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Protech Home Medical Corp.

Exchange: TSXV Exchange | Jul 21, 2019, 5:42 AM EDT

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Protech Home Medical Reports Solid Second Quarter Fiscal 2019 Financial Results

Posts Revenue Growth of 17% and Adjusted EBITDA Growth of 78%

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, May 21, 2019 (GLOBE NEWSWIRE) -- Protech Home Medical Corp. (the “Company”) (TSXV: PTQ), a healthcare services company with operations in the U.S., today announced its second quarter financial results and operational highlights.

Financial highlights from the second fiscal quarter ended March 31, 2019:

  • Revenue for quarter was $21.9 million, an increase of 17% compared to the same quarter in 2018.
  • Revenue YTD of $43.6 million, representing a 17.1% increase in revenue year-over-year.
  • Adjusted EBITDA for quarter was $4 million, an increase of 78% compared to the same quarter in 2018.
  • Adjusted YTD EBITDA for the quarter of $8.4 million, compared to $3.8 million in the same quarter in 2018, an increase of over 122%.
  • Adjusted EBITDA margin for the quarter of 18.2%, compared to 12% for the same quarter in 2018, an increase of approximately 52%.
  • Adjusted YTD EBITDA margin for the quarter of 19.1%, compared to 10.1% for the same quarter in 2018, an increase of approximately 89%.

Operational highlights from the year ended March 31, 2019:

  • Through the Company’s continued use of technology and establishing its national fulfillment center, respiratory resupply set-ups or deliveries increased to 11,641 for the quarter ended March 31, 2019, compared to 9,798 for the same quarter in 2018, an increase of 18.8%.
  • The Company continues to expand its sales reach across four U.S. states by the addition of experienced sales personnel.

“I am pleased with our second quarter financial results,” said CEO and Chairman Greg Crawford. “We continue to achieve these superior financial results while also improving on all aspects of our business including an increase in the number of patients served and respiratory resupply set-ups or deliveries. We continue to focus on our solid organic growth and enhance the profitability of our core operations.”

“We are obviously disappointed in the cyberattack we were subject to a few weeks ago. The investigation into the attack is ongoing. We are working closely with our advisors and applicable authorities. Due to the ongoing nature of this investigation, I am not at liberty to say more at this time. It goes without saying, we will update the market at the appropriate time.”

“There was a short delay in the previously-announced debenture redemption and that has now been settled. Remaining liquid assets, the profitable cash flow of the Company and the proceeds of the approximately CAD$3.6 million loan, provide Protech with sufficient funds to grow our business and meet our internal targets. Liquidity is not an issue for Protech.”

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 substantially 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 EBITDA margin.”

Protech will host its Quarterly Earnings Conference Call on Wednesday, May 22, 2019 at 10:00 a.m. (EDT). The dial-in number is 1 (800) 319-4610 or 1 (604) 638-5340.

The interim financial statements of the Company for the three and six months ended March 31, 2019 and 2018 and accompanying Management's Discussion & Analysis (MD&A) are available at www.sedar.com.

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, 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:

 3 Months Ended March
31, 2019
6 Months ended March
31, 2019
Net Loss$(530) $(396)
Add back:  
Depreciation and amortization 3,136  6,555
Interest expense (net of interest income) 344  641
Recovery for income taxes 163  105
EBITDA$  3,113 $  6,905
Stock-based compensation 361  891
Accretion expense 420  520
Gain on financial derivatives 96  28
Adjusted EBITDA$  3,990 $  8,344
Adjusted EBITDA Margin 18.2%  19.1%

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

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