OAKVILLE, ONTARIO--(Marketwired - May 6, 2014) - (PTZ.TO) Pethealth Inc. ("Pethealth" or "the Company") today announced its financial results for the three months ended March 31, 2014.
|For the three months ended|
($'000 except for per share figures)
|Mar 31 |
|Mar 31 |
|Profit before taxes||203||479||(58%)|
|Basic effective tax rate||21%||29%||-|
|Profit after taxes||161||340||(53%)|
|Basic earnings per share(2)||(0.01)||(0.01)||-|
|Fully diluted earnings per share(2)||(0.02)||(0.01)||-|
|(1)||EBITDA, a non IFRS accounting measure, is profit before amortisation and depreciation, interest and income taxes.|
|(2)||Earnings per share is after giving effect to the annual dividend paid to holders of the convertible preference shares each January.|
"In Q1, we delivered record quarterly revenue and the highest year on year top line growth in any quarter since Q4 2009," said Mark Warren, President and CEO. "Cash flow and earnings were compromised largely on the back of a one-time campaign to repopulate microchip readers to many of our animal welfare organizations in advance of the roll-out of our new t-chip which will measure the dog's or cat's temperature as well as providing a permanent means of animal identification. The t-chip will be premium priced to our current standard chip and Minichip technology. While weather has been cited by many companies as a reason for slower top line growth, weather really only impacted our business-to-business pharmacy sales to animal welfare organizations. Indeed the overall growth in our business, over and above the Fx lift we received, demonstrates that diversification, both geographically and along product lines, all being driven off of a single technology based platform, is serving us well."
Q1 2014 results:
Consolidated revenue increased by 32% to a record $12.7-million as both the business-to-consumer and business-to-business segments recorded double digit revenue growth.
The Business-to-Consumer Segment focuses on the provision of products and services to pet owners primarily designed to help them both better manage the overall health, safety, and security of their pets, and meet the daily "needs and wants" connected to pet ownership. The Company's current business-to-consumer offerings vary by jurisdiction and include pet health insurance, pet pharmacy, pet supplies and pet food products, as well as lost pet recovery services, and subscription-based membership and loyalty programs.
The Business-to-Business Segment focuses primarily on the sale of products and services to the North American animal welfare community, including municipally owned animal control agencies, 501c3 (not for profit) shelter organisations (SPCAs and Humane Societies), and rescue groups in both the United States and Canada (collectively "AWOs"). The Company's product and service offerings address both the organisational infrastructure and day-to-day operating needs of its AWO clients. Pethealth's current business-to-business offerings vary by jurisdiction but are largely driven off of its cloud-based application, PetPoint®, the most comprehensive and widely used database management and logistical support system available to AWOs. Through PetPoint, the Company has a competitive advantage over traditional distributors of hard goods (including RFID microchip technology and pet supplies) and pet pharmacy serving the AWO community.
Consolidated EBITDA decreased by 9% to $1.17-million as the 14% business-to-consumer operating EBITDA increase was more than offset by a 91% decline in business-to-business operating EBITDA. The decline in the business-to-business operating EBITDA was the combination of a reduction in gross margins from the Company's increased investment in the distribution of microchip readers in advance of the rollout of its Allflex manufactured "T-Chip" and a weather related slowdown in the sales of pharmacy products to AWOs.
Consolidated profit was $161,000 as compared to $340,000 in the prior year and was the combination of a 5% increase in the operating profit of the business-to-consumer segment and a 53% decline in the operating profit of the business-to-business segment for the same reasons describe above.
The 8.6% and 14.4% appreciation in the average foreign exchange rate for the U.S. dollar and the U.K. pound, respectively, had a significant impact on the first quarter comparative results. For the quarter, revenue benefitted by $1.1-million and EBITDA by $325,000 as a result of foreign exchange.
Normal Course Issuer Bid:
On September 20, 2013, the Company's Board of Directors announced its intention to continue its Normal Course Issuer Bid ("NCIB") to repurchase up to an additional 1,544,497 of its common shares. Under the renewed NCIB, repurchases commenced on September 24, 2013 and will terminate no later than September 23, 2014. As of today's date, the Company has repurchased 1,002,296 common shares at an average price of approximately $1.88 under its current NCIB representing 3.2% of the outstanding common shares at September 24, 2013.
As of today's date, the Company has repurchased, since September 24, 2012, the commencement of its first NCIB, 2,635,592 common shares at an average price of approximately $1.41 per common share, for an aggregate of $3.7-million in cash representing 8.1% of the outstanding common shares at September 23, 2012.
The Company is hosting an investor conference call on Tuesday, May 6, 2014, at 4:30PM (EST) which can be accessed at 1-877-223-4471 or on-line at www.pethealthinc.com. For those unable to participate, a replay of the call will be available shortly after the call concludes on the Company's website at www.pethealthinc.com.
For detailed financial statements for the quarter ended March 31, 2014, including Management's Discussion and Analysis, please refer to the Company's website or SEDAR at www.sedar.com shortly after May 6, 2014.
Pethealth is North America's second largest provider of medical insurance for dogs and cats to pet owners, operating in the United States, Canada and the United Kingdom. In addition, the Company is the leading provider of management software to North American animal welfare organisations through its SaaS-based application and is the leading provider of pet related database management services to the North American companion animal industry. Pethealth offers a unique range of products and services for veterinarians, shelters and pet owners through a number of wholly owned subsidiaries using a range of brand names including PetCare, 24PetWatch, Pet Protect, Petpals Direct, ShelterCare, PetPoint, Petango.com and ThePetangoStore.com.
Pethealth is based in Oakville, Ontario. To find out more about Pethealth, visit the web site at www.pethealthinc.com.
This press release contains information that is forward-looking information within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts.
Forward-looking information by its nature necessarily involves risks and uncertainties including, without limitation, the difficulty of predicting the current regulatory and supervisory environment, the timing and conditions to obtaining any regulatory approval, reliance on insurance underwriters for pet insurance policies, market acceptance and demand for existing and new products and services, including PetPoint and EVE Software and the 24PetWatch microchip program, the Company's ability to maintain and service new and existing customers, the protection of intellectual property associated with its products and services, the impact of competition generally and new competitive products, currency and foreign exchange fluctuations, risks associated with the Company's customer care solutions facility, and related risks and uncertainties. Additional risks and uncertainties affecting the Company can be found in the Company's Annual Information Form available on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein. The Company disclaims any intention or obligation, other than those required by security laws, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.