Centric Health Reports Strong Fourth Quarter and Full Year 2014 Financial Results
- Quarter Highlighted by Continued Revenue and Adjusted EBITDA Growth in
Each Segment -
TORONTO, March 3, 2015 /CNW/ - Centric Health Corporation ("Centric
Health" or "the Company") (TSX: CHH), Canada's leading diversified
healthcare services company, today reported its financial results for
the fourth quarter and year ended December 31, 2014.
"Our fourth quarter results were further confirmation of the underlying
strength and momentum in our business as we delivered revenue and
adjusted EBITDA growth from continuing operations in each of our
segments for the third consecutive quarter," said David Cutler,
President and Chief Executive Officer, Centric Health Corporation.
"For the year as a whole, revenue and adjusted EBITDA grew by 10% and
18%, respectively, as adjusted EBITDA margins expanded to 9.1% from
8.5%. Importantly, the vast majority of our growth continues to be
driven organically."
Mr. Cutler continued, "2014 was transformational for Centric Health. We
realigned our business model to focus on our core strengths in hands-on
healthcare service delivery, strengthened the balance sheet and
repositioned the business model for sustainable, long-term growth. To
this end, we divested non-core operations and delivered on our stated
objectives to pay down debt and redeploy a meaningful portion of the
divestiture proceeds to a high quality, high margin business that fits
squarely within our refined focus, which we achieved by acquiring the
Care Plus Group of specialty pharmacies subsequent to year end."
Highlights for the Fourth Quarter and 2014 Year
(All comparative figures are for the corresponding period of the prior
year)
-
Revenue from continuing operations for the fourth quarter grew 7.8% to
$78.2 million from $72.6 million, (including organic growth of 6.6%)
and for the year grew 9.6% to $308.1 million from $281.1 million
(including organic growth of 7.7%);
-
Adjusted EBITDA1 from continuing operations for the fourth quarter grew 18.3% to $7.0
million from $5.9 million, while Adjusted EBITDA for the year grew
18.0% to $28.0 million from $23.8 million;
-
Adjusted EBITDA1 margin from continuing operations for the fourth quarter increased to
9.0% from 8.2% and for the year increased to 9.1% from 8.5%;
-
Generated cash flow from operations for the fourth quarter of $5.5
million, the eleventh consecutive quarter of positive cash flow from
operations, and $19.7 million for the year;
-
Consistent with the Company's refined strategy to focus on its core
higher-margin operations, completed the sales of its retail and home
medical equipment operations and methadone pharmacy operations for
gross proceeds of $50 million and $20 million, respectively;
-
Repaid $10 million of its Revolving Facility, permanently reducing its
capacity to $40 million from $50 million;
-
Temporarily repaid an additional $15 million of its Revolving Facility
while the Company evaluates debt repayment options per its commitment
to deploy a minimum of an additional $15 million to some combination of
the Revolving Facility, redemption of second lien senior secured notes
and redemption of preferred partnership units; and,
-
Following the completion of certain earn out periods, Centric canceled
approximately 17.1 million common shares. The cancellation represents
approximately 8.5% of the current total issued and outstanding common
shares on a fully diluted basis.
Highlights Subsequent to Year End
-
Completed the reacquisition of Community Advantage Rehabilitation, Inc.
("CAR") (previously referred to as the Company's Home Care Operations)
and Active Health Services Ltd. ("Active Health") (previously known as
the Company's Seniors Wellness Operations) from Lifespan Health and
Wellness Limited ("Lifespan") in consideration for the full repayment
of the amounts owing under the two promissory notes previously issued
in favour of Centric Health by Lifespan (principal amounts of $2.5
million dollars and $12 million dollars); and,
-
Completed the acquisition of 100% of the shares of Pharmacare
Fulfillment Center Ltd., an Edmonton-based leading specialty pharmacy
business operating under the Care Plus, Pharmacare and Lidia's Pharmacy
brands (collectively, the "Care Plus Group") in Western Canada that
generated annualized trailing 12-month (period ended December 31, 2014)
EBITDA of $5.1 million. The acquisition, which is expected to be
immediately accretive, expanded the number of residents serviced by the
Company's Specialty Pharmacy segment by almost 25%, provides access to
the rapidly growing Western Canadian market and significantly enhances
the segment's ability to serve national clients.
