MCI Onehealth Technologies Inc. (“MCI” or the “Company”) (TSX:
DRDR), a clinician-led healthcare technology company focused on
increasing access to and quality of healthcare, today released its
financial results for the three- and nine-month periods ended
September 30, 2021.
“We are pleased with the momentum we have been
able to build as the acquisition and integration of Khure Health
and Polyclinic into our platform nears completion and the last of
our clinics resume full operations coming out of the COVID-19
restrictions from earlier this year,” said Dr. Alexander
Dobranowski, CEO of MCI. “We are continuing to focus on identifying
strong, strategic acquisitions, while also turning our attention
towards capitalizing on opportunities to create synergies between
our existing and newly acquired businesses.”
A summary of MCI’s financial and operational
highlights for the quarter are set out below, and more detailed
information is contained in the financial statements and related
management discussion and analysis, which are available on MCI’s
SEDAR page at www.sedar.com. Financial measures described as
“Adjusted” in this news release are non-IFRS financial measures and
may not be comparable to other similar measures disclosed by other
companies. Please see Non-IFRS Financial Measures below for more
information.
Third Quarter 2021 Financial Highlights
Significant financial highlights for MCI during the third
quarter of 2021 included:
- Revenue Growth
Year-on-year: Revenue for the third quarter of 2021 increased 29%
over the same period in 2020, driven by the ongoing recovery of
publicly-insured health services, ongoing growth from corporate
health services, and revenue contributed by recently acquired
businesses. Total revenue for the three months ended September 30,
2021 was $12.6 million, compared to total revenue of $9.8 million
in the comparable period in 2020. Revenue contributions from 2021
acquisitions of Khure and Polyclinic accounted for 44% of the
growth, and their contributions are expected to continue to
increase as the businesses are integrated, with revenue synergy
opportunities already being realized in the fourth quarter of
2021.
- Increased
Patient Volumes: Patient volumes grew approximately
31%, year-on-year, excluding increases from acquired businesses in
2021. Patient volumes continued to improve despite continuing
COVID-19 restrictions as patients and physicians become more
comfortable with virtual channels and pent-up demand for health
services continues to grow.
- Growth in
Corporate Customers: The Company added 27 new corporate health
customers in the third quarter of 2021, including a major insurance
company for which MCI is now coordinating national appointments for
plan members, and has become a preferred vendor for Destination
Toronto, providing pre-travel concierge travel testing programs and
other services.
- Liquidity: Cash
was $9.98 million at the end of the quarter, compared to $0.89
million in the same quarter last year, ensuring short- and
medium-term capital requirements are met while the Company
continues to pursue new strategic acquisitions and to develop and
implement the Company’s data-driven healthcare initiatives.
- Adjusted EBITDA:
Adjusted EBITDA(1) for the quarter was negative $1.8 million, as
compared to an Adjusted EBITDA of $2.1 million in the same period
last year.
- Net
Losses: Net losses for the quarter were $5.4 million,
as compared to a gain of $0.9 million from the same quarter in the
previous year, reflecting increased expenses relating to expansion
of personnel, share-based compensation and acquisition-related
expenses as the Company continues to focus on rapid growth and
expansion.
Third Quarter 2021 Operational Highlights
Significant operational highlights for MCI during the third
quarter of 2021 included:
- Acquisition of
Polyclinic: On July 30, 2021, MCI acquired an 80% interest in
Polyclinic for total consideration of $7.1 million. Polyclinic is
comprised of The Quit Clinic Inc., Executive Medical Concierge
Canada Ltd. and Canadian Phase Onward Inc. Polyclinic provides
onsite integrated health services including primary care,
specialist care, concierge medicine, lab services, and an in-house
clinical research organization. The details of the acquisition are
set out in MCI’s press release dated July 30, 2021.
- Khure
Collaborations and Strategic Partnerships: Khure has secured
strategic partnership agreements with 2 of the top 4 electronic
medical record companies in English-speaking Canada, which will
help remove technical barriers and increase the availability of
Khure's AI-enabled rare disease clinical intelligence platform for
more than 15 thousand physicians across the country. As part
of a recently signed commercial collaboration, Khure’s platform is
now included in the product and service offerings of one
of Canada’s leading providers of prescription level data, health
technology services and advanced analytics to the
pharmaceutical industry.
- Commercial
Partnership with Acorn Biolabs Inc. (“Acorn”): The Company’s
commercial partnership with Acorn, a Toronto-based biotechnology
company, continues to roll-out, with Acorn’s stem-cell collection
and cryostorage services being marketed across the Company’s
channels and Acorn performing follicle extractions on designated
days each month at three MCI clinics so far.
- Investment in
ORO: On July 14, 2021, MCI invested $250,000 to purchase an
interest in ORO, an innovative, dermatologically-focused telehealth
and virtual health care service provider, through the acquisition
of Series 1 Class Seed Preferred Shares of ORO.
