Centric Health Further Reduces Debt By $30 Million Through Redemption of All Remaining Alaris Preferred Partnership Units and Take-Back Loan of $8.4 Million Loan from Alaris

– Redemption of Preferred Partnership Units Combined with Recent Senior Note Retirement Reduces Outstanding Debt by $194.3 Million, Lowering Annual Interest Expense by $17.5 Million –

TORONTO, March 7, 2016 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company")  (TSX: CHH) today announced a further $30 million reduction of its outstanding debt through the redemption (without penalty) by LifeMark Health Limited Partnership, an affiliate controlled by Centric Health, of all its Preferred Partnership Units (the "Units") issued and outstanding to Alaris Income Growth Fund Partnership ("Alaris") for the full redemption price of approximately $38.4 million.  Prior to redemption, the Units had an implied interest rate of 11.2% with the principal and interest rate increasing 4% annually.  Immediately upon redemption of the Units, Alaris loaned Centric Health approximately $8.4 million in consideration of a promissory note (the "Alaris Promissory Note") on substantially the same economic terms as applied to the equivalent value of Units.

The repurchase of the Units, as well as the recently completed purchase of a principal amount of $164.3 million of Second Lien Senior Secured Notes (the "Notes"), both of which were funded from the proceeds of the sale of the Company's Rehabilitation, Physiotherapy and Medical Assessments businesses completed on December 31, 2015 (the "Sale Transaction"), have reduced Centric Health's outstanding debt by an aggregate of $194.3 million, representing 83% of the net proceeds from the Sale Transaction.  The Company's outstanding debt as at March 4, 2016 is $120.5 million and net debt as at March 4, 2016 is $82.9 million. The repurchase of the Units will generate incremental interest expense savings of approximately $3.3 million annually, bringing total annual interest savings of $17.5 million taking into account the repurchase of the Notes.  The debt reduction has reduced the Company's total net debt to adjusted EBITDA ratio to 5.7 times from 9.7 times and improved its interest coverage ratio to 2.3 times from 1.2 times¹.

"The deployment of more than $194 million towards debt reduction since the beginning of the year is a truly transformational event for our Company," said David Cutler, President and Chief Executive Officer, Centric Health Corporation.  "Combined, the Unit redemption and Note purchase have dramatically improved our leverage ratio and reduced our annual interest expense, while simplifying our balance sheet considerably."

"Looking ahead, we have the balance sheet strength and financial flexibility going forward to meaningfully invest in the growth of our businesses through both organic opportunities and prudently acting on accretive acquisition opportunities that will drive near-term EBITDA and cash flows, while continuing to pare down debt, with a target of less than 4.0 times debt to EBITDA in the medium term."

Following the redemption of the Units, Centric Health has $34.9 million in proceeds remaining from the Sale Transaction.

The Alaris Promissory Note has a fifteen year term to maturity and the Company has the ability to repay the outstanding balance at any time with one day's notice. The other terms and conditions of the Alaris Promissory Note are substantially the same as those that were in place for the Units.

About Centric Health

Centric Health provides expert solutions and trusted care through a national community of experts who can be accessed quickly and have a track record of achieving superior patient outcomes and providing outstanding client satisfaction.  Centric Health's vision is to be Canada's most respected brand in the independent healthcare sector and world renowned for quality, innovation and for delivering sustainable value to patients, clients and stakeholders.  With national networks of facilities in each of its core businesses of Specialty Pharmacy and Surgical Centres, deep knowledge and experience of healthcare delivery and extensive, trusted relationships with payers, physicians, and government agencies, the Company is uniquely positioned to address current and future healthcare needs in growing markets as the Canadian healthcare industry continues to evolve over the long term.

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements specifically related to the intention to purchase Notes, payment of the Offer Price, statements regarding business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Centric Health will derive there-from.

Notes:

1. Based on trailing 12-month (as at September 30, 2015) revenue and adjusted EBITDA of $168.4 million and $14.6 million, respectively, pro forma the divestiture of Physiotherapy, Rehabilitation and Assessments operations, as well as the acquisition of Pharmacare in March of 2015, and assuming corporate costs of approximately 4% of revenue, which is the Company's target for the end of 2016.

SOURCE Centric Health Corporation

Daniel Gagnon, Chief Financial Officer, Centric Health, 416-619-9417, [email protected]; Lawrence Chamberlain, Investor Relations, NATIONAL Equicom, 416-848-1457, [email protected]