"During 2014, we continued to make meaningful progress on our debt
reduction plan, highlighted by the use of $25 million of the
divestiture proceeds to pay down our Revolving Facility comprised of a
$10 million permanent reduction and a $15 million temporary reduction
as we determine the best application of those funds towards some
combination of the Revolving Facility, redemption of second lien senior
secured notes and redemption of the preferred partnership units," said
Daniel Gagnon, Chief Financial Officer, Centric Health Corporation.
"Reducing debt remains a top priority for us in 2015 as we continue to
pursue expansion of our EBITDA and free cash flow from our growing
business."
FINANCIAL RESULTS
As a result of the strategic initiative to define the Company's long
term operating model and the Company's decision to divest substantially
all of its retail and home medical equipment operations, the Company's
Chief Operating Decision Maker ("CODM") has amended the manner in which
the business is operated and accordingly how financial information is
presented to the CODM. As a result, the Company has amended its
reportable operating segments and will now present three reportable
operating segments rather than five reportable operating segments as
was previously presented. Operating segments, as reported to the CODM
are as follows: Physiotherapy, Rehabilitation and Assessments,
Specialty Pharmacy, and Surgical and Medical Centres. The assessment
operations which were separately reported in the past are now reported
as part of the renamed Physiotherapy, Rehabilitation and Assessments
segment. This segment was previously named the Physiotherapy segment.
As a result of the planned divestiture of substantially all of the
retail and home medical equipment segment, the remaining component of
this segment will now be reported as part of the Physiotherapy,
Rehabilitation and Assessments segment. Comparative balances have been
amended to reflect the presentation of three reportable operating
segments. The support services provided through the corporate offices
largely support the operations of the Company and certain of these
costs have been allocated to the operating segments based on the extent
of corporate management's involvement in the reportable segment during
the period.
Selected Financial Information
(All amounts in the chart below are in thousands except per share,
shares outstanding, and percentage data)
|
|
For the three months ended
December 31,
|
|
|
For the years ended
December 31,
|
(in $000)
|
|
2014
$
|
|
|
2013 4
$
|
|
|
2012
$
|
|
|
2014
$
|
|
|
2013 4
$
|
|
|
2012
$
|
Revenue
|
|
78,245
|
|
|
72,589
|
|
|
65,567
|
|
|
308,074
|
|
|
281,148
|
|
|
264,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
(2,328)
|
|
|
(2,627)
|
|
|
(11,470)
|
|
|
(5,208)
|
|
|
(12,922)
|
|
|
(24,178)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
before interest expense and income taxes
|
|
(1,936)
|
|
|
(269)
|
|
|
(27,936)
|
|
|
(6,342)
|
|
|
4,526
|
|
|
5,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA1 from continuing operations
|
|
4,528
|
|
|
6,135
|
|
|
(16,087)
|
|
|
19,695
|
|
|
30,917
|
|
|
33,020
|
Adjusted EBITDA1 from continuing operations
|
|
7,004
|
|
|
5,920
|
|
|
3,972
|
|
|
28,025
|
|
|
23,760
|
|
|
18,528
|
Per share - Basic
|
|
$0.05
|
|
|
$0.04
|
|
|
$0.03
|
|
|
$0.19
|
|
|
$0.18
|
|
|
$0.16
|
Per share - Diluted
|
|
$0.03
|
|
|
$0.03
|
|
|
$0.02
|
|
|
$0.14
|
|
|
$0.13
|
|
|
$0.12
|
Adjusted EBITDA1 Margin from continuing operations
|
|
9.0%
|
|
|
8.2%
|
|
|
6.1%
|
|
|
9.1%
|
|
|
8.5%
|
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA1
|
|
7,004
|
|
|
6,186
|
|
|
9,591
|
|
|
29,176
|
|
|
33,601
|
|
