- Revenue increased 328% to $8,189,678 in the three-month period ended
September 30, 2019 compared to the
three months ended October 31,
2018.
- WELL significantly increased its digital services EMR footprint
in the third quarter to 852 primary health medical clinics with the
acquisition of Kela Atlantic Inc. ("KAI"). The Company
expects to further increase its footprint to supporting
approximately 946 clinics and over 6,000 registered physicians and
practitioners across Canada with
the proposed acquisition of OSCARwest EMR Services Inc.
("OSCARwest").
- Subsequent to the end of the quarter, WELL expanded its
clinical services with the closing of SleepWorks Medical Inc.
("SleepWorks") and also announced the proposed acquisition
of Spring Medical Centre Ltd. ("Spring Medical").
- WELL ended the quarter with a strong balance sheet with
$19,406,512 in cash and cash
equivalents.
VANCOUVER, Nov. 12, 2019 /CNW/ - WELL Health Technologies
Corp. (TSX.V: WELL) (the "Company" or "WELL"), a
company focused on consolidating and modernizing clinical and
digital assets within the primary healthcare sector, announces it
has filed its condensed interim consolidated financial statements
and Interim MD&A – Quarterly Highlights for fiscal third
quarter ended September 30, 2019.
On December 11, 2018, the Board of
Directors approved a resolution to change the Company's year-end
from October 31 to December 31.
Accordingly, the condensed interim consolidated financial
statements for the period ended September
30, 2019 include the results for the three-months and
nine-months ended September 30, 2019
with comparatives for the three-months and nine-months ended
October 31, 2018.
Third Quarter Financial and Business Highlights:
- WELL achieved record quarterly revenue of $8,189,678 during the three months ended
September 30, 2019 compared to
$1,911,625 revenue generated during
the three months ended October 31,
2018 - an increase of 328% primarily attributable to the
Company's acquisitions over the past year.
- Gross margin(1) increased to 35.2% in the three
months ended September 30, 2019,
compared to 29.2% in the three months ended October 31, 2018 mainly due to the addition of
higher margin digital services revenue.
- Adjusted EBITDA(2)(3) loss was $512,076 for the 3-month period ended
September 30, 2019, compared to
Adjusted EBITDA(2) loss of $540,705 in the 3-month period ended October 31, 2018.
- On July 1, 2019, WELL completed
its acquisition of KAI, who provides OSCAR-based EMR software
and services to approximately 562 clinics across Canada, supporting over 2,100 registered
physicians and practitioners.
- On August 15, 2019, WELL
completed a bought deal private placement of 10,350,000 special
warrants of the Company at a price of $1.45 per special warrant for gross proceeds of
$15,007,500. The offering included
participation from Sir Li Ka-shing
and members of WELL's management team inclusive of the Company's
CEO, CFO and SVP of Strategic Partnerships and Marketing.
- On September 25, 2019, WELL
announced it entered into a share purchase agreement with the
shareholders of OSCARwest, a provider of EMR software, support and
other services to 90 clinics serving approximately 1,100 registered
physicians and practitioners.
"We continued to be very active in executing on our acquisition
growth strategy in the third quarter," said Hamed Shahbazi, Chairman and CEO of WELL. "We
completed the acquisition of KAI and subsequently formed the WELL
EMR Group encompassing all of the Company's current and future EMR
assets where we are seeing strong organic growth. With the
proposed acquisition of OSCARwest, we continue to further
consolidate the OSCAR-based EMR market and strengthen our position
as the third largest EMR service provider in Canada (based on our research). We have a very
robust pipeline of potential acquisitions in both our clinical and
digital portfolios and remain diligent in implementing our
acquisition strategy."
Subsequent Events:
- On October 1, 2019, the Company
completed its 51% majority ownership stake in SleepWorks, a
provider of services for patients who suffer from sleep disorders,
who has provided diagnostic services to over 10,000 patients since
inception.
- On October 11, 2019, the Company
announced a Normal Course Issuer Bid ("NCIB") which
commenced on October 17, 2019 and is
expected to terminate on October 16,
2020, or such an earlier date if the maximum number of
shares of 5,416,226 are purchased (representing 5% of the issued
and outstanding shares).
- On October 23, 2019, the Company
announced it has entered into a definitive share purchase agreement
with the shareholder of Spring Medical Centre Ltd. ("Spring
Medical"), a provider of integrative health services in
Burnaby, BC, pursuant to which
WELL has agreed to acquire 51% of the issued and outstanding shares
of Spring Medical, with an option to acquire the remaining 49% in
the future.