Outlook
MCI expects to accelerate total company revenue
growth in the first half of fiscal 2022 as it executes its
strategic plan on multiple fronts including:
- Organic growth
of government insured health services from its omnichannel network
of clinics, telehealth and the MCI Connect virtual platform.
- Continued
organic growth in health services provided to corporate customers,
as it expands its customer base and increases the number of
available service offerings.
- New technology
partnerships and strategic acquisitions to accelerate its
technology roadmap.
- Acquisitions of
specialty clinics to expand its health service offerings and enter
new markets by leveraging technology to deliver more services to
its large and growing patient and physician base.
- Exploration of
commercial relationships that leverage expressed interest in
Khure’s AI-driven clinical evidence around rare diseases to
accelerate patient recruitment for clinical trials, accelerate
patient access to treatment, support regulatory decision-making
through the application of real-world evidence and set the
foundations for new AI technologies.
Conference Call Details
MCI will hold a conference call to discuss
progress on its key strategic initiatives and financial results for
the third quarter of 2021, on November 15, 2021 at 5:30 pm ET.
Participants are encouraged to access the call at least 10 minutes
prior to start.
Date: |
Monday
November 15, 2021 |
Time: |
5:30 pm (ET) |
Duration: |
60 minutes |
|
|
Dial-in Canada/US: |
(833) 540-1153 (Toll-free) |
|
(918) 922-6528 (International) |
|
|
Conference Call ID: |
5288331 |
|
|
Webcast link: |
https://edge.media-server.com/mmc/p/km3fxffv |
Selected Unaudited Financial
Information(In thousands of dollars, except percentages
and per share amounts)
|
Quarter ended |
|
Period over |
|
Nine months ended |
|
Period over |
|
|
September 30 |
|
period Change |
|
September 30 |
|
period Change |
|
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
|
|
($ in thousands except percentages) |
Revenues |
$ 12,642 |
|
$ 9,837 |
|
2,805 |
|
29 |
|
$ 33,881 |
|
$ 27,590 |
|
$ 6,291 |
|
23 |
|
Cost of sales |
9,227 |
|
6,790 |
|
2,437 |
|
36 |
|
23,820 |
|
19,077 |
|
4,743 |
|
25 |
|
Gross profit |
3,415 |
|
3,047 |
|
368 |
|
12 |
|
10,061 |
|
8,513 |
|
1,548 |
|
18 |
|
|
|
|
|
|
|
|
|
|
Research and developmentGeneral and administrative |
279 |
|
- |
|
279 |
|
NM |
|
970 |
|
- |
|
970 |
|
NM |
|
Sales and marketing |
988 |
|
27 |
|
961 |
|
3,559 |
|
2,145 |
|
90 |
|
2,055 |
|
2,283 |
|
General and administrative |
7,478 |
|
1,582 |
|
5,896 |
|
373 |
|
18,207 |
|
6,672 |
|
11,535 |
|
173 |
|
|
8,745 |
|
1,609 |
|
7,136 |
|
444 |
|
21,322 |
|
6,762 |
|
14,560 |
|
215 |
|
|
|
|
|
|
|
|
|
|
Finance costs |
131 |
|
135 |
|
(4 |
) |
(3 |
) |
339 |
|
415 |
|
(76 |
) |
(18 |
) |
Income from investments |
9 |
|
- |
|
9 |
|
NM |
|
(3 |
) |
- |
|
(3 |
) |
NM |
|
Gain (loss) On sublease |
- |
|
- |
|
- |
|
NM |
|
- |
|
(10 |
) |
10 |
|
(100 |
) |
|
140 |
|
135 |
|
5 |
|
4 |
|
336 |
|
405 |
|
(69 |
) |
(17 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) before taxes |
(5,470 |
) |
1,303 |
|
(6,773 |
) |
(520 |
) |
(11,597 |
) |
1,346 |
|
(12,943 |
) |
(962 |
) |
Income taxes |
(32 |
) |
366 |
|
(398 |
) |
(109 |
) |
(867 |
) |
314 |
|
(1,181 |
) |
(376 |
) |
|
|
|
|
|
|
|
|
|
Net Income (loss) |
(5,438 |
) |
937 |
|
(6,375 |
) |
(680 |
) |
(10,730 |
) |
1,032 |
|
(11,762 |
) |
(1,140 |
) |
|
|
|
|
|
|
|
|
|
Adjusted gross profit (2) |
3,573 |
|
3,047 |
|
526 |
|
17 |
|
10,325 |
|
8,513 |
|
1,812 |
|
21 |
|
Adjusted gross margin (2) |
28.3% |
|
31.0% |
|
|
|
30.5% |
|
30.9% |
|
|
|
Adjusted EBITDA (1) |
(1,824 |
) |
2,190 |
|
(4,014 |
) |
(183 |
) |
(3,186 |
) |
3,973 |
|
(7,159 |
) |
(180 |
) |
Adjusted EBITDA margin (1) |
(14.4% |
) |
22.3% |
|
|
|
(9.4% |
) |
14.4% |
|
|
|
Weighted average number of |
|
|
|
|
|
|
|
|
Share outstanding: Basic and diluted |
49,540,229 |
|
38,004,750 |
|
|
|
47,630,393 |
|
38,004,750 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share -Basic and diluted |
$ (0.11 |
) |
$ 0.02 |
|
|
|
$ (0.23 |
) |
$ 0.03 |
|
|
|
(1), (2) Financial measures described as
“Adjusted” in the table above are non-IFRS financial measures and
may not be comparable to other similar measures disclosed by other
companies, please see Non-IFRS Financial Measures below for more
information.