|
42,832
|
Per share - Basic
|
|
$0.05
|
|
|
$0.05
|
|
|
$0.08
|
|
|
$0.20
|
|
|
$0.26
|
|
|
$0.38
|
Per share - Diluted
|
|
$0.03
|
|
|
$0.03
|
|
|
$0.06
|
|
|
$0.14
|
|
|
$0.18
|
|
|
$0.28
|
Adjusted EBITDA1 Margin
|
|
9.0%
|
|
|
5.6%
|
|
|
8.6%
|
|
|
7.3%
|
|
|
7.4%
|
|
|
9.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(8,035)
|
|
|
(39,257)
|
|
|
(38,530)
|
|
|
(57,203)
|
|
|
(90,850)
|
|
|
(7,088)
|
Per share - Basic5
|
|
($0.04)
|
|
|
($0.30)
|
|
|
$(0.33)
|
|
|
($0.40)
|
|
|
($0.71)
|
|
|
$(0.06)
|
Per share - Diluted5
|
|
($0.04)
|
|
|
($0.30)
|
|
|
$(0.32)
|
|
|
($0.40)
|
|
|
($0.71)
|
|
|
$(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operations
|
|
5,523
|
|
|
8,649
|
|
|
14,813
|
|
|
19,719
|
|
|
20,204
|
|
|
15,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding (Basic)3
|
|
153,331
|
|
|
132,739
|
|
|
119,887
|
|
|
145,221
|
|
|
129,032
|
|
|
114,140
|
Shares Outstanding, December 31 3
|
|
153,384
|
|
|
133,363
|
|
|
121,318
|
|
|
153,384
|
|
|
133,363
|
|
|
121,389
|
1 See "Non-IFRS Measures" below.
|
3 Excludes contingent escrowed shares and restricted shares.
|
4 As part of the year end financial statement close process for the year
ended December 31, 2013, the Company's Motion Specialties operations
performed an inventory count and valuation. Upon the completion of the
inventory count and inventory valuation, adjustments of $7.8 million
$1.8 million income taxes) were recorded for the year ended December
31, 2013 which reduced inventory and increased cost of healthcare
services and supplies.
|
5 Basic and diluted earnings per share are based on the profit or loss
attributable to shareholders of Centric Health.
|
Consolidated Results
Consolidated revenue from continuing operations for the three month
period ended December 31, 2014 increased 7.8% to $78.2 million from
$72.6 million for the comparative period in the prior year. The
increase was primarily attributable to:
-
Organic growth of $4.8 million, or 6.6%, with growth across all
operating segments; and
-
The acquisition of SmartShape Weight Loss Centres ("SmartShape")
(December 2013) and other start-up initiatives contributed incremental
revenue of $1.6 million.
-
Partially offsetting these increases was the impact of generic drug
price reductions in the Specialty Pharmacy segment.
Consolidated revenue from continuing operations for the year ended
December 31, 2014 increased 9.6% to $308.1 million from $281.1 million
for the year ended December 31, 2013. The increase was primarily due
to:
-
Organic growth of $21.9 million, or 7.7%, with growth across all
operating segments; and
-
The acquisition of SmartShape (December 2013) and other start-up
initiatives contributed incremental revenue of $7.2 million.
-
Partially offsetting these increases was the impact of generic drug
price reductions in the Specialty Pharmacy segment and the closure of
certain underperforming rehabilitation clinics in the Physiotherapy,
Rehabilitation and Assessments segment.
Adjusted EBITDA1 from continuing operations for the three month-period ended December 31,
2014 increased 18.3% to $7.0 million from $5.9 million for the
three-month period ended December 31, 2013. Adjusted EBITDA1 margin from continuing operations for the three-month period ended
December 31, 2014 increased to 9.0% from 8.2% for the three-month
period ended December 31, 2013.
Adjusted EBITDA1 from continuing operations for the year ended December 31, 2014
increased 18.0% to $28.0 million from $23.8 million for the year ended
December 31, 2013. Adjusted EBITDA1 margin from continuing operations for the year ended December 31, 2014
increased to 9.1% from 8.5% for the year ended December 31, 2013.
