HOUSTON, Aug. 2, 2018 /PRNewswire/ -- Nobilis Health Corp.
(NYSE American: HLTH) (NEO: HLTH) ("Nobilis" or the "Company")
today announced its financial results for the second quarter ended
June 30, 2018.
"In the second quarter of 2018, we continued to see a positive,
yet familiar, trend in our key operating metrics. Gross margin
remained strong in the second quarter measuring 15.9% of total
revenues; total operating expense per case dropped by 35.0%
year-over-year, and Net Income to Nobilis totaled $0.9 million in the second quarter, despite a
year-over-year $10.8 million
reduction in top line revenues. The year-over-year change in top
line revenues in the second quarter can be attributed to the
discontinuation of our lab testing ancillary, representing about
$8.3 million of non-recurring revenue
in the second quarter. Net income was impacted by an additional
$1.3 million of amortization related
to the Elite acquisition. Excluding that impact, net income for the
second quarter 2018 would have increased to $2.2 million.
Total Adjusted EBITDA1 for the second quarter of 2018
was $11.4 million, representing an
increase of $1.4 million, or 13.7%,
from the prior corresponding period. As a percent of revenues,
Adjusted EBITDA1 increased from 12.6% in Q2 of 2017, to
16.5% of revenues in Q2 of 2018, gaining 390 basis points. Adjusted
EBITDA1 for the first six months of 2018 increased to
$16.5 million, or 36.9%, from
$12.1 million in the prior
corresponding period. Adjusted EBITDA1 for the trailing
twelve months ended June 30th, 2018
totaled $45.8 million, versus
$37.2 million for the trailing twelve
month period ended June 30th, 2017,"
said Harry Fleming, CEO.
Second Quarter 2018 Results
Total revenues for the second quarter of 2018 were $69.2 million, a 13.5% decrease over the same
prior year period. Total case volume increased by 1,644 cases to
6,241 cases, or 35.8%, compared to 4,597 cases in the prior
corresponding period. The decrease in total revenue was largely
driven by the impact of the implementation of ASC 606 and the loss
of the company's Lab Testing ancillary business. The addition of
the Elite entities and the two new in-network ASCs contributed
positively during the second quarter, offsetting the loss of the
physician group mentioned on the first quarter earnings call, as
well as the continued softness experienced in the Houston market.
Revenue per case dipped to $11,086
in the second quarter 2018 from $17,394 in the prior corresponding period. This
decrease can be attributed to the loss of lab testing revenues and
a larger in-network case mix in 2018.
Net income attributable to Nobilis for the second quarter of
2018 was $0.9 million, or
$0.01 per fully diluted share,
compared to a net income of $1.6
million, or $0.02 per fully
diluted share, in the second quarter of 2017.
Adjusted EBITDA1 for the second quarter of 2018,
which adds back certain non-cash and non-recurring expenses, was
$11.4 million, an increase of 13.7%
over $10.1 million in the same
quarter last year.
Total cash was $16.5 million and
accounts receivable was $143.7
million as of June 30, 2018, compared to $22.5 million and $144.5
million, respectively, at December 31, 2017.
Six Months Ended June 2018
Results
Total revenues for the six months ended June 30, 2018 were $133.5
million, a 9.9% decrease over the same prior year period.
Total case volume for the first six months of 2018 increased by
2,488 cases to 11,516 cases, or 27.6%, compared to 9,028 cases in
the prior corresponding period. The decrease in total revenue
during the first six months of 2018 was driven by the same factors
influencing the revenue shortfall experienced in the second
quarter, which was the discontinuation of the Lab Testing business
and the impact of the change in accounting guidance. Lab Testing
represented approximately $13.8 million
dollars of revenue in the first six months of 2017 which did
not re-occur in 2018, and the full year impact of the change in
accounting is $6.8 million.
Revenue per case dipped to $11,595
in the first six months of 2018 from $16,423 in the prior 2017 period due to the loss
of lab testing revenues in 2018 as well as a higher portion of
Nobilis' case mix being comprised of in-network volume.
Net loss attributable to Nobilis for the first six months of
2018 was $3.0 million, or
$0.04 per fully diluted share,
compared to a net loss of $0.8
million, or $0.01 per fully
diluted share, in the same prior year period.
