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Globe and Mail
5 days ago
- Business
- Globe and Mail
TruBridge Announces Second Quarter 2025 Results
TruBridge, Inc. (NASDAQ: TBRG), a healthcare solutions company, today announced financial results for the second quarter and six months ended June 30, 2025. Second Quarter 2025 Highlights* All comparisons are to the quarter ended June 30, 2024, unless otherwise noted Total bookings of $25.6 million compared to $23.3 million Total revenue of $85.7 million compared to $85.6 million Recurring revenue represented 95% of total revenue Financial Health revenue of $54.3 million compared to $54.5 million Financial Health revenue represented 63% of TruBridge's total revenue GAAP net income of $2.6 million compared to a net loss of $4.4 million Non-GAAP net income of $7.9 million compared to $3.0 million Adjusted EBITDA of $13.7 million compared to $13.4 million *As of the third quarter of 2024, TruBridge is now reporting two segments in its financial statements representing the two business units. Financial Health represents the previous Revenue Cycle Management (RCM) segment, and Patient Care represents the previous Electronic Health Record (EHR) segment, including the patient engagement business. Commenting on the results, Chris Fowler, chief executive officer of TruBridge, Inc., stated, 'During the second quarter, we continued to make improvements on many fronts, advancing steadily towards achievement of our long-term objectives. Strong bookings, as well as improved profitability and cash flow, give us confidence in the value we provide to our clients, our position in the market, and the benefits of the work we did to improve the financial health of our business. 'Our north star is client delight, and we are implementing a strategic plan designed to bring our client satisfaction levels back to historical levels and beyond. While we have brought down the top end of our revenue outlook for the full year as a result of client attrition and the reality of signing larger, more complex deals, we are also raising our Adjusted EBITDA range to incorporate the efficiencies realized by our offshoring initiative, our refinement of resource management, and cost optimization. We remain confident that the steps we are taking today to refine and optimize our approach will set us up for success in the quarters and years ahead as we work to deliver exceptional experiences to the communities we serve,' added Fowler. Financial Guidance For the third quarter of 2025, TruBridge expects to generate: Total revenue of $85 million to $87 million Adjusted EBITDA of $14 million to $16 million For the full year 2025, TruBridge expects to generate: Total revenue of $345 million to $350 million; revised from $345 million to $360 million Adjusted EBITDA of $62 million to $67 million; revised from $60 million to $66 million Conference Call TruBridge will hold a conference call and live webcast to discuss second quarter 2025 results on Friday, August 8, 2025, at 7:30 a.m. Central time/8:30 a.m. Eastern time. To access this interactive teleconference, dial (877) 407-0890 and request connection to the TruBridge earnings conference call. A 30-day online replay will be available approximately one hour following the conclusion of the live webcast. To listen to the live webcast or access the replay, visit the Company's investor relations website, About TruBridge TruBridge proudly supports rural and community hospitals and providers in their efforts to stay strong, independent, and deeply rooted in the communities they serve. Backed by more than 45 years of healthcare experience and trusted by over 1,500 clients nationwide, we offer a mix of technology, services, and strategic expertise — including revenue cycle management, electronic health records (EHR) and analytics — all designed singularly for the realities of rural and community healthcare. With a steadfast commitment to keeping care local, TruBridge helps hospitals flourish as the economic heart of their communities, delivering high-quality, personal care close to home. For more information, visit Forward-Looking Statements This press release contains forward-looking statements within the meaning of the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified generally by the use of forward-looking terminology and words such as 'expects,' 'anticipates,' 'estimates,' 'believes,' 'predicts,' 'intends,' 'plans,' 'potential,' 'may,' 'continue,' 'should,' 'will' and words of comparable meaning. Without limiting the generality of the preceding statement, all statements in this press release relating to the Company's future financial and operational results are forward-looking statements. We caution investors that any such forward-looking statements are only predictions and are not guarantees of future performance. Certain risks, uncertainties and other factors may cause actual results to differ materially from those projected in the forward-looking statements. Such factors may include: saturation of our target market and hospital