2022 Q3 Results

Laval, Québec, Canada – November 2, 2022 - Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in the accessibility industry, is pleased to announce its results for the third quarter of fiscal 2022.

Highlights – Q3 2022 compared to Q3 2021

• Revenue was $201.4M, up $20.6M or 11.4%, due to organic growth of 15.7% coming from all segments partially offset by a negative foreign exchange impact of 4.3%.
• Gross profit was $64.0M, up $5.5M or 9.3%, representing 31.8% of revenue compared to 32.4% in Q3 2021.
• Operating income was $17.5M, up $7.1M or 68.9%, representing 8.7% of revenue compared to 5.7% in Q3 2021.
• Adjusted EBITDA was $31.0M, up $4.7M or 17.9%, compared to Q3 2021.
• Adjusted EBITDA margin stood at 15.4%, up 80 bps compared to 14.6% in Q3 2021. 
• Net earnings were $10.6M, or $0.16, per share on a diluted basis, compared to $4.8M or $0.07 per share on a diluted basis in Q3 2021.
• Funds available of $101.7M, as of September 30, 2022, to support working capital, investments and growth opportunities.  

A Word from the President

“We have realized strong results in our third quarter with revenue of $201.4M, an 11.4% increase year-over-year.  Organic growth contributed a 15.7% increase and was somewhat offset by 4.3% of negative foreign currency headwinds. Adjusted EBITDA reached $31.0M in the quarter, representing favorable growth of 17.9% over last year’s third quarter results,” said Marcel Bourassa, Savaria's President and Chief Executive Officer.

“Our new factory in Querétaro, Mexico, built over the past seven months has started its operations on November 1st, 2022, and will complement our two similar facilities in China. With its proximity to our strong North America dealer network, this new assembly location will be instrumental for us to meet capacity needs for our 2025 revenue goal of $1 billion. "

“Strong bookings in our third quarter underscore our continued optimism for reaching our projections made in February 2022. Our industry continues to offer us incredible potential and I thank my 2,250 employees around the world as well as our dedicated dealer network for their support,” concluded Mr. Bourassa.

Third Quarter Results - Q3 2022 compared to Q3 2021

Revenue

Revenue reached $201.4M, up $20.6M or 11.4%. The growth was mainly due to strong organic growth of 15.7%.

• Accessibility segment (72% of Q3-22 revenue): Revenue was $145.4M, an increase of $9.8M or 7.2%. Organic revenue growth stood at 13.3%. 
• Patient Care segment (21% of Q3-22 revenue): Revenue was $42.8M, an increase of $8.0M or 23.0%. Organic revenue growth stood at 21.2%. 
• Adapted Vehicles segment (7% of Q3-22 revenue): Revenue was $13.2M, an increase of $2.9M or 27.7%. Organic revenue growth stood at 28.8%.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $32.8M and 16.3%, respectively, compared to $28.4M and 15.7% for Q3 2021.

• Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $26.1M and 18.0%, respectively, compared to $24.7M and 18.2% for Q3 2021. 
• Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $5.9M and 13.8%, respectively, compared to $3.1M and 8.8% for Q3 2021. 
• Adapted Vehicles segment: Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $0.8M and 6.0%, respectively, compared to $0.6M and 6.1% for Q3 2021. 

Net Earnings and Adjusted Net Earnings

Net earnings for the quarter were $10.6M or $0.16 per share on a diluted basis, compared to $4.8M or $0.07 per share for the same period in 2021. 

Adjusted net earnings stood at $11.2M, or $0.18 per share, compared to $5.2M or $0.07 per share in Q3 2021.

Nine-Month Results - YTD 2022 compared to YTD 2021

Revenue

The Corporation generated revenue of $577.0M, up $105.5M or 22.4%. The increase is mainly due to organic growth of 12.5% and the acquisition of Handicare in 2021. The growth was partially offset by a negative foreign exchange impact of 2.5%.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $92.5M and 16.0%, respectively, compared to $75.9M and 16.1% in 2021.

Net Earnings and Adjusted Net Earnings

The Corporation’s net earnings stood at $24.1M or $0.37 per share on a diluted basis, compared to $10.6M or $0.17 per share in 2021.  Adjusted net earnings were $26.8M or $0.42 per share on a diluted basis, compared to $16.8M or $0.27 in 2021, up 59.3% and $0.15, respectively.

Liquidity and Capital Resources

Savaria generated $46.9M of cash from operations which were primarily used to invest in capital projects, repay debt, and pay interest and dividends.

As at September 30, 2022, the Corporation had a net debt position of $398.3M.

 
Outlook

Savaria expects to generate revenue of approximately $775M and adjusted EBITDA in the low range of $120M to $130M in fiscal 2022, based on the following assumptions:

• Considering Handicare acquisition date of March 4, 2021, Handicare will be consolidated for a period of 12 months in fiscal 2022 compared to 10 months in fiscal 2021. 
• Organic growth coming from the Accessibility and Patient Care segments is expected to continue due to strong demand.
• The integration and anticipated synergies of Handicare are progressing in-line with management’s plan.  
• Management’s ability to continue to effectively manage supply chain challenges, including higher freight costs and availability, as well as overall inflation costs. 
• 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. We believe that promoting environmentally and socially responsible behaviour across our organization is key to achieving sustainable growth and long-term value creation. 

As we advance an ESG strategy that will positively impact our company and the communities in which we operate, our first step is to identify the ESG risks and opportunities that are critical to our business. To that end, and with the support of external consultants, we are preparing our first materiality assessment to survey and validate the most important ESG issues prioritized by our stakeholders. The results of this assessment will help narrow our focus and our guide decision-making.

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 2,250 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 before head office costs, adjusted EBITDA margin before head office costs, adjusted net earnings, adjusted net earnings per share and net debt 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 sections 3 and 6 of Savaria’s MD&A, which is posted on Savaria’s website at www.savaria.com, and filed with SEDAR at www.sedar.com. Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings 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.

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Results webcast and conference call on November 3, 2022, at 8:30 a.m. (EDT)

Savaria will host a conference call on Thursday, November 3 at 8:30 a.m. Eastern Daylight Time with financial analysts to discuss results of the quarter and fiscal year ended September 30, 2022. Investors and members of the media are invited to participate on a listen-only basis.

Conference call access: 

Canada Toll Free Number:

Toronto:  1 (647) 484-0258
Montreal: 1 (438) 320-0340

North American Toll Free Number: 1 (800) 289-0720
Webcast (EN)

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

For further information:

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Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is provided below. Complete financial statements and the management’s report for Q3 2022 will be available shortly on Savaria’s website and on SEDAR (www.sedar.com).