WELL Health Provides Business Update Demonstrating Focus on Profitable and Capital Efficient Growth
- WELL's clinic recruitment, absorption and acquisition program has demonstrated substantial growth and capital efficiency having added two Canadian clinics in Q4-2023 generating approximately $28 million in annualized revenues for total consideration of less than $400,000 and are expected to positively contribute to EBITDA in 2024. WELL now operates 167 clinics in 98 facilities across Canada
- WELL has initiated an enterprise-wide cost optimization initiative, with a focus on improving cost efficiency and improving operating cashflow. It is expected that the Company will leverage a multitude of strategies including tech enablement, robotic process automation, and artificial intelligence for further cost optimization across its enterprise.
- OceanMD continues its successful growth journey and has started its work with the PHSA in British Columbia. WELL continues to expect the full realization of the previously announced $38.5 million contract and is making progress on pursuing new public sector opportunities in its business development pipeline.
VANCOUVER, BC and TORONTO, Jan. 16, 2024 /CNW/ - WELL Health Technologies Corp. (TSX: WELL) (OTCQX: WHTCF) ("WELL" or the "Company"), a digital healthcare company focused on positively impacting health outcomes by leveraging technology to empower healthcare practitioners and their patients globally, is pleased to announce multiple updates to its business.
Hamed Shahbazi, Founder and CEO of WELL, commented, "2023 was a landmark year for WELL, marked by significant growth, record revenues and EBITDA but perhaps what encourages us the most is how doctors and clinic owners across the country are proactively approaching WELL for support on managing their clinics. This has caused an unprecedented growth in the inbound interest in our owned and operated patient care business leading to an acceleration in our organic growth. Simply put, our growth is no longer just limited to buying clinics or developing greenfield sites, we are now attracting and recruiting entire clinics with a full roster of patients and providers for nominal consideration. We refer to this as our clinic absorption program. This is because care providers are increasingly trusting WELL and looking to be 'absorbed' by WELL such that they be supported with professional management that allows them focus on delivering the best care possible."
Mr. Shahbazi continued, "We are coupling this shift of rapid growth due to reduced physician and clinic acquisition costs with an emphasis on streamlining and cost optimizing our operations so that we can scale profitably and demonstrate the operating leverage that exists in our business. We believe it is critical for us to do this so that we can meet the industry demand and be able to continue to support our community of patients and providers."
WELL's clinic recruitment and absorption program has demonstrated substantial growth and capital efficiency. In Q4 alone, WELL has added two Canadian clinics generating approximately $28 million in annualized revenues for total consideration of less than $400,000. These clinics are expected to positively contribute to EBITDA in 2024. This includes the addition of the Manitoba Clinic, the largest privately operated clinic in the Province of Manitoba. Overall, WELL's clinic recruitment and absorption program has now resulted in five clinics joining WELL's network in 2023 and generating more than $33 million in annualized revenues for total consideration of less than $400,000. All of which are expected to positively contribute to EBITDA in 2024. WELL's current pipeline of clinic 'absorption' candidates includes 13 clinics which are currently under LOI. WELL's regular non-absorption M&A pipeline of clinics and targets currently includes approximately 30 clinics and targets under LOI.
Eva Fong, CFO of WELL, commented, "WELL hasn't just demonstrated an ability to acquire or absorb clinics, we've also been very focused on integrating and delivering Revenue and EBITDA growth. From inception through to 2022,1 our acquired clinics underwent WELL's clinic transformation program which resulted in average revenue growth of 20% and EBITDA growth by an average of 31%. We look forward to updating our stakeholders on the results of our clinic transformation on our 2023 and 2024 cohorts."
On December 1, 2023, WELL completed the absorption of the Manitoba Clinic. The addition of this well-known and trusted clinic enhances WELL's network with a range of specialized services including family practice, internal medicine, obstetrics/gynecology, ophthalmology, and more. With over 40 skilled physicians, Manitoba Clinic broadens the depth and breadth of WELL's medical expertise and extends its reach to over 750,000 residents in Winnipeg, one of Canada's largest cities. This is part of WELL's clinic recruitment and absorption program, which has made significant contributions to WELL's organic growth and reflects WELL's discipline regarding capital allocation.
