- WELL achieved record quarterly patient services revenues in the
second quarter due to: (1) a successful shift to telehealth which
included significant revenues from both VirtualClinic+ and phone
consultations; (2) WELL's family practice business proved to be
highly resilient; and (3) WELL's corporate-owned clinics remained
open as a critical business throughout the COVID-19 pandemic.
- COVID-19 has caused an acceleration of WELL's telehealth
business as patients observing physical distancing measures
increasingly turned to telehealth during the pandemic. WELL's
quarterly telehealth visits grew sequentially by 730% to more than
124,800 telehealth visits(1) in Q2, almost half of which
were supported via WELL's VirtualClinic+ telehealth program.
VirtualClinic+ has now onboarded over 1,000 healthcare
practitioners since launching in March and growing.
- WELL achieved record quarterly revenue of $10,578,144 and gross profit of $4,226,831 during the 3 months ended June 30, 2020 representing 43% and 88% YoY growth
respectively, with an Adjusted EBITDA(2) loss of
$543,015. Adjusted EBITDA would have
been close to break-even when removing the elevated levels of
marketing expenses related to launching and supporting
VirtualClinic+.
- Digital services revenue, consisting of predominately SaaS
based revenue generated by the Company's WELL EMR Group, grew by
1212% to $2,344,872 in the second
quarter. WELL's EMR footprint has now expanded to over 2,000
clinics and more than 10,000 physicians across the country.
VANCOUVER, BC, Aug. 11, 2020 /CNW/ - WELL Health Technologies
Corp. (TSX: 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 MD&A for Fiscal Second Quarter 2020 ended
June 30, 2020.
"Q2 2020 was an exceptional quarter in which we achieved record
quarterly revenue despite the challenges presented by the COVID-19
global pandemic. I am extremely proud of our whole team,
especially our doctors and front-line workers who kept all of our
clinics open and provided unbelievable patient care through these
unprecedented times," said Hamed
Shahbazi, Chairman and CEO of WELL. "During the
quarter, our telehealth program successfully allowed the majority
of WELL's patient services to be carried out remotely which means
that thousands of patients and physicians were able to safely meet
and conduct medical consultations for all kinds of critical and
non-critical medical matters. In addition, our digital EMR
business continued to expand with the completion of MedBASE and
Indivica acquisitions. In fact, I'm pleased to confirm that
WELL now serves more than 2,000 clinics and 10,000 doctors as part
of its EMR footprint. This is a very important milestone for
the company."
Covid-19 and VirtualClinic+ Update:
The COVID-19 pandemic has caused an acceleration of WELL's
telehealth business. Since launching at the beginning of
March, WELL's VirtualClinic+ telehealth service has
onboarded over 1,000 healthcare practitioners and is exceeding
1,000 virtual patient booked appointments(3) per
day, often multiple times per week. Patients are increasingly
turning to telehealth services to meet their medical needs while
observing social distancing and self-isolation measures. The
Company's publicly insured clinical revenue has proven to be robust
and highly resilient as result of: (1) strong telehealth execution;
(2) WELL's highly resilient family practice business; and (3)
WELL's corporate-owned clinics not only remained open but also
continued to support the community with an important critical
service for more significant medical matters that could not be
delivered as easily via telehealth.
Second Quarter 2020 Financial Highlights:
- WELL achieved record quarterly revenue of $10,578,144 during the 3 months ended
June 30, 2020 compared to revenue of
$7,402,271 generated during the 3
months ended June 30, 2019 - an
increase of 43% driven by digital services revenues of $2,344,872 for the quarter representing 1212% YoY
growth.
- WELL achieved record Gross Profit of $4,226,831 in the 3 months ended June 30th, representing 88% YoY growth
driven by higher margin digital services revenue. WELL achieved
record Gross Margin(4) percentage of 40.0% during
Q2-2020. Adjusted EBITDA(2) loss was $543,015 for the 3 months ended June 30, 2020, compared to Adjusted EBITDA loss
of $556,255 for the 3 months ended
June 30, 2019. Adjusted EBITDA was
negatively impacted in the quarter by WELL's marketing and
promotion program to launch and market its new VirtualClinic+
telehealth program. The Company's Adjusted EBITDA would have been
close to breakeven without these costs.
- WELL ended the second quarter with a strong balance sheet with
$24,510,014 in cash and cash
equivalents as at June 30, 2020,
compared to $15,643,607 as at
December 31, 2019. The increase in
cash was primarily due to WELL completing a $14.4M bought deal common share financing on
May 22, 2020, in which the Company
issued 6,534,300 common shares at a price of $2.20 per share.
