Earnings call transcript: CareRx misses Q3 2025 EPS forecast, stock dips

CareRx Corporation reported its Q3 2025 earnings, revealing a shortfall in both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of CAD 0.0294, falling short of the expected CAD 0.0347, marking a 15.27% miss. Revenue also slightly missed expectations at CAD 93.88 million against a forecast of CAD 93.93 million. Following the earnings release, CareRx’s stock saw a decline of 2.51%, closing at CAD 3.41, down from its previous close of CAD 3.5. Despite this short-term setback, InvestingPro data shows CareRx has delivered impressive returns with a 70.86% year-to-date price increase and 81.43% over the past year.

Key Takeaways

• CareRx’s Q3 EPS and revenue fell short of analyst expectations.
• The company reported a 7% year-over-year increase in adjusted EBITDA.
• Stock price dropped by 2.51% in after-hours trading.
• CareRx continues to expand its service capabilities in the long-term care sector.

Company Performance

CareRx’s performance in Q3 2025 highlighted steady revenue figures, consistent with the same quarter in 2024, at CAD 93.2 million. The company achieved a positive net income for the third consecutive quarter, reporting CAD 1.6 million. Adjusted EBITDA increased by 7% year-over-year to CAD 8.3 million, with an improved margin of 9%.

Financial Highlights

• Revenue: CAD 93.2 million (unchanged YoY)
• Earnings per share: CAD 0.0294 (missed forecast by 15.27%)
• Adjusted EBITDA: CAD 8.3 million (+7% YoY)
• Net Income: CAD 1.6 million (3rd consecutive positive quarter)
• Cash from Operations: CAD 10.1 million

Earnings vs. Forecast

CareRx’s actual EPS of CAD 0.0294 fell short of the forecasted CAD 0.0347, representing a 15.27% negative surprise. Revenue also missed expectations, albeit slightly, by CAD 0.05 million. This marks a deviation from the company’s historical trend of meeting or exceeding forecasts in previous quarters.

Market Reaction

Following the earnings announcement, CareRx’s stock decreased by 2.51%, closing at CAD 3.41. This movement places the stock closer to its 52-week low of CAD 1.71, highlighting investor concerns over the earnings miss. The broader market reaction was muted, with sector peers showing mixed results.

Outlook & Guidance

CareRx is targeting the addition of 6,000-8,000 beds in 2026, supported by new developments and ongoing consolidation efforts. The company maintains a capital expenditure guidance of CAD 8-10 million for 2026, aiming for a double-digit EBITDA margin. No significant revisions were noted in future guidance.

Executive Commentary

CEO Puneet Khanna emphasized the company’s proactive approach to expansion, stating, "We are always engaged in ongoing conversations with anyone not serviced by us." CFO Suzanne Brand highlighted the company’s strategic focus, asserting, "We continue to manage and pull on our new offerings from customers in the most economic way."

Risks and Challenges

• Potential delays in bed growth could impact future revenue targets.
• Market saturation in key Canadian provinces may limit expansion opportunities.
• Macroeconomic pressures could affect long-term care funding and government policies.
• Supply chain disruptions may hinder operational efficiencies.
• Competitive pressures from other long-term care service providers.

Q&A

During the earnings call, analysts inquired about the delayed bed growth, which CareRx attributed to timing shifts, assuring confidence in meeting their 2026 targets. Questions also focused on the company’s cautious approach to geographic expansion, with management reiterating their commitment to thorough market analysis before entering new regions.

Full transcript - CareRx Corp (CRRX) Q3 2025:

Conference Moderator: Good morning, everyone, and welcome to CareRx’s third quarter 2025 financial results conference call. Please note that this call is being broadcast live over the internet, and the webcast should be available for beginning approximately one hour following the completion of the call. Details of how to access the webcast replay are available in today’s news release announcing the company’s financial results, as well as on the company’s website at www.CareRx.ca. Today’s call has been accompanied by a slide presentation. Those listening on their phones can access the slide presentation from the company’s website in the investor section under Events and Presentations. Certain statements made during today’s call, including answers that may be given to questions, may include forward-looking information, including information considering a financial outlook under applicable Canadian security laws.

