Futuremed Healthcare Products Corporation
TSX : FMD

Futuremed Healthcare Products Corporation

August 11, 2011 17:30 ET

Futuremed Announces Continued Strong Performance in Q2 2011

CONCORD, ONTARIO--(Marketwire - Aug. 11, 2011) - Futuremed Healthcare Products Corporation (TSX:FMD) ("Futuremed" or the "Company") announced today strong financial and operating results for the three and six months ended June 30, 2011. On January 1, 2011 Futuremed Healthcare Income Fund completed its conversion to a corporation pursuant to a plan of arrangement under the Business Corporation Act (Ontario) and all related internal transactions. In addition, beginning on January 1, 2011 the Company adopted International Financial Reporting Standards ("IFRS") to report its operating results and financial position. For details on the effects of the transition to IFRS on the Company's financial statements, please refer to unaudited financial statements, and Management's Discussion and Analysis for the period available on the Company's web site or at www.sedar.com.

Q2 2011 HIGHLIGHTS:

  • Revenues up 9.9% on increased furniture and equipment sales
  • Furniture & equipment revenues rise 78.6%.
  • Sales of consumable nursing supplies up 3.5% on strong organic growth
  • Margins in second quarter impacted by sales mix
  • Ontario Ministry of Health one-time funding in February key factor in sales increase for the year to date

Sales in the second quarter of 2011 were $53.7 million, up 9.9% from sales of $48.9 million in the same quarter last year due to solid organic growth across all product lines and most geographic regions, and a significant increase in sales of furniture and equipment. For the first six months of 2011 revenues rose 11.4% to $108.7 million due to the same factors.

Sales of consumable nursing supplies rose 3.5% in the second quarter and 3.8% for the first six months of 2011 compared to the comparable prior year periods with increases in all but one region in which Futuremed operates. Consumable nursing supplies represented approximately 86.0% and 83.4% of total sales for the three and six months ended June 30, 2011, respectively.

Sales of the Company's furniture and equipment increased 78.6% in the second quarter and 76.0% for the first six months of 2011 compared to the same comparable periods last year. In February 2011 the Ontario Ministry of Health announced extra funding for long-term care facilities in the Province to update aging furniture and equipment, all of which had to be delivered during the first quarter. For the first half of 2011, furniture and equipment revenues have increased in the majority of regions in which Futuremed operates.

"Organic growth in sales of our consumable nursing supplies and furniture and equipment products continued in the second quarter," stated Raymond Stone, Futuremed's President and CEO. "We believe this organic growth should continue across all our product lines over the long term as demographic trends drive increased demand in our sector of the Canadian seniors housing business."

For the three months ended June 30, 2011 gross profit was $11.0 million compared to $11.2 million in the same period last year. For the first six months of 2011 gross profit was $24.2 million compared to $22.5 million in the prior year. While gross profit from the Company's furniture and equipment business increased due to the significant increase in sales, the contribution from the nursing supplies segment declined modestly in the second quarter due primarily to a change in sales mix.

Selling, general and administrative (SG&A) expenses increased 6.8% in the second quarter and 7.6% through the first six months of 2011 due primarily to an increase in extra delivery costs related to the significant increase in deliveries, as well as cost pressures as a result of fuel price volatility. However, as a percentage of sales, SG&A expenses improved to 14.5% and 14.2% for the three and six months ended June 30, 2011, respectively, compared to 14.9% and 14.7%, respectively, for the comparable periods last year.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $3.3 million in the second quarter of 2011 compared to $3.6 million in the prior-year period. For the first six months of 2011 EBITDA rose 10.1% to $8.8 million from $8.0 million last year. Futuremed generated net income of $0.8 million or $0.05 per common share for the three months ended June 30, 2011 compared to $1.7 million or $0.11 per common share last year. For the first six months of 2011 net income was $9.5 million or $0.62 per common share compared to $4.0 million or $0.27 per share last year.

The Company generated cash flow from operations for the six months ended June 30, 2011, after net changes in working capital, of $5.1 million compared to $6.6 million in the same period last year. Working capital was $20.9 million as at June 30, 2011 compared to $22.0 million as at March 31, 2011.

"Looking ahead, we believe market conditions should continue to strengthen over the medium to long term", Mr. Stone commented. "This will enable us to further consolidate and grow our presence as Canada's leading value-added distributor of consumable nursing supplies and furniture and equipment to the Canadian long-term care sector."