Segment Results
(All amounts in the charts below are in thousands except per share,
shares outstanding, and percentage data)
For the three months ended
December 31,
|
|
|
|
Revenue
|
|
|
Adjusted EBITDA from continuing
operations
|
(in $000)
|
|
|
|
2014
$
|
|
|
2013
$
|
|
|
2014
$
|
|
|
|
%
|
|
|
2013 4
$
|
|
|
|
%
|
Physiotherapy, Rehabilitation and
Assessments
|
|
|
|
44,024
|
|
|
41,419
|
|
|
6,327
|
|
|
|
14.4
|
|
|
5,664
|
|
|
|
13.7
|
Specialty Pharmacy
|
|
|
|
24,579
|
|
|
23,582
|
|
|
3,254
|
|
|
|
13.2
|
|
|
2,877
|
|
|
|
12.2
|
Surgical and Medical Centres
|
|
|
|
9,642
|
|
|
7,588
|
|
|
609
|
|
|
|
6.3
|
|
|
536
|
|
|
|
7.1
|
Corporate
|
|
|
|
—
|
|
|
—
|
|
|
(3,186)
|
|
|
|
—
|
|
|
(3,157)
|
|
|
|
—
|
Total
|
|
|
|
78,245
|
|
|
72,589
|
|
|
7,004
|
|
|
|
9.0
|
|
|
5,920
|
|
|
|
8.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended
December 31,
|
|
|
|
Revenue
|
|
|
Adjusted EBITDA from continuing
operations
|
(in $000)
|
|
|
|
2014
$
|
|
|
2013
$
|
|
|
2014
$
|
|
|
|
%
|
|
|
2013 4
$
|
|
|
|
%
|
Physiotherapy, Rehabilitation and
Assessments
|
|
|
|
175,142
|
|
|
163,803
|
|
|
24,930
|
|
|
|
14.2
|
|
|
22,684
|
|
|
|
13.8
|
Specialty Pharmacy
|
|
|
|
95,576
|
|
|
87,825
|
|
|
12,201
|
|
|
|
12.8
|
|
|
9,581
|
|
|
|
10.9
|
Surgical and Medical Centres
|
|
|
|
37,356
|
|
|
29,520
|
|
|
3,321
|
|
|
|
8.9
|
|
|
2,665
|
|
|
|
9.0
|
Corporate
|
|
|
|
—
|
|
|
—
|
|
|
(12,427)
|
|
|
|
—
|
|
|
(11,170)
|
|
|
|
—
|
Total
|
|
|
|
308,074
|
|
|
281,148
|
|
|
28,025
|
|
|
|
9.1
|
|
|
23,760
|
|
|
|
8.5
|
OUTLOOK
With services that address growing demand and evolving needs within the
Canadian healthcare ecosystem, Centric Health's unparalleled national
care delivery platform provides significant potential for future
expansion and growth. Following an extensive review of its core
competencies, business segment performance and market opportunities,
the Company has focused its strategy on its core healthcare service
businesses in the pursuit of top-line growth, improved profitability
and free cash flow generation. The Company's organic growth initiatives
focus on those opportunities with low capital investment that leverage
the Company's existing resources and capacity. Acquisitions are
expected to be accretive and will be consistent with the Company's
focus on its core business segments and on operations that generate
high margins and strong cash flow, require low capital expenditures and
have low exposure to regulatory or public funding changes.
Physiotherapy, Rehabilitation and Assessments
The Company's Physiotherapy, Rehabilitation and Assessments segment
achieved strong growth in 2014, driven by both the rehabilitation
clinic network and the assessments business.
The Company anticipates continued growth in the rehabilitation clinic
network through organic initiatives such as continued expansion of its
preferred provider relationships with employers and other
organizations. Specialty programs offered by the Company's network of
rehabilitation clinics differentiates Centric Health in a highly
competitive industry. The Company is also undertaking expanded local
and digital marketing initiatives to drive brand awareness and increase
the volume of patient visits.