Forward-looking information, including financial outlook information, includes statements regarding future events, conditions, or results, including the company’s future plans, strategies, objectives, and expectations. Forward-looking information and financial outlooks are based on the information available to management, as well as their assumptions and expectations as of the date of the presentation. Forward-looking statements and financial outlook information are given as of the date of this presentation, and the company assumes no obligation to update any forward-looking information as a result of new information or future events, except as required under applicable laws. Forward-looking information is subject to risk and uncertainty, some of which may be unknown to management or beyond the control of the company, which could cause actual results to differ materially from those contemplated by the forward-looking statements or financial outlook provided today.

Given these risks and uncertainties, investors are cautioned not to place undue reliance on the company’s forward-looking information. For additional information on the risk factors that could cause actual results to differ materially from those contemplated by forward-looking information and the factors and assumptions associated with such forward-looking information, please refer to the company’s MD&A for the three and nine-month periods ended September 30, 2025, and 2024, and other documents filed on the company’s profile on www.SEDARplus.ca. I would now like to turn the call over to Puneet Khanna, President and CEO of CareRx Corporation. Thank you, and over to you, sir.

Puneet Khanna, President and CEO, CareRx Corporation: Thank you, and good morning, everyone. Welcome to our third quarter 2025 earnings call. With me this morning is our Chief Financial Officer, Suzanne Brand. We achieved growth across all key metrics in the third quarter, both year-over-year and quarter-over-quarter. In Q3, we delivered revenue of CAD 93.2 million and an adjusted EBITDA of CAD 8.3 million, with our adjusted EBITDA margin expanding once again, now to 9%. Net income in the quarter was CAD 1.6 million, our third consecutive quarter of positive net income. Average bed service grew to 91,298. The tremendous progress we’ve made in our financial and operating results is a testament to the CareRx team’s dedication and hard work. I’d like to acknowledge and sincerely thank the teams across the country who every day support the delivery of the best in pharmacy services and continue to deliver exceptional care to our residents and home partners.

On September 3, CareRx hosted Ontario’s Minister of Long-Term Care, the Honourable Natalia Kusundova-Bashta, at our Oakville pharmacy location to showcase the innovative pharmacy services and technologies we use to deliver integrated pharmacy services and programs to residents across the seniors’ housing spectrum. We also highlighted the critical role our team plays in personalized medication management and enhanced clinical support, helping drive safer, more effective care for Canada’s aging population. We continue to have a productive and collaborative relationship with the government, and together with the ministry, our home partners, and long-term care associations, our team is excited to help shape the future of senior care.

As a reflection of the CareRx team’s commitment to a disciplined capital allocation strategy that provides the flexibility to fund growth initiatives while delivering strong returns to shareholders, in the third quarter, the company announced its intention to pay a quarterly dividend and, on October 15, 2025, paid a dividend of CAD 0.02 per share. This milestone underscores our confidence in our strong financial position, robust operating performance, and the sustainability of our cash flows. Additionally, we renewed our annual normal course issuer bid since we continue to believe that our share price does not adequately reflect the fundamental value in our underlying business and near and long-term growth potential. Through our balanced capital allocation strategy, which includes investments in organic and strategic growth, share buybacks, and now dividends, we are well positioned to drive shareholder value and are optimistic about our momentum.

I will now turn the call over to Suzanne, who will discuss our third quarter financial results in more detail. Suzanne.

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Thank you, Puneet, and good morning, everyone. As Puneet outlined earlier, we achieved broad-based growth in the quarter, both year-over-year and quarter-over-quarter. Average beds serviced in the third quarter increased to 91,298 from 89,099 in the third quarter of 2024 and from 90,048 in the second quarter of 2025. Revenue of CAD 93.2 million remained consistent from CAD 92.8 million last year and CAD 91.4 million in the second quarter of 2025. The year-over-year revenue comparison reflects a change in the mix of branded and generic pharmaceuticals dispensed, even as the number of average beds serviced increased. Adjusted EBITDA for the third quarter increased year-over-year by over 7% to CAD 8.3 million from CAD 7.8 million in the third quarter of last year, an increase by over 4% from last quarter. Adjusted EBITDA margin increased by 60 basis points year-over-year to 9% and increased 20 basis points quarter-over-quarter.

