Full Press Release Details
Guardian Pharmacy Services, Inc. Reports Third Quarter 2024 Financial Results
ATLANTA (BUSINESS WIRE) Guardian Pharmacy Services, Inc. ( Guardian ) (NYSE: GRDN), one of the nation s largest long-term care (LTC)
pharmacy services companies, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights
Three Months Ended September 30, 2024
Nine Months Ended September 30, 2024
After successfully completing our IPO in September, we are happy to report that our
first quarter as a public company produced strong results and highlighted Guardian s track record of consistent growth, said Fred Burke, President & CEO of Guardian.
Mr. Burke added, I am especially proud of our team and how impressively they navigated the challenges surrounding Hurricane Helene in the third
quarter, helping to ensure that all residents served by Guardian impacted by the storm would continue to have access to medications. Heartland, a larger acquisition completed in Q2 that added four new locations and 8,600 residents in the
Intermountain West, has continued to progress in implementing the Guardian platform. While it is typically a 2 to 3 year process for our acquired locations to fully come up to speed, we are encouraged by early results.
As we look forward, we just completed an acquisition which takes us to an attractive, new market; while
smaller in size it has a great operating team which we can leverage for future growth. We expect to end this year on solid footing, setting a steady foundation for continued growth.We have more than 230 employee owners excited to take us forward as
Initial 2024 Full Year Guidance
For the full year, Guardian is providing the following guidance:
Guardian has not provided a quantitative reconciliation of forecasted Adjusted EBITDA, a non-GAAP financial measure to
forecasted net income within this communication because Guardian is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence due to the variability and complexity of such items. These items include, but are
not limited to, income taxes and share-based compensation. These items, which could materially affect the computation of forecasted net income, are inherently uncertain and depend on various factors, many of which are outside of Guardian s
Conference Call Information
host a conference call to discuss its third quarter 2024 financial results later today, Tuesday, November 12, 2024, at 4:30 p.m. ET. The conference call can also be accessed by dialing (800) 245-3047 for
U.S. participants, or (203) 518-9765 for international participants, and referencing conference ID Guardian. A replay will be available online at https:/investors.guardianpharmacy.com shortly after
the call s completion and will remain available for approximately 60 days.
About Guardian Pharmacy Services
Guardian Pharmacy Services is a leading long-term care pharmacy services company that provides an extensive suite of technology-enabled services designed to
help residents of long-term health care facilities ( LTCFs ) adhere to their appropriate drug regimen, which in turn helps reduce the cost of care and improve clinical outcomes. As of September 30, 2024, our 50 pharmacies served
approximately 180,000 residents in approximately 6,800 LTCFs across 37 states.
Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements are all statements other than those of historical fact. Any statements about
our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are forward-looking. These statements are often, but not always, made through the use of words such as aims,
anticipates, believes, continue, estimates, expects, intends, may, outlook, plans, projects, seeks,
should, will, would, and similar expressions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and
involve risks and uncertainties which are subject to change based on various important factors, some of which are beyond our control. Such risks and uncertainties include: our ability to effectively execute our business strategies, implement new
initiatives and improve efficiency; our ability to effectively market and sell, customer acceptance of, and competition for, our
pharmaceutical services in new and existing markets; our relationships with pharmaceutical wholesalers and key manufacturers, LTCFs and health plan payors; our ability to maintain and expand
