Convalo Health International, Corp.
TSX VENTURE : CXV

Convalo Health International, Corp.

January 31, 2017 09:00 ET

Convalo Health International Releases Third Quarter Financials; Highlights Continued Improvement in Enterprise Profitability

LOS ANGELES, CALIFORNIA--(Marketwired - Jan. 31, 2017) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Convalo Health International, Corp. ("Convalo") (TSX VENTURE:CXV), a leading company in the United States addiction recovery industry, released its condensed interim consolidated financial statements for the three and nine months ended November 30, 2016 on SEDAR.

Convalo is a leader in the highly fragmented addiction rehabilitation market. Convalo has operated since May 2014, when it acquired a small outpatient facility in Hollywood, California. Today, Convalo operates nine facilities on the west coast of the United States spanning from Portland, Oregon to San Diego, California.

Quarterly Highlights:

  • Capacity of over 300 beds and seats now online, branded and launched. Additional centers now fully launched and operating are: San Diego outpatient facility, Portland outpatient facility, Greater Los Angeles detox facilities, Central Los Angeles detox facility, and an internal laboratory.
  • Net current assets remained steady from $17,447,000 in the quarter ended August 31, 2016 to $17,292,000 in the most recent quarter ended November 30, 2016
  • Improved enterprise profitability narrowing net loss before stock based compensation to $960,000 from a loss $1,917,000 in the previous quarter as upfront investments and expenses associated with launching five facilities has drawn to a conclusion.

"It has been a long nine-month process, but we have finally completed our heavy upfront investments in more than doubling our capacity. We are now laser focused on filling our seats and beds and growing our business," said Chris Heath, Executive Vice President of Convalo. "It has been a long wait. While we have been frustrated with a full year of flat revenues, mostly hampered by limited capacity, we have been looking forward to this moment where we can finally work on filling our new increased capacity. In 2015, when we tripled capacity, our sales increased almost five fold. I look forward to the next year of filling up our new centers."

"Since being promoted to a senior executive role, I have been developing more effective methods to increase census quickly while driving higher margins. Starting this quarter, I am taking a more active role in improving both our business and our shareholder communications. With our new capacity and our developing team, I believe we have the tools we need to improve profitability."

Convalo's 2017 third fiscal quarter financial statements and accompanying Management's Discussion & Analysis (MD&A) are available at www.sedar.com. All amounts are in Canadian dollars and are based on Convalo's consolidated financial statements and accompanying MD&A for the quarter ending November 30, 2016 and related notes prepared in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.

About Convalo

Convalo, 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, Convalo is well positioned for continued national expansion by launching pods in cities across the United States. A pod consists of a residential, detox, and mental health facility (detox facility) and an intensive outpatient (IOP) facility. Convalo, under the BLVD brand, is focused upon becoming the largest national provider of a range of mental health services, including addictive and co-occurring disorders. In conjunction with the long standing 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.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Convalo are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect Convalo's current views and intentions with respect to future events, and current information available to Convalo, and are subject to certain risks, uncertainties and assumptions. Material factors or assumptions were applied in providing forward-looking information. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. These factors include, without limitation, changes in law, the ability to implement business strategies and pursue business opportunities, state of the capital markets, 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 insurance providers, low profit market segments, as well as general economic, market and business conditions, as well as those risk factors discussed or referred to in Convalo's annual Management's Discussion and Analysis for the year ended February 29, 2016, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect Convalo in an unexpected manner, or should assumptions underlying the forward looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Convalo does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward -looking information included in this press release is made as of the date of this press release and Convalo undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. Convalo's results and forward-looking information and calculations may be affected by fluctuations in exchange rates. All figures are in Canadian dollars.

Non-GAAP Measures

Convalo uses a number of financial measures to assess its performance and are intended to provide additional information to investors concerning Convalo. Some of these measures, including enterprise profitability are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS), are not defined by GAAP and do not have standardized meanings that would ensure consistency and comparability between companies using these measures. These non-GAAP measures are used throughout this news release and are defined below:

  • Enterprise Profitability - calculated as net income / (loss) + stock based compensation. A reconciliation of net income / (loss) to enterprise profitability is included below:
Category Three months ending
November 30, 2016
Three months ending
August 31, 2016
Net Income / (Loss) ($1,638 ) ($2,590 )
Add back: Stock Based Compensation 678 672
Enterprise Profitability ($960 ) ($1,917 )

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.

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