OPMEDIC GROUP Inc. announces its financial results for the second quarter ended February 28, 2013 and declares a dividend on common shares

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MONTREAL, April 11, 2013 /CNW Telbec/ - OPMEDIC GROUP Inc. ("OPMEDIC GROUP") (TSX: OMG), a healthcare-related company in fertility, laboratories and surgeries providing services and facilities to patients and surgeons, announces its financial results for the second quarter ended February 28, 2013.

HIGHLIGHTS FOR THE QUARTER ENDED FEBRUARY 28, 2013:

• Revenue down by 3%. Revenue for the quarter ended February 28, 2013 amounted to $4.341 million compared to $4.456 million in 2012.
• Gross profit down by 14%. Gross profit for the quarter ended February 28, 2013 amounted to $1.752 million compared to $2.046 million in 2012.
• Net earnings down by 51%. Net earnings and net earnings per share for the quarter ended February 28, 2013 were respectively $0.184 million and $0.01 compared to $0.378 million and $0.02 in 2012.

Revenues

Revenues for the quarter ended February 28, 2013 totalled $4.341 million, down $0.115 million or 3% from $4.456 million for the same period in 2012. Fertility revenues increased slightly by $0.078 million mainly as a result of the contribution of the new clinic in Newmarket, Ontario, acquired in July 2012, which generated new revenues of $0.196 million. For clinics in Quebec, the 3% increase in the volume of fertility procedures compared to the corresponding 2012 quarter was affected by the Quebec government's reduction in rates for IVF activities, effective January 2012. Even if this decline concerns only the month of December in the current quarter, it was enough to reduce Quebec's fertility clinic revenues. It should be noted that this is the last quarter in which comparative results will be affected by the reduction in rates. As for other activities, prenatal screening was down $0.103 million because of the increased offer of services in Quebec's public healthcare system, while surgical activities decreased by $0.047 million.

For the six-month period ended February 28, 2013, revenues totalled $9.650 million, down $0.196 million or 2% from $9.846 million for the corresponding period in 2012. Fertility revenues were up slightly by $0.022 million. The new clinic in Newmarket generated new revenues of $0.327 million, which were offset by the drop in fertility clinic revenues in Quebec. In fact, the reduction in rates that had affected the first four months, in relation to the previous period, had a negative impact on revenues despite the 22% increase in the volume of fertility procedures during the first six months of the year. Prenatal screening was down $0.221 million, a trend that has lasted several quarters as a result of the expanded offer of services in the public healthcare system.

Cost of services

The cost of services for the quarter ended February 28, 2013 rose to $2.589 million, up $0.179 million or 7%, compared to $2.410 million in 2012. The new activities of the Newmarket fertility clinic entailed costs of $0.174 million in payroll, consulting fees and purchases of medication, while activities of the South Shore endoscopic clinic resulted in additional costs of $0.041 million in payroll, rent and supplies. Lastly, there was a $0.037 million decrease in surgical supplies.

For the six-month period ended February 28, 2013, the cost of services rose to $5.185 million, up $0.423 million or 9%, compared to $4.762 million in 2012. The new activities of the Newmarket fertility clinic entailed costs of $0.298 million in payroll, consulting fees and purchases of medication, while activities of the South Shore endoscopic clinic resulted in additional costs of $0.150 million in payroll, rent, supplies, depreciation and amortization.

Gross profit

Gross profit for the quarter ended February 28, 2013 stood at $1.752 million, down $0.294 million or 14% from $2.046 million in 2012. Gross profit for the fertility segment was down by $0.338 million, while in the OPMEDIC division, it was up $0.044 million.

Gross profit in relation to revenues for the quarter was 40% in 2013, versus 46% in 2012.

Gross profit for the six-month period ended February 28, 2013 totalled $4.465 million, down $0.619 million or 12% from $5.084 million in 2012. For the fertility segment, gross profit decreased by $0.667 million, while in the OPMEDIC division, it was up by $0.048 million.

Gross profit in relation to revenues for the first half-year was 46% in 2013, versus 52% in 2012.

General and administrative expenses

General and administrative expenses for the quarter ended February 28, 2013 were $1.342 million, slightly up by $0.012 million or 1%, compared to $1.330 million in 2012. Stock-based compensation expenses and the expenses of the new clinic in Newmarket increased by $0.063 million and $0.030 million, respectively, which were offset by a $0.032 million drop in communication expenses, and a $0.051 million decrease in office supplies and committee expenses.

For the six-month period ended February 28, 2013, general and administrative expenses rose to $2.769 million, an increase of $0.247 million or 10% compared to $2.522 million in 2012. The expenses of the new clinic in Newmarket totalled $0.076 million, while depreciation and amortization expenses and stock-based compensation expenses were up by $0.080 million and $0.063 million, respectively.

Net profit 

Net profit and net earnings per share for the quarter ended February 28, 2013 were respectively $0.184 million and $0.01, versus $0.378 million and $0.02 in 2012. Net profit in relation to revenues was 4%, versus 8% in 2012.

For the six-month period ended February 28, 2013, net profit and net earnings per share were respectively $1.105 million and $0.06, compared to $1.625 million and $0.09 in 2012. Net profit in relation to revenues was 11%, versus 17 % in 2012.

DECLARATION OF DIVIDEND ON COMMON SHARES

The Company's Board of Directors has declared a cash dividend of $0.02 per share payable on April 30, 2013 to shareholders of record at the close of business on April 23, 2013. Future dividends are subject to the discretion of the Board of Directors.

The Company designates this dividend to be an "eligible dividend" pursuant to subsection 89(14) of the Income Tax Act (Canada) and its equivalent in any provinces of Canada.

Detailed financial results can be accessed on the OPMEDIC GROUP web site at www.opmedicgroup.com.

About OPMEDIC GROUP

OPMEDIC GROUP is a company incorporated under the laws of the Province of Quebec which provides healthcare-related services including surgical and endoscopic facilities and services to patients and surgeons (with its OPMEDIC division), fertility treatments, medical imaging, laboratory services and diagnostic procedures (with its PROCREA Cliniques division and a joint venture 7667264 Canada Inc.) and sperm banking services (with its PROCREA Cryopreservation Centre subsidiary). OPMEDIC GROUP's Common Shares trade on the Toronto Stock Exchange under the symbol "OMG".

This news release does not constitute an offer to sell or to solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful. This news release contains certain forward-looking statements that reflect the current views and/or expectations of OPMEDIC GROUP with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.

The Content of this press release has not been approved by nor submitted to the TSX which assumes no liability therefore.

SOURCE: OPMEDIC GROUP INC.

Jean-Marc LACHANCE
Vice President Finance and Chief Financial Officer
[phone], x 2260
[email protected]