relationships with LTCF operators on favorable terms; the impact of the outbreak of a national emergency, public health crisis or global pandemic, such as COVID-19, on our employees and business and on our
supply chain and the LTCFs we serve; continuing government and private efforts to lower pharmaceutical costs, including by limiting pharmacy reimbursements; changes in, and our ability to comply with, healthcare laws, regulations or interpretations;
further consolidation of managed care organizations and other health plan payors and changes in the terms of our agreements with these parties; our ability to retain members of our senior management team, our local pharmacy management teams and our
pharmacy professionals; our exposure to, and the results of, claims, legal proceedings and governmental inquiries; our ability to maintain the security of our operating and information technology systems and infrastructure (e.g., against
cyber-attacks); product liability, product recall, personal injury or other health and safety issues related to the pharmaceuticals we dispense; supply chain and other manufacturing disruptions related to the pharmaceuticals we dispense; the
sufficiency of our existing cash and cash equivalents to fund our future operating expenses and capital expenditure requirements, and our ability to raise additional capital, if needed; and the misuse or
off-label use, or errors in the dispensing or administration, of the pharmaceuticals we dispense. We are subject to additional risks and uncertainties described in our periodic reports filed with the
Securities and Exchange Commission from time to time, including in the Risk Factors, and Management s Discussion and Analysis of Financial Condition and Results of Operations sections contained in our most recent
Quarterly Report on Form 10-Q, which reports are made publicly available at www.sec.gov and via our website, investors.guardianpharmacy.com Any forward-looking statements in this press release should be
evaluated in light of these important risk factors. This press release reflects management s views as of the date hereof. Except to the extent required by applicable law, Guardian undertakes no obligation to update or revise any information
contained in this press release beyond the published date, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
To supplement our results prepared in accordance with generally accepted accounting
principles in the United States ( GAAP ), we also present Adjusted EBITDA and Adjusted SG&A, which are non-GAAP financial measures. We define Adjusted EBITDA as net income (loss) before interest
expense, income taxes, depreciation and amortization, as adjusted to exclude the impact of items and amounts that we view as not indicative of our core operating performance, including share-based compensation, acquisition accounting adjustments,
and certain legal and regulatory items. We define Adjusted SG&A as GAAP selling, general, and administrative expenses adjusted to exclude the impact of share-based compensation and expenses relating to certain legal and regulatory items.
Adjusted EBITDA and Adjusted SG&A do not have a definition under GAAP, and our definition of Adjusted EBITDA and Adjusted SG&A may not be the same as, or comparable to, similarly titled measures used by other companies.
We use Adjusted EBITDA and Adjusted SG&A to better understand and evaluate our core operating performance and trends. We believe that presenting Adjusted
EBITDA and Adjusted SG&A provides useful information to investors in understanding and evaluating our operating results, as it permits investors to view our core business performance using the same metrics that management uses to evaluate our
There are a number of limitations related to the use of Adjusted EBITDA and Adjusted SG&A rather than the most directly comparable GAAP
financial measure, including:
Because of these limitations, Adjusted EBITDA and Adjusted SG&A should not be considered
in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. You should consider Adjusted EBITDA and Adjusted SG&A alongside other financial measures, including net income, GAAP selling, general, and
