Futuremed Healthcare Products Corporation
TSX : FMD

Futuremed Healthcare Products Corporation

May 11, 2011 18:26 ET

Futuremed Announces Solid First Quarter 2011 Results

CONCORD, ONTARIO--(Marketwire - May 11, 2011) - Futuremed Healthcare Products Corporation (TSX:FMD) ("Futuremed" or the "Company") announced today solid financial and operating results for the three months ended March 31, 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.

Q1 2011 HIGHLIGHTS:

  • Revenues up 12.8% on increased furniture and equipment sales
  • Ontario Ministry of Health one-time funding in March key factor in sales increase
  • Sales of consumable nursing supplies increase in all markets
  • Gross profit up 15.8% on revenue growth
  • EBITDA up 25.5%
  • Net earnings before tax rise 39% to $3.3 million or $0.22 per common share
  • Cash flow from operations rises 28% to $3.6 million
  • Management renews focus on growth in profitability and enterprise value

Sales in the first quarter of 2011 were $55.0 million, up 12.8% from sales of $48.8 million in the same quarter last year. Sales of consumable nursing supplies rose 3.5% in the quarter compared to the prior year with increases in all regions in which Futuremed operates. Consumable nursing supplies represented approximately 80.8% of total sales for the quarter ended March 31, 2011.

Sales of the Company's furniture and equipment increased 81.3% in the first quarter of 2011 compared to the same period last year. In March 2011 the Ontario Ministry of Health announced extra funding for long-term care facilities in the Province to update aging furniture and equipment with procurement and delivery to occur before the Province's fiscal year end on March 31, 2011. Despite a lack of significant government funded infrastructure program spending in Western Canada, Furniture and Equipment spending in those regions also increased but a similar lack of spending in Quebec mitigated the increase in the Western provinces.

"We were very pleased to have been able to assist our customers in meeting the tight deliveries under the Ontario Ministry of Health's one-time funding program, an example of our industry-leading customer service and the strong relationships we have built with our clients," stated Raymond Stone, Futuremed's President and CEO. "We were also pleased to see solid organic growth in our consumable recurring nursing supplies business in all of our markets as the increased competition and weaker demand we experienced last year appears to be stabilizing."

For the three months ended March 31, 2011 gross profit increased 15.8% to $13.1 million compared to $11.3 million in the same period last year due primarily to the increased sales levels.

Selling, general and administrative (SG&A) expenses increased 8.4% in the first quarter of 2011 due primarily to an increase in extra delivery costs related to the Ontario Ministry of Health project.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") rose 25.5% in the first quarter of 2011 to $5.4 million from $4.3 million in the same period last year. Futuremed generated net income before tax of $3.3 million or $0.57 per common share for the three months ended March 31, 2011 compared to $2.4 million or $0.16 per common share last year.

"Looking ahead, we have renewed our focus is on enhancing our profitability and growing the enterprise value of the Company by expanding our presence 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 we provide to our traditional long-term care customers. We also believe our growth objectives can be achieved through potential strategic and accretive acquisition opportunities that meet our rigorous criteria," Mr. Stone commented.

The Company generated cash flow from operations for the three months ended March 31, 2011, after net changes in working capital, of $3.3 million compared to $2.8 million in the same period last year. Working capital was $22.0 million as at March 31, 2011 compared to $20.4 million at December 31, 2010.

In March 2011 the Corporation reached an agreement with its existing lender to extend its credit facilities to March 2015 on terms and conditions that are similar to the agreement, as amended, governing its prior credit facilities, a copy of which is available on SEDAR at www.sedar.com. As at March 31, 2011, the Corporation was in compliance with all financial and non-financial covenants relating to its credit facilities.

Financial Highlights
($,000 except per share amounts
unaudited)
Three months ended March 31,
20112010
Revenues:
Nursing supplies$44,474$42,977
Furniture & Equipment10,5655,825
Total revenue55,03948,802
Gross profit13,14111,349
Selling, general & administrative expenses7,6637,071
Interest563438
Amortization1,5691,558
Other35(91)
Income before income taxes 3,3112,374
Net income 8,711 2,395
Net income per share$0.57$0.16
Cash flow from operations3,5572,779
EBITDA5,4434,336
Calculation of EBITDA
($,000 except per share amounts unaudited)Three months ended March 31,
20112010
Income before income taxes$3,311$2,374
Non cash depreciation and amortization1,5691,558
Adjustment to carrying value of Class B Units-(34)
Interest expense563438
EBITDA5,4434,336

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 Thursday, May 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 404461#. The call will also be archived on the Futuremed website at www.futuremed.ca.

Annual Shareholders' Meeting

The Company's Annual Meeting of Shareholders will be held on May 12, 2011 at 2.00 pm ET at the Albany Club, 91 King Street East in Toronto.

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. Futuremeds' 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 Fund'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/FMD-Interim.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