Akumin Inc. Announces Third Quarter Fiscal 2018 Financial Results

TORONTO, Nov. 14, 2018 /CNW/ - Akumin Inc. (TSX: AKU, AKU.U) ("Akumin" or the "Corporation") announced today its financial results for the quarter ended September 30, 2018 ("Q3 Fiscal 2018").

Summary Consolidated Financial Results (in thousands, except for per share amounts)

	3-month period ended Sep. 30, 2018	3-month period ended Sep. 30, 2017	9-month period ended Sep. 30, 2018	9-month period ended Sep. 30, 2017
Revenue	39,131	24,107	109,331	55,581
EBITDA ^(1)	4,278	(7,073)	14,168	(4,064)
Adjusted EBITDA ^(1)	8,285	2,184	23,353	6,603
EPS –Diluted	0.00	(0.29)	0.05	(0.35)
Adjusted EPS – Diluted ^(1)	0.05	(0.01)	0.16	(0.00)

⁽¹⁾ See "Non-IFRS Measures" below.

Commenting on the Q3 Fiscal 2018 financial results, Riadh Zine, President and Chief Executive Officer of the Corporation, said, "The quarter ending September 30, 2018 represents another fiscal quarter of strong financial performance with revenue of $39.1 million, Adjusted EBITDA of $8.3 million and Adjusted EPS – Diluted of $0.05, all of which are in line with management's expectations given seasonal impact on this quarter.  The net income of the quarter was impacted by a $2.4 million non-cash expense resulting from the extinguishment of our previous credit facility, which was refinanced during the quarter.

"As of this quarter, we commenced reporting Adjusted EPS and other financial measures to help, when taken together with IFRS measures, assess the Company's overall financial performance in terms of scale, profitability and return on capital, as outlined in our management's discussion and analysis.

"Akumin's volume in Q3 Fiscal 2018 was approximately 850,000 RVUs, compared to approximately 756,000 RVUs in Q2 Fiscal 2018.  The Company reports the volume of procedures performed in its diagnostic imaging centers based on relative-value units, or RVUs, instead of the number of procedures.  RVUs are a standardized measure of value used in the U.S. Medicare reimbursement formula for physician services.

"During Q3 Fiscal 2018, on August 15, 2018, we closed the acquisition of Rose Radiology Centers, adding 11 Tampa-area centers, which we expect will add approximately $27.5 million in annual revenue.  After Q3 Fiscal 2018, on November 12, 2018, we announced the closing of two separate acquisitions in Florida for a total of five diagnostic centers, which we expect to add on a combined basis approximately $19.2 million in annual revenue.  We look forward to integrating these recently acquired centers and continuing to execute on our growth strategy."

The Corporation's current number of diagnostic imaging facilities throughout the United States is 95, compared to 74 as at December 31, 2017.

Akumin would like to remind interested parties of the Corporation's Q3 Fiscal 2018 Financial Results Call, to be held today at 8:30 a.m. Eastern Time. To access the conference call, dial toll-free in Canada or the U.S. 888-231-8191 or, for international callers, 647-427-7450.  Participants are asked to connect at least 10 minutes prior to the beginning of the call to ensure participation.

Unless otherwise indicated, all amounts are expressed in U.S. dollars. Certain metrics, including those expressed on an adjusted or comparable basis, are non-IFRS measures. See "Non-IFRS Measures" and "Selected Consolidated Financial Information" of this press release for further details.  The Corporation's condensed interim consolidated financial statements for Q3 Fiscal 2018 and related management's discussion and analysis are available under Akumin's profile on SEDAR (www.sedar.com).

About Akumin

Akumin is a leading provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States with a network of 95 owned and/or operated imaging centers located in Florida, Texas, Pennsylvania, Delaware, Illinois and Kansas. By combining our clinical expertise with the latest advances in technology and information systems, our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, minimizing the cost and amount of care for patients. Our imaging procedures include MRI, CT, positron emission tomography (PET), ultrasound, diagnostic radiology (X-ray), mammography, and other interventional procedures.

Non-IFRS Measures

This press release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under the International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these non-IFRS measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these non-IFRS measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS financial measures, including "EBITDA", "Adjusted EBITDA", "Adjusted EBITDA Margin" and "Adjusted net income (loss) attributable to shareholders of Akumin". These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management compensation. Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found in our Management's Discussion and Analysis dated November 13, 2018 available at www.sedar.com.

We define such non-IFRS measures as follows:

"EBITDA" means net income (loss) attributable to shareholders of the Corporation before interest expense (net), income tax expense (recovery) and depreciation and amortization.

"Adjusted EBITDA" means EBITDA, as further adjusted for stock-based compensation, impairment of property and equipment, provisions for certain credit losses, settlement costs, provisions, acquisition-related and public offering costs, and gains (losses) in the period.

"Adjusted EBITDA Margin" means Adjusted EBITDA divided by the revenue in the period.

"Adjusted net income (loss) attributable to shareholders of Akumin" means Adjusted EBITDA less depreciation and amortization and interest expense, taxed at Akumin's estimated effective tax rate, which is a blend of U.S. federal and state statutory tax rates for the period.

Forward-Looking Information

Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.

Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Akumin as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the "Risk Factors" section of our Annual Information Form dated March 29, 2018, which is available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Akumin; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Akumin expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

< Financial tables follow. >

Selected Consolidated Financial Information

(in thousands)	Three-month period ended Sep 30, 2018	Three-month period ended Sep 30, 2017
Service fees – net of allowances and discounts	38,317	23,489
Other revenue	814	618
Revenue	39,131	24,107
Employee compensation	14,734	9,529
Reading fees	5,143	3,994
Rent and utilities	4,292	3,019
Third party services and professional fees	3,004	2,339
Administrative	1,779	1,391
Medical supplies and other expenses	1,383	1,096
Depreciation and amortization	2,577	1,623
Stock-based compensation	1,424	1,981
Interest expense	1,482	1,291
Impairment of property and equipment	-	130
Settlement costs (recoveries)	(99)	21
Provisions	-	(30)
Acquisition related costs	256	3,413
Public offering costs	-	499
Financial instruments revaluation, unrealized foreign exchange loss, and other (gains) losses	2,426	3,243
Income (loss) before income taxes	730	(9,432)
Income tax provision	24	2
Non-controlling interests	511	555
Net income (loss) attributable to shareholders of Akumin	195	(9,989)
Adjusted EBITDA (in thousands)	Three-month period ended Sep 30, 2018	Three-month period ended Sep 30, 2017
Revenue	39,131	24,107
Less:
Employee compensation	14,734	9,529
Reading fees	5,143	3,994
Rent and utilities	4,292	3,019
Third party services and professional fees	3,004	2,339
Administrative	1,779	1,391
Medical supplies and other expenses	1,383	1,096
Sub-total	30,335	21,368
Non-controlling interests	511	555
Adjusted EBITDA	8,285	2,184
Adjusted EBITDA Margin	21%	9%
(in thousands)	Nine-month period ended Sep 30, 2018	Nine-month period ended Sep 30, 2017
Service fees – net of allowances and discounts	107,244	54,139
Other revenue	2,087	1,442
Revenue	109,331	55,581
Employee compensation	38,387	21,440
Reading fees	14,796	8,745
Rent and utilities	11,461	7,689
Third party services and professional fees	8,706	4,569
Administrative	6,361	2,942
Medical supplies and other expenses	4,105	3,038
Depreciation and amortization	6,849	3,564
Stock-based compensation	4,465	2,442
Interest expense	4,201	3,102
Impairment of property and equipment	638	130
Settlement costs	29	30
Provisions	-	700
Acquisition related costs	920	3,542
Public offering costs	814	499
Financial instruments revaluation, unrealized foreign exchange loss, and other (gains) losses	2,319	3,324
Income (loss) before income taxes	5,280	(10,175)
Income tax provision	327	12
Non-controlling interests	2,162	555
Net income (loss) attributable to shareholders of Akumin	2,791	(10,742)
Adjusted EBITDA (in thousands)	Nine-month period ended Sep 30, 2018	Nine-month period ended Sep 30, 2017
Revenue	109,331	55,581
Less:
Employee compensation	38,387	21,440
Reading fees	14,796	8,745
Rent and utilities	11,461	7,689
Third party services and professional fees	8,706	4,569
Administrative	6,361	2,942
Medical supplies and other expenses	4,105	3,038
Sub-total	83,816	48,423
Non-controlling interests	2,162	555
Adjusted EBITDA	23,353	6,603
Adjusted EBITDA Margin	21%	12%

Reconciliation of Non-IFRS Measures

(in thousands)	Three-month period ended Sep 30, 2018	Three-month period ended Sep 30, 2017	Nine-month period ended Sep 30, 2018	Nine-month period ended Sep 30, 2017
Net income (loss) attributable to shareholders of Akumin	195	(9,989)	2,791	(10,742)
Income tax provision	24	2	327	12
Depreciation and amortization	2,577	1,623	6,849	3,564
Interest expense	1,482	1,291	4,201	3,102
EBITDA	4,278	(7,073)	14,168	(4,064)
Adjustments:
Stock-based compensation	1,424	1,981	4,465	2,442
Impairment of property and equipment	-	130	638	130
Settlement costs (recoveries)	(99)	21	29	30
Provisions	-	(30)	-	700
Acquisition-related costs	256	3,413	920	3,542
Public offering costs	-	499	814	499
Financial instruments revaluation, unrealized foreign exchange loss, and other (gains) losses	2,426	3,243	2,319	3,324
Adjusted EBITDA	8,285	2,184	23,353	6,603
Revenue	39,131	24,107	109,331	55,581
Adjusted EBITDA Margin	21%	9%	21%	12%
Adjusted EBITDA	8,285	2,184	23,353	6,603
Less:
Depreciation and amortization	2,577	1,623	6,849	3,564
Interest expense	1,482	1,291	4,201	3,102
Sub-total	4,226	(730)	12,303	(63)
Effective tax rate ^(1)	24.7%	36.5%	24.7%	36.5%
Tax effect	1,043	(266)	3,038	(23)
Adjusted net income (loss) attributable to shareholders of Akumin	3,183	(464)	9,265	(40)
EPS – Basic and diluted	0.00	(0.29)	0.05	(0.35)
Adjusted EPS – Basic and diluted	0.05	(0.01)	0.16	(0.00)

(1) Akumin's estimated effective tax rate is a blend of U.S. federal and state statutory tax rates for the period.

SOURCE Akumin Inc.

Riadh Zine, President and Chief Executive Officer, 416-613-1391