Andlauer Healthcare Group Reports 2025 Second Quarter Results

TORONTO, July 31, 2025 /CNW/ – Andlauer Healthcare Group Inc. (TSX: AND) (“AHG” or the “Company”) today reported its financial results for the three and six-month periods ended June 30, 2025 (“Q2 2025” and “YTD 2025”, respectively).  

Q2 2025 Summary

• Revenue totaled $156.6 million, compared to $161.4 million for the three-month period ended June 30, 2024 (“Q2 2024”);
• Operating income was $18.9 million, compared to $22.2 million in Q2 2024;
• Net income was $13.5 million, compared to $15.7 million in Q2 2024;
• EBITDA¹ totaled $38.1 million, compared to $40.1 million in Q2 2024;
• EBITDA Margin¹ was 24.3%, compared to 24.8% in Q2 2024
• On April 23, 2025, AHG entered into a definitive arrangement agreement (the “Arrangement Agreement”) with affiliates of UPS (NYSE: UPS) (collectively, “UPS”) under which UPS has agreed to acquire AHG via an all-cash transaction that values AHG at an equity value of approximately $2.2 billion (the “Transaction”). Under the terms of the Arrangement Agreement, shareholders of AHG will be entitled to receive C$55.00 per share in cash in connection with the closing of the Transaction;
• On June 24, 2025, AHG shareholders voted overwhelmingly in favour of a resolution to approve the Transaction; and on June 26, 2025, the Ontario Superior Court of Justice (Commercial List) issued a final order approving the Transaction;
• The Company expects the Transaction to be completed in the second half of this year, subject to receipt of approval under the Competition Act (Canada), which process remains ongoing, and the satisfaction or waiver of the other customary closing conditions. All other regulatory clearances and approvals required to consummate the Transaction have been obtained.

“Our results for the quarter reflect continued organic growth in our Canadian specialized transportation network and logistics and distribution product line, offset by continued challenges in our US-based truckload businesses and one-time costs associated with the Transaction. Our EBITDA margin for quarter remained within our target range of 24% to 26%,” said Michael Andlauer, Chief Executive Officer of AHG.

Q2 2025 Financial Results

Consolidated revenue for Q2 2025 decreased by 3.0% to $156.6 million, compared with $161.4 million in Q2 2024. The decrease was primarily attributable to a decline in fuel surcharge revenue, continued challenges in the Company’s US-based truckload businesses (Boyle Transportation and Skelton USA) and the deconsolidation of Nova Pack, as discussed below. 

Revenue for the healthcare logistics segment totaled $41.6 million, a decrease of 6.0% compared with $44.2 million in Q2 2024. The decline was attributable to the deconsolidation of AHG’s packaging subsidiary, Nova Pack, which resulted in a 85.6% decline in packaging revenue. Effective March 1, 2025, AHG entered into a joint venture (the “Joint Venture”) to combine its packaging subsidiary, Nova Pack Ltd. (“Nova Pack”), with NowPac Inc. (“NowPac”), a privately-owned Toronto-based company specializing in contract packaging services for the healthcare sector. The decline in packaging revenue was partially offset by a 3.6% increase in logistics and distribution revenue compared to Q2 2024, primarily reflecting organic growth from Logistics Support Unit (LSU) Inc. (“LSU”) clients.

Revenue in the specialized transportation segment totaled $115.0 million, a decrease of 1.9% compared with $117.2 million in Q2 2024. Ground transportation revenue for Q2 2025 was $103.2 million, a decrease of 1.9% compared with Q2 2024, reflecting reduced revenue from fuel surcharges passed on to customers as a component of the Company’s pricing and a decline in revenue for AHG’s US-based truckload businesses, partially offset by organic growth in the Company’s Canadian ground transportation network. Average fuel prices were approximately 12.4% lower in Q2 2025 compared with Q2 2024. Ground transportation revenue, excluding fuel, in the Company’s Canadian network increased by approximately 6.3% in Q2 2025 compared to Q2 2024. Ground transportation revenue, excluding fuel, in the Company’s US-based truckload businesses decreased by 15.8% in Q2 2025 compared to Q2 2024. Air freight forwarding revenue totaled $8.2 million for Q2 2025, an increase of 3.6% compared to Q2 2024, and dedicated and last mile delivery revenue totaled $19.1 million, an increase of 4.0% compared to Q2 2024, reflecting continued organic growth in both product lines.

Cost of transportation and services was $78.2 million, or 50.0% of revenue, compared with $80.9 million, or 50.1% of revenue, for Q2 2024. The decline was primarily attributable to lower fuel costs in Q2 2025 and a lower volume of truckloads in  the Company’s US-based truckload businesses, partially offset by costs attributable to organic growth in the Canadian network.