The year-over-year and sequential improvement in adjusted EBITDA and adjusted EBITDA margin was primarily the result of the onboarding of the new beds and improved efficiencies and cost savings initiatives. We delivered our third consecutive quarter of positive net income at CAD 1.6 million compared with a net loss of CAD 360,000 in the third quarter of 2024. Net income of CAD 561,000 last quarter. The growth in our net income was due primarily to new onboards and lower finance and transaction costs. Cash from operations was CAD 10.1 million compared to CAD 12.2 million last year and CAD 3.8 million in the second quarter of 2025. The year-over-year comparison is largely due to changes in non-cash working capital items.

Cash at September 30 grew to CAD 15.5 million from CAD 8.7 million at the end of the second quarter, which was a primary driver behind the improvement in net debt to CAD 28.8 million compared to CAD 34.8 million last quarter. Net debt to adjusted EBITDA at the end of the third quarter improved to 0.9 times from 1.1 times in the second quarter of 2025. Subsequent to quarter-end and following the September 30 National Day for Truth and Reconciliation, the company completed a number of transactions that reduced our quarter-end cash balance. We made a dividend payment of CAD 1.3 million, repaid CAD 2 million of principal and interest on our outstanding debt, and repurchased for cancellation 139,500 shares under our normal course issuer bid at an aggregate cost of approximately CAD 497,000.

The initiation of a quarterly dividend and the renewal of our share buyback program are evidence of the confidence we have in the strength of our financial position. Our sustained and improving operating performance, and the predictability of our cash flows. With that, I will turn the call back over to Puneet.

Puneet Khanna, President and CEO, CareRx Corporation: Thank you, Suzanne. Before we close, I would like to take a moment to highlight some of the ways we continue to engage with our communities, employees, and industry partners this quarter. We were proud to introduce our new Voices of CareRx video series on LinkedIn, a bi-monthly social media video series which shines the light on CareRx team members. Through their stories, we showcase the compassion, dedication, and professionalism that defines our organization, what inspires them about working at CareRx with seniors in our communities, and the positive impact our teams have on residents and their families. In addition, our teams also presented at ISMP Canada, the Institute for Safe Medication Practices, where they shared important insights on medication safety in long-term care. Their participation demonstrated our ongoing leadership and expertise in advancing best practices in medication management across our homes and pharmacies nationwide.

Finally, I’m proud that our team continues to actively participate in community events, including Long-Term Care Community Engagement Day, an event that brings together residents, health teams, families, and community leaders to share stories and celebrate the vital role long-term care homes play in our communities. We also participated in the Strides for Seniors Walk and Run, which raised over CAD 2 million to support York Region’s first nonprofit residential respite dementia care center. These initiatives allow us to collaborate with partners across the continuum of care, advocate for the needs of seniors, and strengthen our connection to the people and communities we serve. Together, these activities reflect our commitment not only to operational performance but to being a trusted voice and a partner in the long-term care and seniors’ care sector. With that, I would now like to open the call to questions. Operator.

Conference Moderator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star and then One on your touchstone phone. If you’re using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star and then Two. Participants are requested to kindly restrict their questions to one followed by a follow-up question per participant. At this time, we will pause momentarily to assemble our roster. We have the first question from the line of Girish Jaishankar from Bloom Burton. Please go ahead.

Girish Jaishankar, Analyst, Bloom Burton: Good morning, Puneet and Suzanne. Thank you very much for taking my question. Just on bed growth, it was fairly modest from the end of Q2 to now. Could you provide any color on the gross bed growth for this quarter, and were there any large rollovers? Also, how many beds did you end the quarter with?

