Thank you, and good morning, everyone. Welcome to our earnings call for the first quarter of 2021.

I am joined this morning by our Chief Financial Officer, Andrew Mok.

Continuing the momentum from 2020 CareRx has had an exciting start to 2021, marking one of the busiest and most eventful periods in the company's history. We announced three acquisitions in less than 90 days, including our largest and most meaningful to date, that in aggregate will expand our bed count by approximately 85% from where we were at the end of the first quarter.

We closed the first of these acquisitions in April and are targeting to complete the others in the summer. They will not only further transform our revenue and profitability profile, but also significantly expand our scale, which will enable us to realize cost advantages in ways that were not previously available to us.

Our financial results for Q1 highlighted by significant year-over-year growth in revenue and adjusted EBITDA reflect last year's successful execution on our growth strategy. And in particular, the scale and synergies generated by our Remedy’s acquisition last May.

Turning to the numbers, revenue for Q1 increased 47% year-over-year to just under $45 million, driven by growth in the number of beds serviced, which was attributable primarily to the Remedy's acquisition. The average number of beds serviced during the quarter was 48,703, up 55% year-over-year.

This was down slightly however from Q4 as the impact of the COVID-19 pandemic seniors homes peaked in December and January. The impact of this third wave of COVID-19 did have an impact on revenue in the quarter, which again was particularly pronounced in the month of January.

We have seen bed counts trend favorably with successive improvements in February and March, and the strongest indication of normalization coming in April. In addition, the on-boarding of the 1100 bed contract that we won in Q4 of last year which was set to start in January was delayed as a result of the pandemic.

The bulk of that on-boarding occurred late in Q1 and was subsequently fully completed in mid-April. As a result, this contract contributed minimal revenue to Q1.

Adjusted EBITDA for Q1 doubled from the same period last year to $4.1 million from $2 million, driven by the addition of the Remedy's beds as well as the full quarterly contribution of the $3 million in annual cost savings synergies from the Remedy's integration. This growth was partially offset by the impact of COVID-19 including the previously mentioned impact on beds serviced as well as certain costs incurred in assisting our home operator partners facing COVID-19 outbreaks during the beginning of the quarter.

The resulting EBITDA margin increased to 9.1% from 8.8% in Q4 and 6.7% in Q1 last year. As a reminder, this is the first quarter in which we realized the full synergies of the Remedy's acquisition, several quarters ahead of our initial projections, attributable to our team's outstanding work in completing the integration well ahead of our original schedule.

This gives me great confidence with respect to the integration of the even larger Medical Pharmacies acquisition and our ability to realize the expected synergies from that transaction. Turning to that acquisition, on April 19, we announced that we have entered into a definitive agreement to purchase the long-term care pharmacy business of Medical Pharmacies.

The acquisition includes 18 facilities serving approximately 36,000 residents in the same provinces that we already serve. This acquisition alone expands our bed count by over 70% and further cements the leadership position we have been building in this sector over the past few years.

The Medical Pharmacies business is expected to contribute run rate, annualized revenue of approximately $150 million, and adjusted EBITDA of between $10 million and $12 million. In addition, we are estimating cost saving synergies to be a minimum of $5 million.

The purchase price is $70 million in cash plus 1 million common shares with the cash portion to be financed through a $55 million equity offering and $39 million in incremental debt as part of a refinancing both of which we announced concurrent with the transaction. Andrew will speak to these in more detail.

The acquisition is subject to a number of regulatory approvals, including approval by the competition bureau. Subject to those approvals we look forward to completing the acquisition sometime around mid-year.

We followed our Medical Pharmacies news rather quickly with the announcement of a definitive agreement with Rexall to purchase a portion of its long-term care pharmacy business following their strategic decision to exit this business entirely. The portion of the business we are acquiring serves approximately 4,200 residents of long-term care, assisted living, and other congregate care settings across Ontario and Northern Alberta and includes a fulfillment center in Sudbury Ontario.

It is expected to contribute run rate annualized revenue of approximately $14 million and nominal adjusted EBITDA prior to any benefits from the integration of the operations of the two businesses. Importantly, there is additional opportunity here to work with Rexall to transition beds in Western Canada beyond the portion of the business we are acquiring as Rexall winds down the remainder of its.

Before I turn the call over to Andrew, there were a number of additional highlights during and subsequent to the end of the quarter that I would like to mention. In January we announced the acquisition of SmartMeds Pharmacy which was completed on April 1, and added approximately 2,400 beds in Ontario.