Selected Statement of Financial Position
Data
|
September 30, 2021 |
|
December 31, 2020 |
|
|
|
Cash |
$ 9,984 |
|
$ 894 |
|
Accounts receivable |
6,157 |
|
3,637 |
|
Net investment in subleases |
2,115 |
|
1,685 |
|
Related party loan |
- |
|
1,210 |
|
Loan receivable |
290 |
|
- |
|
Accounts payable and accrued liabilities |
(7,700 |
) |
(6,998 |
) |
Lease liabilities |
(15,356 |
) |
(13,833 |
) |
Other liabilities |
(130 |
) |
80 |
|
Non-controlling interest redeemable liability |
(1,305 |
) |
- |
|
Liability for contingent consideration |
(5,438 |
) |
- |
|
Non-IFRS Financial Measures
The terms Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Gross Profit and Adjusted Gross Margin used in
this document do not have any standardized meaning under IFRS, may
not be comparable to similar financial measures disclosed by other
companies and should not be considered a substitute for, or
superior to, IFRS financial measures. Readers are advised to review
the section entitled “Non-IFRS Financial Measures” in the Company’s
management discussion and analysis for the quarter ended September
30, 2021, available on MCI’s SEDAR page at www.sedar.com, for a
detailed explanation of the composition of these measures and their
uses.
(1) The following table reconciles Adjusted
EBITDA and Adjusted EBITDA Margin to net income (loss) for the
three- and nine-month periods ended September 30, 2021 and
September 30, 2020:
|
Quarter ended |
|
Nine months ended |
|
|
September 30 |
|
September 30 |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
$ in thousands |
|
|
|
|
|
Total Revenue |
$ 12,642 |
|
$ 9,837 |
|
$ 33,881 |
|
$ 27,590 |
|
|
|
|
|
|
Net income (loss) |
(5,438 |
) |
937 |
|
(10,730 |
) |
1,032 |
|
Add back (deduct) |
|
|
|
|
Depreciation and amortization |
1,329 |
|
752 |
|
3,012 |
|
2,222 |
|
Finance charges |
131 |
|
135 |
|
339 |
|
415 |
|
Income from investments |
9 |
|
- |
|
(3 |
) |
- |
|
Income taxes expense (recovery) |
(32 |
) |
366 |
|
(867 |
) |
314 |
|
Gain (loss) on sublease contracts |
- |
|
- |
|
- |
|
(10 |
) |
Share-based payment expense |
1,722 |
|
- |
|
4,370 |
|
- |
|
Expected credit loss loan |
310 |
|
- |
|
310 |
|
310 |
|
Acquisition related legal expenses |
145 |
|
- |
|
383 |
|
- |
|
Adjusted EBITDA |
(1,824 |
) |
$ 2,190 |
|
(3,186 |
) |
$ 3,973 |
|
Adjusted EBITDA Margin |
(14.4% |
) |
22.3% |
|
(9.4% |
) |
14.4% |
|
(2) The following table reconciles Adjusted
Gross Profit and Adjusted Gross Margin to revenue and cost of sales
for the three- and nine-month periods ended September 30, 2021, and
September 30, 2020:
|
Quarter ended |
|
Period over |
|
Nine months ended |
|
Period over |
|
|
September 30 |
|
period Change |
|
September 30 |
|
period Change |
|
|
2021 |
|
2020 |
|
$ |
|
% |
|
2021 |
|
2020 |
|
$ |
|
% |
|
|
($ in thousands except percentages) |
|
|
|
|
|
|
|
|
|
Revenue |
12,642 |
|
9,837 |
|
2,805 |
|
29% |
|
33,881 |
|
27,590 |
|
6,291 |
|
23% |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
9,227 |
|
6,790 |
|
2,437 |
|
36% |
|
23,820 |
|
19,077 |
|
4,743 |
|
25% |
|
Less: |
|
|
|
|
|
|
|
|
Depreciation and Amortization |
(158 |
) |
- |
|
(158 |
) |
NM |
|
(264 |
) |
- |
|
(264 |
) |
NM |
|
|
9,069 |
|
6,790 |
|
2,279 |
|
34% |
|
23,556 |
|
19,077 |
|
4,479 |
|
23% |
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
3,573 |
|
3,047 |
|
|
|
10,325 |
|
8,513 |
|
|
|
Adjusted gross margin |
28.3% |
|
31.0% |
|
|
|
30.5% |
|
30.9% |
|
|
|
About MCI
MCI is a healthcare technology company focused
on empowering patients and doctors with advanced technologies to
increase access, improve quality, and reduce healthcare costs. As
part of the healthcare community for over 30 years, MCI operates
one of Canada’s leading primary care networks with 25 clinics,
serves over one million patients annually and had over 200,000
telehealth visits last year. MCI additionally offers an expanding
suite of occupational health service offerings that support a
growing list of over 500 corporate customers. Led by a proven
management team of doctors and experienced executives, MCI is
executing a strategy centered on acquiring technology and health
services that complement MCI’s current roadmap. For more
information, visit mcionehealth.com
For IR enquiries please
contact:Fernando Massalin | ir@mcionehealth.com | +1
(416) 440-4040 ext 155
For media enquiries please contact:Nolan Reeds
| nolan@mcionehealth.com | +1 (416) 440-4040 ext 158
Forward Looking Statements
Certain statements in this press release,