consolidations; unfavorable economic or market conditions that may cause a decline in spending for information technology and services; significant legislative and regulatory uncertainty in the healthcare industry; exposure to liability for failure to comply with regulatory requirements; transition to a subscription based recurring revenue model and modernization of our technology; competition with companies that have greater financial, technical and marketing resources than we have; potential future acquisitions that may be expensive, time consuming, and subject to other inherent risks; our ability to attract and retain qualified personnel in a global workforce; disruption from periodic restructuring of our sales force; slower than anticipated development of the market for Financial Health services; potential inability to properly manage growth in new markets we may enter; potential failure to effectively implement a new enterprise resource planning software solution; exposure to numerous and often conflicting laws, regulations, policies, standards or other requirements through our domestic and international business activities; potential litigation against us and investigations; our use of offshore third-party resources; competitive and litigation risk related to the use of artificial intelligence; potential failure to develop new products or enhance current products that keep pace with market demands; failure of our products to provide accurate and timely information for clinical decision-making; breaches of security and viruses in our systems resulting in customer claims against us and harm to our reputation; failure to maintain customer satisfaction through new product releases free of undetected errors or problems; failure to convince customers to migrate to current or future releases of our products; failure to maintain our margins and service rates; increase in the percentage of total revenues represented by service revenues, which have lower gross margins; exposure to liability in the event we provide inaccurate claims data to payors; exposure to liability claims arising out of the licensing of our software and provision of services; dependence on licenses of rights, products and services from third parties; failure to protect our intellectual property rights; exposure to significant license fees or damages for intellectual property infringement; interruptions in our power supply and/or telecommunications capabilities; potential inability to secure additional financing on favorable terms to meet our future capital needs; our substantial indebtedness, and our ability to incur additional indebtedness in the future; pressures on cash flow to service our outstanding debt; restrictive terms of our credit agreement on our current and future operations; changes in and interpretations of financial accounting matters that govern the measurement of our performance; significant charges to earnings if our goodwill or intangible assets become impaired; fluctuations in quarterly financial performance due to various factors; volatility in our stock price; failure to maintain effective internal control over financial reporting; inherent limitations in our internal control over financial reporting; vulnerability to significant damage from natural disasters; market risks related to interest rate changes; potential material adverse effects due to macroeconomic conditions; we do not anticipate paying dividends on our common stock; actions of activist stockholders against us; and other risk factors described from time to time in our public releases and reports filed with the Securities and Exchange Commission. We also caution investors that the forward-looking information described herein represents our outlook only as of this date, and we undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this press release. TruBridge, Inc. (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 * 2025 2024 * Revenues Financial Health $ 54,284 $ 54,509 $ 110,417 $ 107,948 Patient Care 31,445 31,091 62,520 61,769 Total revenues 85,729 85,600 172,937 169,717 Expenses Costs of revenue (exclusive of amortization and depreciation) Financial Health 29,308 30,269 56,499 59,866 Patient Care 11,962 13,073 24,284 25,237 Total costs of revenue (exclusive of amortization and depreciation) 41,270 43,342 80,783 85,103 Product development 8,113 8,207 16,360 18,894 Sales and marketing 8,041 7,815 13,450 14,408 General and administrative 18,076 18,878 37,540 38,274 Amortization 6,290 9,107 12,414 14,975 Depreciation 312 400 603 800 Total expenses 82,102 87,749 161,150 172,454 Operating income (loss) 3,627 (2,149 ) 11,787 (2,737 ) Other income (expense): Interest expense (3,065 ) (4,242 ) (6,447 ) (8,315 ) Other income 136 91 280 1,514 Total other expense (2,929 ) (4,151 ) (6,167 ) (6,801 ) Income (loss) before taxes 698 (6,300 ) 5,620 (9,538 ) Provision for (benefit from) income taxes (1,882 ) (1,912 ) 2,581 (3,296 ) Net income (loss) $ 2,580 $ (4,388 ) $ 3,039 $ (6,242 ) Net income (loss) per common share—basic $ 0.17 $ (0.29 ) $ 