Skylight Health Group Inc. (NASDAQ:SLHG; TSXV:SLHG) (“Skylight
Health” or the “Company”), a multi-state primary care management
group in the United States, today announced its financial results
for the fourth quarter and year ended December 31, 2021, as well as
the filing of its restated condensed interim consolidated financial
statements and management's discussion and analysis for the
quarters ended March 31, 2021, June 30, 2021 and September 30, 2021
(collectively, “restated financial statements and MD&A”).
“Our strength as an entrepreneurial team means
that we continue to place our efforts where we believe will drive
the maximum value for the Company and our shareholders,” said Prad
Sekar, CEO and Co-Founder of Skylight Health. “We are pleased with
our results for 2021 which saw a year of high growth as we invested
in our team, technology, and refocused business lines to support
our mission of fully encompassing value based care. While market
conditions in 2022 have seemingly slowed our growth trajectory from
an acquisition standpoint, our strong foundation has given us the
ability to endure a weaker climate and allowed us to focus on
strategic optimization and cost-savings. We remain bullish on
several large-scale initiatives that have been quietly in the works
for several months. As we continue to scale towards profitability,
the strategic impact of these initiatives could potentially result
in a positive impact for the Company.”
Fourth Quarter and Full-Year 2021
Financial Highlights:
- Revenues for the year were
$27.2 million (excluding revenue from discontinued operations
of $10.6 million), compared to $0.7 million for the year
ended December 31, 2020 (excluding revenue from discontinued
operations of $12.5 million), an increase of $26.5
million;
- Gross profit was $15.1 million
for the year ended December 31, 2021 (excluding gross profit from
discontinued operations of $8.1 million), compared to
$0.3 million for the year ended December 31, 2020 (excluding
gross profit from discontinued operations of
$8.8 million);
- Gross margin was 56% for the year
ended December 31, 2021, compared to 39% for the year ended
December 31, 2020 (discontinued operations gross margin was 76% and
70%, respectively);
- Adjusted EBITDA loss of $14.6
million in 2021 compared to loss of $6.0 million in 2020, driven by
one-time expenses in infrastructure development and acquisition
related expenses. The Company does not expect to see many of these
expenses moving forward;
- Loss from continuing operations in
2021 was $22.2 million, with approximately $6.7 million in
share-based compensation and depreciation and amortization and $4.2
million in professional fees related to accounting, legal and
consulting fees;
- Cash balance of $11.7 million as of
December 31, 2021.
Fourth Quarter and Full-Year 2021
Operational Highlights:
- On January 4, 2021, acquired 100%
of Colorado based primary care services group Apex for $2.3
million.
- Executed clinical trial contracts,
with an increase in revenues of 207% compared to 2020;
- On January 5, 2021, The Company’s
shares commenced trading on the TSX-V under the symbol “SHG” after
the Company’s shares were voluntarily delisted from the Canadian
Securities Exchange on January 4, 2021
- On January 14, 2021, the Company
appointed Grace Mellis, as an independent director to the Company’s
Board of Directors and the Chair of the Audit Committee. Ms. Mellis
has a robust background in strategy and finance leadership roles
with over 28 years of success and experience
- On February 3, 2021, acquired 100%
of Florida-based RCMA with 6 clinic locations for $5.6 million
(US$4.4 million).
- On February 26, 2021, the Company
appointed Andrew Elinesky as Chief Financial Officer. Mr. Elinesky
has a long and distinguished career in Finance and has served as
CFO for multiple publicly traded companies in Canada and the United
States. He comes with strong cross-border market experience and
specializes in mergers & acquisitions and consolidation.
- On March 16, 2021, the Company
appointed Mr. Patrick McNamee as Chairman of the Board. Mr. McNamee
succeeds Norton Singhavon who will remain involved as an active
member of the Board. Mr. McNamee has previously acted as EVP and
COO of Express Scripts, where he led all major activities of the
$120B+ technology-driven pharmacy benefit management company.
