TORONTO, Nov. 11 /CNW/ - Centric Health Corporation ("Centric Health") (TSX: CHH), Canada's leading diversified healthcare services company, today announced financial results for the three and nine months ended September 30, 2010.

"Centric added two new divisions with the acquisition of Community Advantage Rehabilitation Inc. to establish the company's Homecare Division and two pharmacies located at Southlake Regional Healthcare to establish the Pharmacy Division," said Dr. Jack Shevel, Interim President and Chief Executive Officer of Centric Health Corporation.  "The momentum of these acquisitions coupled with our strong financial results and organic growth, provide an excellent platform for management to continue its pursuit of other targets that will compliment and build on Centric Health's strategy."

Financial and Operating Highlights

During and subsequent to the three months ended September 30, 2010:

• Net income grew by 49% to $1.3 million, as compared to $0.9 million in Q3 2009
• Q3 EBITDA¹ increased by 33% to $2.2 million, as compared to $1.7 million in Q3 2009
• YTD EBITDA¹ increased by 106% to $6.6 million, as compared to $3.2 million during the same period last year
• Basic earnings per share increased 47%, to $0.022 from $0.015 in Q3 2009
• Established Homecare Division through the acquisition of Community Advantage Rehabilitation Inc. ("CAR"), a privately-held company specializing in the delivery of occupational therapy, physiotherapy, social work and dietitian services to adults and children in their homes and schools
• Appointed Dr. Paul Gamble, with more than 30 years of experience in healthcare and current President and CEO of the Michener Institute for Applied Health Sciences, to the Board of Directors
• Established Pharmacy Division through the acquisition of two pharmacies located on the campus of Southlake Regional Health Centre in Newmarket, Ontario
• Received funding through an increased facility from a major Canadian Chartered Bank, as well as $10 million of unsecured subordinated loans from a major shareholder for mergers and acquisitions.

Financial Results and Highlights (in thousands)

Revenue for the three months ended September 30, 2010 increased by $3,324 to $15,755 over the comparable quarter last year.  Sales attributable to Active Health for the comparable quarter increased by $1,878 to $9,351, due to an increase in the number of long-term care homes serviced as well as increased utilization in current homes.  Sales for the disability management division increased by $1,059 for the quarter, driven primarily by a higher number of assessments.  Sales for the CAR business, newly acquired on September 1, 2010, amounted to $372.

Revenue for the nine month period increased by $21,695 of which $13,112 was generated by Active Health in the five-month period which is not comparable to the 2009 results, before the Active acquisition, and $5,323 was generated in the four-month period in 2009 after Active's acquisition.  The disability management division generated additional revenue of $2,856.  Revenue from DMSU increased by $32 over the comparable period in the prior year.  The balance of the revenue growth of $372 was generated from CAR. 

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. 

Direct costs for the three months ended September 30, 2010 were $11,599, which was an increase of $2,285 over the comparable quarter in the prior year driven by the increase in revenues.  For the quarter, direct costs expressed as a percentage of revenue were comparable at 75% for the same quarter in the current and prior years. 

Direct costs as a percentage of revenue for the nine month period ended September 30, 2010 are higher than the prior year which reflects the higher cost structure for the Active Health business as a percentage of revenue which was owned for only four months in 2009 but is consistent with the percentage of revenue in the three-month period ended September 30, 2010.

General and administrative expenses for the three months ended September 30, 2010 were $2,036 which was $559 higher than the comparable period in the prior year.  This increase was driven by higher salary and benefit costs of $192 associated with the Active Health business, implementation of HST in the current quarter and an increase in non-cash stock-based compensation expense of $79 relating to the vesting of options granted at the end of 2009. The implementation of HST negatively affects the Company as services are largely HST-exempt. Therefore expenses that attract HST are absorbed by the Company as operating costs.

General and administrative expenses for the nine month period ended September 30, 2010 were $2,246 higher than the comparable period in the prior year.  This increase was due to higher general and administrative expenses associated with the Active Health business, an increase of $243 in stock-based compensation expense over the prior year, and an increase in the contractual fees of $291 relating to the services performed by Global Healthcare Investments and Solutions, Inc. ("GHIS"), as explained in Note 7 to the unaudited interim consolidated financial statements.

Amortization was higher during the three and nine month period ended September 30, 2010 due to the amortization of the assets acquired in the Active Health acquisition in May 2009.

Interest expense for the current quarter and the nine month period ended September 30, 2010, relates to the long-term loan that was arranged at the end of May 2009, for the purchase of the Active Health and includes $69 of amortization of loan arrangement costs ($35 for the quarter ended September 30, 2009) and year-to-date amortization of $214 of loan arrangement costs ($47 for 2009).  The total interest expense for the quarter and the nine month period ended September 30, 2010, was $182 and $597 respectively, (2009 - $190 and $250) and has been shown net of $17 in interest income for the period.  Interest expense has decreased in the current quarter, as compared to last year, due to the reduction in principal on the long-term loan.

At September 30, 2010, the Company had total cash on hand of $325, a decrease of $1,271 during the quarter ended September 30, 2010 (2009 increase of $1,025).  The decrease in cash is largely due to the funds needed for the acquisition of CAR, a deposit on the pharmacy acquisition, and the quarterly principal repayment on the long-term loan.

During the quarter, option holders exercised 25,000 options to purchase a similar number of shares for a weighted average exercise price per share of $0.275.

As at September 30, 2010, the number of shares outstanding is 61,165,095; the number of options outstanding is 4,975,000; and, the number of warrants outstanding is 20,500,000.

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, homecare, pharmacy, 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. ("GHIS") (www.ghis.us). GHIS and entities controlled by shareholders of GHIS are currently the majority shareholders of Centric Health.

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.

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