Patient Home Monitoring Corp.
TSX VENTURE : PHM

May 24, 2017 08:00 ET

Patient Home Monitoring Releases Second Quarter Financials; Posts Increase in Quarterly Revenues, Gross Profit and Adjusted EBITDA, Reports Positive Net Profit for the Quarter

LAFAYETTE, LOUISIANA--(Marketwired - May 24, 2017) -

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Patient Home Monitoring Corp. (the "Company") (TSX VENTURE:PHM), a healthcare services company with operations in the U.S., announced today that it has posted its financial results for the quarter ended March 31, 2017.

Highlights:

  • Revenues for the quarter ended March 31, 2017 were approximately $31,835,000 and gross margin was $25,772,000, or 81%, as compared to 78% in the previous quarter. Adjusted EBITDA was approximately $6,261,000, or 20%, as compared to 15% in the previous quarter an increase of 25%. This is the second consecutive quarter of growth in both gross margin and Adjusted EBITDA.
  • As of the end of the quarter, the Company had a cash balance of $11,851,000, as compared to $7,852,00 last quarter; Accounts receivable balance of $23,451,000; and current liabilities of $26,095,000. The cash balance increased approximately 51% and was organically generated through cash flow from operations. The increase in current liabilities is due to the capital expenditures associated with growth in the patient base.
  • The Company's total general and administrative (G&A) expenses (excluding bad debt) decreased 18% from the quarter ended March 31, 2016 as a result of the significant employee related cost reductions over the last year. Excluding bad debt expense, G&A expenses increased slightly from the quarter ended December 31, 2016 which is primary the result of the expansion of the sales force and additional employee related costs in the Viemed division.
  • Revenues for the third quarter of 2017 are expected to be approximately $32.5-33.5 million which is slightly higher than the second quarter. Additionally, the Company is expecting to generate a consolidated Adjusted EBITDA margin percentage of approximately 20-23%.

The interim financial statements of the Company for the three months ended March 31, 2017 and 2016 and accompanying Management's Discussion & Analysis (MD&A) are available at www.sedar.com.

"I am once again pleased to announce another healthy quarter of results, as we continue to see the operational and financial benefits resulting from the divisional overhaul conducted over the last year," said Casey Hoyt, CEO of the Company. "We continue to move ahead with our proposed split into two operating companies: Apparo and Viemed, as we await final regulatory approval, and we plan to update our shareholders with our meeting date as soon as possible."

"It is gratifying to see the turnaround complete, cost have been reduced while revenues and gross margins are up again," said Michael Dalsin, outgoing Chairman of PHM. "Most significantly, cash on the balance sheet is building. It is a credit to both Casey Hoyt and Greg Crawford and their respective teams in the Viemed and Apparo divisions that PHM posted such a strong result this quarter. The proposed split into two operating companies, Apparo and Viemed, will unlock further shareholder value as certain costs associated with having two disparate operations will be eliminated and both companies can more aggressively pursue their separate growth strategies unencumbered by the other."

The Company also announced that it will hold an investor conference call to review the quarter results at 4:15 p.m. EST on Wednesday, May 24, 2017.

Conference Call Details

The details of the call are: Wednesday, May 24, 2017 at 4:15 p.m. (EST)
US & Canada Toll Free:Dial In: (888) 394-8218
Meeting ID Number: 530 26 51

Financial professionals are invited to call in to register in advance to ask questions. To pre-register as a qualified caller, please e-mail investorinfo@myphm.com by 12:00 p.m. (EST) on Wednesday, May 24, 2017.

About Patient Home Monitoring Corp.

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. The Company fills this need by delivering a growing number of specialized products and services to achieve these goals. The Company serves patients with heart disease and other chronic health conditions, this operation is a platform for acquisitions and organic growth. The Company 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. The Company'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.

Non-GAAP Measures

This press release refers to "Adjusted EBITDA" which is a non-GAAP and non-IFRS financial measure that does not have a standardized meaning prescribed by GAAP or IFRS. The Company's presentation of this financial measure may not be comparable to similarly titled measures used by other companies. This financial measure is intended to provide additional information to investors concerning the Company's performance. Adjusted EBITDA is defined as EBITDA excluding stock based compensation and gains/losses on financial derivatives. Adjusted EBITDA is a Non-IFRS measure the Company uses as an indicator of financial health, and excludes several items which may be useful in the consideration of the financial condition of the Company, including interest expense, taxes, depreciation, amortization, stock based compensation, good will impairment and gain/losses on financial derivatives. The following table shows our Non-IFRS measure (Adjusted EBITDA) reconciled to our net income for the indicated periods:

Quarter Ended
March 31, 2017
Net income $ 20
Add back:
Depreciation and amortization 8,451
Interest expense (net of interest income) 474
Provision for income taxes 144
EBITDA 9,089
Stock-based compensation (2,987)
Loss (gain) on financial derivatives 159
Adjusted EBITDA $ 6,261

Management uses these non-GAAP measures as key metrics in the evaluation of the Company's performance and the consolidated financial results. The Company believes these non-GAAP measures are useful to investors in their assessment of the operating performance and the valuation of the Company. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data, the Company has determined that it is appropriate to make this data available to all investors. However, non-GAAP financial measures are not prepared in accordance with GAAP, and the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

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 the Company, revenues for the third quarter expected to be slightly higher than the prior quarter at $32.5-$33.5 million and achieving a 20-23% EBITDA margin, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions, including, our ability to increase higher margin product sales while continuing to phase out certain product lines, and our reduction of G&A expenses and bad debt expenses. 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 the Company operates; the ability of the Company 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 the Company'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 behavior to which the Company is exposed; the failure of third parties to comply with their obligations to the Company 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 the Company; 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 the Company's annual Management's Discussion and Analysis for the year ended September 30, 2016, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect the Company 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, the Company 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 the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

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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