Covalon Technologies Ltd. (TSXV: COV, OTCQX: CVALF), a leader in advanced medical technologies, has announced impressive financial results for the first quarter of fiscal 2025, ending December 31, 2024. This marks the fourth consecutive quarter of year-over-year revenue growth for the company, highlighting its successful trajectory in the medical consumables sector.
CEO Brent Ashton emphasized the robust performance driven by Covalon’s US Medical Consumables business, which remains a primary focus. The company achieved a remarkable 75% revenue growth, reaching approximately $8.17 million compared to $4.66 million during the same period last year. Product revenue alone surged by 77%, totaling around $8.08 million, fueled by increased demand for Covalon’s collagen dressing and expanded product offerings within US hospitals.
Covalon reported impressive financial highlights, achieving a gross profit of $5 million with a gross margin of 61.2%, reflecting a remarkable 75% increase from the previous year. Additionally, the company recorded an Adjusted EBITDA of $1.6 million, a significant turnaround of $2.8 million compared to the same period last year, moving from an Adjusted EBITDA loss of $4 million in the prior twelve months. Furthermore, earnings per share rose to $0.04, representing an increase of $0.07 over the prior year.
Despite this strong growth, Covalon experienced a slight sequential slowdown in its US Collagen business due to normalization in channel inventory. However, Ashton remains optimistic about recovery in the second half of fiscal 2025, supported by ongoing customer discussions and forecasts.
Covalon has also celebrated several key achievements during this quarter:
- The company was recognized as both a 2025 TSX Ventures Top 50 Company and a 2025 OTCQX Best 50 Company, reflecting its strong performance in 2024.
- A new patent was secured for its flagship VALGuard® Line Guard product line, enhancing its competitive edge in the market.
- Covalon achieved a remarkable 39% year-over-year revenue growth from its top 50 customers in the US Vascular Access and Surgical Consumables segment while adding 21 new hospital customers.
- The VALGuard® Line Guard product line received approval for system-wide use at one of the top five Integrated Delivery Networks (IDNs) in the United States.
In terms of operational performance, Covalon managed to reduce total operating expenses by 15%, falling to approximately $3.68 million from $4.32 million in the previous year. This reduction is largely attributed to restructuring efforts within the sales and marketing teams completed in the prior fiscal year. Research and development expenses saw an increase to approximately $373,339 due to higher patent and trademark costs, while sales and marketing expenses decreased significantly by 27% to about $1.21 million.
Covalon’s commitment to innovation and operational efficiency positions it for continued growth in the competitive medical technology landscape.
