Full Year 2017 Total Revenues of $299.7 million Increased 4.9% Over Prior
Year
HOUSTON, March 8, 2018
/CNW/ -- Nobilis Health Corp. (NYSE American: HLTH) ("Nobilis"
or the "Company") today announced financial and operational results
for the fourth quarter and full year ended December 31,
2017.
Full Year and Fourth Quarter Highlights
- Full year total revenue of $299.7
million, a 4.9% increase over prior year
- Full year net income of $3.8
million, compared to prior year net income of $6.4 million; net income impacted by $6.2 million deferred tax asset adjustment
- Full year Adjusted EBITDA1 of $41.4 million, an increase of 21.9% over the
prior year Adjusted EBITDA1 of $34.0 million
- Full year cash from operations of $26.4
million, compared to $1.6
million in the prior year
- Fourth quarter total revenues of $86.8
million, compared to $101.9
million in the prior year
- Fourth quarter net income of $3.6
million, compared to $9.4
million in the prior year; net income impacted by
$6.2 million deferred tax asset
adjustment
- Fourth quarter Adjusted EBITDA1 of $22.6 million, an increase of 8.9% over the prior
year Adjusted EBITDA1 of $20.8
million
"We are pleased to report 2017 year over year growth in revenue
and Adjusted EBITDA of 4.9% and 21.9%, respectively," said
Harry Fleming, Chief Executive
Officer of Nobilis Health. "We made great progress reducing overall
costs last year as evidenced by improvements in gross margins,
operating income and net income, absent the impact of tax reform.
We achieved this despite an estimated loss of $15-$20 million of
revenues in the Houston market
resulting from Hurricane Harvey. 2017 was a big year for us--we
made significant progress on our in-network strategy with the
acquisitions of Elite Surgical Affiliates, Hamilton Vein Center,
DeRosa Medical and Mountain West
Surgery Center. As we enter 2018, we will continue to focus on
improving operational efficiency, increasing in-network revenues
and expanding the continuum of care we offer our patients through
enhanced alignment with primary care physician practices and growth
of our vertically integrated services lines."
Fourth Quarter 2017 Financial Results
Total revenue for the fourth quarter of 2017 was $86.8 million, a 14.8% decrease over the same
period in the prior year. Revenues in the fourth quarter of 2017
continued to be impacted by Hurricane Harvey (Houston, Texas is our largest market) and the
shift away from low margin lab business. Total case volume
decreased by 161 cases to 5,846 cases in the fourth quarter of
2017, as compared to the same period in the prior year. Fourth
quarter 2017 revenue per case decreased to $14,848 as compared to prior year's revenue per
case of $16,966.
Net income attributable to Nobilis for the fourth quarter of
2017 was $3.6 million, or
$0.05 per fully diluted share, as
compared to the prior period of $9.4
million, or $0.12 per fully
diluted share. Fourth quarter net income was impacted by
$6.2 million deferred tax asset
write-down. Absent of this write-down, net income for the fourth
quarter would have been $9.8
million.
Adjusted EBITDA1 for the fourth quarter of 2017,
which adds back certain non-cash and non-recurring expenses, was
$22.6 million, an increase of 8.9%
over Adjusted EBITDA1 of $20.8
million for the same period in the prior year.
Total cash was $22.5 million,
accounts receivable was $144.5
million and total debt was $120.9
million as of December 31, 2017, compared to
$24.6 million, $125.0 million and $67.8
million, respectively, at December 31, 2016. Operating
cash for the year was $26.4 million
versus $1.6 million in 2016.
Full Year 2017 Financial Results
Total revenue for 2017 increased to $299.7 million, a 4.9% increase over the prior
year. Total case volume decreased by 1,184 cases, or 5.9%, to
18,757 in 2017, compared to the prior year. Revenue per case
increased to $15,979 for 2017, as
compared to $14,329 in the prior
year, reflecting the impact of higher acuity case mix.
Net income attributable to Nobilis for 2017 was $3.8 million, or $0.05 per fully diluted share, as compared to
$6.4 million, or $0.08 per fully diluted share, in the same period
the prior year. Absent the effects of recent tax reform
legislation, net income for 2017 would have been $10.0 million.
Adjusted EBITDA1 for the year ended 2017, which adds
back certain non-cash and non-recurring expenses, was $41.4 million, a 21.9% increase over Adjusted
EBITDA1 of $34.0 million
for the prior year.