Puneet Khanna, President and CEO, CareRx Corporation: Yep. Good morning, Girish. I can tell you from a year-to-date growth, we’ve had just over 4,200 beds. We did have about 800 beds in Q3 that were supposed to start in the last 10 days, and then the customer asked us to push and roll that over into the first two weeks of October. That was a bit of a push where, obviously, we wanted to win it, but you want to start off the relationship with the customer right, and we ended up pushing that into Q4.

Girish Jaishankar, Analyst, Bloom Burton: Okay. Thanks. How much visibility do you have on new bed wins for the remainder of the year, and are you still confident in that 6,000-8,000 beds added for the year expectation?

Puneet Khanna, President and CEO, CareRx Corporation: Yeah. Yeah. If you look, I mean, I think if you look at the 4,200 we’ve already added year-to-date plus the eight I just mentioned, we’re already at five. Even on the low end of our target at six, it’s in sight, and we are looking to close a few more deals, which would get us to at least that number.

Girish Jaishankar, Analyst, Bloom Burton: Thank you. Just one last one. Are you still on pace for the double-digit EBITDA margin by the end of the year, and have you felt the full impact of the Burnaby facility yet?

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Thank you. With respect to Burnaby, we continue to manage and try to—we will get those efficiencies in the latter half, in that last quarter. We are starting to see those efficiencies and gaining that with the lower mainland now. We are doing everything we can with respect to driving margin expansion in terms of exiting. With respect to double-digit growth, that is something that we would really strive for as we pull through the efficiencies in the P&L in the future.

Girish Jaishankar, Analyst, Bloom Burton: Thank you very much. I’ll hop back into you.

Puneet Khanna, President and CEO, CareRx Corporation: Thanks, Girish.

Conference Moderator: Thank you. We have the next question from the line of Gary Ho from DigiArdens Capital Markets. Please go ahead.

Gary Ho, Analyst, DigiArdens Capital Markets: Good morning. I believe the extended care contract is a shorter-term contract. Just wondering if you’ve kind of reopened that file with that client for the next contract term. Would you approach the bidding differently this time around?

Puneet Khanna, President and CEO, CareRx Corporation: Hey, good morning, Gary. Yep. We are pursuing everyone all the time, everywhere, whatever the saying is. Yeah. We think we have a compelling service offering and value proposition to customers as well. We are always engaged in ongoing conversations with anyone not serviced by us. I think to answer your question, when we amalgamated a number of these pharmacies a few years ago, we were still trying to knit it together and figure out who and what we could become. I think we now are pretty confident in, again, that service delivery and who we are. I think some of the wins you are starting to see over the last couple of quarters are representative of that. I think we would take that to the market going forward, be it that opportunity or anyone else.

Gary Ho, Analyst, DigiArdens Capital Markets: Okay. Great. My second question, I know you’ve been ramping up the Oakville and North Burnaby mega facilities. Any discussions on looking at a third facility yet, or is that too early? I also just want to get an update on your piloting of the hub-and-spoke strategy, leveraging the scale of these facilities. What are you seeing so far from locations you’ve onboarded or tested so far?

Puneet Khanna, President and CEO, CareRx Corporation: Yep. Still a bit early to make a decision on anything else. I think from our pilots and what we have, moving with the hub-and-spoke, we are extremely encouraged by it. Obviously, we are in budget cycle and sort of taking that into our consideration, into our model. We are being able to leverage those high-volume packaging machines, so particularly in Oakville, the BD ROAS that we have, to get more use out of it to cover off other locations. You are really using that value to help offset labor costs in other pharmacies. Yeah, look, we are excited. We think that is the future. I think as with anything we have done, we are going to be measured and make sure before we jump into anything.

Gary Ho, Analyst, DigiArdens Capital Markets: Okay. Great. Those are my two questions. Thank you.

Puneet Khanna, President and CEO, CareRx Corporation: Thanks, Gary.

Conference Moderator: Thank you. We have the next question from the line of Justin Keyword from Stifel. Please go ahead.

Justin Keyword, Analyst, Stifel: Hi. Good morning. Thanks for taking my call. Are you able just to refresh us on the organic growth opportunity? I believe there’s several potential RFPs or contracts that are set to go in the next 12-18 months.