- On April 5, 2021, acquired 100% of
Colorado based Primary Care Clinic Group, Rocky Mountain for $13.3
million (US$10.7 million).
- On May 13, 2021, the Company
received conditional approval from Nasdaq to list its issued and
outstanding common shares on Nasdaq. On May 25, 2021, the Company
received a confirmation from the Nasdaq that its common shares will
be able to commence trading on the Nasdaq during the week of June
7, 2021 under the symbol “SLHG”. On June 7, 2021, the Company
commenced trading on the Nasdaq under the symbol “SLHG”.
- On May 26, 2021, the Company closed
a bought deal offering with a syndicate of underwriters led by
Raymond James Ltd. as sole bookrunner and co-lead underwriter and
Stifel GMP as co-lead underwriter on behalf of a syndicate
including Beacon Securities Limited, Echelon Wealth Partners Inc.,
and Bloom Burton Securities Inc. (collectively the "Underwriters").
Pursuant to this, the Underwriters were issued, on a bought deal
basis, with full exercise of the Underwriters' 15% over-allotment
option, 1,970,360 common shares (post-Share Consolidation basis) of
the Company at a price of $7.00 per common share for gross proceeds
of $13.8 million.
- On June 23, 2021, acquired 100% of
Florida based primary care group Doctors Center Inc. for $2.8
million (US$2.2 million).
- On July 7, 2021, the Company
appointed Dr. Kit Brekhus as Chief Medical Officer (“CMO”), taking
over from Dr. Georges Feghali who served as CMO from February
2021.
- On August 26, 2021, the Company
appointed Mohammad Bataineh as President.
- On September 16, 2021, acquired 70%
of Pennsylvania based Primary Care Clinic Group, Aspire Health
Concepts, Inc. for $2.0 million (US$1.6 million).
- On December 6, 2021, the Company
announced the closing of the registered offering of 275,000 9.25%
Series A Cumulative Redeemable Perpetual Preferred Shares (“Series
A Preferred Shares”) at a price to the public of US$21 per share
for gross proceeds of US$5.8 million. The Series A Preferred Shares
trade on the Nasdaq Capital Market under the symbol “SLHGP”;
and
- On December 15, 2021, the Company
completed the divesture of 100% of assets related to the Legacy
Business for a total cash consideration of $11.1 million (US$8.6
million), including $5.2 million ($US4.0 million) on closing
subject to customary working capital holdbacks and the remaining
balance paid over three installments.
Fourth Quarter and Full-Year 2021
Performance:
Revenue increased $9.0 million from the same
period last year, largely due to additional revenue being
contributed by the clinics acquired during the fiscal year ended
December 31, 2021. The fourth quarter of 2021 was the first period
that included a full three months of contribution by Harrisburg,
Pennsylvania's Aspire Heath Concepts, Inc. The Company remains
committed to a strong growth by acquisition model fueled by a
strengthened balance sheet and robust pipeline.
Net loss for the year ended December 31, 2021
was driven by approximately $6.7 million in share-based
compensation and depreciation and amortization and $4.2 million in
professional fees related to accounting, legal and consulting fees.
Adjusted EBITDA loss of $14.6 million was a result of investments
made primarily in human capital, technology and infrastructure.
While the Company is focused on managing EBITDA, it expects that
investments needed to be successful in a full risk and total cost
of care reimbursement model will be offset by improved patient
economics driven by higher margin payor contracts as validated by
its peers. As a result, the Company expects to continue to make
investments in this growth opportunity and believes that it has
sufficient capital on hand to see this investment through to
realize increased margin contribution.
2021 was a year of infrastructure development
for value-based care and laying the foundation for the effective
management of practices across multiple markets. Several
large-scale initiatives that were executed through 2021 and into Q1
of 2022 included the integration of technology systems in human
resources, payroll, electronic health records and the
implementation of improved benefits and insurance programs. These
initiatives, while an investment in 2021 and early 2022, will lead
to improved cost synergies and savings while driving future revenue
growth through better practice management.