0.20 $ 0.42 Net income (loss) per common share—diluted $ 0.17 $ (0.29 ) $ 0.20 $ 0.42 Weighted average shares outstanding used in per common share computations: Basic 14,522 14,313 14,446 14,273 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. TruBridge, Inc. Condensed Consolidated Balance Sheets (In '000s, except per share data) June 30, 2025 (Unaudited) December 31, 2024 Assets Current assets Cash and cash equivalents $ 12,279 $ 12,324 Accounts receivable, net of allowance for expected credit losses of $5,208 and $5,861 56,432 53,753 Current portion of financing receivables, net of allowance for expected credit losses of $560 and $417 2,727 4,663 Inventories 444 767 Prepaid income taxes 3,459 2,886 Prepaid expenses and other current assets 14,473 15,275 Assets held for sale 445 606 Total current assets 90,259 90,274 Property & equipment, net 2,559 2,294 Software development costs, net 43,317 41,474 Operating lease right-of-use assets 2,617 3,092 Financing receivables, less current portion, less allowance for expected credit losses of $258 and $21 22 232 Other assets, less current portion 8,196 7,786 Intangible assets, net 70,608 76,707 Goodwill 172,573 172,573 Total assets $ 390,151 $ 394,432 Liabilities & Stockholders' Equity Current liabilities Accounts payable $ 19,672 $ 15,040 Current portion of long-term debt 2,980 2,980 Deferred revenue 9,368 10,653 Accrued vacation 5,235 4,770 Income taxes payable 623 3,538 Other accrued liabilities 12,302 15,994 Total current liabilities 50,180 52,975 Long-term debt, less current portion 163,108 168,598 Operating lease liabilities, less current portion 1,827 2,293 Deferred tax liabilities 1,863 1,871 Total liabilities 216,978 225,737 Stockholders' Equity Common stock, $0.001 par value; 30,000 shares authorized; 15,700 and 15,522 shares issued 15 15 Additional paid-in capital 204,376 201,066 Retained deficit (11,913 ) (14,952 ) Accumulated other comprehensive income 27 45 Treasury stock, 685 and 619 shares (19,332 ) (17,479 ) Total stockholders' equity 173,173 168,695 Total liabilities and stockholders' equity $ 390,151 $ 394,432 TruBridge, Inc. Condensed Consolidated Statements of Cash Flows (In '000s) (Unaudited) Six Months Ended June 30, 2025 2024 * Operating activities: Net income (loss) $ 3,039 $ (6,242 ) Adjustments to net income (loss): Provision for credit losses 1,609 358 Deferred taxes (7 ) (5,224 ) Stock-based compensation 3,310 2,300 Depreciation 603 800 Gain on sale of business (53 ) (1,250 ) Amortization of acquisition-related intangibles 6,098 6,253 Amortization of software development costs 6,316 8,722 Amortization of deferred finance costs 259 213 Non-cash operating lease costs 537 897 Gain on disposal of property and equipment (120 ) - Changes in operating assets and liabilities: Accounts receivable (3,967 ) (1,085 ) Financing receivables 1,825 506 Inventories 323 (318 ) Prepaid expenses and other assets (1,827 ) 1,502 Accounts payable 5,082 5,750 Deferred revenue (1,284 ) 1,769 Operating lease liabilities (548 ) (583 ) Other liabilities (3,191 ) (2,375 ) Income taxes, net (3,487 ) (263 ) Net cash provided by operating activities 14,517 11,730 Investing activities: Purchase of business, net of cash acquired - (664 ) Sale of business, net of cash and cash equivalent sold 2,102 21,410 Investment in software development (8,159 ) (9,324 ) Purchases of property and equipment (902 ) (306 ) Net cash (used in) provided by investing activities (6,959 ) 11,116 Financing activities: Payments of long-term debt principal (1,750 ) (5,750 ) Proceeds from revolving line of credit 15,368 21,072 Payments of revolving line of credit (19,368 ) (33,379 ) Debt issuance cost - (529 ) Treasury stock purchases (1,853 ) (358 ) Net cash used in financing activities (7,603 ) (18,944 ) (Decrease) Increase in cash and cash equivalents (45 ) 3,902 Change in cash and cash equivalents included in assets sold - (41 ) Cash and cash equivalents, beginning of period 12,324 3,848 Cash and cash equivalents, end of period $ 12,279 $ 7,709 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the six months ended June 30, 2024 by $1.7 million. These revisions had no cash flow consequences. TruBridge, Inc. Consolidated Bookings (In '000s) (Unaudited) (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2024 2025 2024 Financial Health (1) $ 13,705 $ 13,458 $ 26,485 $ 27,849 Patient Care (2) 11,908 9,832 21,109 19,010 Total Bookings $ 25,613 $ 23,290 $ 47,594 $ 46,859 (1) Generally calculated as the annual contract value (2) Generally calculated as the total contract value for system sales and SaaS, and annual contract value for maintenance and support Annual Contract Value Effective January 2025, the Company will be providing bookings on an Annual Contract Value ('ACV') basis in addition to the reported bookings amounts, which has historically represented a mix of ACV and Total Contract Value ('TCV') for Patient Care. This new methodology of reporting total bookings at ACV represents the newly contracted revenue that is expected to be recognized over a twelve-month