowings of $500,000 since Dec. 31, 2022.

Grey Wolf's financial statements and accompanying management's discussion and analysis for the three and six months ended June 30, 2023, are available under the company's profile on SEDAR.

(1) Non-IFRS (international financial reporting standards) measures

Management uses both IFRS and non-IFRS measures to assess the financial and operating performance of the company's operations. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable with similar measures presented by other companies. The non-IFRS measures referenced in this news release includes adjusted EBITDA. The company defines adjusted EBITDA as earnings before financing and special transaction costs (including, for greater certainty, fees related to the qualifying transaction), interest income, interest and accretion expenses, income taxes, depreciation of property and equipment, depreciation of right of use assets, amortization of intangible assets, share-based compensation, change in fair value of embedded derivatives, foreign exchange gains or losses, and other income. The company considers adjusted EBITDA as an additional metric in assessing business performance and an important measure of operating performance and cash flow, providing useful information to help analyze and compare profitability between companies for investors and analysts.

The attached table provides a summary of the differences between Grey Wolf's consolidated IFRS and non-IFRS financial measures, which are reconciled.

About Grey Wolf Animal Health Corp.

Grey Wolf, headquartered in Toronto, Canada, is a diversified animal health company founded by a veterinarian to bring to market a broad portfolio of products that meets the unmet needs of veterinarians, clinics and pets. The company's strategy is to in-license, acquire or develop innovative prescription and non-prescription products for commercialization in the veterinarian channel in Canada.

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