The Company expanded its clinic network in 2014 through the acquisition
of four new clinics. The Company will pursue continued expansion of the
national clinic footprint through additional strategically beneficial
acquisitions. Growth through acquisition will only occur if the
acquisition will be accretive to earnings and complementary to the
national network and strategic plan.
Over the longer term, this segment should benefit from growth in
Employer Healthcare Management and Wellness contracts, which should
contribute to increased volumes at the Company's rehabilitation
clinics.
In February 2015, the Company completed the reacquisition of Active
Health ("Seniors Wellness") and Community Advantage Rehabilitation
("CAR"). These acquisitions represent a continued focus on meeting the
increasing needs of the growing seniors population and overall
alignment with the Company's core strategy.
Specialty Pharmacy
The Specialty Pharmacy segment continued to achieve success with its
organic growth strategy focused on maximizing the utilization of
existing infrastructure by winning new tenders for contracts with
long-term care and retirement homes and retail initiatives. The Company
anticipates that revenue and Adjusted EBITDA growth in its Specialty
Pharmacy segment will continue for 2015 and beyond, but expects
increased competition for new long-term care and retirement home
contracts through competitive tendering processes across Ontario. In
order to offset the increasing competition, the Specialty Pharmacy
segment will continue to pursue operational efficiencies and cost
savings from management.
As the majority of the Company's Specialty Pharmacy operations are based
in Ontario, the Company seeks to strategically expand this business
into key growth markets beyond the province, in particular across
Western Canada, and enhance its ability to service clients with
national networks. On March 2, 2015, the Company completed the
acquisition of 100% of the shares of Pharmacare Fulfillment Center
Ltd., an Edmonton-based leading specialty pharmacy business operating
under the Care Plus, Pharmacare and Lidia's Pharmacy brands
(collectively, the "Care Plus Group") in Western Canada that generated
annualized trailing 12-month (period ended December 31, 2014) EBITDA of
$5.1 million. The acquisition, which is expected to be immediately
accretive, expanded the number of residents serviced by the Company's
Specialty Pharmacy segment by almost 25%, provides access to the
rapidly growing Western Canadian market and significantly enhances the
segment's ability to serve national clients.
The Company is also pursuing organic growth opportunities by
establishing co-location pharmacy services within selected existing
facilities, having opened the first such pharmacy location during the
fourth quarter of 2014 within the Richmond Oval sports medicine complex
in Richmond, British Columbia.
Adjusted EBITDA margins, which have returned to historical levels
following the implementation of Electronic Medical Administrative
Records ("EMAR") for existing long-term care home contracts, are
expected to be stable in coming quarters. However, as Centric wins new
contracts, margins may be impacted in the short term as EMAR
implementation costs may be absorbed.
Longer term, this segment should benefit from growth in Employer
Healthcare Management and Wellness contracts, which should contribute
to increased volumes.
Surgical and Medical Centres
Growth in the Company's Surgical and Medical Centres segment is expected
to be driven primarily by increasing utilization of the existing
network capacity through a multi-faceted strategy that includes the
introduction of innovative programs and new technologies, partnerships
with local physicians and health authorities, marketing and brand
development and facilitating medical tourism. Efforts to expand the
roster of physicians in order to utilize excess operating room capacity
are ongoing at all of the Company's surgical centres.
The financial results of the Surgical and Medical Centres segment
improved in 2014 due to growth in the contribution from bariatric
procedures following the 75% acquisition of SmartShape, a leader in
state-of-the-art bariatric (weight loss) surgical procedures, in the
fourth quarter of 2013. The Company expects the number of bariatric
procedures to increase based on the roll out of SmartShape's proven
business model at each surgical centre location. SmartShape recently
added the higher margin gastric sleeve procedure to its offerings at
the Don Mills (Toronto) facility (and will do so at other Ontario
facilities pending regulatory approval), which is expected to further
increase volumes.
The Company continues to seek partnerships with some of Canada's leading
surgeons for the future launch of additional specialized surgical
Centres of Excellence and other initiatives. In addition, facilitating
out of province care presents a growth opportunity for the Company.