The incorporation of Manitoba Clinic into the portfolio marks WELL's first entry into Manitoba, representing a significant milestone as the fifth province in Canada where WELL has established a physical clinical presence. This crucial step aligns with WELL's vision of creating a nationwide network of physical and virtual healthcare services. By integrating Manitoba Clinic, WELL not only expands its geographical footprint but also lays a foundation for further clinical expansion within the province. With this acquisition, WELL now operates 167 clinics in 98 facilities across Canada, significantly advancing towards its goal of a widespread, integrated healthcare system serving Canadians coast to coast.
WELL has embarked on an enterprise-wide cost optimization initiative, aimed at enhancing operational efficiency and increasing operating cash flow. This strategic move is key to WELL's long-term vision, reflecting a commitment to not only improve financial performance but also to establish a foundation for sustained growth and market leadership.
Central to this strategy, WELL has made significant strides in technology integration, particularly with AI. Earlier this year, WELL established an AI Center of Excellence internally to help expand the use of AI across functions throughout the enterprise. The Company has recently procured several leading-edge AI solutions, some of which are slated for deployment in early 2024. These advancements are expected to increase operational efficiency, provide improved support and care to our valued customers, and enhance the organization's productivity velocity. In tandem with these technological enhancements, WELL is also focusing on the centralization of key vendor relationships. This includes a major initiative in data center hosting, which is anticipated to significantly refine WELL's hosting economics. By optimizing these vendor relationships, WELL is aiming to achieve more favorable cost structures and service efficiencies, contributing to improved scalability, security, and reduced operational costs.
Through these initiatives, WELL is reinforcing its commitment to leveraging technology and strategic operational restructuring. The focus on AI integration and vendor relationship centralization is a testament to WELL's pursuit of excellence in healthcare efficiency and customer service. These efforts are poised to drive enhanced profitability and assert WELL's position as a leader in the healthcare industry, ready to address the evolving challenges of the healthcare sector.
WELL continues to focus on opportunities to grow its public sector business. OceanMD, a wholly owned subsidiary of WELL, continues to demonstrate significant growth overall and through its ongoing project with the Provincial Health Services Authority (PHSA) in British Columbia. The start of this collaboration signals a significant expansion in OceanMD's role within the Canadian healthcare sector. Central to this collaboration's success is the Ocean Platform, whose effectiveness and innovation are exemplified through services like eReferrals, eConsults, and eOrders. These offerings are set to significantly enhance healthcare efficiency in the province. The collaboration with the BC PHSA represents a significant milestone for OceanMD, further establishing its role in advancing digital healthcare solutions across Canada, and WELL remains optimistic about realizing the full $38.5 million contract. WELL has recently participated in new public service-oriented business development opportunities and looks forward to supporting its public service federal and provincial partners in 2024 and beyond.
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WELL's clinic acquisitions that closed in 2023 were excluded from this figure as they were recently enrolled in WELL's clinic transformation program |
WELL HEALTH TECHNOLOGIES CORP.
Per: "Hamed Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chairman and Director
WELL's mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL's comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. WELL's solutions enable more than 33,000 healthcare providers between the US and Canada and power the largest owned and operated healthcare ecosystem in Canada with more than 165 clinics supporting primary care, specialized care, and diagnostic services. In the United States WELL's solutions are focused on specialized markets such as the gastrointestinal market, women's health, primary care, mental health, revenue cycle management, and practitioner recruiting. WELL is publicly traded on the Toronto Stock Exchange under the symbol "WELL" and on the OTC Exchange under the symbol "WHTCF". To learn more about the Company, please visit: www.well.company.
SOURCE WELL Health Technologies Corp.
Tyler Baba, Investor Relations Manager, [email protected], 604-628-7266
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