Second Quarter 2020 Business Highlights:
- On June 1, 2020, the Company
completed its acquisition of Indivica Inc. ("Indivica"),
WELL's seventh EMR acquisition, for a total consideration of
approximately $6.2M. Indivica
provides EMR software and services to approximately 390 clinics
serving over 2,000 physicians in Ontario. With this acquisition, WELL now
supports 10,000 physicians on its EMR network caring for over
18M unique patients in its combined
EMR databases.
- On May 27, 2020, the Company
announced a $250,000 investment in
Phelix.ai Inc., a Toronto based
digital health company that has developed an artificial
intelligence (AI) powered clinical assistant. WELL also received
the rights to use and sublicense Phelix.ai's software in all
aspects of its business including its OSCAR(5) EMR
network.
- On May 4, 2020, the Company
announced it completed the acquisition of all the issued and
outstanding shares of MedBASE Software Inc. ("MedBASE"), for
a total consideration of $650,000.
MedBASE provides OSCAR EMR services
to 61 clinics in Ontario.
- On May 7, 2020, WELL converted
the outstanding principal and interest of the Insig convertible
promissory note in the amount of $2,023,497 into common shares of Insig; thus,
becoming the largest shareholder of Insig.
- On May 1, 2020, the Company
announced it entered into a Memorandum of Understanding with
McMaster University's Department of
Family Medicine that authorizes the Company to use the OSCAR brand
in perpetuity. Furthermore, the Company assumed responsibility from
OSCAR EMR for stewardship of OSCAR
19 as an OntarioMD-certified EMR Offering.
Subsequent Events:
- On August 4, 2020, the Company
completed the acquisition of the assets of the Services Division of
Cycura Inc. ("Cycura"), for $2.55M in an all cash transaction. In the past 12
months Cycura's Services Division has generated over $1.7M revenue and the transaction is expected to
be immediately accretive to WELL, contributing double digit EBITDA
margins.
- On July 31, 2020, the Company
announced it has provided notice to its debenture holders that the
Company will convert all outstanding debentures to common shares by
the end of August, resulting in WELL having no debt or debt
instruments on its balance sheet.
- On July 24, 2020, the Company
announced the formation of a new subsidiary WELL Digital Health
Apps Inc. solely focused on establishing partnerships and/or
investments in leading digital health apps that allow WELL to
unlock the value of its EMR and clinical assets.
Outlook:
WELL is currently experiencing a strong rebound
of in-clinic physical visits due to Phase 3 re-opening of the
economy, while at the same time the Company has also continued to
maintain its patient volumes
of telehealth consultations including continued growth
and momentum behind its VirtualClinic+ telehealth
program. Digital services revenue is expected to
increase in Fiscal Q3-2020 compared to Fiscal
Q2-2020 primarily due to the contribution from
the Indivica acquisition, and the Company continues
to expect the WELL EMR Group will achieve
double-digit growth in 2020.
WELL's goals for 2020, which are unchanged from last quarter,
are to: (i) achieve organic revenue growth in its operating
businesses; (ii) continue to follow a disciplined acquisition and
capital allocation strategy; and (iii) increase market share and
awareness of its VirtualClinic+ telehealth service.
Conference Call:
WELL will hold a conference call to discuss its 2020 Second
Quarter financial results on Tuesday, August
11, 2020 at 1:00 pm ET
(10:00 am PT). Please use the
following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local) or 1-888-664-6383
(Toll-Free), with Conference ID: 7161 1016.
Selected Financial Highlights:
Please see SEDAR for complete copies of the
Company's condensed interim consolidated financial statements
and MD&A for the three months ended June
30, 2020.