During the first quarter of 2014, the Company completed a significant
renovation to its facility in Calgary, Alberta and completed a
renovation of its Don Mills facility in the third quarter of 2014. In
the first quarter of 2015, the Company is planning an expansion and
renovation of its False Creek location in Vancouver, British Columbia,
which will result in a temporary closure of this facility.
Employer Healthcare Management and Wellness Initiative
The Company recently established a dedicated cross-divisional support
team to pursue opportunities in the high growth employer services
market by coordinating business development and account-based marketing
efforts across multiple entry points. The Company offers clients
customizable program options from a broad continuum of services across
its platform, including mandatory workplace injury insurance programs,
optional wellness programs and corporate health benefits and
prescription plans, generating additional revenue in its core
segments. In the fourth quarter of 2014, the Company launched an
incentives-based wellness pilot program for employees to help test and
optimize the offer in advance of a market launch.
Corporate Infrastructure
Management believes overall profitability can be improved through
further optimization of corporate infrastructure. The Company has
multiple initiatives underway intended to reduce corporate costs as a
proportion of consolidated revenue through consolidation and
centralization of functions, rightsizing, achieving unrealized
synergies amongst the operating segments and managing discretionary
spend and professional fees.
FINANCING AND DEBT REDUCTION
On August 29, 2014, the Company repaid $10,000 of its Revolving Facility
resulting in a permanent reduction in the capacity of the Revolving
Facility from $50,000 to $40,000. The Company intends to make a further
$15,000 debt reduction through a combination of additional reduction of
the Revolving Facility, redemption of second lien senior secured notes
and redemption of the preferred partnership units. While the Company
evaluates its debt repayment options, on September 19, 2014, the
Company made a temporary repayment of an additional $15,000 against the
Revolving Facility which further reduced the capacity of the Revolving
Facility to $25,000. However, the capacity on the Revolving Facility
can be increased to $40,000 with an equivalent return of funds to the
escrow cash account for the proceeds of sale from the non-core
businesses as long as the Company is not in default under the Revolving
Facility. The Company's Revolving Facility matures in June 2015 and the
Company is in the process of extending the facility with the lender.
In August 2014, as a result of the pending divestiture of certain
non-core operations and subject to the completion of these
divestitures, the Company received a waiver from a financial
performance covenant at the September 30, 2014 measurement date and
amendments to certain financial performance covenants for the remaining
measurement dates up to the maturity of the Revolving Facility in June
2015. In December 2014, the Company received a waiver from a financial
performance covenant at December 31, 2014 and March 31, 2015. The
Company was in compliance with its financial performance covenants at
December 31, 2014, except for the one financial covenant for which the
Company received a waiver in December 2014.
The Company has at December 31, 2014 $36,302 of restricted cash
representing the balance of net proceeds from the sale of the methadone
pharmacy operations and the retail and home medical equipment
business. In February 2015, the Company obtained approval to use
$26,000 of this restricted cash from both the second lien senior
secured notes and revolving facility lenders to fund the cash cost of
the acquisition of specialty pharmacy business Pharmacare Fulfillment
Center Ltd. (the "Care Plus Group") on March 2, 2015.
With the completion of this accretive acquisition and the Company's 2015
projected improved budget from operations over 2014 results through
organic growth, operational improvements and cost containment, the
Company plans to renegotiate its existing Revolving Facility with its
lenders.
The Company intends to use the remaining restricted cash to reinvest in
its core businesses through accretive acquisitions or further debt
reductions.
