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Protech Home Medical Reports Solid Third Quarter Fiscal 2019 Financial Results

Posts Revenue Growth of 7.1% and Adjusted EBITDA Growth of 7.8%

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

CINCINNATI, Aug. 19, 2019 (GLOBE NEWSWIRE) -- Protech Home Medical Corp. (the “Company”) (PTQ.V), a healthcare services company with operations in the U.S., today announced its third quarter financial results and operational highlights. These results pertain to the three- and nine-month periods ended June 30, 2019.

Protech will host its Quarterly Earnings Conference Call on Tuesday August 20, 2019 at 10.00am EDT. The dial-in number is 1 (800) 319 4610 or 1 (604) 638 5340.

Financial highlights from the third fiscal quarter ended June 30, 2019:

  • Revenue for the third quarter ended June 30, 2019 was $21.1 million, an increase of 7.1% compared to third quarter ended June 30, 2018.
  • Revenue YTD for the third quarter ended June 30, 2019 of $64.7 million, representing a 13.6% increase in revenue year-over-year.
  • Adjusted EBITDA for the third quarter ended June 30, 2019 was $3.9 million, an increase of 7.8% compared to third quarter ended June 30, 2018.
  • Adjusted YTD EBITDA for the third quarter ended June 30, 2019 of $11.7 million, compared to $7.4 million for the same period ended June 30, 2018, an increase of 58.9%.
  • Adjusted EBITDA margins for the third quarter ended June 30, 2019 of 18.4%, compared to 18.3% for the same period in prior year.
  • Adjusted YTD EBITDA margins for the third quarter ended June 30, 2019 of 18.1%, compared to 12.9% for the same period in prior year, an increase of approximately 40%.
  • A cash balance of $4.2 million as at June 30, 2019 compared to $4.4 million as of June 30, 2018.

Operational highlights from the quarter ended June 30, 2019:

  • Through the Company’s continued use of technology and establishing its national fulfillment center, respiratory resupply set-ups or deliveries increased to 11,034 for the quarter ended June 30, 2019, compared to 10,245 for the same period ended June 30, 2018, an increase of 7.7%.
  • The increase in three-month and nine-month revenue are due to the Company’s integration efforts to standardize regional processes and operations including various degrees: changing product focus, product mix, sales practices, billing practices, ordering practices, and recurring operational protocols as well as the acquisition of two businesses in Q1 of fiscal year 2019.
  • The company continues to expand its sales reach across four US states by the addition of experienced sales personnel.

“I am pleased with our third quarter financial results,” said CEO and Chairman Greg Crawford. “We continue to achieve these solid financial results while also improving on all aspects of our business operations, including an increase in the number of patients served and respiratory resupply set-ups or deliveries. We continue to focus on achieving solid organic growth and on enhancing the profitability of our core operations. While we were obviously extremely disappointed in the cyberattack that our Company suffered on May 3, 2019, we were delighted to learn on June 26, 2019, the Asian court with jurisdiction over the bank account suspected to contain the stolen funds entered a judgement in the Company’s favour. Furthermore, on August 16, 2019, we announced that the Company had received a final Garnishee Order Absolute in Hong Kong which completes the legal hurdles surrounding the return of the stolen funds.  Accordingly, our Company is expecting to receive C$8.6 million plus accrued interest within the next several weeks. Additionally, the Company has filed a claim under its insurance policy for costs related to this cyber-crime. While we are delighted with the result, I am cognizant of the distraction the fraud has had on our management team and we are very pleased to have all of this behind us so that we can now focus on continuing to improve upon the very significant financial results we have achieved over the past several quarters.”

Chief Financial Officer Hardik Mehta added, “We continue to grow our business at a solid rate. We are particularly pleased that our Adjusted EBITDA margin remains strong at 18% and our recurring revenues have increased over the last year. These metrics remain a focus internally from a financial perspective. We continue to be laser focused on revenue growth and increasing margins.”

The interim financial statements of the Company for the three and nine months ended June 30, 2019 and 2018 and accompanying Management's Discussion & Analysis (MD&A) are available at www.sedar.com.

  For the three
months ended
June 30, 2019
For the three
months ended
June 30, 2018
For the nine
months ended
June 30, 2019
For the nine
months ended
June 30, 2018
Number of patients serviced   34,308     31,420     103,290     119,308  
Number of equipment set-ups or deliveries   62,170     58,186     183,673     180,957  
Respiratory resupply set-ups or deliveries   11,034     10,245     33,954     29,829  
Adjusted EBITDA $    3,882,000   $    3,601,000   $  11,704,000   $  7,365,000  

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.

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, including the Company’s revised corporate strategy improving overall financial results on a go forward basis, 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’s ability to maintain/slightly increase its collections ratios; the Company maintaining its gross margins and maintaining its revenue growth; and the Company maintaining its selling, general and administrative 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. 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.

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:

  Three Months Ended
June 30, 2019
Three Months Ended
June 30, 2018
Nine Months Ended
June 30, 2019
Nine Months Ended
June 30, 2018
Net income (loss) $   (12,539 ) $   (1,443 ) $   (12,935 ) $   13,142  
Add back:        
Depreciation and amortization   3,487     4,195     10,041     12,468  
Interest expense (net of interest income)   946     328     1,067     807  
Provision for income taxes   29     -     133     89  
EBITDA $     (8,077 ) $     3,080   $   (1,694 ) $   26,506  
Stock-based compensation   446     404     1,337     2,072  
Accretion expense   1,105     68     1,625     485  
Loss (gain) on disposal of business   -     -     -     (21,509 )
Fraud related expenses   9,184     -     9,184     -  
Tax expense related to 338(h) election   1,385     -     1,385     -  
Loss (gain) on financial derivatives   (161 )   49     (133 )   (189 )
Adjusted EBITDA $   3,882   $   3,601   $   11,704   $   7,365  

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.

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.

For further information please visit our website at www.protechhomemedical.com, or contact:

Hardik Mehta
Chief Financial Officer
Protech Home Medical Corp.
859-300-6455
investorinfo@myphm.com