period. Over the course of 2025, the Company will be providing total bookings under both methodologies for year over year comparability before fully transitioning to ACV in 2026. The below table represents bookings at the ACV methodology for the three and six months ended June 30, 2025: Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2025 Financial Health $ 13,705 $ 26,485 Patient Care 5,921 10,480 Total Bookings (ACV) $ 19,626 $ 36,965 TruBridge, Inc. Bookings Composition (In '000s, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2024 2025 2024 Financial Health Net new (1) $ 5,067 $ 6,453 $ 11,529 $ 15,446 Cross-sell (1) 8,638 7,004 14,956 12,402 Patient Care Non-subscription sales (2) 2,730 4,084 5,332 7,534 Subscription revenue (3) 9,178 5,749 15,777 11,477 Total Bookings $ 25,613 $ 23,290 $ 47,594 $ 46,859 (1) 'Net new' represents bookings from outside the Company's core client base, and 'Cross-sell' represents bookings from existing customers. In each case, such bookings are generally comprised of recurring revenues to be recognized ratably over a one-year period and an average timeframe for bookings-to-revenue conversion of four to six months following contract execution. (2) Represents nonrecurring revenues that generally exhibit a timeframe for bookings-to-revenue conversion of five to six months following contract execution. (3) Represents recurring revenues to be recognized on a monthly basis over a weighted-average contract period of five years, with a start date in the next 12 months and an average timeframe for commencement of bookings-to-revenue conversion of five to six months following contract execution. Annual Contract Value Effective January 2025, the Company will be providing bookings on an Annual Contract Value ('ACV') basis in addition to the reported bookings amounts, which has historically represented a mix of ACV and Total Contract Value ('TCV') for Patient Care. This new methodology of reporting total bookings at ACV represents the newly contracted revenue that is expected to be recognized over a twelve-month period. Over the course of 2025, the Company will be providing total bookings under both methodologies for year over year comparability before fully transitioning to ACV in 2026. The below table represents bookings at the ACV methodology for the three and six months ended June 30, 2025: Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2025 Financial Health Net new (1) $ 5,067 $ 11,529 Cross-sell (1) 8,638 14,956 Patient Care Non-subscription sales (2) 2,730 5,332 Subscription revenue (3) 3,191 5,148 Total Bookings (ACV) $ 19,626 $ 36,965 TruBridge, Inc. Adjusted EBITDA - by Segment (In '000s) (Unaudited) (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In '000s 2025 2024 * 2025 2024 * Financial Health $ 7,092 $ 8,209 $ 18,373 $ 15,006 Patient Care 6,651 $ 5,235 13,601 8,762 Total Adjusted EBITDA $ 13,743 $ 13,444 $ 31,974 $ 23,768 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. TruBridge, Inc. Reconciliation of Non-GAAP Financial Measures (In '000s) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, Adjusted EBITDA: 2025 2024 * 2025 2024 * Total Adjusted EBITDA $ 13,743 $ 13,444 $ 31,974 $ 23,768 Adjusted EBITDA Margin 16.0 % 15.7 % 18.5 % 14.0 % Depreciation expense 312 400 603 800 Amortization of software development costs 3,245 5,980 6,316 8,722 Amortization of acquisition-related intangibles 3,046 3,126 6,098 6,253 Stock-based compensation 2,097 1,501 3,310 2,300 Severance and other nonrecurring charges 1,416 4,586 3,860 8,430 Interest expense and other income 2,929 4,151 6,340 8,051 Gain on disposal of property and equipment - - (120 ) - Gain on sale of AHT - - (53 ) (1,250 ) Income (loss) before taxes, as reported 698 (6,300 ) 5,620 (9,538 ) Provision for (benefit from) income taxes (1,882 ) (1,912 ) 2,581 (3,296 ) Net income (loss), as reported $ 2,580 $ (4,388 ) $ 3,039 $ (6,242 ) Net income (loss) margin 3.0 % (5.1 %) 1.8 % (3.7 %) *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. TruBridge, Inc. (In '000s, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, Non-GAAP Net Income and Non-GAAP EPS: 2025 2024 * 2025 2024 * Net income (loss), as reported $ 2,580 $ (4,388 ) $ 3,039 $ (6,242 ) Pre-tax adjustments for Non-GAAP EPS: Amortization of acquisition-related intangible assets 3,046 3,126 6,098 6,253 Stock-based compensation 2,097 1,501 3,310 2,300 Severance and other nonrecurring charges 1,416 4,586 3,860 8,430 Non-cash interest expense 130 107 260 213 Gain on sale of AHT - - (53 ) (1,250 ) After-tax adjustments for Non-GAAP EPS: Tax-effect of pre-tax adjustments, at 21% (1,405 ) (1,957 ) (2,830 ) (3,349 ) Tax shortfall (windfall) from stock-based compensation - 4 (670 ) 113 Non-GAAP net income $ 7,864 $ 2,979 $ 13,014 $ 6,468 Weighted average shares outstanding, diluted 14,522 14,313 14,446 14,273 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. TruBridge, Inc. Revenue Composition (In '000s) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 * 2025 2024 * Recurring revenues Financial Health $ 53,322 $ 52,798 $ 108,586 $ 104,914 Patient Care 28,115 27,135 55,562 55,678 Total recurring revenues 81,437 79,933 164,148 160,592 Non-recurring revenues Financial Health 962 1,711 1,831 3,034 Patient Care 3,330 3,956 6,958 6,091 Total non-recurring revenues 4,292 5,667 8,789 9,125 Total revenues $ 85,729 $ 85,600 $ 172,937 $ 169,717 *As described in the 2024 Annual Report, certain line items have been revised to correct an error related to the reversal of revenue from customers that was recognized improperly during 2023. These revisions increased revenue for the three and six months ended June 30, 2024 by $0.9 million and $1.7 million, respectively. These revisions had no cash flow consequences. Explanation of Non-GAAP Financial Measures We report our financial results in accordance with accounting principles generally accepted in the United States of America, or 'GAAP.' However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures that are prepared in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management uses these non-GAAP financial measures in order to evaluate the operating performance of the Company and compare it against past periods, make operating decisions, and serve as a basis for strategic planning. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts. In addition, management understands that some investors and financial analysts find these non-GAAP financial measures helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. We do not provide a reconciliation of the non-GAAP guidance measure Adjusted EBITDA for the second quarter of 2025 or the fiscal year 2025 to net income for such periods, the most comparable GAAP financial measure, due to the inherent difficulty of forecasting certain types of expenses and gains, without unreasonable effort, which affect net income but not Adjusted EBITDA. As such, to supplement the GAAP information provided, we present in this press release and during the live webcast discussing our financial results the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA Margin, Non-GAAP net income, and Non-GAAP earnings per share ('EPS'). We calculate each of these non-GAAP financial measures as follows: Adjusted EBITDA – Adjusted EBITDA consists of GAAP net income as reported and adjusts for (i) depreciation expense; (ii) amortization of software development costs; (iii) amortization of acquisition-related intangibles; (iv) stock-based compensation; (v) severance and other nonrecurring charges; (vi) interest expense and other income; (vii) gain on disposal of property and equipment; (viii) gain on sale of AHT; and (ix) the provision for (benefit from) income taxes. Adjusted EBITDA Margin – Adjusted EBITDA Margin is calculated as Adjusted EBITDA, as defined above, divided by total revenue. Non-GAAP net income – Non-GAAP net income consists of GAAP net income as reported and adjusts for (i) amortization of acquisition-related intangible assets; (ii) stock-based compensation; (iii) severance and other nonrecurring charges; (iv) non-cash interest expense; (v) gain on sale of AHT; and (vi) the total tax effect of items (i) through (v). Non-GAAP EPS – Non-GAAP EPS consists of Non-GAAP net income, as defined above, divided by weighted average shares outstanding (diluted) in the applicable period. Certain of the items excluded or adjusted to arrive at these non-GAAP financial measures are described below: Amortization of acquisition-related intangibles – Acquisition-related amortization expense is a non-cash expense arising primarily from the acquisition of intangible assets in connection with acquisitions or investments. We exclude acquisition-related amortization expense from non-GAAP financial measures because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. Investors should note that the use of these intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation, and the related amortization expense will recur in future periods. Stock-based compensation – Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards. We exclude stock-based compensation expense from non-GAAP financial measures because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of the timing and valuation of grants of new stock-based awards, including grants in connection with acquisitions. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods, and such expense will recur in future periods. Severance and other nonrecurring charges – Non-recurring charges relate to certain severance and other charges incurred in connection with activities that are considered non-recurring. We exclude non-recurring expenses (primarily related to costs associated with our recent business transformation initiative and transaction-related costs) from non-GAAP financial measures because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods. Non-cash Interest expense – Non-cash interest expense includes amortization of deferred debt issuance costs. We exclude non-cash interest expense from non-GAAP financial measures because we believe these non-cash amounts relate to specific transactions and, as such, may