administrative expense and our other financial results presented in accordance with GAAP. For a reconciliation of Adjusted EBITDA to net income, and Adjusted SG&A to GAAP selling, general, and administrative expense, for the historical periods
presented herein, please see the reconciliation tables below.
GUARDIAN PHARMACY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (In thousands, except share amounts) | December 31, 2023 | September 30, 2024 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 752 | $ | 37,221 | ||||
| Accounts receivable, net | 77,262 | 90,943 | ||||||
| Inventories | 36,727 | 45,216 | ||||||
| Other current assets | 14,864 | 6,885 | ||||||
| Total current assets | 129,605 | 180,265 | ||||||
| Property and equipment, net | 45,064 | 48,125 | ||||||
| Intangible assets, net | 11,979 | 15,151 | ||||||
| Goodwill | 56,046 | 68,419 | ||||||
| Operating lease right-of-use assets | 28,113 | 29,720 | ||||||
| Deferred tax assets | 5,973 | |||||||
| Other assets | 358 | 374 | ||||||
| Total assets | $ | 271,165 | $ | 348,027 | ||||
| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 85,603 | $ | 106,870 | ||||
| Accrued compensation | 16,961 | 13,955 | ||||||
| Line of credit | 9,000 | 10,000 | ||||||
| Notes payable, current portion | 3,977 | 5,434 | ||||||
| Operating leases, current portion | 6,229 | 6,963 | ||||||
| Other current liabilities | 16,245 | 15,096 | ||||||
| Total current liabilities | 138,015 | 158,318 | ||||||
| Notes payable, net of current portion | 18,992 | 28,666 | ||||||
| Operating leases, net of current portion | 22,803 | 23,840 | ||||||
| Other liabilities | 31,496 | 3,307 | ||||||
| Total liabilities | 211,306 | 214,131 | ||||||
| Commitments and contingencies (see Note 6) | ||||||||
| Equity: | ||||||||
| Members equity | 28,209 | |||||||
| Class A common stock- 700,000,000 shares authorized, par value $0.001, 9,200,000 shares issued and outstanding as of September 30, 2024 | 9 | |||||||
| Class B common stock- 100,000,000 shares authorized, par value $0.001, 54,094,232 shares issued and outstanding as of September 30, 2024 | 54 | |||||||
| Additional paid-in capital | 122,323 | |||||||
| Retained earnings | 5,181 | |||||||
| Non-controlling interests | 31,650 | 6,329 | ||||||
| Total equity | 59,859 | 133,896 | ||||||
| Total liabilities and equity | $ | 271,165 | $ | 348,027 |
GUARDIAN PHARMACY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (In thousands, except share and per share amounts) | 2023 | 2024 | 2023 | 2024 | ||||||||||||
| Revenues | $ | 262,741 | $ | 314,393 | $ | 765,126 | $ | 889,840 | ||||||||
| Cost of goods sold | 210,549 | 253,515 | 611,394 | 712,573 | ||||||||||||
| Gross profit | 52,192 | 60,878 | 153,732 | 177,267 | ||||||||||||
| Selling, general, and administrative expenses | 58,522 | 165,491 | 128,310 | 256,942 | ||||||||||||
| Operating income (loss) | (6,330 | ) | (104,613 | ) | 25,422 | (79,675 | ) | |||||||||
| Other expenses: | ||||||||||||||||
| Interest expense | 716 | 1,026 | 2,120 | 2,857 | ||||||||||||
| Other expense (income), net | (51 | ) | 2 | 141 | 166 | |||||||||||
| Total other expenses | 665 | 1,028 | 2,261 | 3,023 | ||||||||||||
| Income (loss) before income taxes | (6,995 | ) | (105,641 | ) | 23,161 | (82,698 | ) | |||||||||
| Provision for income taxes | 176 | 176 | ||||||||||||||
| Net income (loss) | (6,995 | ) | (105,817 | ) | 23,161 | (82,874 | ) | |||||||||
| Less net income (loss) attributable to Guardian Pharmacy, LLC prior to the Corporate Reorganization | (11,290 | ) | 9,350 | 11,884 | 22,760 | |||||||||||
| Less net income attributable to non-controlling interests | 4,295 | 6,823 | 11,277 | 16,356 | ||||||||||||
| Net income (loss) attributable to Guardian Pharmacy Services, Inc | $ | $ | (121,990 | ) | $ | $ | (121,990 | ) | ||||||||
| Net income (loss) per share of Class A and Class B common stock 1 | ||||||||||||||||
| Basic | N/A | $ | (2.00 | ) | N/A | $ | (2.00 | ) | ||||||||
| Diluted | N/A | $ | (2.00 | ) | N/A | $ | (2.00 | ) | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | N/A | 61,143,311 | N/A | 61,143,311 | ||||||||||||
| Diluted | N/A | 61,143,311 | N/A | 61,143,311 |
GUARDIAN PHARMACY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended September 30, | ||||||||
| (In thousands) | 2023 | 2024 | ||||||
| Operating activities | ||||||||
