- Revenue increased 258% to $7,402,271 in the three-month period ended
June 30, 2019 compared to the three
months ended July 31, 2018.
- WELL continued to be an active acquirer during the second
quarter as the Company completed the acquisition of OSCARprn –
Treatment Solutions Ltd. ("OSCARprn") on June 12, 2019. Subsequent to quarter end, WELL
completed the acquisition of Kela Atlantic Inc. dba KAI Innovations
("KAI Innovations") on July 1,
2019 and on July 18, 2019 the
Company announced its entry into a definitive agreement to acquire
a majority ownership stake in SleepWorks Medical Inc.
("SleepWorks").
- As of June 30, 2019, WELL
operated 19 wholly-owned primary healthcare clinics and provided
digital EMR services to 292 clinics. Subsequent to the quarter,
upon closing of the KAI Innovations acquisition, the Company's EMR
SaaS or "Software as a service" business grew to support
approximately 852 medical clinics and more than 4000 doctors and
other medical practitioners across the country.
- WELL ended the quarter with a strong balance sheet with
$6,687,904 in cash and cash
equivalents. The Company also recently completed a bought deal
private placement of special warrants for gross proceeds of
$15,007,500 which closed on
August 15, 2019.
VANCOUVER, Aug. 22, 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 second
quarter ended June 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 June 30,
2019 include the results for the three-months and six-months
ended June 30, 2019 with comparatives
for the three-months and six-months ended July 31, 2018.
Second Quarter Financial and Business Highlights:
- WELL achieved record quarterly revenue of $7,402,271 during the three months ended
June 30, 2019 compared to
$2,066,524 revenue generated during
the three months ended July 31, 2018
- an increase of 258%;
- Gross margin(1) increased to 30.4% in the three
months ended June 30, 2019, compared
to 28.4% in the three months ended July 31,
2018 mainly due to the addition of higher margin digital
services revenue.
- Adjusted EBITDA(2)(3) loss was $556,255 for the 3-month period ended
June 30, 2019, compared to Adjusted
EBITDA(2) loss of $287,054
in the 3-month period ended July 31,
2018.
- On June 12, 2019, WELL completed
its acquisition of OSCARprn, who provides OSCAR-based
EMR software and services to 71 clinics in British Columbia, supporting approximately 820
registered doctors and practitioners.
- On June 13, 2019, WELL completed
a bought deal private placement offering of senior unsecured
convertible debentures for a total aggregate principal of
$10,500,000. Sir Li Ka-shing and WELL's senior management team
inclusive of the Company's CFO and CEO also participated in this
convertible debenture offering.
"Q2 was an excellent quarter for us which demonstrated continued
strong clinical revenue growth and increasing gross margin from our
SaaS based EMR service," said Hamed
Shahbazi, Chairman and CEO of WELL. "In addition, the
recently completed acquisition of KAI Innovations has been a very
strong fit with our prior EMR related acquisitions and has spurred
new growth and expanded capabilities in our EMR business.
Also, to our knowledge, it firmly positions us as the third largest
EMR service provider in Canada.
Furthermore, our recent financing transactions give us a
strong balance sheet to execute on our future acquisition growth
strategy. WELL management continues to be very focused on
securing new acquisitions to grow both its clinical and digital
portfolios in a manner that is highly accretive to shareholder
value both in the short and long term."
Subsequent Events:
- On July 1, 2019, the Company
completed the acquisition KAI Innovations for approximately
$10,750,000. KAI Innovations provides
SaaS (Software as a Service) based EMR services to approximately
562 clinics in Ontario, supporting
approximately 2,100 registered doctors and practitioners.
- On July 18, 2019, the Company
announced it has entered into a definitive share purchase agreement
with the shareholders of SleepWorks, a company engaged in the
diagnosis and treatment of sleep disorders, pursuant to which WELL
has agreed to acquire 51% of the issued and outstanding shares of
SleepWorks, with an option to acquire the remaining 49% in the
future. The remaining 49% of the issued and outstanding shares of
SleepWorks will be retained by the former principal shareholders of
SleepWorks, who will continue to operate the company on a
post-closing basis.
- On August 15, 2019, the Company
announced that it has closed its previously announced bought deal
private placement of 10,350,000 special warrants of the Company
(the "Special Warrants") at a price of $1.45 per Special Warrant, for gross proceeds of
approximately $15,007,500. Each
Special Warrant will entitle the holder to one common share capital
of the Company, subject to the terms and conditions of the Special
Warrant. The financing included subscriptions by Sir Li Ka-shing and WELL's senior management team
inclusive of the Company's CEO, CFO and SVP of Strategic
Partnerships and Marketing.