SHARES OUTSTANDING
As at December 31, 2014 the Company had total shares outstanding of
155,502,902 and as at the date of this press release (March 3, 2015)
the Company had total shares outstanding of 159,850,725. The
outstanding shares at December 31, 2014 include 2,113,916 shares which
are restricted or held in escrow and will be released to certain
vendors of previously acquired businesses based on the achievement of
certain stated performance targets and at March 3, 2015 include
1,813,916 which are also restricted or held in escrow and will be
released to certain vendors of previously acquired businesses based on
the achievement of certain stated performance targets. Escrowed and
restricted shares are not reflected in the shares reported on the
Company's financial statements. Accordingly, for financial reporting
purposes, the Company reported 153,388,986 common shares outstanding as
at December 31, 2014 and 133,363,294 shares outstanding at December 31,
2013. The number of options outstanding is 6,871,000 at December 31,
2014 and 7,671,000 at March 3, 2014. The number of restricted share
units outstanding is 3,414,835 at December 31, 2014 and 3,201,657 at
March 3, 2015. The number of warrants outstanding is 12,694,427 at
December 31, 2014 and March 3, 2015. Should all outstanding options
and warrants that were exercisable at December 31, 2014 be exercised,
the Company would receive proceeds of $20.8 million.
1NON-IFRS MEASURES
This press release includes certain measures which have not been
prepared in accordance with IFRS such as EBITDA, Adjusted EBITDA,
Adjusted EBITDA margin and Adjusted EBITDA per share. These non-IFRS
measures are not recognized under IFRS and, accordingly, shareholders
are cautioned that these measures should not be construed as
alternatives to net income determined in accordance with IFRS. The
non-IFRS measures presented are unlikely to be comparable to similar
measures presented by other issuers.
The Company defines EBITDA as earnings before depreciation and
amortization, interest expense, amortization of lease incentives, and
income tax expense (recovery). Adjusted EBITDA is defined as EBITDA
before transaction and restructuring costs, changes in the fair value
of the contingent consideration liability, impairments, stock based
compensation expense, change in fair value of derivative financial
instruments and gain on disposal of property and equipment recognized
in the statement of income. Adjusted EBITDA margin is defined as
Adjusted EBITDA divided by revenue. Adjusted EBITDA per share is
defined as Adjusted EBITDA divided by the weighted outstanding shares
on both a basic and diluted basis. The Company believes that Adjusted
EBITDA1 is a meaningful financial metric as it measures cash generated from
operations which the Company can use to fund working capital
requirements, service interest and principal debt repayments and fund
future growth initiatives. The Company's agreements with senior
lenders are structured with certain financial performance covenants
which include Adjusted EBITDA1 as a key component of the covenant calculations. EBITDA and Adjusted
EBITDA1 are not recognized measures under IFRS.
Reconciliation of Non-IFRS Measures
|
|
|
|
For the three months ended
December 31,
|
|
|
|
For the years ended
December 31,
|
(in $000)
|
|
|
|
2014
$
|
|
|
2013 3
$
|
|
|
|
2014
$
|
|
|
|
|
|
|
2013 3
$
|
Net loss from continuing operations
|
|
|
|
(8,821)
|
|
|
(20,320)
|
|
|
|
(37,593)
|
|
|
|
|
|
|
(38,401)
|
Depreciation and amortization
|
|
|
|
6,474
|
|
|
6,407
|
|
|
|
25,917
|
|
|
|
|
|
|
26,273
|
Interest expense
|
|
|
|
8,107
|
|
|
8,305
|
|
|
|
32,909
|
|
|
|
|
|
|
36,194
|
Amortization of lease incentives
|
|
|
|
(10)
|
|
|
(3)
|
|
|
|
120
|
|
|
|
|
|
|
118
|
Income tax expense (recovery)
|
|
|
|
(1,222)
|
|
|
11,746
|
|
|
|
(1,658)
|
|
|
|
|
|
|
6,733
|
EBITDA from continuing operations
|
|
|
|
4,528
|
|
|
6,135
|
|
|
|
19,695
|
|
|
|
|
|
|
30,917
|
Transaction and restructuring costs
