SOURCE: Northstar Healthcare Inc.

Northstar Healthcare Inc.

November 13, 2014 12:06 ET

Northstar Healthcare Reports Record Revenues and $1.5MM in EBITDA During 2014 Third Quarter

HOUSTON, TX--(Marketwired - Nov 13, 2014) - Northstar Healthcare Inc. (TSX: NHC) today announced its financial results for the three and nine months ended September 30, 2014. All dollar amounts are in United States currency unless otherwise stated; percentage calculations are based on the numbers in the financial statements and may not correspond to rounded figures presented in this release.

Detailed information relating to the three and nine months ended September 30, 2014 is available in Management's Discussion and Analysis (MD&A) and Interim Consolidated Financial Statements, which are available on the company's web site at: www.northstar-healthcare.com and at www.sedar.com. This information is not intended to provide a comprehensive comparison of financial results.

Dr. Donald Kramer, Northstar's CEO, said, "Northstar continues to see rapid growth and record revenue of $17.2 million in the third quarter. With the acquisition of a majority interest in a hospital and surgery center in the Houston market, the company is growing its operational platform and driving new revenue."

"We will remain aggressive in the expansion and enhancement of new and existing marketing programs, pivotal to maximizing profitability and shareholder value in the fourth quarter and into 2015," said Harry Fleming, Northstar's President.

Third Quarter Results

Net patient service revenue for the three months ended September 30, 2014 totaled $17.2 million, an increase of $9.6 million or 125.0%, compared to $7.6 million from the prior corresponding period. Total cases for the three months ended September 30, 2014 were 1,649, representing an increase of 305 cases or 22.7% from the 1,344 cases in the prior corresponding period. Revenue per case increased as a product of the procedure mix moving towards surgeries with higher reimbursements. The increase in net patient service revenue resulted in Northstar having EBITDA of $1.5 million, for the three months ended September 30, 2014 compared with $(0.1) million from the prior corresponding period. The increase in net patient service revenue was offset by an increase in operating general and administrative expenses as Northstar invested in its revenue growth and diversification. Northstar had net income of $0.02 per weighted average share, compared with net loss of $(0.01) per weighted average share in the corresponding 2013 period.

Cash flows provided for operating activities in the three months ended September 30, 2014 were $2.2 million, which represented a $0.1 million increase compared to the prior corresponding period, which provided $2.0 million in cash flows from operating activities.

Nine Months Results

Net patient service revenue for the nine months ended September 30, 2014 totaled $44.4 million, an increase of $26.8 million or 152.1%, compared to $17.6 million from the prior corresponding period. Total cases for the nine months ended September 30, 2014 were 4,789, representing an increase of 1,104 cases or 30.0% from the 3,685 cases in the prior corresponding period. Revenue per case increased as a product of the procedure mix moving towards surgeries with higher reimbursements. The increase in net patient service revenue resulted in Northstar having EBITDA of $1.7 million, for the nine months ended September 30, 2014 compared with $(0.9) million from the prior corresponding period. The increase in net patient service revenue was offset by an increase in operating general and administrative expenses as Northstar invested in its revenue growth and diversification. Northstar had a net income of $0.01 per weighted average share, compared with a net loss of $(0.04) per weighted average share in the corresponding 2013 period.

Cash flows provided by operating activities in the nine months ended September 30, 2014 were $4.3 million, which represented a $0.8 million increase compared to the prior corresponding period, which provided $3.5 million in cash flows from operating activities.

At September 30, 2014, Northstar had consolidated net working capital of $21.4 million, including cash of $13.3 million. This compares with $8.9 million and $15.2 million, respectively, at year-end 2013.

October Revenue Estimate

The company also announces estimated net patient services revenue for October 2014, of $10.1 million.

About Northstar Healthcare Inc.

Northstar partners with physicians in the ownership and management of ambulatory and acute care facilities and healthcare services. Northstar owns and manages interests in five ambulatory surgery centers, three in Houston, one in Dallas, and the fifth in Scottsdale, Arizona. In addition, Northstar owns one acute care hospital in Houston. Northstar also owns and manages interests in two imaging centers and one urgent care clinic in Houston.

EBITDA is defined as earnings before interest, income taxes and depreciation and amortization. EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA is an analytical indicator used by management and the health care industry to evaluate company performance, allocate resources and measure leverage and debt service capacity. EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, EBITDA as presented may not be comparable to other similarly titled measures of other companies. Net income attributable to Northstar Healthcare Inc. common shareholders is the financial measure calculated and presented in accordance with generally accepted accounting principles that is most comparable to EBITDA as defined.

Forward-looking statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) and financial outlooks relating to the business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions and may discuss future expectations, contain projections of future results of operations or of financial condition, or state other forward-looking information. These statements are based on the Company's expectations, estimates, forecasts and projections and while the Company considers these to be reasonable based on information currently available, they may prove to be incorrect. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. Other than as required by law, the Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.