Each of these programs have now been executed
and the Company is starting to see immediate improvements to its
annual expenses under each of these initiatives. These initiatives
will also support the implementation of business development
activities which the Company has outlined as its priorities for
2022. These include a national contact center to boost patient
access and service and drive revenue growth, in-house revenue cycle
management, improved payor contract negotiations and the ability to
better identify the shift to value-based care under certain payor
agreements.
Restated financial statements and
MD&A
The Company has restated its condensed interim
consolidated financial statements for the periods ended March 31,
2021, June 30, 2021 and September 30, 2021, as well as the
management's discussion and analysis for those periods. The
restated financial statements and MD&A were necessary because
of errors related to the accounting treatment of certain revenue
transactions. The Company overstated revenue and accounts
receivable due to not properly recording price concessions as a
reduction of revenue.
Outlook
Skylight Health remains focused on growth, both
organically, and through acquisition, as it rapidly captures market
share within the US healthcare network. The Company continues to
prioritize the integration of health technology solutions to help
small and independent practices shift from a traditional
fee-for-service model to value-based care through proprietary
technology, data analytics and infrastructure. This organic growth
through an increase in insurable services and new patients
represents a predominant portion of revenue and is where the
Company expects to see its strongest growth in future periods. The
Company expects that by 2022, the large majority of investments
made at the start of the year will result in both a higher growth
of revenue driven organically and by acquisition and will also
result in stronger EBITDA recognition. The Company is focused on
revenue growth which it believes is how its peers are measured and
expects to continue to compete aggressively for market share growth
in three areas: acquisition of primary care practice groups,
development of its single system of operation and clinical
leadership, and conversion from fee-for-service to
value-based-care. With the growing demand for accessible and
affordable medical services in the US, Skylight Health is well
positioned to meet this growing opportunity while creating
significant shareholder value.
2021 Financial Highlights**
(in 000s of dollars) |
Year ended December 31 |
|
|
2021 |
|
2020 |
|
Revenue |
27,157 |
|
689 |
|
Cost of sales |
12,071 |
|
419 |
|
Gross profit |
15,086 |
|
270 |
|
Total operating expenses |
36,952 |
|
10,099 |
|
Loss from continuing operations |
(21,866 |
) |
(9,829 |
) |
Net loss from continuing operations |
(22,151 |
) |
(12,153 |
) |
Net income from discontinued operations |
8,563 |
|
2,672 |
|
Net loss |
(13,588 |
) |
(9,481 |
) |
Adjusted EBITDA* |
(14,612 |
) |
(6,034 |
) |
* Adjusted EBITDA is defined as earnings before
interest, tax, depreciation, and amortization, adjusted by
significant nonrecurring, nonoperational expenses and partially
offset by the cash impact of certain accounting treatments during
the period. Please see the Company’s Management Discussion &
Analysis for a detailed reconciliation to operating loss.** Certain
prior period financial information on the consolidated statements
of loss and comprehensive loss, and consolidated statements of cash
flows have been updated to present the Legacy Business as
discontinued operations and has therefore been excluded from
continuing operations for all periods presented in this MD&A.
This press release reflects only the results of continuing
operations, unless otherwise noted.
Conference Call
The Company will host a conference call at
8:00am EDT on the morning of March 31 2022, to discuss the
financial results. If you would like to participate in the call,
details can be found here. Please dial in approximately 10 minutes
prior to the start of the call. An audio replay of the conference
call will be available on www.skylighthealthgroup.com within
24 hours after the live call has ended.
ABOUT SKYLIGHT HEALTH GROUP
INC.
Skylight Health Group (NAQSAQ:SLHG; TSXV:SLHG)
is a healthcare services and technology company, working to
positively impact patient health outcomes. The Company operates a
US multi-state primary care health network comprised of physical
practices providing a range of services from primary care,
sub-specialty, allied health, and laboratory/diagnostic testing.