constitute “forward-looking information” and "forward looking
statements" (collectively, "forward looking statements") within the
meaning of applicable Canadian securities laws and are based on
assumptions, expectations, estimates and projections as of the date
of this press release. Forward-looking statements include
statements with respect to projected revenues, earnings, growth
rates, targets, revenue mix, product plans, use of proceeds, new
business ventures, commercial arrangements and potential
acquisitions, as well as MCI's future growth, strategic
transformation plan, results of operations, performance and
business prospects and opportunities. The words “plans”, “expects”,
“projected”, “estimated”, “forecasts”, “anticipates”, “intend”,
“guidance”, “outlook”, “potential”, “prospects”, “seek”, “aim”,
“strategy”, “targets” or “believes”, “for use in”, “growth”,
“expansion”, “to pursue”, “to develop”, “future”, “later” or
variations of such words and phrases or statements that certain
future conditions, actions, events or results “will”, “may”,
“could”, “would”, “should”, “might” or “can”, or negative versions
thereof, “occur”, “continue” or “be achieved”, and other similar
expressions, identify forward-looking statements. Forward-looking
statements are necessarily based upon management’s perceptions of
historical trends, current conditions and expected future
developments, as well as a number of specific factors and
assumptions that, while considered reasonable by MCI as of the date
of such statements, are outside of MCI's control and are inherently
subject to significant business, economic and competitive
uncertainties and contingencies which could result in the
forward-looking statements ultimately being entirely or partially
incorrect or untrue. Forward looking statements contained in this
press release are based on various assumptions, including, but not
limited to, the following: MCI's ability to achieve its growth
strategy; the demand for MCI's products and fluctuations in future
revenues; the availability of future business venture, commercial
arrangement and acquisition targets or opportunities and MCI’s
ability to consummate them; MCI’s ability to effectively integrate
existing and future acquisition targets into its platform; the
effects of competition in the industry; the requirement for
increasingly innovative product solutions and service offerings;
trends in customer growth; sufficiency of current working capital
to support future operating and working capital requirements; the
stability of general economic and market conditions; currency
exchange rates and interest rates; equity and debt markets
continuing to provide MCI with access to capital; MCI's ability to
comply with applicable laws and regulations; MCI's continued
compliance with third party intellectual property rights; the
anticipated effects of COVID-19; and that the risk factors noted
below, collectively, do not have a material impact on MCI's
business, operations, revenues and/or results. By their nature,
forward-looking statements are subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved.
Known and unknown risk factors, many of which
are beyond the control of MCI, could cause the actual results of
MCI to differ materially from the results, performance,
achievements or developments expressed or implied by such
forward-looking statements. Such risk factors include, but are not
limited to those factors which are discussed under the section
entitled “Risk Factors” in MCI's final prospectus dated December
29, 2020 and in MCI’s annual information form dated March 31, 2021,
each of which is available under MCI's SEDAR profile at
www.sedar.com. The risk factors are not intended to represent a
complete list of the factors that could affect MCI and the reader
is cautioned to consider these and other factors, uncertainties and
potential events carefully and not to put undue reliance on
forward-looking statements. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Forward-looking statements are
provided for the purpose of providing information about
management’s expectations and plans relating to the future. MCI
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, or to explain any material difference
between subsequent actual events and such forward-looking
statements, except to the extent required by applicable law. All of
the forward-looking statements contained in this press release are
qualified by these cautionary statements.
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