Prism Medical Ltd.
TSX VENTURE : PM

Prism Medical Ltd.

July 28, 2015 14:24 ET

Prism Medical Reports Second Quarter Results

TORONTO, ONTARIO--(Marketwired - July 28, 2015) - Prism Medical Ltd. ("Prism Medical" or "the Company") (TSX VENTURE:PM), a leading provider of durable medical equipment and related services to the mobility challenged, today reported financial results for the second quarter (Q2) ended May 31, 2015.

Three months ended May 31 Six months ended May 31
(Expressed in thousands of Canadian dollars except for earnings per share and where otherwise noted) 2015
$
20141
$
2015
$
20141
$
Revenues 14,148 10,376 26,329 20,266
Gross margin 6,041 4,268 10,909 8,534
(as % of revenues) 42.7% 41.1% 41.4% 42.1%
Restructuring charges 121 1,218 121 1,218
Net income from operations 430 22,577 832 22,398
(as % of revenues) 3.0% Nm 3.2% Nm
Net loss from discontinued operations - (1,188) - (341)
Net income 430 21,389 832 22,057
Adjusted EBITDA
Continuing operations 1,465 25,863 2,888 26,388
(as % of revenues) 10.4% Nm 11.0% Nm
Basic earnings per share
From continuing operations 0.09 (0.17) 0.17 (0.20)
From discontinued operations - 2.68 - 2.81
From net income (loss) 0.09 2.51 0.17 2.61
Diluted earnings per share
From continuing operations 0.09 (0.17) 0.17 (0.20)
From discontinued operations - 2.63 - 2.78
From net income (loss) 0.09 2.46 0.17 2.58
As at
May 31
2015
$
As at
November 30
2014
$
Total assets 51,279 46,491
Total liabilities 27,711 20,009
Cash and cash equivalents 4,989 6,497
Bank indebtedness 1,321 1,160
Current portion of long-term debt 2,229 1,976
Long-term debt 10,453 8,040
Shareholders' equity 23,568 26,482
Common shares (in thousands) 4,939 4,742

1 Restated to reflect continuing operations

Second Quarter Highlights

  • Strong year-over-year growth in revenue for the quarter, with revenues increasing by 36% from $10.4 million in Q2 2014 to $14.1M in Q2 2015
  • Adjusted EBITDA from continuing operation of $1.5 million, is significantly higher than the loss of $1.4 million incurred in Q2 2014* (excluding gain on sale of UK of $27.2 million). The loss in the prior year's quarter includes restructuring and other costs of $2.2 million.
  • Second quarter 2015 net income from continuing operations was $430 thousand or $0.09 per common share compared to a loss of $1.5 million from continuing operations (excluding gain on sale of UK, net of tax) in the second quarter of 2014 or a loss of $0.17 per common share
  • For a comprehensive discussion of the quarter please refer to the Company's Management Discussion and Analysis and Financial Statements for the three and six month period ended May 31, 2015. Both these documents can be found on SEDAR or the Company's website

Chairman's comments

"We are pleased with this quarter's growth and expect the trend to continue for the balance of the year. While revenues are subject to fluctuations as demand from institutions is lumpy, the North American business prospects are strong. The Company is committed to growing both the Canadian and US businesses organically and from acquisitions. We are pleased to report that your Board of Directors has declared a dividend of $0.125 per common share to shareholders of record on August 17, 2015, to be paid on August 27, 2015."

Outlook

The Company intends to grow sales and profitability and provide a reasonable return on shareholders' equity with a focus on the North American market. The Company believes that performance will be positively affected by a continued North American institutional and homecare demand for our products, improved manufacturing efficiencies, greater geographic coverage, and revenues and profits from new product introductions. During the past year the Company's North American operations have materially improved. Management believes that there are significant growth opportunities within the expanding North American health care industry both through organic growth and acquisitions that offer the potential to significantly increase shareholder value, while remaining consistent with Prism Medical's key growth strategies of vertical integration, product diversification and the application of relevant knowledge by its service oriented personnel.

The demand for our core products and services, in management's estimation, continues to experience growth at different rates in the geographic markets in which we participate. Government funding for our products in Canada is a key driver of sales. Although government policies related to healthcare in the markets we operate continues to change, we believe that the long term trend continues to be favorable.

Management believes that the US market holds the greatest long-term potential to provide above-average revenue growth both in the institutional and homecare markets. While budget constraints and the cyclicality of the institutional order pipeline can cause variability in US revenue, our efforts to build a larger footprint in this market have already translated into strong revenue growth

Dividend Policy

While the Company has no formal policy on dividend payments and the Board of Directors determines the suitability of such payments on a quarterly basis, the Company views dividend payments an important part of its investor strategy and expects to continue its historical pattern of four dividend payments per fiscal year.

Dividend Declaration

On July 28, 2015, the Board of Directors approved the payment of $0.125 per common share to shareholders of record on August 17, 2015 to be paid on August 27, 2015. This is an eligible dividend within the Income Tax Act.

About Prism Medical Ltd.

Prism Medical is a vertically integrated manufacturer and leading provider of equipment and services used to move and handle mobility challenged individuals in a safe and dignified manner. Prism Medical's products are marketed under the brand names of Prism Medical, ErgoSafe, Waverly Glen and Nightingale in the homecare, acute care and long-term care markets throughout North America. The Company offers solutions that encourage improved care, quality of life and mobility, while seeking to lower the overall cost of the caregiving function in a number of ways, including reducing the incidence of handling-related injuries among caregivers. In addition, the Company through its network of Nightingale dealers provides an integrated suite of products and services that make home care a viable option for many people. For further information visit Prism Medical's website at www.prismmedicalltd.com or www.sedar.com.

Non-IFRS Financial Measures

Prism Medical's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Company also uses non‐IFRS measures such as Adjusted EBITDA to measure its financial performance. Adjusted EBITDA from continuing operations consists of earnings before interest, income taxes, depreciation, amortization, stock‐based compensation. Adjusted EBITDA from continuing operations is a financial metric used by many investors to compare companies on the basis of operating results, asset value and the ability to incur and service debt. Management believes that Adjusted EBITDA from continuing operations is a useful measure for evaluating the performance of the Company. Adjusted EBITDA from continuing operations is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS and may not be comparable to similarly titled financial metrics reported by other companies.

Forward-Looking Information

This document contains forward-looking statements relating to our operations and to the environment in which we operate and our strategy, action plans and investments, which may involve estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond our control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in this report and our other public filings. Consequently, readers should not place any undue reliance on such forward-looking statements. These forward-looking statements are made as of the date of this report. Prism Medical is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. All forward-looking statements attributable to Prism Medical are expressly qualified by these cautionary statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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