Puneet Khanna, President and CEO, CareRx Corporation: Good morning, Justin. Thanks for the question. Yeah. The pipeline continues to look robust. I think we’re seeing a number of things like just organic opportunities where we’re starting—we’re seeing either RFPs or our sales team that is soliciting have targeted a number of things, and we have those built into our pipeline. I think I’ve publicly stated 6,000-8,000 was our target for this year. We are comfortable for that same target next year for what we see in the pipeline. I think the other thing that will continue to be a really strong tailwind are the new developments and new builds that we’re seeing. I think the Ford government announced those 58,000 new and redeveloped beds, which we will see more and more of them come online in 2026 and 2027. We expect to have some growth based on there.

I think the last piece, similar to what we did over the last couple of years on M&A and consolidation, we are seeing that on the home operator side. When you look at the large REITs and the large players in this market, they’re consolidating, and we definitely have some upside there as well.

Justin Keyword, Analyst, Stifel: That’s very helpful. On the mention of the Ontario government investing more in long-term care, is there any elements of the federal budget today that we should be looking out for that could be of note for CareRx and the sector in general?

Puneet Khanna, President and CEO, CareRx Corporation: Not that we expect. Health is provincial, and particularly with pharmacy, it’s provincially driven. That’s why most of our focus is in conversations with provincial governments in the jurisdictions we operate in.

Justin Keyword, Analyst, Stifel: Okay. Understood. Thank you for taking my questions.

Conference Moderator: Thank you. We have the next question from the line of Kyle McPhee from Cornmark Securities. Please go ahead.

Gary Ho, Analyst, DigiArdens Capital Markets: Hi, everyone. Just on the topic of margin expansion, potentially still on the come beyond what you’ve already successfully delivered in recent years here, is there any material margin expansion still on offer from your efficiency and cost-savings efforts, or is any material margin expansion largely just going to come from organically adding beds, getting that favorable contribution margin? Just help us understand how those moving pieces might play out over the next year or so.

Puneet Khanna, President and CEO, CareRx Corporation: Yeah. Thanks for the question, Kyle. So yeah, look, I think a couple of different levers for us to pull here. One, as you said, the bed growth in the system, in the network, and the platform we’ve built, we’ve built capacity. And so when you’re adding beds into these locations, we are not doing it at the same labor increment that is required. So you’re adding beds, not necessarily adding the same amount of labor. So we will get the efficiency from that standpoint. I think we had gone down the path of the lean daily management. We have almost 70% of the network rolled out. We obviously started with our largest locations, working our way down so that we got the biggest bang for our buck. So there’s those opportunities.

And then I think similar to the question that was asked earlier on hub-and-spoke, we feel there’s opportunity on margin that. And then just on procurement and continuing to consolidate vendors that we use in our business as further opportunity.

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Yep. Maybe I can just add to that a little bit, Kyle. With respect to purchasing efficiencies, Puneet just already commented on that. We’ll continue with some of the major providers of things like delivery and supplies. We will continue, maybe it will not be as material, but in terms of managing all of the lines, right, whether that be customer delinquency and/or customer expenses, we continue to manage and ensure that we deliver efficiencies through those methods as well.

Puneet Khanna, President and CEO, CareRx Corporation: Got it. Okay. Thanks for all that, Kyle. For the visible near-term bed adds that you would know about internally, how is that contribution margin shaping up on those beds versus the math of the past? Is the competitive environment changing at all? Irrational actors out there bidding down the economics, or maybe most of what you’re adding is not even facing competitive bidding processes? Can you offer any thoughts on that?

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Sure. Thanks for the question. We continue to manage and pull on our new offerings from customers in the most economic way. We continue to manage and ensure that we’re doing it most efficiently. Again, as Puneet commented earlier, we’ll do that with the most efficient labor add and in the most competitive way. I have not seen anything different in terms of our approach.

Puneet Khanna, President and CEO, CareRx Corporation: No. No. I think the other piece is, in what we’re starting to unleash and being able to offer with respect to robustness in services and programs, that is valuable to the customer too. The mindset we’ve taken, Kyle, is sort of that operating partnership mindset to say, "What can we bring forward that helps save nursing time? How do we keep residents healthier longer in these homes so they’re not being transferred back and forth between hospitals?" All of those pieces are valued by prospects and customers.