| Net income (loss) | $ | 23,161 | $ | (82,874 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 13,520 | 14,619 | ||||||
| Share-based compensation expense | 16,632 | 128,029 | ||||||
| Provision for losses on accounts receivable | 3,707 | 4,240 | ||||||
| Other | 257 | (31 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (11,958 | ) | (17,285 | ) | ||||
| Inventories | 3,571 | (6,226 | ) | |||||
| Other current assets | (2,173 | ) | 768 | |||||
| Accounts payable | 10,213 | 14,158 | ||||||
| Accrued compensation | (2,396 | ) | (3,373 | ) | ||||
| Other operating liabilities | 1,731 | (16,402 | ) | |||||
| Net cash provided by operating activities | 56,265 | 35,623 | ||||||
| Investing activities | ||||||||
| Purchases of property and equipment | (11,793 | ) | (11,867 | ) | ||||
| Payment for acquisitions | (985 | ) | (12,460 | ) | ||||
| Other | 484 | 544 | ||||||
| Net cash used in investing activities | (12,294 | ) | (23,783 | ) | ||||
| Financing activities | ||||||||
| Proceeds from equity offering, net of underwriter fees | 119,784 | |||||||
| Payments of equity offering costs | (538 | ) | ||||||
| Payments to Class B common stock stockholders | (55,176 | ) | ||||||
| Borrowings from notes payable | 15,000 | |||||||
| Repayment of notes payable | (3,000 | ) | (3,750 | ) | ||||
| Borrowings from line of credit | 198,000 | 189,300 | ||||||
| Repayments of line of credit | (196,000 | ) | (188,300 | ) | ||||
| Principal payments on finance lease obligations | (3,091 | ) | (3,309 | ) | ||||
| Contributions from non-controlling interests | 538 | 2,107 | ||||||
| Distributions to non-controlling interests | (11,732 | ) | (14,279 | ) | ||||
| Member distributions | (28,422 | ) | (36,050 | ) | ||||
| Other | (250 | ) | (160 | ) | ||||
| Net cash provided by (used in) financing activities | (43,957 | ) | 24,629 | |||||
| Net change in cash and cash equivalents | 14 | 36,469 | ||||||
| Cash and cash equivalents, beginning of period | 607 | 752 | ||||||
| Cash and cash equivalents, end of period | $ | 621 | $ | 37,221 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid during the year for interest | $ | 2,082 | $ | 2,851 | ||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Purchases of property and equipment through finance leases | $ | 5,562 | $ | 2,256 | ||||
| Accrued and capitalized offering costs recorded to additional paid-in capital | $ | $ | 12,509 | |||||
| Non-cash equity contributions from non-controlling members | $ | 225 | $ | 4,989 |
GUARDIAN PHARMACY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA AND ADJUSTED SG&A TO THE MOST DIRECTLY
COMPARABLE GAAP FINANCIAL MEASURES
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands) | 2023 | 2024 | 2023 | 2024 | ||||||||||||
| Net income (loss) | $ | (6,995 | ) | $ | (105,817 | ) | $ | 23,161 | $ | (82,874 | ) | |||||
| Add: | ||||||||||||||||
| Interest expense | 716 | 1,026 | 2,120 | 2,857 | ||||||||||||
| Depreciation and amortization | 4,638 | 4,994 | 13,520 | 14,619 | ||||||||||||
| Provision for income taxes | 176 | 176 | ||||||||||||||
| EBITDA | $ | (1,641 | ) | $ | (99,621 | ) | $ | 38,801 | $ | (65,222 | ) | |||||
| Share-based compensation (1) | 20,700 | 122,355 | 16,632 | 128,029 | ||||||||||||
| Certain legal & other regulatory matters (2) | 85 | 278 | 866 | 3,807 | ||||||||||||
| Other (3) | (1,670 | ) | ||||||||||||||
| Adjusted EBITDA | $ | 19,144 | $ | 23,012 | $ | 56,299 | $ | 64,944 | ||||||||
| Net income (loss) as a percentage of revenue | (2.7 | )% | (33.7 | )% | 3.0 | % | (9.3 | )% | ||||||||
| Adjusted EBITDA as a percentage of revenue | 7.3 | % | 7.3 | % | 7.4 | % | 7.3 | % | ||||||||
| GAAP selling, general, and administrative expenses | $ | 58,522 | $ | 165,491 | $ | 128,310 | $ | 256,942 | ||||||||
| Subtract: | ||||||||||||||||
| Share-based compensation (1) | 20,700 | 122,355 | 16,632 | 128,029 | ||||||||||||
| Certain legal & other regulatory matters (2) | 85 | 278 | 866 | 3,807 | ||||||||||||
| Adjusted SG&A | $ | 37,737 | $ | 42,858 | $ | 110,812 | $ | 125,106 | ||||||||
| GAAP selling, general, and administrative expenses as a percentage of revenue | 22.3 | % | 52.6 | % | 16.8 | % | 28.9 | % | ||||||||
| Adjusted SG&A as a percentage of revenue | 14.4 | % | 13.6 | % | 14.5 | % | 14.1 | % |