The Company is focused on helping small and independent practices
shift from a traditional fee-for-service (FFS) model to value-based
care (VBC) through tools including proprietary technology, data
analytics and infrastructure. In a FFS model, payors (commercial
and government insurers) reimburse on an encounter-based approach.
This puts a focus on volume of patients per day. In a VBC model,
payors reimburse typically on a capitation (fixed fee per member
per month) basis. This places an emphasis on quality over volume.
VBC will lead to improved patient outcomes, reduced cost of
delivery and drive stronger financial performance from existing
practices.
For more information, please visit
www.skylighthealthgroup.com or contact:
Investor Relations:
Canadian Investors
Jackie
Kelly investors@skylighthealthgroup.com416-301-2949
Currency Usage, Cautionary and
Forward-Looking Statements
All currency contained in this Press Release
represent Canadian Dollars unless otherwise stated.
Statements in this news release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed here and
elsewhere in Skylight Health's filings with Canadian and United
States securities regulators. When used in this news release, words
such as "will, could, plan, estimate, expect, intend, may,
potential, believe, should," and similar expressions, are
forward-looking statements.
Although Skylight Health has attempted to
identify important factors that could cause actual results,
performance or achievements to differ materially from those
contained in the forward-looking statements, there can be other
factors that cause results, performance or achievements not to be
as anticipated, estimated or intended, including, but not limited
to: the ability of Skylight Health to execute on its business
strategy, continued revenue growth in accordance with management’s
expectations, operating expenses continuing in accordance with
management expectations, dependence on obtaining regulatory
approvals; Skylight Health being able to find, complete and
effectively integrate target acquisitions; change in laws relating
to health care regulation; reliance on management; requirements for
additional financing; competition; hindering market growth or other
factors that may not currently be known by the Company.
There can be no assurance that such information
will prove to be accurate or that management's expectations or
estimates of future developments, circumstances or results will
materialize. As a result of these risks and uncertainties, the
results or events predicted in these forward-looking statements may
differ materially from actual results or events.
Accordingly, readers should not place undue
reliance on forward-looking statements. The forward-looking
statements in this news release are made as of the date of this
release. Skylight Health disclaims any intention or obligation to
update or revise such information, except as required by applicable
law, and Skylight Health does not assume any liability for
disclosure relating to any other company mentioned herein.
Non-GAAP Financial Measures
This Press Release contains references to EBITDA
and Adjusted EBITDA. These financial measures are not measures that
have any standardized meaning prescribed by IFRS and are therefore
referred to as non GAAP measures. The non-GAAP measures used by the
corporation may not be comparable to similar measures used by other
companies. EBITDA is defined as “income (loss) before interest
expenses, taxes, expenses related to listing on the Canadian
Securities Exchange, depreciation, foreign exchange and financial
expenses.
Adjusted EBITDA excludes the effect of
share-based compensation expenses and related payroll taxes as well
as removes substantial one-time costs for unusual business
activities. Additional discussion on this can be found in the
Skylight Health Management Discussion and Analysis filed on
SEDAR.
The Company uses these non-GAAP measures because
they provide additional information on the performance of its
commercial operations. Such tools are frequently used in the
business world to analyze and compare the performance of
businesses; however, the Company’s definition of these metrics may
differ from those of other businesses. Skylight Health will, at
times, use certain non-GAAP financial measures to provide readers
with additional information in order to assist investors in
understanding our financial and operating performance. Skylight
Health believes that these non-GAAP measures provide readers with
useful information about the Company’s operating results, enhance
the overall understanding of past financial performance and future
prospects, and allow for greater transparency with respect to key
metrics used by management in its financial and operational
decision making.
Such non-GAAP financial measures should be
considered as a supplement to, and not as a substitute for, the
corresponding measures calculated in accordance with IFRS. See the
Company’s unaudited Financial Statements for a reconciliation of
the non-GAAP measures.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Skylight Health (NASDAQ:SLHGP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Skylight Health (NASDAQ:SLHGP)
Historical Stock Chart
From Sep 2023 to Sep 2024