Full Year 2018 Guidance
- Revenue in the range of $345.0
million to $355.0 million
- Adjusted EBITDA of $57.0 million
to $62.0 million
Conference Call Information
Nobilis Health will host a conference call on March 8, 2018, at 8:00
a.m. CT (9:00 a.m. ET) to
discuss its financial results for the fourth quarter and full year
2017. To participate in the conference call, please dial (866)
393-4306 in the U.S. and Canada,
and +1 (734) 385-2616 internationally. Please enter conference ID
9329879. 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
by March 16, 2018, as updated by other filings with the
Securities and Exchange Commission.
NOBILIS HEALTH
CORP.
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share amounts)
|
(unaudited)
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
Current
Assets:
|
|
|
|
Cash
|
$
|
22,536
|
|
|
$
|
24,572
|
|
Trade accounts
receivable, net of allowance for bad debts of $2,598 and $750 at
December 31, 2017 and 2016, respectively
|
144,522
|
|
|
124,951
|
|
Medical
supplies
|
3,356
|
|
|
4,468
|
|
Prepaid expenses and
other current assets
|
14,472
|
|
|
10,083
|
|
Total current
assets
|
184,886
|
|
|
164,074
|
|
Property and
equipment, net
|
51,559
|
|
|
36,723
|
|
Intangible assets,
net
|
65,990
|
|
|
19,618
|
|
Goodwill
|
116,072
|
|
|
62,018
|
|
Deferred tax
asset
|
9,951
|
|
|
21,652
|
|
Other long-term
assets
|
2,580
|
|
|
1,350
|
|
Total
Assets
|
$
|
431,038
|
|
|
$
|
305,435
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities:
|
|
|
|
Trade accounts
payable
|
$
|
24,312
|
|
|
$
|
22,184
|
|
Accrued
liabilities
|
35,393
|
|
|
30,145
|
|
Current portion of
capital leases
|
3,249
|
|
|
3,985
|
|
Current portion of
long-term debt
|
3,766
|
|
|
2,220
|
|
Current portion of
convertible promissory note
|
4,250
|
|
|
—
|
|
Current portion of
warrant and stock option derivative liabilities
|
—
|
|
|
3
|
|
Other current
liabilities
|
16,324
|
|
|
7,561
|
|
Total current
liabilities
|
87,294
|
|
|
66,098
|
|
Lines of
credit
|
18,000
|
|
|
15,000
|
|
Long-term capital
leases, net of current portion
|
12,667
|
|
|
12,387
|
|
Long-term debt, net
of current portion
|
90,619
|
|
|
48,323
|
|
Convertible
promissory note, net of current portion
|
4,250
|
|
|
2,250
|
|
Warrant and stock
option derivative liabilities, net of current portion
|
384
|
|
|
899
|
|
Other long-term
liabilities
|
3,036
|
|
|
3,999
|
|
Total
liabilities
|
216,250
|
|
|
148,956
|
|
Commitments and
contingencies
|
|
|
|
Contingently
redeemable noncontrolling interest
|
17,161
|
|
|
14,304
|
|
Shareholders'
Equity:
|
|
|
|
Common shares, no par
value, unlimited shares authorized, 78,183,802 and 77,805,014
shares issued and outstanding at December 31, 2017 and 2016,
respectively
|
—
|
|
|
—
|
|
Additional paid in
capital
|
225,790
|
|
|
222,240
|
|
Accumulated
deficit
|
(75,245)
|
|
|
(79,042)
|
|
Total shareholders'
equity attributable to Nobilis Health Corp.
