Centric Health reports strong second quarter 2010 financial results
TORONTO, Aug. 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 strong financial results for the second quarter ended June 30, 2010.
"Centric Health has successfully integrated the Active Health business and we are seeing the benefits of that acquisition in the form of strong quarterly numbers and synergies," said Dr. Jack Shevel, Chairman and Interim President and Chief Executive Officer of Centric Health. "Besides the benefits of the acquisition, the businesses have shown strong organic growth ahead of expectations of over twenty percent - a testament to our management team and their staff."
Q2 2010 Financial Highlights
- Net income grew by 154% to $1.3 million, as compared to $0.5 million
in Q2 2009
- EBITDA(1) increased by 174% ($1.5 million) to $2.4 million, as
compared to $0.9 million in Q2 2009
- Basic earnings per share doubled from $0.011 in Q2 2009 to $0.022 per
share
- Maintained a strong balance sheet with $1.6 million of cash on hand
at June 30, 2010, an increase of $0.5 million over the end of Q1 2010
Q2 2010 and Operating Highlights
- Successful integration of Active Health including initiatives to
enhance patient care and outcomes
- Operational efficiencies yielding a decline in G&A expenses as a
percentage of revenue from 25% to 14%
- Development of expansion opportunities using existing infrastructure
into Seniors' Health and Wellness Centres, Clinic Network and Sleep
Clinic
Financial Highlights (in thousands)
Three months ended Six months ended
June 30, June 30,
2010 2009 % Change 2010 2009 % Change
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Revenue $15,927 $7,027 127% $29,667 $11,296 163%
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Expenses:
Direct costs 11,420 4,704 21,515 6,969
General and
administrative
expenses 2,191 1,463 4,024 2,880
Amortization 130 61 224 108
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13,741 6,228 25,763 9,957
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Income before
interest expense 2,186 799 3,904 1,339
Interest expense 202 60 415 60
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Income before
income taxes 1,984 739 3,489 1,279
Income taxes 666 221 1,169 422
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Net income for
the period $1,318 $518 154% $2,320 $857 171%
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EBITDA $2,449 $894 174% $4,370 $1,506 190%
Earnings per share
- basic $0.022 $0.011 100% $0.038 $0.021 81%
- diluted $0.019 $0.011 73% $0.033 $0.021 57%
* The acquisition of Active Health occurred on May 29, 2009; therefore,
the results for 2009 include only one month of operations for this
business.
Financial Results (in thousands)
Revenue for the three months ended June 30, 2010 increased by 127%, or $8,900, to $15,927 over the comparable quarter last year. Revenue attributable to Active Health for the non-comparable months of April and May amounted to $6,043 and revenue for the comparable month of June increased by $646. Impressive organic growth was also seen in the disability management division, which amounted to $2,200 for the quarter, driven primarily by higher number of assessments. Revenue for Don Mills Surgical Unit increased by $11 over the comparable quarter last year.
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. For the three months ended June 30, 2010, direct costs were $11,420, an increase of $6,716 over the comparable quarter in the prior year. This increase is primarily due to Active Health business which is included in all the month's operating results in 2010 and only in the month of June 2009.
General and administrative expenses for the three months ended June 30, 2010 were $2,191, an increase of $728 over Q1 2009. This increase was driven by higher salary and benefit costs of $201 associated with the Active Health business, an increase in non-cash stock-based compensation expense of $99 relating to the increase in options granted at the end of 2009, as well as higher professional fees associated with M&A activity and strategic planning.
At June 30, 2010, the Company had total cash on hand of $1,596, an increase of $547 during the quarter.
As at June 30, 2010, the Company had total shares outstanding of 61,140,095, an increase of 25,000 since March 31, 2010, as a result of options exercised. There were also 20,500,000 warrants outstanding as at June 30, 2010 entitling the holder to acquire 20,500,000 common shares at an exercise price of $0.33 per share.
For further information please refer to the Company's website and 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, hospital services, sleep disorders and wellness and prevention. 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 Measure1: 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, 619-467-7067, [email protected]
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