Financial Highlights
($,000 except per share amounts unaudited) Three months ended June 30, Six months ended June 30,
2011 2010 2011 2010
Revenues:
Nursing supplies $ 46,199 $ 44,650 $ 90,673 $ 87,388
Furniture & Equipment 7,505 4,201 18,070 10,265
Total revenue 53,704 48,851 108,743 97,653
Gross profit 11,045 11,187 24,187 22,536
Selling, general & administrative expenses
7,790

7,297

15,453

14,368
Conversion costs - 843 - 843
Interest 610 750 1,172 1,188
Depreciation and amortization 1,577 1,543 3,147 3,101
Other (91 ) (600 ) (56 ) (658 )
Net income 759 1,654 9,471 4,049
Net income per share $ 0.05 $ 0.11 $ 0.62 $ 0.27
Cash flow from operations 1,555 3,778 5,112 6,557
EBITDA 3,346 3,647 8,790 7,983
Calculation of EBITDA
($,000 except per share amounts unaudited) Three months ended June 30, Six months ended June 30,
2011 2010 2011 2010
Income before income taxes $ 1,159 $ 1,344 $ 4,471 $ 3,718
Non cash depreciation and amortization
1,577

1,543

3,147

3,101
Adjustment to carrying value of Class B Units
-

10

-

(24
)
Interest expense 610 750 1,172 1,188
EBITDA 3,346 3,647 8,790 7,983

About Futuremed

Futuremed is Canada's leading value-added distributor of consumable nursing home supplies and specialized furniture and equipment to the growing long-term care facilities sector. Futuremed's common shares trade on the Toronto Stock Exchange under the symbol FMD. More information can be found at www.futuremed.ca.

Investor Conference Call

A conference call hosted by Raymond Stone, President and Chief Executive Officer and Daniel Sacks, Chief Financial Officer, will be held Friday, August 12, 2011 at 11.00 am ET. The telephone numbers for the conference call are: Local: (416) 915-8110, North American Toll Free: (866) 838-1265. The telephone numbers to listen to the call after it is completed (Instant Replay) are local (416) 915-1035 or toll free (866) 245-6755. The Passcode for the Instant Replay is 805995#. The call will also be archived on the Futuremed website at www.futuremed.ca.

Readers are cautioned that certain terms used in this press release are not International Financial Reporting Standards ("IFRS") measures and should not be construed as an alternative to net earnings and earnings per share determined in accordance with IFRS as an indicator of the Company's performance. Futuremed's methods of calculating these measures may differ from other issuers' methods and accordingly, they may not be comparable to measures used by other issuers.

Certain statements in this press release may be considered "forward-looking statements" as defined under applicable Canadian securities laws. These statements include, but are not limited to, statements regarding the ability to grow by expanding in current and new geographic markets, as well as through the introduction of new product lines and entering new synergistic markets that utilize the same products and services, the ability to grow through strategic and accretive acquisitions, future government funding levels, the impact on Futuremed's business of current and anticipated economic conditions, Futuremed's ability to pay dividends to shareholders and expected improvements in Futuremed's infrastructure. When used in this press release, such statements use words, including but not limited to, "should", "may", "will", "expect", "believe", "plan", "intend", "anticipate", "future" and other similar terminology. These forward-looking statements reflect the current expectations of management regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Futuremed to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These factors include, but are not limited to, future market conditions being different than anticipated by management and the risks described in Futuremed and the Company's other public filings on SEDAR at www.sedar.com. Material factors or assumptions that were applied to drawing a conclusion or making an estimate set out in the forward-looking information include the views of management regarding current and anticipated market condition and the successful attainment of certain goals. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release. Except as required by applicable securities laws, Futuremed does not undertake, and specifically disclaims, any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise, except as required by applicable law.

To view the Interim Consolidated Balance Sheet, Interim Consolidated Statements of Comprehensive Income, and Interim Consolidated Statements of Cash Flows, please visit the following link: http://media3.marketwire.com/docs/811fmd.pdf.

Contact Information

  • Futuremed Healthcare Products Corporation
    Daniel Sacks
    Chief Financial Officer
    (905) 761-0068, ext. 2222
    Toll-free investor relations: 1-800-387-7025