SmartMeds is expected to contribute run rate annual revenue of $15 million dollars and run rate annual EBITDA of approximately $1.5 million prior to any integration synergies. Earlier I discussed the onboarding activity for the new 1100 bed contract in Ontario, although onboarding delays minimized the contribution of this contract to our Q1 results, it was fully onboarded by mid April.

Some of these additional beds are being serviced by a new CareRx location in Thunder Bay, which was purchased from Medical Pharmacies y in a transaction that is separate from the broader acquisition. The Thunder Bay site, plus the Medical Pharmacies and Rexall acquisitions, will provide us with a significantly expanded footprint and presence in Northern Ontario, a region where CareRx has not historically had meaningful market share.

Earlier, I discussed the normalization of our bed count since its low point in January. As vaccination rates in seniors homes increased and outbreaks decreased, we have begun to see a gradual increase in the number of beds serviced.

In April, in addition to the new beds from the onboarded contract and the SmartMeds acquisition, we saw an increase of approximately 750 beds driven by higher occupancy rates within the homes we service. We are optimistic that this normalization will continue throughout Q2 and into the summer.

Finally, outside of the growth in our core seniors care pharmacy business, following expansion to the greater Edmonton area in Q4 we recently launched Pharmacy At Your Door in the greater Vancouver area. Results continue to be positive and although we are taking a measured long-term approach year, we are increasingly positive on the prospects for growth in this market and our ability to leverage our site network and fulfillment capabilities to deliver a customer pharmacy experience that is superior to new competitive entrants into this space.

We believe Pharmacy At Your Door can be a steady contributor to our growth over the next several years. I would now like to turn the call over to Andrew to discuss our Q1 results in more detail.

Andrew?

Thank you, David and good morning everyone. First as a reminder our financial statements and MD&A for the first quarter have been filed with CEDAR and are also available on our website.

Revenue for the first quarter of 2021 increased $14.5 million or 47% to $44.9 million from $30.4 million in the first quarter of 2020. This increase was primarily attributable to the contribution of the Remedy’s business.

As David discussed, Q1 revenue growth was dampened by the temporary COVID-19 related reduction in our average headcount due to COVID-19 outbreaks that occurred in the first half of the quarter at some of the homes that we service, as well as the delay in the onboarding of the 1100 bed contract awarded in Q4, which shifted towards the end of Q1 and into Q2. Adjusted EBITDA in Q1 increased $2.1 million or 100% to $4.1 million from $2 million in Q1 of last year.

The increase was driven primarily by the contribution from the Remedy’s business which as David noted, include the realization of a full quarter of the annualized cost saving synergies of over $3 million. Again, adjusted EBITDA was dampened by the temporary reduction in bed count and additional costs incurred to assist our her home care partners with managing COVID-19 outbreaks.

Turning to our balance sheet, we ended Q1 with $28.7 million in cash, which was up from $19.6 million at the end of the fourth quarter of 2020. The increase was primarily the result of the bought deal financing and concurrent private placement we completed in February of just under 5 million shares, which included the full exercise of the overallotment option at a price of $4.25 per share for total gross proceeds of $21.2 million or R19.6 million net of financing fees.

This was partially offset by the closing cash payment for the SmartMeds acquisition of just over $4 million, the settlement of an earnout related one of our historical acquisitions, and capital expenditures of just over $1 million each. Additionally, the proceeds from the equity raise were also partially offset by cash used in operating activities of $1.7 million in the quarter, which was primarily due to a $2.3 million payment made during the quarter related to the settlement of the previously disclosed arbitration award related one of the company's historical acquisitions, as well as the timing of certain other working capital movements and transaction fees incurred relating to the recently announced acquisitions.

And to be clear, the quarter end numbers do not reflect the equity financing or debt refinancing we announced subsequent to quarter end with the Medical Pharmacies transaction. With the exception of the amendment to the ODBA [ph] facility which is expected to be effective on or about May 19, those are expected to be completed concurrently with the closing of the Medical Pharmacies acquisition.

Net debt at the end of Q1 decreased to $29.5 million from $38.5 million at the end of Q4, primarily due to the increased cash position which reduced our net debt to annualized run rate adjusted EBITDA to 1.8 times from 2.4 times at the end of Q4. As a reminder, that metric was 4.3 times this time last year to we made some significant progress here that we expect to continue with the contribution of the recently announced and completed acquisitions.