Direct operating expenses were $24.6 million, or 15.7% of revenue, compared with $26.6 million, or 16.5% of revenue, for Q2 2024. The decline was primarily attributable to the deconsolidation of Nova Pack, as discussed above, partially offset by organic growth in AHG’s logistics and distribution product line.

Selling, General and Administrative Expenses were $16.9 million, or 10.8% of revenue, compared to $14.2 million, or 8.8% of revenue, for Q2 2024. The increase was attributable to increased legal and professional fees in connection with the Transaction.  

Operating income was $18.9 million, a decrease of 14.9% compared with $22.2 million for Q2 2024. The decline was primarily attributable to increased legal and professional fees in connection with the Transaction, and the deconsolidation of Nova Pack. Organic growth in AHG’s Canadian specialized transportation network continues to be largely offset by lower contributions from the Company’s US-based truckload businesses.

Effective March 1, 2025, Accuristix Inc., a subsidiary of AHG, entered into the Joint Venture to combine its packaging subsidiary, Nova Pack, with NowPac.  As partial consideration for Nova Pack acquiring 100% of the issued and outstanding shares of NowPac, Nova Pack issued shares to the shareholder of NowPac (the “JV Partner”), resulting in the JV Partner and Accuristix each owning 50% of the issued and outstanding shares of the Joint Venture. The remainder of the consideration was satisfied with cash of $5.5 million, which was funded from $6.1 million of cash and cash equivalents that remained in Nova Pack prior to deconsolidation. Accuristix recorded its investment in the Joint Venture at a fair value of approximately $15.2 million, and recognized a gain of $5.1 million on the deconsolidation of its investment in Nova Pack upon entering into the Joint Venture. The transaction date fair value and related gain on deconsolidation were measured on a preliminary basis as at March 1, 2025, and were finalized during Q2 2025 resulting in an increase of $0.1 million in the gain on deconsolidation and a similar increase in the fair value of AHG’s investment in the Joint Venture.

Net income for Q2 2025 was $13.5 million, or $0.34 per share (diluted), compared with $15.7 million, or $0.38 per share (diluted), in Q2 2024. The decrease is primarily attributable to increased legal and professional fees in connection with the Transaction. Segment net income for AHG’s healthcare logistics operating segment primarily reflects increased revenue from the Company’s LSU clients and AHG’s share of profit from the Joint Venture, partially offset by the decrease in net income attributable to deconsolidating Nova Pack. Lower segment net income before eliminations for AHG’s specialized transportation segment was primarily attributable to lower contributions from Boyle Transportation and Skelton USA, largely offset by organic growth in the Company’s Canadian specialized transportation business.

Total comprehensive income for Q2 2025 was $1.4 million, compared to $18.1 million for Q2 2024. Total comprehensive income differs from net income due to the acquisition of foreign operations (Boyle Transportation and Skelton USA), which resulted in a negative foreign currency translation adjustment of $12.0 million in Q2 2025, compared to a positive foreign currency translation adjustment of $2.3 million in Q2 2024.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”)¹ for Q2 2025 totaled $38.1 million, a decrease of 4.9% from $40.1 million in Q2 2024. EBITDA¹, excluding the gain on deconsolidation of Nova Pack, was $38.0 million in Q2 2025. The decrease was due to the factors discussed above and primarily reflects increased legal and professional fees in connection with the Transaction, and organic growth in the Company’s Canadian specialized transportation network and healthcare logistics segment, largely offset by lower contributions from AHG’s US-based truckload businesses. EBITDA¹ attributable to Boyle Transportation and Skelton USA was approximately $0.4 million lower in Q2 2025 compared to Q2 2024.

EBITDA Margin¹, excluding the gain on deconsolidation of Nova Pack, for Q2 2025 was 24.3% compared with 24.8% for Q2 2024. The decrease was primarily attributable to increased legal and professional fees in connection with the Transaction. EBITDA Margins¹ in AHG’s US-based truckload business, which have steadily declined since Fiscal 2022, remained relatively unchanged in Q2 2025 compared with Q2 2024.

Dividend

The Company paid a dividend (encompassing the period from April 1, 2025 to June 30, 2025) in the amount of $0.12 per subordinate voting share and multiple voting share on July 15, 2025.

Subject to financial results, capital requirements, available cash flow, corporate law requirements and any other factors that AHG’s Board of Directors may consider relevant, it is the Company’s intention to declare a quarterly dividend of $0.12 per subordinate voting share and multiple voting share on an ongoing basis until the closing of the Transaction.  