|
150,545
|
|
|
143,198
|
|
Noncontrolling
interests
|
47,082
|
|
|
(1,023)
|
|
Total shareholders'
equity
|
197,627
|
|
|
142,175
|
|
Total Liabilities and
Shareholders' Equity
|
$
|
431,038
|
|
|
$
|
305,435
|
|
NOBILIS HEALTH
CORP.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands,
except share and per share amounts)
|
(unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Patient and net
professional fees
|
$
|
80,752
|
|
|
$
|
97,012
|
|
|
$
|
282,240
|
|
|
$
|
264,211
|
|
Contracted marketing
revenues
|
3,045
|
|
|
2,592
|
|
|
8,208
|
|
|
13,346
|
|
Factoring
revenues
|
3,004
|
|
|
2,313
|
|
|
9,269
|
|
|
8,187
|
|
Total
revenues
|
86,801
|
|
|
101,917
|
|
|
299,717
|
|
|
285,744
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Salaries and
benefits
|
17,336
|
|
|
14,397
|
|
|
63,809
|
|
|
52,774
|
|
Drugs and
supplies
|
13,167
|
|
|
17,341
|
|
|
48,876
|
|
|
57,011
|
|
General and
administrative
|
27,615
|
|
|
41,170
|
|
|
124,024
|
|
|
126,848
|
|
Bad debt (recovery)
expense
|
2,402
|
|
|
(385)
|
|
|
2,402
|
|
|
(385)
|
|
Depreciation and
amortization
|
3,478
|
|
|
2,077
|
|
|
11,260
|
|
|
8,539
|
|
Total operating
expenses
|
63,998
|
|
|
74,600
|
|
|
250,371
|
|
|
244,787
|
|
Corporate
expenses:
|
|
|
|
|
|
|
|
Salaries and
benefits
|
2,695
|
|
|
1,897
|
|
|
11,706
|
|
|
6,974
|
|
General and
administrative
|
2,739
|
|
|
3,913
|
|
|
12,839
|
|
|
18,897
|
|
Legal
expenses
|
506
|
|
|
645
|
|
|
2,149
|
|
|
4,755
|
|
Depreciation
|
87
|
|
|
84
|
|
|
343
|
|
|
293
|
|
Total corporate
expenses
|
6,027
|
|
|
6,539
|
|
|
27,037
|
|
|
30,919
|
|
Income from
operations
|
16,776
|
|
|
20,778
|
|
|
22,309
|
|
|
10,038
|
|
Other (income)
expense:
|
|
|
|
|
|
|
|
Change in fair value
of warrant and stock option derivative liabilities
|
(74)
|
|
|
(1,014)
|
|
|
(432)
|
|
|
(2,580)
|
|
Interest
expense
|
2,009
|
|
|
1,884
|
|
|
6,007
|
|
|
3,999
|
|
Other (income)
expense, net
|
(6,762)
|
|
|
41
|
|
|
(6,547)
|
|
|
(2,970)
|
|
Total other (income)
expense
|
(4,827)
|
|
|
911
|
|
|
(972)
|
|
|
(1,551)
|
|
Income before income
taxes and noncontrolling interests
|
21,603
|
|
|
19,867
|
|
|
23,281
|
|
|
11,589
|
|
Income tax expense
(benefit)
|
12,372
|
|
|
$
|
6,253
|
|
|
13,000
|
|
|
4,487
|
|
Net income
|
9,231
|
|
|
13,614
|
|
|
10,281
|
|
|
7,102
|
|
Net income
attributable to noncontrolling interests
|
5,635
|
|
|
$
|
4,247
|
|
|
6,484
|
|
|
653
|
|
Net income
attributable to Nobilis Health Corp.
|
$
|
3,596
|
|
|
$
|
9,367
|
|
|
$
|
3,797
|
|
|
$
|
6,449
|
|
Net income per basic
common share
|
$
|
0.05
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
|
$
|
0.08
|
|
Net income per fully
diluted common share
|
$
|
0.05
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
|
$
|
0.08
|
|
Weighted average
shares outstanding (basic)
|
77,994,408
|
|
|
77,070,944
|
|
|
77,852,752
|
|
|
76,453,128
|
|
Weighted average
shares outstanding (fully diluted)
|
78,248,772
|
|
|
77,844,014
|
|
|
78,188,597
|
|
|
77,562,495
|
|
|
|
|
|
|
|
|
|
NOBILIS HEALTH
CORP.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
|
Years ended
December 31,
|
|
2017
|
|
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
|
10,281
|
|
|
$
|
7,102
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
11,603
|
|
|
8,832
|
|
Provision
(recoupment) for bad debts, net
|
2,402
|
|
|
(385)
|
|
Share-based
compensation
|
2,706
|
|
|
6,192
|
|
Change in fair value