Subsequent to quarter end, we entered into a bought deal private placement of just over $8.9 million subscription receipts, that will generate aggregate gross proceeds of approximately $45 million, as well as a concurrent binding term sheet with Yorkville for just under 2 million additional sub receipts for additional gross proceeds of approximately $10 million. Upon completion of these offerings, the total proceeds of $55 million will be used to fund a portion of the cash component of the consideration for the Medical Pharmacies acquisition as well as associated transaction costs.

We also entered into binding commitment letters with our lenders, Crown Capital and Yorkville to refinance our existing credit facilities providing for a new $60 million senior debt facility and an increase of $6 million to our subordinated facility. The proceeds from this refinancing will lower our overall cost of capital and be used to repay the existing senior credit facility and fund a portion of the cash consideration for the Medical Pharmacies acquisition.

I will now turn the call back over to David for some concluding comments. David?

Thank you, Andrew. In the last 12 months we have delivered on our consolidation strategy, adding more than 60,000 beds in total through four separate acquisitions.

When all these transactions are completed, that will translate into a nearly 300% increase in our bed count since the end of Q1 last year. Even with the success of the past year though, CareRx remains very well positioned to continue to execute on our growth strategy.

The Canadian seniors care pharmacy market remains very fragmented. After closing of the Medical Pharmacies and Rexall transactions, we will still represent just 21% of the market.

Meaningful organic growth opportunities continue to exist both from winning new customer contracts and from robust projected growth in the underlying market itself. The most important benefit from the accelerated success of our consolidation strategy is that it affords us the opportunity to deliver a truly superior and differentiated service offering to our home operator partners.

Our future growth will depend on their confidence in us and the outstanding service quality and support we provide to them. We are very confident in our ability to demonstrate that differentiation to them and earn their continued trust.

We are not only the largest player in the sector, we are now the only national pharmacy provider with a singular focus on servicing the unique and complex needs of congregate care settings, and long-term care and retirement homes in particular. We have the largest fulfillment network, the strongest team, a team that will be meaningfully augmented by the addition of approximately 700 future colleagues from Medical Pharmacies.

And we will continue to incorporate and build upon the best of the various legacy companies that constitute CareRx, including Medical Pharmacies and Rexall, to deliver a truly market leading platform built around quality, technology and clinical and service excellence. Before opening the call to questions, I would again like to acknowledge the entire CareRx team for their tireless efforts, especially through this challenging time.

To achieve what we have achieved this past year is incredible, but to have achieved it despite the additional challenges and stresses of the pandemic; is further testament to the talent and commitment of our people. I would now like to open the call to questions.

Operator?

Hi good morning. Just want to confirm first of all I guess the bed count and obviously the slide in your presentation, but I just want to sort of line by line if you could go through,48.7 was the end of or the average in the period.

You said you onboarded 750, I guess that were "vacant" during the pandemic. So is the 1100 beds contract that you finished onboarding in I guess, March-April 40,200 between Rexall and Medical Pharmacies and the 2400 from SmartMeds, so it is about 93,000, is that number correct?

Yes, I think that's right. Doug, I think if you take the quarter end bed counts which is just under 49,000 and then the moving pieces in April, are about 400 additional beds of the 1100 that got onboarded in April 2400 from SmartMeds and 750 that I mentioned as sort of normalization, that gets you to somewhere around 52,500.

Your math on the two acquisitions that are coming is obviously right. And then really the missing piece is just sort of some further normalization is probably another 1500 bed by our count that would constitute full normalization back to pre-covert levels that still hasn’t happened yet?

Okay and we’ve discussed in the past some fees outstanding. Where do those stand?

What is your expectation on those, timing of those?

Yes, I mean as we discussed at the Q4 call, obviously the successive waves of COVID has really had a chilling effect on any serious to big attempts of home operators to consider making a pharmacy transition. It is just, it is -- the impact of this has been fairly devastating not just in terms of impact on the residents, but also on staff.

So we're continuing to see a reluctance of home operators to consider pharmacy transitions until things are more normalized. So yes, none of those opportunities have gone away.

We continue to believe that there are meaningful competitive opportunities available to us, that they have just been delayed because of COVID. And my own view on that is that we may end up regarding that as a bit of a blessing, because fundamentally organic growth in this sector will come down to the ability to provide a meaningfully differentiated offering in a sector that historically has not had a lot of differentiation and so from our perspective the ability to make these acquisitions the last year, so and to be able to offer something that we believe will be demonstrably superior to any other offering in the country is going to put us in good stead when these home operators turn their minds more seriously to considering their pharmacy options.

