- WELL achieved record quarterly revenues of $145.8 million in Q3-2022 representing a 47%
year-over-year (YoY) increase compared to Q3-2021, driven by robust
organic growth.
- WELL achieved record Adjusted EBITDA(2) of
$27.5 million in Q3-2022, an increase
of 23% YoY compared to Adjusted EBITDA(2) of
$22.3 million for Q3-2021.
- WELL's Virtual Services unit grew by 75% organically YoY and
now is the largest of the three main lines of business at 36% of
total revenue.
- WELL is increasing its guidance for 2022 annual revenue to
exceed $565 million from the previous
guidance for annual revenue to exceed $550
million. WELL also expects to generate over $100 million of Adjusted EBITDA(2) in
2022. Furthermore, the Company expects its exit run-rate revenue to
approach $700 million by the end of
2023.
VANCOUVER, BC, Nov. 10,
2022 /PRNewswire/ - WELL Health Technologies Corp.
(TSX: WELL) (OTCQX: WHTCF) (the "Company" or "WELL"),
a digital healthcare company focused on positively impacting health
outcomes by leveraging technology to empower healthcare
practitioners and their patients globally, is pleased to announce
its results for the fiscal third quarter ended September 30, 2022.
Hamed Shahbazi, Chairman and CEO
of WELL commented, "We had a great quarter achieving 'best ever'
results on both revenue and Adjusted EBITDA(2) line
without even being in our seasonally strongest quarter. These
exemplary results were once again driven by strong operating
performances across all our lines of business including on and
offline channels reflecting robust operating margins and organic
growth of over 18% YoY. Organic growth in our Virtual
Services was especially strong at 75%, making Virtual Services now
our single largest line of business by revenue, larger now than our
CRH or our Canadian Clinics businesses which both continue to grow
and perform nicely. WELL also achieved record patient
engagement in the quarter with over 1.25 million combined
omni-channel, diagnostic and asynchronous patient interactions –
representing an annual run-rate of approximately 5.0 million
patient interactions system wide. WELL's US-based virtual patient
services businesses, Circle Medical and Wisp, achieved profitable
results and continued growth in revenues with a combined annual
revenue run-rate exceeding US$100
million in Q3, which was one quarter earlier than our prior
forecast. We have worked hard to align ourselves closely to
the success of care providers and doing everything we can to
further their success. That is what makes the success of
these record results so special. We don't prosper or succeed unless
our care provider partners do. Our outlook for the fourth quarter
remains very positive, hence we are able to confidently increase
our annual guidance for annual revenue to exceed $565 million in 2022."
Third Quarter 2022 Financial Highlights:
- WELL achieved record quarterly revenue of $145.8 million in Q3-2022, compared to revenue of
$99.3 million generated during
Q3-2021, an increase of 47% driven by acquisitions during the past
year and organic growth.
- Omni-channel Patient Services revenue increased 15% to
$93.6 million in Q3-2022, compared to
$81.3 million in Q3-2021.
- Virtual Services revenues increased 191% to $52.2 million in Q3-2022, compared to Virtual
Services revenue of $18.0 million in
Q3-2021.
- WELL achieved record Adjusted Gross Profit(1) of
$78.2 million in Q3-2022, compared to
Adjusted Gross Profit(1) of $50.0
million in Q3-2021, representing an increase of 56%.
- WELL achieved Adjusted Gross Margin(1) percentage of
53.6% during Q3-2022 compared to Adjusted Gross
Margin(1) percentage of 50.3% in Q3-2021.
- Adjusted EBITDA(2) was a record $27.5 million for Q3-2022, compared to Adjusted
EBITDA(2) of $22.3 million
in Q3-2021. Adjusted EBITDA(2) was positively impacted
in the quarter by an increase in revenue for the higher margin
virtual services businesses, in addition to healthy EBITDA margins
in the Company's Omni-channel Patient Services.
- Adjusted Net Income(3) was $14.8 million, or $0.07 per share in Q3-2022, compared to Adjusted
Net Income(3) of $9.8
million, or $0.05 per share in
Q3-2021.
Eva Fong, CFO of WELL commented,
"I am also pleased to report that WELL is a profitable business
that generated $11.4 million free
cash flow during the quarter attributable to
shareholders(4) in Q3 which can be used to fund the
Company's future organic and in-organic growth. As we turn
our attention to the next fiscal year, we can't help but be filled
with optimism as our talented team is executing and delivering on
our mission of supporting providers with best-in-class technology
and operating solutions. For this reason, the Company is
pleased to announce it expects to approach $700 million in exit run-rate revenue by the end
of 2023."
Third Quarter 2022 Patient Visit Metrics:
Total omni channel patient visits in Q3-2022 was 892,966, a 53%
increase as compared to Q3-2021. In addition, MyHealth
conducted 169,294 diagnostic visits in Q3-2022, while Wisp
completed 186,952 asynchronous patient consultations.
Combining WELL's omni-channel patient visits, MyHealth's
diagnostic visits and Wisp's asynchronous patient consultations,
WELL achieved a total of 1,249,212 patient interactions in Q3-2022,
representing an annual run-rate of 5.0 million patient
interactions.