Outlook:
WELL expects Fiscal Q4 revenue to benefit from the closing of
the SleepWorks acquisition and higher seasonal revenue in clinical
services. The Company continues to execute on its 2019 growth
strategy by focusing on the following: (i) Achieving organic
revenue growth in both its clinical and digital portfolios; (ii)
In-organic growth obtained by developing an active pipeline of
potential acquisition opportunities including accretive health
clinics, OSCAR-based EMR service providers and other digital health
related technologies; and (iii) Realizing operational
excellence through the use of technology and shared services
infrastructure to support our doctor partners and service our
patients.
Conference Call:
WELL will hold a call to discuss its 2019 third quarter
financial results on Tuesday November 12,
2019 at 12:30 pm ET
(9:30 am PT). Please use the
following dial-in numbers: 416-764-8609 (Toronto local), 778-383-7417 (Vancouver local) or 1-888-390-0605
(Toll-Free), with Conference ID: 73454719.
Selected Financial Highlights:
Please see SEDAR for complete copies of the
Company's condensed interim consolidated financial statements
and Interim MD&A – Quarterly Highlights for fiscal third
quarter ended September 30, 2019.
|
For the three
months ended
|
For the nine
months ended
|
|
September
30, 2019
|
October
31, 2018
|
September
30, 2019
|
October
31, 2018
|
|
$
|
$
|
$
|
$
|
|
Revenue
|
8,189,678
|
1,911,625
|
22,979,992
|
5,897,343
|
|
Cost of clinical and
digital services
|
(5,309,054)
|
(1,352,490)
|
(15,580,976)
|
(4,166,994)
|
|
Gross
Profit(1)
|
2,880,624
|
559,135
|
7,399,016
|
1,730,349
|
|
Gross
Margin(1)
|
35.2%
|
29.2%
|
32.2%
|
29.3%
|
|
Adjusted
EBITDA(2) (3)
|
(512,076)
|
(540,705)
|
(1,406,796)
|
(794,938)
|
|
Net loss from
continuing operations(3)
|
(4,833,216)
|
(916,849)
|
(8,009,981)
|
(1,698,920)
|
|
Total comprehensive
loss for the period(3)
|
(4,833,216)
|
(907,462)
|
(8,009,981)
|
(1,841,533)
|
|
Net loss per share -
from continuing operations
|
(0.05)
|
(0.01)
|
(0.09)
|
(0.02)
|
|
Net loss per share -
for the period
|
(0.05)
|
(0.01)
|
(0.09)
|
(0.03)
|
|
Weighted average
number of common shares outstanding (basic and diluted)
|
97,791,445
|
80,875,583
|
91,957,814
|
71,421,728
|
|
|
|
|
|
|
Reconciliation of
net income to Adjusted EBITDA
|
|
|
|
|
|
Net loss for the
period
|
(4,833,216)
|
(907,462)
|
(8,009,981)
|
(1,841,533)
|
|
Depreciation and
amortization
|
422,983
|
12,470
|
1,210,158
|
35,938
|
|
Income tax
|
76,176
|
435
|
161,176
|
9,442
|
|
Interest
income
|
(59,186)
|
(42,484)
|
(139,812)
|
(75,144)
|
|
Interest
expense
|
553,805
|
6,837
|
1,079,013
|
19,296
|
|
Rent expense on
finance leases
|
(469,029)
|
-
|
(1,291,799)
|
-
|
|
Stock-based
compensation
|
1,023,857
|
221,762
|
2,250,975
|
639,923
|
|
Net loss (income)
from discontinued operations
|
-
|
(9,387)
|
-
|
142,613
|
|
Special warrants
related expenses
|
2,458,790
|
-
|
2,458,790
|
-
|
|
Time-based earn-out
expense
|
115,934
|
-
|
388,376
|
-
|
|
Transaction,
restructuring, & integration costs expensed
|
197,810
|
177,124
|
486,308
|
274,527
|
|
Adjusted
EBITDA(2) (3)
|
(512,076)
|
(540,705)
|
(1,406,796)
|
(794,938)
|
|
Notes:
|
|
|
(1)
|
Non-GAAP
measure. Gross profit and gross margin do not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. The Company
defines gross profit as revenue less cost of clinical and digital
services and gross margin as gross profit as a percentage of
revenue. Gross profit and gross margin should not be
construed as an alternative for revenue or net loss determined in
accordance with IFRS. The Company believes that gross profit
and gross margin are meaningful metrics in assessing the Company's
financial performance and operational efficiency.