not directly correlate to the underlying performance of our business operations. Interest expense and other income – Interest expense and other income represents (i) interest incurred on our term loan and revolving credit facility and (ii) non-cash interest expense. We exclude interest expense from non-GAAP financial measures because we believe these amounts relate to specific transactions and, as such, may not directly correlate to the underlying performance of our business operations. Gain on disposal of property and equipment – Gain on disposal of property and equipment represents the excess of proceeds received over the book value of assets disposed of during the period. We exclude gain on disposal of property and equipment from non-GAAP financial measures because we believe (i) the amount of such gain or loss in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such gain or loss can vary significantly between periods. Gain on sale of AHT – Gain on sale of AHT represents the excess of proceeds received over the net assets sold from our sale of AHT, our previously wholly-owned post-acute business, in January 2024. We exclude gain on sale of AHT from non-GAAP financial measures because we believe the amount relates to a specific transaction and, as such, may not directly correlate to the underlying performance of our business operations. Tax shortfall (windfall) from stock-based compensation – ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, became effective for the Company during the third quarter of 2017 and changes the treatment of tax shortfall and excess tax benefits arising from stock based compensation arrangements. Prior to ASU 2016-09, these amounts were recorded as an increase (for excess benefits) or decrease (for shortfalls) to additional paid-in capital. With the adoption of ASU 2016-09, these amounts are now captured in the period's income tax expense. We exclude this component of income tax expense from non-GAAP financial measures because we believe (i) the amount of such expenses or benefits in any specific period may not directly correlate to the underlying performance of our business operations; and (ii) such expenses or benefits can vary significantly between periods as a result of the valuation of grants of new stock-based awards, the timing of vesting of awards, and periodic movements in the fair value of our common stock. Management considers these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance. In addition, management may use Adjusted EBITDA, Non-GAAP net income and/or Non-GAAP EPS to measure the achievement of performance objectives under the Company's stock and cash incentive programs. Note, however, that these non-GAAP financial measures are performance measures only, and they do not provide any measure of cash flow or liquidity. Non-GAAP financial measures are not alternatives for measures of financial performance prepared in accordance with GAAP and may be different from similarly titled non-GAAP measures presented by other companies, limiting their usefulness as comparative measures. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Additionally, there is no certainty that we will not incur expenses in the future that are similar to those excluded in the calculations of the non-GAAP financial measures presented in this press release. Investors and potential investors are encouraged to review the 'Unaudited Reconciliation of Non-GAAP Financial Measures' above.
Yahoo
6 days ago
- Business
- Yahoo
Record Quarter as Savaria Delivers $16.3M of Net Earnings and Reaches 20.6% Adjusted EBITDA Margin* in Q2 2025
LAVAL, Quebec, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Savaria Corporation ('Savaria') (TSX: SIS), one of the global leaders in the accessibility industry, is pleased to announce its results for the second quarter of 2025. Highlights – Q2 2025 compared to Q2 2024 Revenue was $226.7M, up $5.4M or 2.4%, mainly due to a positive foreign exchange impact of 2.6% partially offset by an organic contraction of 0.7%. The revenue benefited from the contribution of Western Elevator acquired this quarter. Accessibility experienced growth of 1.9%, including growth of 3.3% coming from North America and partially offset by a contraction of 0.8% in Europe. Patient Care achieved revenue growth of 4.4%. Gross profit was $88.5M, up $5.5M or 6.6%, representing 39.0% of revenue, an increase of 150 bps compared to 37.5% in Q2 2024. Operating income was $26.7M, up $4.1M or 18.2%, representing 11.8% of revenue compared to 10.2% in Q2 2024. Adjusted EBITDA* was $46.7M, up $4.8M or 11.4%, representing $0.65 per share, up $0.06, when compared to Q2 2024. Adjusted EBITDA margin stood at 20.6% up 160 bps compared to 19.0% in Q2 2024. Accessibility adjusted EBITDA margin reached 21.9%. Patient Care adjusted EBITDA margin stood at 20.9%. Net earnings were $16.3M or $0.23 per share on a diluted basis, compared to $11.4M or $0.16 per share in Q2 2024. The ratio of net debt to adjusted EBITDA* stood at 1.34 in comparison to 1.63 as at December 31, 2024. Available