Savaria Corp (SISXF) Q3 2024 Earnings Call Highlights: Record EBITDA Margin and Strategic ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $213.6 million, an increase of 1.7% year-over-year.

  • Adjusted EBITDA: $41.7 million, up from $34.5 million last year.

  • EBITDA Margin: 19.5%, compared to 16.4% last year.

  • Gross Profit: $79.1 million, with a gross margin of 37%.

  • Net Earnings: $13 million or $0.18 per diluted share.

  • Net Debt-to-EBITDA Ratio: 1.69, improved from 2.07 at year-end.

  • Cash from Operating Activities: $35.8 million, an increase of over $10 million from last year.

  • North America Revenue Growth: 8% in the accessibility segment.

  • Europe Revenue Contraction: 6.6% in the accessibility segment.

  • Patient Care Revenue: $43.9 million, stable compared to last year.

  • Accessibility Segment EBITDA Margin: 21.3%, up from 18% last year.

  • Patient Care Segment EBITDA Margin: 17.4%, up from 14% last year.

  • Net Finance Costs: $4.4 million, down from $5.5 million last year.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Savaria Corp (SISXF) achieved a record EBITDA margin of 19.5% in Q3 2024, showing continued improvement and stability in their transformation efforts.

  • North American operations saw an 8% revenue growth in Q3, with a year-to-date growth of 11.3%, driven by strong demand in the residential sector.

  • The company successfully reduced its net debt-to-EBITDA ratio to 1.69, down from 2.07 at the end of the previous year, indicating improved financial health.

  • Savaria Corp (SISXF) has a strong innovation pipeline, including new product launches like the M-Series clinical ceiling lift, which is expected to drive future growth.

  • The company has increased its available funds to $247 million, positioning it well for potential strategic acquisitions to further enhance growth.

Negative Points

  • European operations experienced a 6.6% revenue decline in Q3, highlighting challenges in that market despite improvements in EBITDA margins.

  • The patient care segment showed flat revenue growth, with delays in project execution impacting performance, although a stronger Q4 is anticipated.

  • Savaria Corp (SISXF) faced a decrease in overall revenue growth, with only a 1.7% increase compared to the previous year, partly due to divestitures.

  • The company incurred $5.4 million in strategic initiative expenses in Q3, which, while expected, impacted net earnings.

  • Savaria Corp (SISXF) is not providing specific guidance for fiscal 2024, creating uncertainty about short-term financial performance.

Q & A Highlights

Q: Can you discuss the incremental margin contribution from new product introductions and whether it might exceed your 20% target? A: Sebastien Bourassa, President and CEO, explained that R&D efforts focus on improving current products and launching new ones at the right margins. While the 20% EBITDA target is achievable, future guidance will determine if they can exceed this target. R&D is crucial for margin improvement and growth.

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