Centric Health reports 2009 financial results

TORONTO, March 8 /CNW/ - Centric Health Corporation ("Centric Health") (TSX: CHH), a diversified healthcare company, today announced its financial results for the fourth quarter and year ended December 31, 2009.

"The Centric Team has made significant progress this past year towards building the platform from which the future vision of Centric Health will grow," said Dr. Jack Shevel, Interim President and Chief Executive Officer of Centric Health Corporation. "With the increased demand for healthcare we believe the market is well positioned for consolidation to extract efficiencies with innovative solutions. This year will see Centric Health expand into new sectors to increase its service offering to patients in partnership with healthcare professionals to ensure quality outcomes."

    
    Q4 and Year End 2009 Financial and Operating Highlights

    -   Centric Health completed the acquisition of Active Health Management
        ("Active Health") increasing its footprint in the physiotherapy and
        rehabilitation marketplace.

    -   On August 25, 2009, the Company changed its name from Alegro Health
        Corp. ("Alegro") to Centric Health Corporation to better reflect its
        philosophy and culture of healthcare professional and patient
        centricity. In conjunction, the Company migrated from the TSX Venture
        to the TSX main board on September 1, 2009.

    -   Centric Health's revenue grew by 132% or $20.8 million to
        $36.6 million for the year. This result was driven largely by the
        acquisition of the Active Health business and inclusion of its
        revenue from June 2009.

    -   EBITDA(1), increased by 105% to $4.1 million for the year compared to
        $2.0 million in 2008, while earnings per share were up almost 54% to
        $0.04, compared to $0.026 in the prior year, before giving effect to
        a one-time restructuring charge of $0.6 million.

    Financial Results and Highlights (in thousands)

                           Twelve months ended            Three months ended
                               December 31                   December 31
                           --------------------          --------------------
                                2009      2008    Change      2009      2008
                           --------------------------------------------------
    Revenue                  $36,623   $15,795      132%   $12,896    $4,595
    Expenses:
      Direct costs            26,188     8,918               9,918     2,491
      General and
       administrative
       expenses                6,954     4,898               2,693     1,349
      Stock-based compensation   140       124                  31        89
      Amortization               371       174                 138        43
                           --------------------          --------------------

                              33,653    14,114              12,780     3,972
                           --------------------          --------------------
    Income before interest
     expense and income
     taxes                    $2,970    $1,681                $116      $623
    Interest expense             433         -                 183         -
                           --------------------          --------------------
    Income (loss) before
     income taxes             $2,537    $1,681       51%      $(67)     $623
                           --------------------          --------------------
    Income before income
     taxes and restructuring
     charge                   $3,137    $1,681       87%      $533      $623
                           --------------------          --------------------
    EBITDA(1)                 $4,081    $1,979      106%      $885      $755
                           --------------------          --------------------
                           --------------------          --------------------
    

Revenue for the year increased by $20,828 over the prior year, driven primarily by the acquisition of Active Health which generated revenue of $20,187 for the seven months of 2009 that it was owned by Centric Health. Revenue for the Disability Management division increased by $801 due to a higher number of assessments.

Revenue for the fourth quarter increased by $8,301 to $12,896, of which Active Health accounted for $8,836. Revenue for the Disability Management group was lower by $400, partially due to a one-time adjustment in the fourth quarter of 2008 of $422 and DMSU was lower by $135.

Direct costs for the year were $26,188, which was an increase of $17,270 over the prior year. Active Health accounted for $16,009 of this increase and the remainder of the increase was primarily attributable to the Disability Management group. Direct costs include third party consultant fees associated with the assessment and physiotherapy businesses and salaries and wages of employees working directly in each business segment.

Direct costs as a percentage of revenue for the fourth quarter are higher than the full year percentage which reflects that the Active Health business has higher direct costs and was owned for seven out of twelve months of the year.

General and administrative expenses for the year were $6,954 which was $2,056 higher than the prior year. This increase was driven largely by a number of items including

    
    -   General and administrative costs associated with the Active Health
        business: $722
    -   One-time restructuring relating to the re-organization of the
        business as a result of integration initiatives associated with the
        acquisition of the Active Health business: $600
    -   Contractual fees relating to services performed by Global Healthcare
        Investments and Solutions, Inc. ("GHIS"): increased by $298.
    

General and administrative costs for the fourth quarter were $2,693, an increase of $1,344 which was largely driven by the restructuring charge described above and the additional overhead associated with the Active Health business.

Amortization was higher during three and the twelve month periods ended December 31, 2009 due to the amortization of the assets acquired in the Active Health acquisition.

Interest expense for the fourth quarter and the twelve month period, relates to the long-term loan that was arranged at the end of May, for the purchase of the Active Health and includes $24 of amortization of loan arrangement costs included in the fourth quarter ($71 year to date).

Changes in Directors

Following the resignation of Brenda Rasmussen (founder of Alegro) from the board of directors on February 16, Ingrid Davis, former executive and Board Member of the Netcare Group in South Africa and the United Kingdom, was appointed to the Centric Health Board of Directors subject to the necessary regulatory approvals.

For further information please refer to the Company's complete filings at www.sedar.com.

About Centric Health

Centric Health's vision is to be Canada's premier healthcare company, providing innovative solutions centered around patients and healthcare professionals. As a diversified healthcare company with investments in several niche service areas, Centric Health currently has operations in medical assessments, disability and rehabilitation management, physiotherapy and hospital services. With knowledge and experience of healthcare delivery in international markets and extensive and trusted relationships with payers, physicians, and government agencies, Centric Health is pursuing expansion opportunities into other healthcare sectors to create value for all stakeholders with an unwavering commitment to the highest quality of care. Centric Health is listed on the TSX under the symbol CHH. For further information, please visit www.centrichealth.ca. Centric Health's strategic advisor is Global Healthcare Investments & Solutions, Inc. (www.ghis.us).

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 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.

Non-GAAP Measure(1): The Company defines EBITDA as earnings before interest, taxes, stock based compensation, depreciation and amortization. EBITDA is not a recognized measure under Canadian GAAP. Management believes that in addition to net earnings, EBITDA is a useful supplemental measure, as it provides an indication of performance. One should be cautioned, however, that EBITDA should not be construed as an alternative to net earnings determined in accordance with GAAP. The method of calculating EBITDA may differ from other companies and accordingly, EBITDA may not be comparable to measures used by other companies.

%SEDAR: 00016656E

For further information: Peter Walkey, Chief Financial Officer, Centric Health, [phone] ext. 309, [email protected]; Michael Moore, Investor Relations, Equicom Group, [phone] ext. 241, [email protected]