Adjusted EBITDA1 for the first six months of
2018, which adds back certain non-cash and non-recurring expenses,
was $16.5 million, an increase of
36.9% over $12.1 million in the same
quarter last year.
Revised Full Year 2018 Guidance
- Revenue in the range of $315.0 million to $330.0 million
- Adjusted EBITDA in the range of $56.0 million to
$59.0 million
Conference Call Information
Nobilis Health will host a conference call Thursday morning, at
8:00 a.m. CDT (9:00 a.m. EDT) to discuss its financial results
for the second quarter 2018. To participate in the conference call,
please dial (833) 233-4454 in the U.S. and Canada, and +1 (647) 689-4133 internationally.
Please enter conference ID 1348089. There will be a livestream of
the conference call available
at: http://investors.nobilishealth.com/investors/events-and-presentations/.
About Nobilis Health Corp.
Nobilis Health (www.NobilisHealth.com) is a full-service
healthcare development and management company, with more than 30
locations across Texas and Arizona, including
hospitals, ambulatory surgery centers, and multi-specialty clinics.
In addition, Nobilis Health partners with more than 30
facilities across the country. Marketing nine independent
brands, Nobilis Health deploys a unique patient
acquisition strategy driven by proprietary, direct-to-consumer
marketing technology, focusing on a specified set of procedures
that are performed at its facilities by local
physicians. Nobilis Health's business model connects
patients with physicians and delivers the highest quality
healthcare.
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of Canadian and United
States securities laws, including the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, as amended. Forward-looking
statements include all statements that do not relate solely to
historical or current facts and may be identified by the use of
words such as "may," "believe," "will," "expect," "project,"
"estimate," "anticipate," "plan" or "continue." These
forward-looking statements are based on current plans and
expectations and are subject to a number of risks, uncertainties
and other factors which could significantly affect current plans
and expectations and our future financial condition and results.
These factors, which could cause actual results, performance and
achievements to differ materially from those anticipated, include,
but are not limited to our ability to successfully maintain
effective internal controls over financial reporting; our ability
to implement our business strategy, manage the growth in our
business, and integrate acquired businesses; the risk of litigation
and investigations, and liability claims for damages and other
expenses not covered by insurance; the risk that payments from
third-party payers, including government healthcare programs, may
decrease or not increase as costs increase; adverse developments
affecting the medical practices of our physician limited partners;
our ability to maintain favorable relations with our physician
limited partners; our ability to grow revenues by increasing case
and procedure volume while maintaining profitability at the Nobilis
Facilities; failure to timely or accurately bill for services; our
ability to compete for physician partners, patients and strategic
relationships; the risk of changes in patient volume and patient
mix; the risk that laws and regulations that regulate payments for
medical services made by government healthcare programs could cause
our revenues to decrease; the risk that contracts are canceled or
not renewed or that we are not able to enter into additional
contracts under terms that are acceptable to us; and the risk of
potential decreases in our reimbursement rates. The foregoing are
significant factors we think could cause our actual results to
differ materially from expected results. However, there could be
additional factors besides those listed herein that also could
affect us in an adverse manner.
We have not undertaken any obligation to publicly update or
revise any forward-looking statements. All of our forward-looking
statements speak only as of the date of the document in which they
are made or, if a date is specified, as of such date. Subject to
any mandatory requirements of applicable law, we disclaim any
obligation or undertaking to provide any updates or revisions to
any forward-looking statement to reflect any change in our
expectations or any changes in events, conditions, circumstances or
information on which the forward-looking statement is based. All
subsequent written and oral forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in
their entirety by the foregoing factors and in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2017, filed
on March 12, 2018, as updated by other filings with the
Securities and Exchange Commission.
