WELL Reports First Quarter 2019 Results
- Revenue in the three months ended March 31, 2019 increased 285% compared to the three months ended April 30, 2018
- Gross margin(1) increased to 31% in the first quarter due to the increase in higher margin digital services revenue
- WELL operated 19 wholly-owned primary healthcare clinics as at March 31, 2019 and provided digital services to 220 clinics. Subsequent to quarter end, the Company entered into a share purchase agreement to acquire OSCARprn, which would add an additional 71 clinics to its digital services portfolio.
Vancouver, B.C. May 29, 2019
WELL Health Technologies Corp. (TSX.V: WELL) (the “Company” or “WELL”), a company focused on consolidating and modernizing clinical and digital assets within the primary healthcare sector, announces it has filed its condensed interim consolidated financial statements and Interim MD&A – Quarterly Highlights for fiscal first quarter ended March 31, 2019.
On December 11, 2018, the Board of Directors approved a resolution to change the Company’s year-end from October 31 to December 31. Accordingly, the condensed interim consolidated financial statements for the period ended March 31, 2019 include the results for the 3-months ended March 31, 2019 with comparatives for the 3-months ended April 30, 2018.
First Quarter Financial and Business Highlights:
- The Company generated $7,388,043 of revenue during the three months ended March 31, 2019 compared to $1,919,194 generated during the three months ended April 30, 2018 - an increase of 285%.
- Gross margin(1) increased to 31% in the three months ended March 31, 2019, compared to 30% in the three months ended April 30, 2018 due to the addition of higher margin digital services revenue.
- Adjusted EBITDA(2),(3) loss was $338,465 for the 3-month period ended March 31, 2019, compared to Adjusted EBITDA(2) income of $32,821 in the 3-month period ended April 30, 2018.
- On March 7, 2019, WELL completed a non-brokered private placement of approximately $2.7M for an aggregate of 5.93M shares at a price of $0.46 per share. The Company issued 2.17M shares to a group of strategic investors led by Sir Li Ka-shing and included Horizons Ventures for gross proceeds of $1M. The remainder of the private placement was subscribed to by seven members of WELL’s management team who co-invested in the financing.
- On January 1, 2019, the Company acquired all of the issued and outstanding shares of NerdEMR Services Ltd. NerdEMR provides electronic medical records (EMR) software and services to approximately 220 clinics, most of which are located in the province of British Columbia.
On May 22, 2019, the Company entered into an arm’s length share purchase agreement with the shareholder of OSCARprn – Treatments Solutions Ltd., whereby the Company has agreed to acquire all of the issued and outstanding shares of OSCARprn, a provider of OSCAR EMR services to approximately 71 clinics in British Columbia. The total consideration payable by the Company in connection with the acquisition of OSCARprn is $876,000.
The Company continues to execute on its 2019 growth strategy by focusing on the following:
- Organic growth - attracting and retaining physicians and patients to the Company’s facilities;
- In-organic growth - the acquisition of accretive health clinics and digital technologies to continue to expand the Company’s operations; and
- Operational excellence - continue to provide the highest standard of care to patients by leveraging technologies and shared services model to service the patients.
”We are very pleased with our first quarter results, which include a full quarter of contribution from our 19 WELL-owned primary healthcare clinics and SaaS revenue from our NerdEMR acquisition,” said Hamed Shahbazi, Founder and CEO of WELL. “In addition, we expect our recently announced proposed acquisition of OSCARprn will further strengthen our position as one of the leading providers of OSCAR EMR services and support in Canada.”
Selected Financial Highlights:
|For the three months ended|
|March 31, 2019||April 30, 2018|
|Cost of clinical and digital services||(5,120,550)||(1,334,053)|
|Net loss from continuing operations(3)||(1,450,248)||(148,801)|
|Total comprehensive loss for the period(3)||(1,450,248)||(266,601)|
|Net loss per share - from continuing operations||(0.02)||(0.00)|
|Net loss per share - for the period||(0.02)||(0.00)|
|Weighted average number of common shares outstanding (basic and diluted)||86,295,648||55,712,752|
|Reconciliation of EBITDA and adjusted EBITDA|
|Net loss for the period||(1,450,248)||(265,626)|
|Depreciation and amortization||391,182||8,964|
|Rent expense on finance leases||(411,517)||-|
|Net loss from discontinued operations||-||116,825|
|Time-based earn-out expense||136,247||-|
|Transaction and restructuring costs expensed||82,886||72,372|
- Non-GAAP measure. Gross profit and gross margin do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines gross profit as revenue less cost of clinical and digital services and gross margin as gross profit as a percentage of revenue. Gross profit and gross margin should not be construed as an alternative for revenue or net loss determined in accordance with IFRS. The Company believes that gross profit and gross margin are meaningful metrics in assessing the Company’s financial performance and operational efficiency.
- Non-GAAP measure. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines EBITDA as earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA (i) less net rent expense on premise leases considered to be finance leases under IFRS and (ii) before transaction and restructuring costs, discontinued operations, time-based earn-out expense and stock-based compensation expense. The Company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.
- On January 1, 2019, the Company adopted IFRS 16 – Leases (“IFRS 16”). The adoption of this new standard had a significant impact on the Company’s financial statements, including its statement of loss and comprehensive loss, statement of financial position and statement of cash flows. As a result of adopting the new standard, the Company has classified some of its premise leases and subleases as finance leases at January 1, 2019, all of which were previously classified as operating leases. The Company adopted the new standard utilizing the modified retrospective exemption which did not require the restatement of prior periods. See note 3(f) in the Company’s condensed interim consolidated financial statements for further information on the accounting treatment of leases under IFRS 16.
Please see SEDAR for complete copies of the Company’s condensed interim consolidated financial statements and Interim MD&A – Quarterly Highlights for fiscal first quarter ended March 31, 2019.
WELL HEALTH TECHNOLOGIES CORP.
Per: “Hamed Shahbazi”
Chief Executive Officer, Chairman and Director
WELL is a unique company that operates Primary Healthcare Facilities as well as a significant EMR or Electronic Medical Records business that supports the digitization of such clinics. WELL’s overarching objective is to empower doctors to provide the best and most advanced care possible leveraging the latest trends in digital health. In the last 12 months, WELL physicians served approximately 600,000 patient visits through its network of 19 medical clinics. WELL is publicly traded on the TSX Venture Exchange under the symbol WELL.V. WELL was recognized as a TSX Venture 50 Company in 2018 and 2019.
This news release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws, including, without limitation: the Company’s outlook for its 2019 growth strategy consisting of organic growth, in-organic growth and operational excellence; the expectation of the proposed acquisition of OSCARprn; the position of the Company as one of the leading providers of OSCAR EMR services; and the intention to provide the best and most advanced care and leveraging the latest in digital health. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. WELL’s statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of WELL 's control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by inherent risks and uncertainties, including: that WELL’s assumptions in making forward-looking statements may prove to be incorrect; adverse market conditions; risks inherent in the primary healthcare sector in general; regulatory and legislative changes; that future results may vary from historical results; inability to obtain future financing on suitable terms; and that market competition may affect the business, results and financial condition of WELL. Except as required by securities law, WELL does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.