Centric Health reports strong first quarter 2010 financial results
TORONTO, May 12 /CNW/ - Centric Health Corporation ("Centric Health") (TSX: CHH), a diversified healthcare company with a vision to become Canada's premier healthcare company providing innovative solutions centered around patients and healthcare professionals, today announced solid financial results for the first quarter ended March 31, 2010.
"We are truly enthused and excited about the performance and progress of the Company during the quarter, and notably appreciate the outstanding efforts of the staff and consultants during this transformational stage in the development of Centric Health," said Dr. Jack Shevel, Interim President and Chief Executive Officer of Centric Health Corporation. "We are working towards developing a healthcare company that has a sustainable portfolio of healthcare interests that integrate effectively and provide innovative healthcare solutions. We believe that with the current management team, further appointments and the strong cash generation, Centric Health is well-positioned as the partner of choice for the expected consolidation and rationalization within the healthcare services industry. To that end, we continue to focus on opportunities in new healthcare sectors with the strategic imperative of partnering with healthcare professionals to ensure quality outcomes and stakeholder value creation."
Q1 2010 Financial and Operating Highlights
- Net income grew to $1 million, as compared to $0.3 million in Q1 2009
- EBITDA(1) increased by $1.3 million to $1.9 million, as compared to
$0.6 million in Q1 2009
- Basic earnings per share increased 78%, to $0.016 from $0.009 in Q1
2009
- Maintained a strong balance sheet with $1 million of cash on hand at
March 31, 2010
Financial Results and Highlights (in thousands)
Three months ended March 31,
2010 2009
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Revenue $ 13,775 $ 4,269
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Expenses:
Direct costs 10,133 2,265
General and administrative expenses 1,721 1,392
Stock-based compensation 109 25
Amortization 94 47
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12,057 3,729
Income before interest expense 1,718 540
Interest expense 213 -
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Income before income taxes 1,505 540
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Income taxes 503 201
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Net income for the period $ 1,002 $ 339
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EBITDA(1) $ 1,921 $ 612
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Revenue for the three months ended March 31, 2010 increased by 223%, or $9,506, to $13,775 over the comparable quarter last year, driven primarily by the acquisition of Active Health which generated revenue of $8,481 for the quarter. Revenue for the disability management division continued to grow and increased by 26% or $1,025 for the quarter, due to a higher number of assessments resulting from successful marketing efforts to three major insurance companies. Revenue for DMSU was flat as compared to the same period in 2009. The current key businesses of Active Health, Workable and Direct Health service over 260 long-term care and retirement homes - over 27,000 beds - and provide assessment services to the largest insurance companies in Canada.
Direct costs, which include third party consultant fees associated with the assessment and physiotherapy businesses and salaries and wages of employees working directly in each business segment, were $10,133 for the three months ended March 31, 2010, which was an increase of $7,868 over the comparable quarter last year. Active Health accounted for $6,808, and the remainder of the increase was primarily attributable to increases in the costs associated with the disability management group and the higher revenue that it achieved during the quarter.
General and administrative expenses for the three months ended March 31, 2010 were $1,721 which was $329 higher than the prior year. This increase was driven by higher general and administrative costs associated with the Active Health business and increase in the contractual fees of $162 relating to services performed by Global Healthcare Investments and Solutions, Inc. ("GHIS"), (as explained in Note 7 to the Company's 2010 consolidated interim financial statements).
Amortization was higher by $47 during the three month period ended March 31, 2010 due to the amortization of the assets acquired in the Active Health acquisition.
Interest expense for the quarter relates to the long-term loan that was arranged at the end of May 2009 for the purchase of the Active Health and includes $73 of amortization of loan arrangement costs.
During the quarter, option holders exercised 100,000 options to purchase a similar number of shares for a weighted average exercise price per share of $0.21, for total proceeds of $21.
At March 31, 2010, the Company had total cash on hand of $1,049, a decrease of $147 during the quarter, offset by a significant growth in accounts receivable in line with the business growth.
As at March 31, 2010, the Company had total shares outstanding of 61,115,095, an increase of 100,000, as compared to December 31, 2009, as a result of options exercised.
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, (416) 481-0834 ext. 309, [email protected]; Michael Moore, Investor Relations, Equicom Group, (416) 815-0700, ext. 241, [email protected]
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