Non-Core Asset Sale, Return of Stolen Funds and Executive Team Expansion Allow the Company to Accelerate its Growth
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
CINCINNATI, Sept. 10, 2019 (GLOBE NEWSWIRE) -- Protech Home Medical Corp. (“Protech” or the “Company”) (TSXV: PTQ), a healthcare services company with operations in the United States, today provides a corporate update including details regarding the return of stolen funds previously misappropriated pursuant to a cyberscam, the sale of a non-core asset, the strengthening of its executive team and the renewed emphasis on the Company’s strategic initiatives including its acquisition objectives.
The Return of Stolen Funds
As press released on September 9, 2019, the Company is pleased to announce the return of CAD$8.6 million which had been misappropriated pursuant to a cyberscam incident originally announced on May 6, 2019. The funds have now been returned by the perpetrator’s bank pursuant to the final Garnishee Order Absolute announced by the Company on August 16, 2019. The Company will also be repaying its Chief Executive Officer the sum of USD$2,600,000, being the principal amount, he advanced the Company in the wake of the theft as announced by the Company on May 6, 2019. This advance allowed the Company to complete its previously-announced debenture repayment.
“Obviously we are relieved that the funds have been returned. This is obviously a material positive change to our balance sheet,” commented Greg Crawford, Chief Executive Officer. “The incident, while being highly distracting for our management team, has made us very aware of such external threats and as a result, we have worked diligently to strengthen our internal and external defenses to prevent such an incident from ever happening again.”
Sale of Non-Core Asset
The Company has recently disposed of its only non-core asset, wholly-owned Patient Home Monitoring, Inc. The cash consideration at close was approximately CAD$4.5 million. Patient Home Monitoring, Inc. accounted for approximately less than 5% of total consolidated revenues in the YTD June 30, 2019 and was no longer consistent with the corporate initiatives of the Company.
Augmentation of Executive Team
The Company is pleased to announce that Mr. Thomas Roehrig has joined the Company as Executive Vice President, Finance. Commenting on the hire, CFO Hardik Mehta said, “We are delighted to welcome Tom to our team. Tom is a CPA and has over 30 years of hands-on experience in accounting and finance. His background includes being the Chief Accounting Officer of a publicly-traded US company. He brings significant experience in public company financial reporting, debt and equity financings, inventory management, and acquisition transactions. His prolific career significantly broadens our internal capabilities in these areas at this pivotal point in the Company’s development. Additionally, his addition allows me to hyper-focus on our M&A strategy and further assist Greg in operational matters leading to further improvement of our margins.”
Update on Corporate Strategy
With the combination of the return of the stolen funds, the sale of the non-core asset and the repayment of the loan provided by the Company’s CEO, the Company has the strongest balance sheet in its recent history with total cash of approximately CAD$12.5 million. As such, the Company will be immediately intensifying its efforts with respect to its previously-announced growth strategy consisting of three main components: the utilization of technology in its product offering to drive further margin expansion; increasing its DME market share at a rate in excess of the organic growth rate of the market; and, most importantly, acquiring targeted DME/HME companies in geographies that will allow the Company to further achieve regional market domination.
As the Company has shown in previous quarters, the acquisition program not only adds to its patient distribution volume, but also allows Protech to capture material hard dollar synergies relating to more favorable equipment and supply vendor spend, stand-alone administrative expenses and back office costs, all of which are significant expenses for the acquisition targets.
“The implementation of these strategic initiatives has to date, resulted in achieving significantly improved financial results since my management team was put in place in December of 2017 and I continue to be very bullish on what lies ahead for our company,” commented Greg Crawford. “The combination of our very strong cash position together with our enhanced management team will allow us to focus our efforts on more meaningful acquisition targets in a market that continues to be characterized by strong and growing demand for services and a fragmented supplier base characterized by smaller companies. Such suppliers continually struggle to achieve economies of scale and they represent a highly attractive group of targets. We are excited to now be in a position to execute on these initiatives over the coming quarters.”
ABOUT PROTECH HOME MEDICAL CORP
The Company provides in-home monitoring and disease management services for patients in the United States healthcare market. The primary business objective of the Company is to create shareholder value by offering a broader range of services to patients in need of in-home monitoring and chronic disease management. The Company’s 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 the Company, including: the Company successfully completing acquisitions; the Company’s M&A strategy and utilization of technology in its product offering leading to further improvement of operational margins; and the timing of the Company completing on its new initiatives; 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, without limitation, the Company identifying, negotiating and closing one or more acquisitions. 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. Examples of such risk factors include, without limitation: credit; market (including equity, commodity, foreign exchange and interest rate); liquidity; operational (including technology and infrastructure); reputational; insurance; strategic; regulatory; legal; environmental; capital adequacy; 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 disclosure documents 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.
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For further information please visit our website at www.protechhomemedical.com or contact:
Chief Executive Officer
Protech Home Medical Corp.