Okay, just on the Rexall 4200 beds, I think they had around what between 15,000 and 20,000, like what's their plan with the rest of those?

Yes, the actual number Doug now is closer to 11,000.

After your 42?

No, before. So I won't speak for them, but I would say, what's publicly known is that they have indicated to customers and the market an intention to wind down that business.

Almost all of the difference between what they have and what we purchased are in British Columbia. So it really comes down to their own plans for winding down that business.

And yes, I would just say we're, we have a different good relationship with them by virtue of having done the transaction and so we're certainly willing to present ourselves to customers as an option to take those beds, where fundamentally it will come down to Rexall's decision to wind down and their timeline and then obviously the customers will have a choice as it relates to who they might want to partner with instead.

Okay. And final one on the bed count in Quebec, you talked about national platform, is there any plans to moving to Quebec, I am assuming that's the sort of biggest whole…?

Yes, I think, obviously our focus over the last year has been on doing synergistic acquisitions of companies that do the same thing that we do in the same space and that's been our focus. So we will have to integrate that.

But yes, we continue to have a desire to be national and our gaps are Manitoba, Québec, and Atlantic Canada and so I think a stronger company, better capitalized, I think we may have more options for geographic expansion in the next 12 to 18 months.

Okay, and my final one may be for Andrew. Can you just give us obviously a lot has changed in the balance sheet in capital structure since the quarter ended.

Can you just give us just confirm where we stand basic and fully diluted shares and the total debt outstanding as of today?

Sure, so and just to clarify Doug are you looking for that kind of pre or post the announced equity financing the subscription receipts?

Oh, like as if everything is closed and done and everything…

Sure, so at that point we issued outstanding shares and it depends on what your assumption would be on exercise of overallotment options et cetera, but on the base deal the outstanding shares would be just over 42 million and on a fully diluted basis it would be just over 56 million. And then from a debt perspective it would be just over, from an actually debt standpoint it would be 80 million plus the 25 million of November 2019 convertible debentures, and 13 million of March 2019 convertible debentures.

Right, and those convertible debentures are being included obviously in the 56 million of fully diluted shares, correct?

That's correct.

Yes, that's correct.

Okay, great, that's it from me. Thanks very much.

Thank you, Doug.

Good morning, gentlemen.

Hi David.

Hey David.

Been very busy, and that's great to see, and obviously executing very quickly because that's just terrific. So you are over 90,000 beds and it looks like your run rate, EBITDA is around $40 million plus in 2022 and not really giving full benefit to the synergies.

But more importantly, as you kind of build out may be mega sites including new packaging equipment and things like that, do you think you could start hitting your aspirational EBITDA levels like 13%, 14% margin as A, you soak up excess capacity today in the facilities and you basically build out these mega sites. What's the path forward here on the margin front?

Yes, I mean the short answer on the margin side is, yes we do. I think we're going to continue to be cautious though as it relates to talking about sites and at the end of day we have to make the right decisions as it relates to site consolidation and our approach in the Remedy's transaction is when we make decisions we're going to first tell our employees and then tell our customers, and then publicly.

And I don't want to get too far ahead of ourselves since the consolidation, but you are right David that in addition to the normal rationalization of duplication that comes from an acquisition, we do see an opportunity particularly in our large Metropolitan markets to move towards facilities that will service a much higher volume of beds and has historically been seen in the Canadian markets. So I don’t think we'll go further than that at this point in terms of timelines or savings projections, but we do certainly see an iterative improvement in margin that comes from the efficiencies of significant increase in the number of beds that will go through some of our larger sites.

Very good. And on the, in Rexall and BC on 6800 incremental beds, have you had any direct conversations with any of the long-term care and retirement customers in the province with Rexall's blessing as of yet or is that to come?

Yes, we have. But I thought I probably wouldn’t go further than that at this point.

Okay, and then as you look at, it has become a bit of a two-horse race here with MediSystem with the consolidation in the market and you are clearly in the pool position. Does your -- did your move actually create more capitulation by the small independents who cannot compete with you especially as you developed a scale and you can, you have much more flexibility and an even stronger pan-Canadian presence, I have to think there's smaller independents out there that would capitulate.

And similarly, if I look at your long-term care and retirement home customers, they also might want to migrate towards you. Do you think there will be an [indiscernible] effect here?

It is a good question. I think I need to be clear, when you, if you say two-horse race, that means, those two national players, ourselves and the one you mentioned, still have a pretty small percentage of the overall market.