On July 2, 2024, the Company commenced its second normal course issuer bid (“2024 NCIB”) for up to a maximum of 1,770,429 of its subordinate voting shares, or approximately 10% of its public float as of June 26, 2024, over the following 12-month period. As of June 30, 2025, a total of 374,034 subordinate voting shares, including 34,800 subordinate voting shares during Q2 2025, had been purchased and cancelled pursuant to the 2024 NCIB.

As a result of the announcement of the Transaction, the Company’s previously announced automatic share purchase plan established in connection with 2024 NCIB has terminated in accordance with its terms. The Transaction restricted any further purchases under the Company’s current normal course issuer bid, which formally terminated on July 1, 2025.

As at June 30, 2025, there were 18,342,254 subordinate voting shares and 20,807,955 multiple voting shares issued and outstanding.

AHG’s unaudited interim consolidated financial statements and related Management’s Discussion & Analysis (“MD&A”) for Q2 2025 are available on the Company’s website at www.andlauerhealthcare.com and under AHG’s profile on SEDAR+ at www.sedarplus.ca.

AHG is a leading and growing supply chain management company offering a robust platform of customized third-party logistics (“3PL”) and specialized transportation solutions for the healthcare sector. The Company’s 3PL services include customized logistics, distribution and packaging solutions for healthcare manufacturers across Canada. AHG’s specialized transportation services in Canada, including air freight forwarding, ground transportation, dedicated delivery and last mile services, provide a one-stop shop for clients’ healthcare transportation needs. Through its complementary service offerings, available across a coast-to-coast distribution network, AHG strives to accommodate the full range of its clients’ specialized supply chain needs on an integrated and efficient basis. The Company also provides specialized ground transportation services, primarily to the healthcare sector, across the 48 contiguous U.S. states. For more information on AHG, please visit: www.andlauerhealthcare.com.

This news release contains forward-looking information and forward-looking statements (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may relate to the Company’s future financial outlook and anticipated events or results and may include information regarding the Company’s financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans, objectives and expectations. Particularly, information regarding the Company’s growth expectations, performance, achievements, payment of dividends, prospects, potential acquisitions, financial targets or outlook is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “believes”, “commencing” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, targets, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Such forward-looking statements are qualified in their entirety by the inherent risks, uncertainties and changes in circumstances surrounding future expectations which are difficult to predict and many of which are beyond the control of the  Company.

Statements regarding the anticipated benefits of the Transaction for the Company, shareholders and other stakeholders, including, plans, objectives, expectations and intentions of UPS or the Company; statements regarding the satisfaction of the conditions precedent to the Transaction, including the receipt of regulatory approvals and the anticipated timing thereof; payment of dividends; the proposed timing and completion of the Transaction; and other statements that are not statements of historical facts are all considered to be forward-looking information.

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions, including but not limited to those assumptions described under the heading “Cautionary Note Regarding Forward-Looking Information” in the Company’s MD&A for Q2 2025. Forward-looking information is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the risk that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated; that the Transaction may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, the remaining regulatory approval and other conditions to the closing of the Transaction or for other reasons; the negative impact that the failure to complete the Transaction, for any reason, could have on the price of the subordinate voting shares of AHG or on the business of AHG; the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; risks relating to the Company’s ability to retain and attract key personnel during and following the interim period; the possibility of litigation relating to the Transaction; credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Transaction, including changes in economic conditions, interest rates or tax rates; and those other factors discussed under the heading “Risk Factors” in the Company’s annual information form dated February 26, 2025, which is available on the Company’s profile on SEDAR+ at www.sedarplus.ca. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Accordingly, investors should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company’s expectations as of the date of this news release and are subject to change after such date and the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

This news release contains certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. AHG uses non-IFRS measures including “EBITDA” and “EBITDA Margin”. These non-IFRS measures are used to provide investors with supplemental measures of the Company’s operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. AHG also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. AHG management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation.

EBITDA

AHG defines EBITDA as net income for the period before: (i) income tax expense (recovery); (ii) interest income; (iii) interest expense; and (iv) depreciation and amortization.

AHG believes EBITDA is a useful measure to assess the Company’s financial performance because it provides a more relevant picture of operating results by excluding the effects of expenses that are not reflective of the Company’s underlying business performance.

EBITDA Margin

AHG defines EBITDA Margin as EBITDA divided by revenue. EBITDA Margin represents a measure of the Company’s profitability expressed as a percentage of revenue.

AHG believes EBITDA Margin is a useful measure to assess the Company’s financial performance because it helps quantify the Company’s ability to convert revenues generated from clients into EBITDA.

Reconciliation of EBITDA

SOURCE Andlauer Healthcare Group Inc.