funds* of $275.5M, as of June 30, 2025, to support working capital, investments and growth opportunities. Q2 YTD in thousands of dollars, except percentages and per-share amounts 2025 2024 Change 2025 2024 Change Revenue $ 226,746 $ 221,344 2.4 % $ 446,978 $ 430,788 3.8 % Gross profit $ 88,490 $ 82,974 6.6 % $ 171,741 $ 158,368 8.4 % % of revenue 39.0 % 37.5 % 150 bps 38.4 % 36.8 % 160 bps Operating income $ 26,712 $ 22,604 18.2 % $ 47,950 $ 40,325 18.9 % Net earnings1 $ 16,316 $ 11,383 43.3 % $ 28,795 $ 23,012 25.1 % Diluted net earnings per share 1 $ 0.23 $ 0.16 43.8 % $ 0.40 $ 0.32 25.0 % Adjusted net earnings*1 $ 20,829 $ 16,014 30.1 % $ 37,345 $ 30,347 23.1 % Adjusted net earnings per share*1 $ 0.29 $ 0.23 26.1 % $ 0.52 $ 0.43 20.9 % Adjusted EBITDA* $ 46,738 $ 41,945 11.4 % $ 87,385 $ 76,626 14.0 % Adjusted EBITDA per share* $ 0.65 $ 0.59 10.2 % $ 1.22 $ 1.08 13.0 % % of revenue 20.6 % 19.0 % 160 bps 19.6 % 17.8 % 180 bps *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.1 The amounts for 2024 reflect adjustments made for Q2 2024 and YTD, as detailed and explained in Section 7 of the MD& from the Executive Chairman and from the President & CEO 'As a result of our collective, global efforts, we achieved an adjusted EBITDA margin of 20.6%, meeting our Savaria One goal. We quickly pivoted our home elevator manufacturing for US distribution with a new production line in Greenville, South Carolina that now handles many of our residential elevator orders for American dealers. With available funds of over $275 million, we have the flexibility to invest in additional marketing for new products such as the Luma lift and Matot dumbwaiters, as well as seek out strategic acquisitions, giving us confidence for the remainder of the year and beyond,' said Marcel Bourassa, Executive Chairman. 'Our focus on transformation over the past 18 months uncovered many efficiencies from procurement, to pricing, to operations. The gross margin in the second quarter was 39% – our highest ever. Meeting our Savaria One goal for adjusted EBITDA margin in the second quarter is a testament to our employees' commitment to succeed. The senior leadership team has now initiated planning sessions for the second stage of Savaria One that will outline our strategy for the next three years. We are focused on growth including marketing of the Luma through-floor lift and additional Savaria products for European distribution. With a ratio of net debt to adjusted EBITDA* now at 1.34, we have a comfortable position for investments in growth and the management team is energized about the future,' said Sebastien Bourassa, President and CEO. Second Quarter Results - Q2 2025 compared to Q2 2024 REVENUE Revenue reached $226.7M, up $5.4M or 2.4%. The increase was mainly due to a positive foreign exchange impact of 2.6% combined with the revenue contribution from the acquisition of Western Elevator, partially offset by an organic contraction of 0.7%. Accessibility segment (78% of Q2-25 revenue): Revenue was $176.7M, an increase of $3.3M or 1.9%. Patient Care segment (22% of Q2-25 revenue): Revenue was $50.1M, an increase of $2.1M or 4.4%. OPERATING INCOME Operating income was $26.7M, up $4.1M or 18.2%, representing an operating margin of 11.8% compared to 10.2% in Q2 2024. The increase was mainly attributable to the additional revenue contribution and higher gross margins while partially offset by increased selling and administrative expenses and other expenses. ADJUSTED EBITDA Adjusted EBITDA and adjusted EBITDA margin* was $46.7M and 20.6%, respectively, compared to $41.9M and 19.0% for Q2 2024. Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin was $38.8M and 21.9%, respectively, compared to $36.2M and 20.9% for Q2 2024. Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $10.5M and 20.9%, respectively, compared to $8.2M and 17.0% for Q2 2024. *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A. Six-Month Results - YTD 2025 compared to YTD 2024 REVENUE The Corporation generated revenue of $447.0M, up $16.2M or 3.8%. The increase is mainly due to a positive foreign exchange impact of 3.0%, combined with the impact of the acquisition of Western Elevator and Matot. The growth was partially offset by the divestitures of Van-Action and Freedom Motors. OPERATING INCOME Operating income was $48.0M, up $7.6M or 18.9%, representing an operating margin of 10.7% compared to 9.4% in 2024. ADJUSTED EBITDA Adjusted EBITDA and adjusted EBITDA margin stood at $87.4M and 19.6%, respectively, compared to $76.6M and 17.8% in 2024. LIQUIDITY AND CAPITAL RESOURCES Savaria generated $61.5M of cash from operations which was primarily used to invest in capital projects, a business acquisition, repay debt and pay interest and dividends. As at June 30, 2025, the Corporation had a net debt* position of $231.2M and a ratio of net debt to adjusted EBITDA of 1.34 compared to 1.63 as of December 31, 2024. Outlook Savaria's fiscal 2025 forecast projects revenue of approximately $925M, with an adjusted EBITDA margin of approximately 20%. This