So there is a long, there are still lot of choice. And this business has always been a localized business.

Home operators make choices that are local. So look obviously we wouldn't have done the deals if we don’t believe it gives us advantages in terms of what we can offer, but as I was saying earlier, at the end of the day it is about showing competitive difference.

There's no shortcuts in this sector. Home operators rightfully expect very high quality and very high service.

And how big you are doesn’t necessarily get you anything. So yes, we still, there's a lot of good competitors that are smaller local that are still very limitable, but yes, obviously in the long run we believe that yes, we are going to have a set of capabilities of resources and sort of technology that will be very attractive, but I don’t think this happens easily.

I think its all a very competitive market.

Do you think you have to digest for a little bit here now before you kind of really pursue the M&A angle again or do you still think you can do the sort of [indiscernible]?

Obviously our primary priority is going to be getting the integration right. We've done a lot in the last year.

But yes, we would not rule out anything. I think the types of deals we've done in the last year, as I said earlier, highly synergistic acquisitions of companies in the same geography.

There are still things that interest us. I think we'd like to get the integration done, but sometimes you cannot control the timing of good opportunities and more broadly as to the previous question from Doug Cooper, we may be in a position to consider other things, whether that's geographic expansion or acquisitions that don’t necessarily require our existing teams in our existing geographies do a lot of heavy lifting on integration.

So I think it is very obvious the next year will not look like the last year, but I wouldn’t rule out further M&A.

Excellent, and then a quick last one for Andrew, just on quick sort of housekeeping. I can probably do the math myself, but what does this after all the rate is closed and exing out the overallotment, what's your liquidity position after all this shakes out?

Just from a cash standpoint?

Cash and availability, yes.

Yes, so from a cash standpoint at closing we estimate that it will be about $20 million on hand. No other I guess additional availability in the subset, the credit facility that fully drives the term facility yes.

Right, very good, excellent, thank you guys.

Thanks David.

Good morning. I think most of my questions were asked, but I do have one that wasn’t, I'm just looking I guess more color on sort of the delay of the onboarding and so there are a lot of good guys coming into, on the Ontario contact and I know this was at the request of the home operators, and then really expect, do you foresee any similar delays and sort of reasoning for this delay time leading to some of the anticipated beds that you are onboarding in the near term?

Sure, hi Chelsea. The first part of the question, did the overall umbrella in terms of the reason for the delay was COVID in some cases that was actual outbreaks in specific homes and others it was more just the staff, concerns about staff, resources and fatigue, and you know the last thing we want to do starting a new customer relationship is have the transition be something that stretches the team.

So yes, look do I think future wins might be until we are at a truly normalized place might be a little slower than normal, I think that's possible, but I don’t think that's a material risks. Just because most, for the most part I'm not sure that many customers are going to actually make the award until they're ready to do the onboarding.

So I suspect that's just sort of a function of the normalization process that's happening right now.

Okay, that's all the questions from me, thank you.

Thanks Chelsea.

Oh, hi good morning. Thanks for taking my call.

I just had a broader question, you mentioned in your opening remarks the market share for CareRx is now 21% and I believe that's up from 12% last year and also close to a goal of basically doubling the business. And I'm just wondering now are you seeing any new trends or just with your current pipeline that gives you confidence that you can still increase that market share and if there are any new broader goals for the organization?

Yes, it's a great question. We did publish that goal of getting to 100,000 beds by 2023 last year.

I can say it did not contemplate making the acquisitions that we've made or making all of them. So first our sights are higher and in fact my, I'm not sure if I'd guarantee it because there is still some work to do, but our goal now is to get to that 100,000 number by the end of this year, that's where we're marching towards.

But yes, just I think we'll -- I think with our board just have to recalibrate in terms of what goals we set and how much sort of a public ambition we set, but categorically our goals have changed, because we'd always said that we looked at our gross, our doubling of beds as roughly a 50-50 proposition between organic growth and M&A. And so, per my earlier comments we still believe there's lots of organic growth opportunities that come from us just showing the market what we can do from a differentiated service offering perspective.

Okay, and just the next largest competitor as far as their market share I believe its, would be 7% or 8% still?

I think it's in the range of about 35,000 beds to the best that we are aware.

Okay, thank you for taking my questions.

Thanks Justin.

Thank you, and thank you, everyone for participating on today’s call and for your continued interest in CareRx. We look forward to reporting on our continued progress next quarter.

Thank you.