Convalo Health International, Corp.
TSX VENTURE : CXV

Convalo Health International, Corp.

May 02, 2016 09:00 ET

Convalo Health International Announces Launch of Advanced Hi-Tech National Drug Testing Laboratory; Opportunity to Increase Per Patient Revenues

LOS ANGELES, CALIFORNIA--(Marketwired - May 2, 2016) -

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Convalo Health International, Corp. (Convalo) (TSX VENTURE:CXV), a company in the addiction recovery industry in the US, announced it has launched a national advanced technology quantitative urine analysis laboratory based out of Scottsdale, Arizona.

Health insurance companies (known as Payors) typically pay for patients to participate in weekly drug testing to ensure addiction treatment program compliance. As Convalo scales its operations to a national footprint, the laboratory operation will provide an opportunity to capture this additional per patient revenue not previously available to Convalo as a regional company. To date, Convalo has had third party laboratories process and bill for the quantitative analyses on these urine specimens and therefore has not captured the revenue associated with the tests.

The advanced toxicology laboratory will have the technical capacity to perform all drug panel screens that could be requested by the clinical team. The investment in this laboratory, which costs about $1 million both in cap ex and expenses this quarter, is expected to result in increased revenues from efficiently servicing all of Convalo's current and future planned detox, residential, and outpatient (IOP) specimens. This laboratory has capacity for up to 20 Convalo pods or more than 6,000 tests per month.

The revenue and cost savings impacts from the launch are expected to be reflected initially in the fiscal third quarter with both improving revenues through directly billing Payors for testing and reduced costs in collecting samples centrally. Further, as the number of patients at Convalo grows, the revenues and cost savings is expected increase.

"This is a key component of our national strategy," said Stampp Corbin, CEO of Convalo. "With the launch of our additional residential and outpatient facilities around the country, the number of toxicology specimens is expected to increase with total census. This lab will enhance patient care, increase clinical control, and capture that additional testing revenue, effectively increasing per patient revenue."

"The operational leadership team continues to execute on our 2016 growth plan. Their focus is to create a national footprint, enhance clinical outcomes, and increase overall revenues to make Convalo the leader in the substance abuse treatment industry."

About Convalo

Convalo Health International, operating under the brand name BLVD Centers (www.blvdcenters.com), is a leader in the highly fragmented addiction rehabilitation market. Led by a seasoned executive management team with experience in US healthcare, Convalo is well positioned for continued national expansion by launching Pods in cities across the US. A pod consists of a residential, detox, and mental health facility "detox facility" and an intensive outpatient facility "IOP facility". Convalo, under the BLVD brand, is focused on becoming the largest national provider of a range of mental health services, including addictive and co-occurring disorders, helpful to the recovery process. In conjunction with the 12-Step approach, BLVD also offers supplemental insurance-reimbursed services catering to a variety of communities: gender specific, creatively-oriented, meditation/mindfulness, trauma and LGBT affirmative.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Convalo and anticipated events or results, are assumptions based on beliefs of Convalo's senior management as well as information currently available to it. While these assumptions were considered reasonable by Convalo at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue operations, decline of reimbursement rates, dependence on few payors, possible new drug discoveries, a novel business model, dependence on key suppliers, granting of permits and licenses in a highly regulated business, competition, difficulty integrating newly acquired businesses, the outcome and cost of any litigation with the sellers of Hollywood Detox, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected. These financial measures are intended to provide additional information to investors concerning Convalo's performance.

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