Outlook:
WELL expects Fiscal Q3 revenue to benefit from a full quarter of
contribution from the OSCARprn and KAI Innovations acquisitions.
The Company continues to execute on its 2019 growth strategy by
focusing on the following:
- Achieving organic revenue growth by attracting and retaining
physicians and patients, by offering new revenue generating
services and by winning new clinic customers for its EMR software
and services business;
- In-organic growth is 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;
- 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 second quarter
financial results on Thursday August 22,
2019 at 1:00 pm ET
(10:00 am PT). Please use the
following dial-in numbers: 1-416-764-8609 (Toronto local) or 1-888-390-0605 (Toll-Free),
with Conference ID: 54030543.
The Company will provide a replay of the call which will be
accessible for 7 days. To access the replay use the following
dial-in numbers: 1-416-764-8677 or 1-888-390-0541, with Playback
passcode: 030543#.
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 second
quarter ended June 30, 2019.
|
For the three
months ended
|
For the six months
ended
|
|
June 30,
2019
|
July 31,
2018
|
June 30,
2019
|
July 31,
2018
|
|
$
|
$
|
$
|
$
|
|
Revenue
|
7,402,271
|
2,066,524
|
14,790,314
|
3,985,718
|
|
Cost of clinical and
digital services
|
(5,151,372)
|
(1,480,451)
|
(10,271,922)
|
(2,814,504)
|
|
Gross
Profit(1)
|
2,250,899
|
586,073
|
4,518,392
|
1,171,214
|
|
Gross
Margin(1)
|
30.4%
|
28.4%
|
30.5%
|
29.4%
|
|
EBITDA(2),(3)
|
(998,644)
|
(670,891)
|
(1,860,008)
|
(921,798)
|
|
Adjusted
EBITDA(2),(3)
|
(556,255)
|
(287,054)
|
(894,720)
|
254,233
|
|
Net loss from
continuing operations(3)
|
(1,726,517)
|
(633,270)
|
(3,176,765)
|
(782,071)
|
|
Total comprehensive
loss for the period(3)
|
(1,726,517)
|
(669,317)
|
(3,176,765)
|
(935,918)
|
|
Net loss per share -
from continuing operations
|
(0.02)
|
(0.01)
|
(0.04)
|
(0.01)
|
|
Net loss per share -
for the period
|
(0.02)
|
(0.01)
|
(0.04)
|
(0.01)
|
|
Weighted average
number of common shares outstanding (basic and diluted)
|
94,462,130
|
77,343,098
|
89,760,785
|
66,616,454
|
|
|
|
|
|
|
Reconciliation of
EBITDA and adjusted EBITDA
|
|
|
|
|
|
Net loss for the
period
|
(1,726,517)
|
(668,445)
|
(3,176,765)
|
(934,072)
|
|
Depreciation and
amortization
|
395,993
|
14,504
|
787,175
|
23,468
|
|
Income tax
|
85,000
|
3,251
|
85,000
|
9,007
|
|
Interest
income
|
(39,823)
|
(32,660)
|
(80,626)
|
(32,660)
|
|
Interest
expense
|
286,703
|
12,459
|
525,208
|
12,459
|
|
EBITDA(2),(3)
|
(998,644)
|
(670,891)
|
(1,860,008)
|
(921,798)
|
|
Rent expense on
finance leases
|
(411,253)
|
-
|
(822,770)
|
-
|
|
Stock-based
compensation
|
511,835
|
323,631
|
1,227,118
|
418,161
|
|
Net loss from
discontinued operations
|
-
|
35,175
|
-
|
152,001
|
|
Time-based earn-out
expense
|
136,195
|
-
|
272,442
|
-
|
|
Transaction and
restructuring costs expensed
|
205,612
|
25,031
|
288,498
|
97,403
|
|
Adjusted
EBITDA(2),(3)
|
(556,255)
|
(287,054)
|
(894,720)
|
(254,233)
|
|
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 and restructuring 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 19 Primary Healthcare
Facilities delivering approximately 600,000 patient visits per year
as well as an Electronic Medical Records or EMR SaaS (Software as a
Service) business that provides thousands of doctors with digital
practice management software solutions. WELL's overarching
objective is to empower doctors to provide the best and most
advanced care possible 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: 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 Q3 revenue to benefit from a full quarter
of contribution from the OSCARprn and KAI Innovations acquisitions;
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.