revenue forecast is driven by volume and price increases, new product launches, and favorable foreign exchange effects across the Accessibility and Patient Care segments. Despite geopolitical uncertainties, the completion of Savaria One positions us well to sustain profitability. Structural improvements have enhanced production capacity, increased operational efficiencies, and generated meaningful cost savings through streamlined procurement. As one of the global leaders in the accessibility industry with extensive operations in Canada and the United States, Savaria is assessing its supply chain and evaluating and implementing strategies to optimize its North American manufacturing footprint. These efforts aim to maintain competitiveness and ensure continued service for our valued dealer partners. The above-mentioned outlook is a 'forward-looking statement' within the meaning of the securities laws of Canada and subject to the Corporation's disclosure statement. 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. By delivering products and solutions that promote accessibility, health, and wellness, improving operational efficiencies and resource usage, and engaging our employees and stakeholders, we'll create a stronger, more resilient business that will continue to be an industry leader while delivering positive social change. *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A. We recognize this work requires long-term vision, planning, and collaboration, yet also must be grounded in clear actions and an ongoing commitment to transparency. To that end, on April 30, 2025 Savaria published its ESG report for the fiscal year ended December 31, 2024. Through this report, Savaria discloses its strategy and initiatives on ESG matters that are important to its stakeholders, and where it sees an opportunity to have a positive and meaningful influence. The 2024 ESG report can be found under the investor relations section of our website at Savaria Corporation ( 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 elevators for home and commercial use, stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts and dumbwaiters. In addition, Savaria manufactures and markets a comprehensive selection of pressure management products, medical beds, as well as an extensive line of medical equipment and solutions for the safe movement of patients, such as transfer, lifting and repositioning aids. 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) and Australia. Savaria employs approximately 2,500 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 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, 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 to 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 MD&A, which is posted on Savaria's website at and filed with SEDAR+ at 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. Results webcast and conference call on August 7, 2025, at 8:30 a.m. (EDT) Savaria will host a conference call on Thursday, August 7th at 8:30 a.m. Eastern Daylight Time with financial analysts to discuss results of the period ended June 30, 2025. Investors and members of the media are invited to participate on a listen-only basis. Conference call access: To register: (en): Link to the replay of the webcast will be available on the Corporation's website at For further information: Sébastien BourassaPresident and Chief Executive Officersb@ Stephen Reitknecht, CPAChief Financial Officersreitknecht@ Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is provided below. Complete financial statements and the management's report for Q2 2025 will be available shortly on Savaria's website and on SEDAR+ Reconciliation of adjusted net earnings*1 and adjusted EBITDA* with net earnings1 Q2 YTD in thousands of dollars, except per-share amounts 2025 2024 2025 2024 Net earnings1 $ 16,316 $ 11,383 $ 28,795 $ 23,012 Strategic initiatives expenses 4,607 5,347 9,277 10,646 Other expenses (income) 1,391 764 2,164 (427 ) Income tax related to strategic initiatives and other expenses (1,485 ) (1,480 ) (2,891 ) (2,884 ) Adjusted net earnings*1 $ 20,829 $ 16,014 $ 37,345 $ 30,347 Adjusted net earnings per share*1 $ 0.29 $ 0.23 $ 0.52 $ 0.43 Income tax related to strategic initiatives and other expenses 1,485 1,480 2,891 2,884 Income tax expense 5,742 4,407 10,979 8,158 Depreciation of fixed assets 2,570 2,234 5,305 4,371 Depreciation of right-of-use assets 3,339 2,737 6,501 5,418 Amortization of intangible assets 7,472 7,576 14,813 15,020 Net finance costs 4,654 6,814 8,176 9,155 Stock-based compensation 647 683 1,375 1,273 Adjusted EBITDA* $ 46,738 $ 41,945 $ 87,385 $ 76,626 Adjusted EBITDA per share* $ 0.65 $ 0.59 $ 1.22 $ 1.08 Diluted weighted average number of shares 71,858,056 71,405,637 71,869,297 71,309,308 *Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.1 The amounts for 2024 reflect adjustments made for Q2 and YTD 2024, as detailed and explained in Section 7 of the MD& in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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