|
|
(2)
|
Non-GAAP
measure. Earnings before interest, taxes, depreciation and
amortization ("EBITDA") and Adjusted EBITDA should not be construed
as alternatives to net income/loss determined in accordance with
IFRS. EBITDA and Adjusted EBITDA do not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. The Company defines
EBITDA as earnings before interest, taxes, depreciation, and
amortization. Adjusted EBITDA is defined as EBITDA (i) less
net rent expense on premise leases considered to be finance leases
under IFRS and (ii) before transaction, restructuring, and
integration costs, discontinued operations, time-based earn-out
expense and stock-based compensation expense. The Company
believes that Adjusted EBITDA is a meaningful financial metric as
it measures cash generated from operations which the Company can
use to fund working capital requirements, service future interest
and principal debt repayments and fund future growth
initiatives.
|
|
(3)
|
On January 1,
2019, the Company adopted IFRS 16 – Leases ("IFRS 16"). The
adoption of this new standard had a significant impact on the
Company's financial statements, including its statement of loss and
comprehensive loss, statement of financial position and statement
of changes in cash flows. As a result of adopting the new
standard, the Company has classified the majority of its premise
leases and subleases as finance leases at January 1, 2019, all of
which were previously classified as operating leases. The
Company adopted the new standard utilizing the modified
retrospective exemption which did not require the restatement of
prior periods. See note 3(f) in the Company's condensed
interim consolidated financial statements for further information
on the accounting treatment of leases under IFRS
16.
|
WELL HEALTH TECHNOLOGIES CORP.
Per:
"Hamed Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chairman and Director
About WELL
WELL is a unique company that operates Primary Healthcare
Facilities as well as a significant Electronic Medical Records
(EMR) business that supports the digitization of such clinics. WELL
wholly owns nineteen medical clinics, is a majority owner of one
clinic and provides digital EMR software and services to
approximately 852 medical clinics across Canada. WELL's overarching objective is to
empower physicians and other care providers to deliver the best and
most advanced care possible while leveraging the latest trends in
digital health. WELL is publicly traded on the TSX Venture Exchange
under the symbol "WELL.v". WELL was recognized as a TSX Venture 50
Company in 2018 and 2019.
Forward-Looking Statements
This news release may contain "forward-looking statements"
within the meaning of applicable Canadian securities laws,
including, without limitation: that the proposed acquisition of
OSCARwest will be completed and that it will strengthen WELL's
position as the third largest EMR service provider in Canada; the projected completion of proposed
acquisition of a majority stake in Spring Medical; the belief that
the Company is and will continue to be the third largest EMR
service provider in Canada; the
operations of SleepWorks on a post-closing basis; the
statement that the Company's recent financing transactions gives
the Company a strong balance sheet to execute on its future
acquisition growth strategy; the Company's expectation that Fiscal
Q4 revenue to benefit from contribution from the SleepWorks
acquisition; the statement relating to securing new acquisitions to
grow both the Company's clinical and digital portfolios in a manner
that is highly accretive to shareholder value both in the short and
long term; and the statements relating to the Company's 2019 growth
strategy consisting of organic growth, in-organic growth and
operational excellence; and the intention to provide the best and
most advanced care and leveraging the latest in digital health.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
management, are inherently subject to significant business,
economic and competitive uncertainties, and contingencies. These
statements generally can be identified by the use of
forward-looking words such as "may", "should", "will", "could",
"intend", "estimate", "plan", "anticipate", "expect", "believe" or
"continue", or the negative thereof or similar variations.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause future results,
performance or achievements to be materially different from the
estimated future results, performance or achievements expressed or
implied by those forward-looking statements and the forward-looking
statements are not guarantees of future performance. WELL's
statements expressed or implied by these forward-looking statements
are subject to a number of risks, uncertainties, and conditions,
many of which are outside of WELL 's control, and undue reliance
should not be placed on such statements. Forward-looking statements
are qualified in their entirety by inherent risks and
uncertainties, including: that WELL's assumptions in making
forward-looking statements may prove to be incorrect; adverse
market conditions; risks inherent in the primary healthcare sector
in general; regulatory and legislative changes; that future results
may vary from historical results; inability to obtain future
financing on suitable terms; and that market competition may affect
the business, results and financial condition of WELL. Except as
required by securities law, WELL does not assume any obligation to
update or revise any forward-looking statements, whether as a
result of new information, events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE WELL Health Technologies Corp.