Nobilis Health
Corp. and Subsidiaries
|
Consolidated
Balance Sheets
|
June 30, 2018
and December 31, 2017
|
(in
thousands, except share amounts)
|
(unaudited)
|
|
|
June 30,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
Current
Assets:
|
|
|
|
Cash
|
$
|
16,531
|
|
|
$
|
22,536
|
|
Trade accounts
receivable, net of allowance of $0 and $2,598 at June 30, 2018 and
December 31, 2017, respectively
|
143,699
|
|
|
144,522
|
|
Medical
supplies
|
3,236
|
|
|
3,356
|
|
Prepaid expenses and
other current assets
|
14,484
|
|
|
14,472
|
|
Total current
assets
|
177,950
|
|
|
184,886
|
|
Property and
equipment, net
|
46,173
|
|
|
51,559
|
|
Intangible assets,
net
|
62,695
|
|
|
65,990
|
|
Goodwill
|
116,072
|
|
|
116,072
|
|
Deferred tax
asset
|
10,710
|
|
|
9,951
|
|
Other long-term
assets
|
2,571
|
|
|
2,580
|
|
Total
Assets
|
$
|
416,171
|
|
|
$
|
431,038
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities:
|
|
|
|
Trade accounts
payable
|
$
|
23,790
|
|
|
$
|
24,312
|
|
Accrued
liabilities
|
29,516
|
|
|
35,393
|
|
Current portion of
capital leases
|
2,992
|
|
|
3,249
|
|
Current portion of
long-term debt
|
3,764
|
|
|
3,766
|
|
Current portion of
convertible promissory notes
|
5,750
|
|
|
4,250
|
|
Other current
liabilities
|
14,665
|
|
|
16,324
|
|
Total current
liabilities
|
80,477
|
|
|
87,294
|
|
Lines of
credit
|
26,000
|
|
|
18,000
|
|
Long-term capital
leases, net of current portion
|
11,303
|
|
|
12,667
|
|
Long-term debt, net
of current portion
|
88,072
|
|
|
90,619
|
|
Convertible
promissory notes, net of current portion
|
1,750
|
|
|
4,250
|
|
Warrant and stock
option derivative liabilities
|
228
|
|
|
384
|
|
Other long-term
liabilities
|
2,853
|
|
|
3,036
|
|
Total
liabilities
|
210,683
|
|
|
216,250
|
|
Commitments and
Contingencies
|
|
|
|
Contingently
redeemable noncontrolling interest
|
15,765
|
|
|
17,161
|
|
Total shareholders'
equity
|
|
|
|
Common shares, no par
value, unlimited shares authorized, 78,250,469 and 78,183,802
shares issued and outstanding at June 30, 2018 and December 31,
2017
|
—
|
|
|
—
|
|
Additional paid in
capital
|
227,735
|
|
|
225,790
|
|
Accumulated
deficit
|
(78,212)
|
|
|
(75,245)
|
|
Total shareholders'
equity attributable to Nobilis Health Corp.
|
149,523
|
|
|
150,545
|
|
Noncontrolling
interests
|
40,200
|
|
|
47,082
|
|
Total shareholders'
equity
|
189,723
|
|
|
197,627
|
|
Total Liabilities and
Shareholders' Equity
|
$
|
416,171
|
|
|
$
|
431,038
|
|
Nobilis Health
Corp. and Subsidiaries
|
Consolidated
Statements of Operations
|
(in thousands,
except share and per share amounts)
|
(unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
Net patient
and professional fees
|
$
|
64,479
|
|
|
$
|
77,073
|
|
|
$
|
126,961
|
|
|
$
|
141,974
|
|
Contracted
marketing revenues
|
2,309
|
|
|
1,573
|
|
|
2,444
|
|
|
2,952
|
|
Factoring
revenues
|
1,561
|
|
|
1,316
|
|
|
2,370
|
|
|
3,338
|
|
Other
revenue
|
840
|
|
|
—
|
|
|
1,758
|
|
|
—
|
|
Total revenues
|
69,189
|
|
|
79,962
|
|
|
133,533
|
|
|
148,264
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Salaries and
benefits
|
16,187
|
|
|
15,417
|
|
|
32,414
|
|
|
30,738
|
|
Drugs and
supplies
|
10,501
|
|
|
12,579
|
|
|
20,416
|
|
|
25,323
|
|
General and
administrative
|
26,353
|
|
|
35,150
|
|
|
54,676
|
