LAFAYETTE, LOUISIANA--(Marketwired - Nov. 9, 2016) -
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Patient Home Monitoring Corp. ("PHM") (TSX VENTURE:PHM), a healthcare service company with operations in the US, announced today highlights of its fourth quarter activities:
- Preliminary unaudited estimates show a slight increase in revenue during the fourth quarter as compared to the third quarter.
- This increase comes during a quarter when a round of rural competitive bid pricing reductions were put in place as well as PHM reducing sales of lower margin products.
- PHM continued its trend of increasing gross margins as a result of its product selection, and its ongoing overhead reductions since the reorganization was enacted having driven employee costs down by over 20%.
- PHM estimates its consolidated cash balance at October 31, 2016 was within 3% of the June 30, 2016 balance.
- PHM has turned from being cash flow negative as it has continued to decrease its current liabilities by approximately 9% quarter over quarter while at the same time reducing the overall leases and notes payable.
With PHM's ongoing divisional split, the billing and collections departments have been finalized, and the Company expects to complete its assessment of collectability and bad debts during the fourth quarter. As previously disclosed, the fourth quarter should complete the higher than normal bad debt expense.
Viemed Division Update
The Viemed division continues to execute its strategic plan of organic growth. This revenue growth is what drove the significant increase market share over the last several years. While revenue for the first half of 2016 held steady, the active patient count rose greater than 20% from May 2016 to October 2016.
This increase, along with the optimization of the billing and collection cycles, have increased Viemed's monthly cash receipts. Additionally, the personnel reductions that have occurred over the last several months are estimated to decrease Viemed's annual overhead by approximately $4 million CAD.
Apparo Division Update
The Apparo division continued to decrease operational expenses and drove financial improvement during the fourth quarter as part of its transition to a sustainable cash flow positive business. The division's SG&A expenses (excluding bad debt expense) for the fourth quarter are estimated to have decreased by 19% and are estimated to decrease annual overhead by more than $8 million CAD. Additionally, the division saw increased gross margins of approximately 1% through its efforts of consolidating its purchasing activities.
Company Split Update
The Company is continuing down the path of the legal split into two separate companies, and currently expects the legal and regulatory approval process to be completed early during 2017. This timing should drive a shareholder meeting to be held during the first quarter of 2017.
"Throughout the last several months, our management team has been executing on our plan to fully rationalize the durable/home medical equipment businesses acquired during the initial PHM roll-up," said Greg Crawford, PHM's COO. "These efforts have included enterprise-wide implementation of best practices from our highest performing business units, operating expense rationalizations and streamlined integration of critical back office functions. As a result of these efforts, we believe that we have in place the underlying cost structure to both better manage systemic changes in Medicare reimbursement rates and support sustainable organic growth. In addition, the operating foundation resulting from these efforts will allow us to continue to profitably explore acquisition opportunities in the highly fragmented U.S. DME markets. All of our competitors have had to deal with the reimbursement changes, and many are simply looking to exit at just above book value. We have also identified areas for immediate cash collection and top line revenue growth which we will be aggressively implementing during the first quarter."
"We are very excited about the latest trends that we are seeing over the last few months as we continue to expand our active patients through our organic growth model at Viemed," said Casey Hoyt, CEO of PHM. "Even more exciting is our real-time view of the changing U.S. healthcare system where we see the ability to augment our historical growth through relationships with payors and other organizations like ACO's."
The explosive growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs. PHM fills this need by delivering a growing number of specialized products and services to achieve these goals. PHM is company that serves patients with heart disease and other chronic health conditions, this operation is a platform for acquisitions and organic growth. PHM is focused on a highly fragmented and developing market of small privately-held companies servicing chronically ill patients with multiple disease states caused mainly by age and obesity. PHM's post acquisition organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient's services and making life easier for the patient.
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 PHM, the completion of the proposed transaction and any transactions associated therewith (including the estimated timing of completion), the proposed transaction providing each new company with the ability to be positioned for sustained growth under their individual business plans, PHM's expected revenue and unaudited results are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect PHM's current views and intentions with respect to future events, and current information available to PHM, and are subject to certain risks, uncertainties and assumptions. Material factors or assumptions were applied in providing forward-looking information, including our ability to increase higher margin product sales while continuing to phase out certain product lines. 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 credit, market (including equity, commodity, foreign exchange, and interest rate), liquidity, operational (including technology and infrastructure), reputational, insurance, strategic, regulatory, legal, environmental, capital adequacy, and other risks. Examples of such risk factors include the general business and economic conditions in the regions in which PHM operates; the ability of PHM to execute on key priorities, including the successful completion of acquisitions, business retention, and strategic plans and to attract, develop and retain key executives; difficulty integrating newly acquired businesses; the ability to implement business strategies and pursue business opportunities; low profit market segments; disruptions in or attacks (including cyber-attacks) on PHM's information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behaviour to which PHM is exposed; the failure of third parties to comply with their obligations to PHM or its affiliates; the impact of new and changes to, or application of, current laws and regulations; 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; the overall difficult litigation environment, including in the U.S.; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the availability of funds and resources to pursue operations; critical accounting estimates and changes to accounting standards, policies, and methods used by PHM; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events; as well as those risk factors discussed or referred to in PHM's annual Management's Discussion and Analysis for the year ended September 30, 2015, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect PHM 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, PHM 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 PHM undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
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