|
Three
months
ended June
30, 2020
|
Three
months
ended June
30, 2019
|
Six
months
ended June
30, 2020
|
Six
months
ended June
30, 2019
|
|
$
|
$
|
$
|
$
|
Revenue
|
10,578,144
|
7,402,271
|
20,805,144
|
14,790,314
|
Cost of clinical and
digital services
|
(6,351,313)
|
(5,151,372)
|
(12,636,358)
|
(10,271,922)
|
Gross
Profit(4)
|
4,226,831
|
2,250,899
|
8,168,786
|
4,518,392
|
Gross
Margin(4)
|
40.0%
|
30.4%
|
39.3%
|
30.5%
|
Adjusted
EBITDA(2)
|
(543,015)
|
(556,255)
|
(788,947)
|
(894,720)
|
Net loss and total
comprehensive loss
|
(3,387,579)
|
(1,726,517)
|
(5,401,954)
|
(3,176,765)
|
Net loss per share -
for the period
|
(0.03)
|
(0.02)
|
(0.04)
|
(0.04)
|
Weighted average
number of common shares outstanding (basic and diluted)
|
126,181,778
|
94,462,130
|
122,162,548
|
89,760,785
|
|
|
|
|
|
Reconciliation of
net loss to Adjusted EBITDA(2)
|
|
|
|
|
Net loss for the
period
|
(3,387,579)
|
(1,726,517)
|
(5,401,954)
|
(3,176,765)
|
Depreciation and
amortization
|
826,168
|
395,993
|
1,554,541
|
787,175
|
Income tax
|
113,356
|
85,000
|
169,005
|
85,000
|
Interest
income
|
(85,860)
|
(39,823)
|
(175,307)
|
(80,626)
|
Interest
expense
|
641,665
|
286,703
|
1,093,720
|
525,208
|
Rent expense on
finance leases
|
(516,401)
|
(411,253)
|
(1,004,053)
|
(822,770)
|
Stock-based
compensation
|
1,044,102
|
511,835
|
1,676,093
|
1,227,118
|
Time-based earn-out
expense
|
510,210
|
136,195
|
844,625
|
272,442
|
Transaction,
restructuring, & integration costs expensed
|
311,324
|
205,612
|
454,383
|
288,498
|
Adjusted
EBITDA(2)
|
(543,015)
|
(556,255)
|
(788,947)
|
(894,720)
|
Footnotes:
|
1.
|
This figure includes
all visits delivered via the Company's VirtualClinic+ platform in
addition to any medical consultations delivered via telephone by
WELL physicians
|
2.
|
EBITDA is a
Non-GAAP measure. Earnings before interest, tax,
depreciation and amortization ("EBITDA") should not be
construed as an alternative to net income/loss determined in
accordance with IFRS. The Company defines Adjusted EBITDA as
EBITDA less net rent expense on premise leases considered to be
finance leases under IFRS and before transaction, restructuring,
and integration costs, time based earn-out expense and stock based
compensation. EBITDA does not have any standardized meanings
under IFRS and therefore may not be comparable to similar measures
presented by other issuers. The Company believes that
Adjusted EBITDA is a meaningful financial metric as it measures
cash generated from operations.
|
3.
|
Booked Appointments
include the total number of appointments booked by patients.
Once a booking has taken place, this metric is referred to as a
patient visit. There are often a small number of
cancellations or no-shows associated with booked
appointments.
|
4.
|
Gross
Profit and Gross Margin are Non-GAAP measures that
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.
|
5.
|
OSCAR, an
acronym for "Open Source Clinical Application Resource", is an
open-source EMR or "Electronic Medical Records" system developed
by McMaster University's Department of Family Medicine to
inspire collaboration between the wide spectrum of health
professionals with the goal to drive downstream benefits to patient
care.
|
WELL HEALTH TECHNOLOGIES CORP.
Per: "Hamed
Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chairman and Director
About WELL
WELL is an omni-channel digital health company that operates
Primary Healthcare Facilities, is the third largest digital
Electronic Medical Records (EMR) supplier in Canada and is a national provider of
telehealth services. WELL owns and operates 20 medical
clinics, provides digital EMR software and services to over 2,000
medical clinics across Canada and
is a majority owner of SleepWorks Medical. WELL's overarching
objective is to empower doctors to provide the best and most
advanced care possible while leveraging the latest trends in
digital health. WELL is an acquisitive company that has
completed twelve acquisitions and three equity investments.
WELL is publicly traded on the Toronto Stock Exchange under the
symbol "WELL". WELL was recognized as a TSX Venture 50
Company three years in a row in 2018, 2019 and 2020. To
access the Company's telehealth service, visit: virtualclinics.ca
and for corporate information,
visit: www.WELL.company.
Forward-Looking Statements
This news release may contain "forward-looking statements"
within the meaning of applicable Canadian securities laws,
including, without limitation: all statements in the "Outlook"
section of this news release, including the Company's goals for
2020 and the intention to ramp up the telehealth program, drive
efficiencies from clinics, and drive growth from its EMR portfolio;
the expectation that the Cycura transaction is expected to be
immediately accretive and contribute double digit EBITDA margins;
and the anticipation that WDHA initiatives may allow WELL to unlock
the value of its EMR and clinical assets. 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: direct and
indirect material adverse effects from the COVID-19 pandemic;
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 nor its Regulation Services Provider (as that
term is defined in policies of the TSX) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE WELL Health Technologies Corp.