|
|
|
|
2,454
|
|
|
1,562
|
|
|
|
5,381
|
|
|
|
|
|
|
3,764
|
Change in fair value of contingent consideration liability
|
|
|
|
113
|
|
|
(2,587)
|
|
|
|
808
|
|
|
|
|
|
|
(12,562)
|
Stock-based compensation expense
|
|
|
|
415
|
|
|
574
|
|
|
|
1,814
|
|
|
|
|
|
|
6,520
|
Change in fair value of derivative financial instruments
|
|
|
|
(505)
|
|
|
229
|
|
|
|
326
|
|
|
|
|
|
|
(4,886)
|
Gain on disposal of property and equipment
|
|
|
|
(1)
|
|
|
7
|
|
|
|
1
|
|
|
|
|
|
|
7
|
Adjusted EBITDA from continuing operations
|
|
|
|
7,004
|
|
|
5,920
|
|
|
|
28,025
|
|
|
|
|
|
|
23,760
|
Adjusted EBITDA from discontinued operations
|
|
|
|
—
|
|
|
(2,352)
|
|
|
|
1,151
|
|
|
|
|
|
|
9,841
|
Adjusted EBITDA
|
|
|
|
7,004
|
|
|
6,186
|
|
|
|
29,176
|
|
|
|
|
|
|
33,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of shares
|
|
|
|
153,331
|
|
|
132,739
|
|
|
|
145,221
|
|
|
|
|
|
|
129,032
|
Adjusted EBITDA per share from continuing
operations (basic)
|
|
|
|
$0.05
|
|
|
$0.04
|
|
|
|
$0.19
|
|
|
|
|
|
|
$0.18
|
Adjusted EBITDA per share (basic)
|
|
|
|
$0.05
|
|
|
$0.05
|
|
|
|
$0.20
|
|
|
|
|
|
|
$0.26
|
Fully diluted weighted average number of shares
|
|
|
|
211,199
|
|
|
184,737
|
|
|
|
200,796
|
|
|
|
|
|
|
184,984
|
Adjusted EBITDA per share from continuing
operations (diluted)
|
|
|
|
$0.03
|
|
|
$0.03
|
|
|
|
$0.14
|
|
|
|
|
|
|
$0.13
|
Adjusted EBITDA per share (diluted)
|
|
|
|
$0.03
|
|
|
$0.03
|
|
|
|
$0.14
|
|
|
|
|
|
|
$0.18
|
2PRESENTATION OF FINANCIAL RESULTS
In the second quarter of 2014, Centric Health launched a strategic plan
to focus on core businesses and divest of non-core businesses. As a
result of entering into definitive agreements for the divestiture of
non-core businesses in June 2014, which were subsequently closed in
September 2014, the sale of other businesses in May 2014 and the
closure of an underperforming surgical centre, the Company has
segregated its results from operations between continuing and
discontinued operations for the three- and twelve-month periods ended
December 31, 2014 and 2013. Continuing operations reflect the
Company's focus on its three core segments: Physiotherapy,
Rehabilitation and Assessments, Specialty Pharmacy, and Surgical and
Medical Centres.
CONFERENCE CALL
Centric Health will host a conference call, including a slide
presentation, to discuss its fourth quarter and year-to-date financial
results tomorrow, Wednesday, March 4, 2015, at 8:30 a.m. (ET).
Telephone Dial-In Access Information
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 10 minutes prior to the
beginning of the call to ensure participation. Those participating in
the conference call by telephone can view the slide presentation by
accessing the online webcast (see instructions below) and choosing the
Non-Streaming Audio option.
Webcast Access Information
A live webcast of the conference call, including the slide presentation,
will be available on the Events and Presentations page of the Investors
section of the Company's web site (http://www.centrichealth.ca/events-presentations.php). Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast. To view the webcast presentation with slides, please
choose either the Real Streaming Audio or Windows Streaming Audio
option.
Archive Access Information
The conference call will be archived for replay by telephone until
Wednesday, March 11, 2015 at midnight. To access the archived
conference call, dial 1-855-859-2056 or 416-849-0833 and enter the
reservation number 85639046.
The webcast with slide presentation will be archived for 90 days on the
Events and Presentations page of the Investors section of the Company's
web site (http://www.centrichealth.ca/events-presentations.php).
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 on 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 surgical centres, specialty pharmacy 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.
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.
SOURCE Centric Health Corporation