|
|
68,838
|
|
Depreciation
and amortization
|
5,114
|
|
|
2,728
|
|
|
9,745
|
|
|
5,066
|
|
Total operating expenses
|
58,155
|
|
|
65,874
|
|
|
117,251
|
|
|
129,965
|
|
Corporate
expenses:
|
|
|
|
|
|
|
|
Salaries and
benefits
|
2,975
|
|
|
3,623
|
|
|
5,586
|
|
|
6,062
|
|
General and
administrative
|
3,197
|
|
|
2,595
|
|
|
6,742
|
|
|
6,848
|
|
Legal
expenses
|
638
|
|
|
405
|
|
|
1,468
|
|
|
976
|
|
Depreciation
|
94
|
|
|
80
|
|
|
188
|
|
|
163
|
|
Total corporate expenses
|
6,904
|
|
|
6,703
|
|
|
13,984
|
|
|
14,049
|
|
Income from
operations
|
4,130
|
|
|
7,385
|
|
|
2,298
|
|
|
4,250
|
|
Other (income)
expense:
|
|
|
|
|
|
|
|
Change in fair
value of warrant and stock
option
derivative liabilities
|
(217)
|
|
|
188
|
|
|
(156)
|
|
|
(187)
|
|
Interest
expense
|
3,292
|
|
|
1,363
|
|
|
6,177
|
|
|
2,618
|
|
Other (income)
expense, net
|
(1,180)
|
|
|
330
|
|
|
(2,113)
|
|
|
72
|
|
Total other expense
|
1,895
|
|
|
1,881
|
|
|
3,908
|
|
|
2,503
|
|
Income (Loss) before
income taxes and noncontrolling interests
|
2,235
|
|
|
5,504
|
|
|
(1,610)
|
|
|
1,747
|
|
Income tax expense
(benefit), net
|
495
|
|
|
2,249
|
|
|
(209)
|
|
|
698
|
|
Net income
(loss)
|
1,740
|
|
|
3,255
|
|
|
(1,401)
|
|
|
1,049
|
|
Net income
attributable to noncontrolling interests
|
855
|
|
|
1,670
|
|
|
1,566
|
|
|
1,862
|
|
Net income (loss)
attributable to Nobilis Health Corp. (Basic)
|
$
|
885
|
|
|
$
|
1,585
|
|
|
$
|
(2,967)
|
|
|
$
|
(813)
|
|
Net income (loss) per
basic common share
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.01)
|
|
Net income (loss) per
fully diluted common share
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.01)
|
|
Weighted average
shares outstanding (basic)
|
78,186,000
|
|
|
77,805,014
|
|
|
78,184,907
|
|
|
77,805,014
|
|
Weighted average
shares outstanding (fully diluted)
|
82,153,945
|
|
|
78,115,242
|
|
|
78,184,907
|
|
|
77,805,014
|
|
Nobilis Health
Corp. and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
(loss)
|
$
|
(1,401)
|
|
|
$
|
1,049
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation
and amortization
|
9,933
|
|
|
5,229
|
|
Share-based
compensation
|
1,681
|
|
|
1,630
|
|
Change in fair
value of warrant and stock option derivative liabilities
|
(156)
|
|
|
(187)
|
|
Deferred income
taxes
|
(759)
|
|
|
120
|
|
Loss on sale of
property and equipment
|
61
|
|
|
—
|
|
Loss from
equity method investment
|
—
|
|
|
108
|
|
Amortization of
deferred financing fees
|
670
|
|
|
233
|
|
Changes in
operating assets and liabilities, net of assets acquired and
liabilities assumed:
|
|
|
|
Trade
accounts receivable
|
823
|
|
|
15,279
|
|
Medical
supplies
|
120
|
|
|
1,300
|
|
Prepaid
expenses and other current assets
|
(12)
|
|
|
(2,714)
|
|
Other
long-term assets
|
9
|
|
|
—
|
|
Trade
accounts payable and accrued liabilities
|
(6,399)
|
|
|
(5,130)
|
|
Other
current liabilities
|
(1,659)
|
|
|
2,280
|
|
Other
long-term liabilities
|
(183)
|
|
|
(303)
|
|
Net cash provided by operating activities
|
2,728
|
|
|
18,894
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchase of property and equipment
|
(1,338)
|
|
|
(3,802)
|
|
Proceeds on sale of property and equipment
|
22
|
|
|
—
|
|
Acquisitions, net of cash acquired
|
—
|
|
|
(7,883)
|
|
Sale of additional ownership interest in subsidiaries