Justin Keyword, Analyst, Stifel: Got it. Okay. I’ll squeeze in one last one here. Can you just offer some CapEx guidance for 2026? It sounds like you’re still in your budgeting process, but maybe high-level, the budget and how it allocates across maintenance versus investment in bed adds versus investment in your efficiency plan.

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Yep. I appreciate that question. We are still, as you said, hammering out our 2026 planning horizon. With that, we continue to be in around the CAD 8 million-CAD 10 million mark with respect to capital additions annually. Every year is a little bit different with respect to that allocation, but we will put the capital behind what provides value at the end of the day. Again, CAD 8 million-CAD 10 million from a 2026 perspective.

Justin Keyword, Analyst, Stifel: Okay. Thank you very much. That’s it for me.

Puneet Khanna, President and CEO, CareRx Corporation: Thanks, Kyle.

Conference Moderator: Thank you. We have the next question from the line of Doug Lee from Lead Financial. Please go ahead.

Doug Lee, Analyst, Lead Financial: Yeah. Good morning. Congratulations on the quarter, folks. All arrows pointing upward here. Congratulations, as I said.

Justin Keyword, Analyst, Stifel: Thanks.

Doug Lee, Analyst, Lead Financial: Maybe just building on Kyle’s question about CapEx, maybe just over a longer-term time horizon. I mean, your footprint in Canada is considerable in all of what we consider to be the high-value geographies, but there are a few pockets where you could establish fulfillment centers if desired, I guess. Just wondering if there are any plans in order to expand your geographic footprint independent of the organic bed count growth that you talked about in your original comments.

Puneet Khanna, President and CEO, CareRx Corporation: Yep. Thanks, Doug. You know what? I think we are comfortable in the provinces we are in. I think we’ve been fairly forthcoming. In a discussion that we sort of jumped over Quebec to go into the Maritimes in Moncton, New Brunswick. So we do operate there. We are interested in the Quebec market, but I think I’ll be a bit of a broken record here in saying what we understand the uniqueness of that market and no different than Centrifill or hub-and-spoke or any of the other pieces we do. We like to do our homework and be comfortable before we jump into anything. We will continue to look at Quebec or any other markets as they present themselves to us.

Doug Lee, Analyst, Lead Financial: Thanks for that, Kyle. Not really a follow-up, but a different question. I mean, I see that in the commentary in your MD&A, I mean, you continue to talk about the potential for professional fee reduction in the province of Ontario. Fortunately, that’s the gift that keeps on not giving five years and counting. I was just wondering if there’s a timeframe over which this officially goes away or officially gets established as part of your pricing dynamics in Ontario. That’s it for me.

Puneet Khanna, President and CEO, CareRx Corporation: Yeah. Yeah. You know what? Look. I think it is one of those that we’ve seen that continue to just get rolled over. Again, I think the conversations we’ve had, I think the Ford government in Ontario, very supportive of long-term care. This minister, particularly, is a nurse, understands the value of pharmacists as an interdisciplinary participant and collaborator in the care spectrum. Look, I think we feel optimistic by our relationship, and those are ongoing conversations we have with both the minister and her staff.

Doug Lee, Analyst, Lead Financial: Thanks for that.

Puneet Khanna, President and CEO, CareRx Corporation: Thanks for that.

Conference Moderator: Thank you.

Justin Keyword, Analyst, Stifel: Thank you. We have the next question from the line of Douglas Cooper from Beacon Securities. Please go ahead. Hi. Good morning, everybody. I just want to dig in further to something was—can you hear me?

Puneet Khanna, President and CEO, CareRx Corporation: Yes, we can. Hey, Doug.

Justin Keyword, Analyst, Stifel: Okay. Just something that was brought up earlier about the consolidation of the major home operators, Extendicare, Chartwell, and Sienna in particular, for you guys. How many beds did you—of the bed growth this quarter, how many were realized through, if any, from M&A activity they did, getting beds that you did not have prior to their M&A activity? If not seen yet in the third quarter, what do you think that will come in the fourth quarter or early next year?

