Covalon Technologies (COV) investor relations material

Executive summary

• Q3 revenue reached $10,041,033 (CAD 10 million), up 20% year-over-year, with growth across all sales channels, led by U.S. vascular access and contamination protection solutions.

• Gross profit rose 73% to $6,745,607 (CAD 6.7 million), with gross margin improving to 67.2% from 46.5% last year, driven by high-margin U.S. vascular business and favorable inventory adjustments.

• Net income for Q3 was $2,810,837 (CAD 2.8 million), a significant increase from the prior year; adjusted EBITDA was $3.0 million, more than triple last year.

• Cash position increased to $19.4 million at quarter-end, up $2.8 million from the previous quarter, with no bank debt.

• All key financial metrics—revenue, gross profit, gross margin, adjusted gross margin, and adjusted EBITDA—were the highest in any quarter in the past five years.

Financial highlights

• Q3 gross margin was 67.2%, up from 46.5% last year; adjusted gross margin was 66.4% versus 55.6%.

• Operating expenses remained stable at $4,018,397 (CAD 4 million), up just 1% year-over-year.

• Generated $7.4 million in operating cash flow in nine months, up from $3.0 million last year.

• Paid out $4.1 million in the first-ever dividend and invested over $1 million in capital expenditures.

• Year-to-date revenue was $25,656,349 (CAD 26 million), up 6% year-over-year, with net income more than doubling to $4 million and EPS rising to $0.15.

Outlook and guidance

• Management expressed strong optimism for continued growth, citing robust sales momentum, expanding adoption of key products, and a robust pipeline for hospital opportunities.

• Investments in manufacturing and regulatory submissions are expected to support future efficiency and international expansion.

• Fiscal 2026 is on track for strong performance, with growth expected to continue into next year and beyond.

• Focus remains on expanding contamination protection solutions and driving value creation.

• Management highlights massive further opportunity with existing account penetration and new account acquisition.