|
263
|
|
|
—
|
|
Net cash used for investing activities
|
(1,053)
|
|
|
(11,685)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Distributions to noncontrolling interests
|
(9,840)
|
|
|
(1,520)
|
|
Principal payments on capital lease obligations
|
(1,621)
|
|
|
(2,214)
|
|
Proceeds from line of credit
|
8,000
|
|
|
3,000
|
|
Payments on debt
|
(4,219)
|
|
|
(1,356)
|
|
Deferred financing fees
|
—
|
|
|
(466)
|
|
Net cash used for financing activities
|
(7,680)
|
|
|
(2,556)
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH
|
(6,005)
|
|
|
4,653
|
|
CASH — Beginning of
period
|
22,536
|
|
|
24,572
|
|
CASH — End of
period
|
$
|
16,531
|
|
|
$
|
29,225
|
|
Nobilis Health
Corp. and Subsidiaries
|
Reconciliation of
Non-GAAP Financial Measures
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Nobilis Health Corp.
|
|
$
|
885
|
|
|
$
|
1,585
|
|
|
$
|
(2,967)
|
|
|
$
|
(813)
|
|
Interest
|
|
3,292
|
|
|
1,363
|
|
|
6,177
|
|
|
2,618
|
|
Income tax expense
(benefit), net
|
|
495
|
|
|
2,249
|
|
|
(209)
|
|
|
698
|
|
Depreciation and
amortization
|
|
5,208
|
|
|
2,808
|
|
|
9,933
|
|
|
5,229
|
|
EBITDA
|
|
9,880
|
|
|
8,005
|
|
|
12,934
|
|
|
7,732
|
|
|
|
|
|
|
|
|
|
|
Non-cash compensation
expenses
|
|
846
|
|
|
570
|
|
|
1,681
|
|
|
1,835
|
|
Change in fair value
of warrant and stock option derivative liabilities
|
|
(217)
|
|
|
188
|
|
|
(156)
|
|
|
(187)
|
|
Acquisition
expenses
|
|
619
|
|
|
558
|
|
|
1,448
|
|
|
1,192
|
|
Non-recurring
expenses
|
|
306
|
|
|
732
|
|
|
613
|
|
|
1,495
|
|
Adjusted
EBITDA1
|
|
$
|
11,434
|
|
|
$
|
10,053
|
|
|
$
|
16,520
|
|
|
$
|
12,067
|
|
|
|
|
|
|
|
|
|
|
1 Use of Non-GAAP Financial
Measures
Adjusted EBITDA is defined as earnings before interest,
income taxes, depreciation and amortization, non-cash compensation
expenses, change in fair value of warrant and stock option
derivative liabilities, acquisition expenses, and non-recurring
expenses. Adjusted EBITDA should not be considered a measure of
financial performance required by accounting principles generally
accepted in the United States of
America ("U.S. GAAP"). Items excluded from Adjusted EBITDA
are significant components in understanding and assessing financial
performance. Adjusted EBITDA is an analytical indicator used by
management and the health care industry to evaluate company
performance, allocate resources and measure leverage and debt
service capacity. Adjusted EBITDA should not be considered in
isolation or as an alternative to net income, cash flows generated
by operations, investing or financing activities, or other
financial statement data presented in the consolidated financial
statements as indicators of financial performance or liquidity.
Because Adjusted EBITDA is not a measurement determined in
accordance with U.S. GAAP and is thus susceptible to varying
calculations, Adjusted EBITDA as presented may not be comparable to
other similarly titled measures of other companies.
Contact Information:
Joel Lehr
Assistant Vice President, Corporate Communications
IR@nobilishealth.com
346-207-6342
View original content with
multimedia:http://www.prnewswire.com/news-releases/nobilis-health-reports-second-quarter-2018-financial-results-300690783.html
SOURCE Nobilis Health Corp.