of warrant and stock option derivative liabilities
|
(432)
|
|
|
(2,580)
|
|
Deferred income
taxes
|
11,701
|
|
|
3,383
|
|
Impairment
charges
|
1,500
|
|
|
688
|
|
Gain on sale of
property and equipment
|
—
|
|
|
(265)
|
|
Gain on derecognition
of liabilities through settlement
|
(3,711)
|
|
|
—
|
|
Loss (earnings) from
equity method investment
|
108
|
|
|
(938)
|
|
Amortization of
deferred financing fees
|
734
|
|
|
1,034
|
|
Changes in operating
assets and liabilities, net of assets acquired and liabilities
assumed:
|
|
|
|
Trade accounts
receivable
|
(14,737)
|
|
|
(28,517)
|
|
Medical
supplies
|
1,407
|
|
|
216
|
|
Prepaid expenses and
other current assets
|
(4,042)
|
|
|
(7,106)
|
|
Other long-term
assets
|
(219)
|
|
|
(6)
|
|
Trade accounts
payable and accrued liabilities
|
5,010
|
|
|
11,031
|
|
Other current
liabilities
|
2,400
|
|
|
1,293
|
|
Other long-term
liabilities
|
(321)
|
|
|
508
|
|
Distributions from
equity investments
|
—
|
|
|
1,085
|
|
Net cash provided by
operating activities
|
26,390
|
|
|
1,567
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchase of property
and equipment
|
(5,152)
|
|
|
(5,541)
|
|
Purchase of equity
method investment
|
—
|
|
|
(609)
|
|
Note receivable,
net
|
—
|
|
|
150
|
|
Acquisitions, net of
cash acquired
|
(62,268)
|
|
|
(17,239)
|
|
Net cash used for investing activities
|
(67,420)
|
|
|
(23,239)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Distributions to
noncontrolling interests
|
(2,646)
|
|
|
(7,059)
|
|
Proceeds from
exercise of stock options
|
—
|
|
|
2,322
|
|
Proceeds from
exercise of stock warrants
|
—
|
|
|
130
|
|
Payments on capital
lease obligations
|
(4,467)
|
|
|
(3,613)
|
|
Proceeds from line of
credit
|
3,000
|
|
|
23,213
|
|
Payments from line of
credit
|
—
|
|
|
(11,213)
|
|
Proceeds from
debt
|
50,000
|
|
|
58,940
|
|
Payments on
debt
|
(2,013)
|
|
|
(29,713)
|
|
Deferred financing
fees
|
(4,880)
|
|
|
(2,429)
|
|
Net cash provided by financing activities
|
38,994
|
|
|
30,578
|
|
|
|
|
|
NET (DECREASE)
INCREASE IN CASH
|
(2,036)
|
|
|
8,906
|
|
CASH — Beginning of
year
|
24,572
|
|
|
15,666
|
|
CASH — End of
year
|
$
|
22,536
|
|
|
$
|
24,572
|
|
NOBILIS HEALTH
CORP.
|
RECONCILIATION ON
NON-GAAP FINANCIAL MEASURES
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Nobilis Health Corp.
|
|
$
|
3,596
|
|
|
$
|
9,367
|
|
|
$
|
3,797
|
|
|
$
|
6,449
|
|
Interest
|
|
2,009
|
|
|
1,884
|
|
|
6,007
|
|
|
3,999
|
|
Income
taxes
|
|
12,372
|
|
|
$
|
6,253
|
|
|
13,000
|
|
|
4,487
|
|
Depreciation and
amortization
|
|
3,565
|
|
|
2,161
|
|
|
11,603
|
|
|
8,832
|
|
EBITDA
|
|
$
|
21,542
|
|
|
$
|
19,665
|
|
|
$
|
34,407
|
|
|
$
|
23,767
|
|
|
|
|
|
|
|
|
|
|
Non-cash compensation
expenses
|
|
$
|
(68)
|
|
|
$
|
966
|
|
|
$
|
2,705
|
|
|
$
|
6,191
|
|
Change in fair value
of warrant and stock option derivative liabilities
|
|
(74)
|
|
|
(1,014)
|
|
|
(432)
|
|
|
(2,580)
|
|
Acquisition
expenses
|
|
1,530
|
|
|
496
|
|
|
3,294
|
|
|
2,315
|
|
Non-recurring
expenses
|
|
(296)
|
|
|
674
|
|
|
1,441
|
|
|
4,292
|
|
Adjusted
EBITDA1
|
|
$
|
22,634
|
|
|
$
|
20,787
|
|
|
$
|
41,415
|
|
|
$
|
33,985
|
|
|
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, bargain purchase gain
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:
Tuan Tran
Vice President, Investor Relations
IR@nobilishealth.com
713-355-8614
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SOURCE Nobilis Health Corp.