Puneet Khanna, President and CEO, CareRx Corporation: Yep. Good question, Doug. I think we may have had—I do not know off the top of my head, but I think there was one small home that got added this quarter. I do not believe we anticipate anything for next quarter, but we do expect some of those bed adds to come through early in 2026.

Justin Keyword, Analyst, Stifel: Can you quantify them at all?

Puneet Khanna, President and CEO, CareRx Corporation: You know what? It’s a retirement home—it’s a retirement group that was acquired. I think total suites was 1,000, but we don’t get full connectivity on all of it. We’re just working through what the exact number of beds would be serviced on that business. If I had to guess, I would say it would be 500-650, but again, to be determined.

Justin Keyword, Analyst, Stifel: Okay. With your balance sheet now in probably the best shape it’s been at, certainly in recent memory, and I can’t remember the last time debt to EBITDA was below one. Will this accelerate any M&A activities you may be contemplating, particularly, I guess, for those companies that may lose beds upon a Sienna or Chartwell acquisition that gets moved to you, somebody’s losing them, that may be fodder for acquisition? Just maybe just some comments on M&A, given your balance sheet and the opportunities.

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Thanks, Doug. With respect to the balance sheet, thank you. It is in probably the best shape that we’ve seen in a very long time. It is one of those things where it provides great opportunity in terms of making the right choices in terms of how we want to invest for value in the future. While we can rely on the strength of our balance sheet, it really does open up opportunities for M&A that does become available and allows us with flexibility in how we handle that. It is very strong, and we do have opportunity for choice in how we want to add beds. I’ll maybe add a lot to that.

Puneet Khanna, President and CEO, CareRx Corporation: Yeah. I think all our competitors, we are open for business, and they all know how to get ahold of me, Doug.

Doug Lee, Analyst, Lead Financial: Okay. Final one for me. Just on the dividend, what prompted the, I guess, the implementation of a dividend as opposed to M&A, for example, or paying down debt further or whatever? Is it going to be $0.02 per quarter? Is that what you anticipate going forward?

Puneet Khanna, President and CEO, CareRx Corporation: Yep. We did a robust review of cash strategy, which was presented to the board. Look, I think we felt we were able to provide some value back to shareholders who’ve been supportive of the business for a long time and at the same time continue to have the opportunity. We’ve got cash. We’re going to continue to generate cash to do M&A to support growth, to do the NCIB. We didn’t feel like we were handcuffing ourselves. I think I’ve been sort of forecasting that a little bit into the last few quarters, saying, "Look, we are really comfortable where debt’s at," and paying down debt just didn’t make sense at this point.

Doug Lee, Analyst, Lead Financial: Okay. Maybe just final one for me. Just to, Suzanne, what was free cash flow in the quarter? Operating cash flow at $10 million, but what was free cash flow? Just so dividend payment represents what of free cash flow in the quarter?

Suzanne Brand, Chief Financial Officer, CareRx Corporation: Yeah. Dividend payment represented about CAD 1.2 million with respect to cash flow for the quarter. Maybe I’m not sure if I misheard you, Doug, but I just want to make sure that I thought I heard you say 3 cents, but it’s 2 cents just to confirm.

Doug Lee, Analyst, Lead Financial: Yeah. Just wondering what free cash flow was in the quarter.

Suzanne Brand, Chief Financial Officer, CareRx Corporation: The free cash flow in the quarter would have been approximately CAD 10 million. I can get that number more accurately for you.

Doug Lee, Analyst, Lead Financial: Okay. That’d be great. That’s it for me. Thank you.

Puneet Khanna, President and CEO, CareRx Corporation: Thanks, Doug.

Conference Moderator: Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to the management for closing comments.

Puneet Khanna, President and CEO, CareRx Corporation: Thank you, everyone, for participating in today’s call and your continued interest in CareRx. We look forward to reporting on our continued progress next quarter.

Conference Moderator: Thank you. The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

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