Third Quarter 2022 Business Highlights:
- On August 1, 2022, the Company
completed the acquisition of INLIV Inc. ("INLIV") INLIV is a
healthcare provider located in Calgary,
Alberta, specializing in consumer preventative health,
corporate and executive health, primary care, cosmetics, fitness,
and integrated health services. For the 12 months ended
April 30, 2022, INLIV had revenues of
approximately $7.3 million with
double digit Adjusted EBITDA(1) margins. INLIV has over
1,000 customers and 85%+ of its revenues are attributable to
recurring membership fees.
- On August 5, 2022, the Company
announced the addition of Sybil Lau
to WELL's Board of Directors. Sybil has 25 years of experience in
both public and private investments. She is also on the Board of
Directors of the Dalio Family Office in Singapore and a Chinese hedge fund.
- On September 1, 2022, CRH
completed the sale of its 55% stake in West Florida Anesthesia
Associates ("WFAA") to United Digestive for US$12.4 million and recorded a gain in the amount
of $5.2 million net of transaction
costs. The transaction includes a 5-year multi-million dollar
Management Services Agreement, meaning CRH will continue to provide
services to these ASCs for the next 5 years.
- On September 26, 2022, CRH
completed the acquisition of Grand Canyon Anesthesia ("GCA"), a
well-established group headquartered in Phoenix, Arizona and consisting of over 100
anesthesia providers supporting the delivery of anesthesia for more
than 50,000 surgical cases annually. This acquisition marks CRH's
entry into its 18th state of service, further supporting its
disciplined growth and diligent focus on the provision of services
while staying in the ambulatory surgical setting. GCA was purchased
for a net of US$6.5 million after
adjusting for working capital and is expected to generate more than
US$16.0 million in annual revenue and
US$2.0 million in shareholder
EBITDA.
Events Subsequent to September 30,
2022:
- On November 1, 2022, the Company
completed the acquisition of CloudMD's Cloud Practice entity which
includes Juno EMR or "Electronic Medical Record" and ClinicAid
billing Software applications as well as three primary care clinics
located in the province of British
Columbia for total consideration of approximately
$5.7 million subject to post-closing
adjustments and holdbacks.
Outlook:
WELL's outlook for 2022 remains strong and resilient. As a
result of Company's strong organic growth profile, the Company is
increasing its guidance for 2022 annual revenue to exceed
$565 million, compared to the
previous guidance for annual revenue exceeding $550 million. WELL expects to achieve Adjusted
EBITDA(2) exceeding $100
million in 2022, representing Adjusted EBITDA margin of
approximately 18%. Furthermore, the Company is pleased to
announce it expects to approach $700
million in exit run-rate revenue by the end of 2023.
WELL's performance continues to be very positive across all its
business units and for the entire Company as a whole. The cashflows
generated by the Company will continue to be re-invested in the
business and allocated in a disciplined manner, which may come in
the form of further acquisitions, debt repayments, share
repurchases, and/or to accelerate organic growth.
Despite the current geo-political, inflationary, and turbulent
economic environment, the Company does not see any material
influences or challenges that would impair its ability to deliver
strong results for the remainder of 2022 and in 2023. Many of
the key variables inherent in the execution of WELL's business are
firmly in its own grasp and not dependent on outside factors.
Conference Call:
WELL will hold a conference call to discuss its 2022 Third
Quarter financial results on Thursday,
November 10, 2022, at 1:00 pm
ET (10:00 am PT). Please
use the following dial-in numbers: +1-416-764-8650 (Toronto local and International), 778-383-7413
(Vancouver local), 1-888-664-6383
(Toll-Free), with Conference ID: 0127 7025.
The conference call will also be simultaneously webcast and can
be accessed at the following audience URL:
https://www.well.company/for-investors/events/
Selected Unaudited Financial Highlights:
Please see SEDAR for complete copies of the Company's
consolidated financial statements and MD&A for the three and
nine months ended September 30,
2022.
|
|
Restated
|
Restated
|
|
|
Restated
|
|
Three
months
ended
September
30, 2022
|
Three
months
ended June
30, 2022
|
Three
months
ended
September
30, 2021
|
|
Nine
months
ended
September
30, 2022
|
Nine months
ended
September
30, 2021
|
|
$
'000
|
$ '000
|
$ '000
|
|
$
'000
|
$ '000
|
|
Revenue
|
145,789
|
140,326
|
99,291
|
|
412,623
|
186,644
|
|
Cost of sales
(excluding depreciation and amortization)
|
(67,597)
|
(64,852)
|
(49,322)
|
|
(189,569)
|
(96,432)
|
|
Adjusted gross
profit(1)
|
78,192
|
75,474
|
49,969
|
|
223,054
|
90,212
|
|
Adjusted gross
margin(1)
|
53.6 %
|
53.8 %
|
50.3 %
|
|
54.1 %
|
48.3 %
|
|
Adjusted
EBITDA(2)
|
27,458
|
26,434
|
22,275
|
|
77,385
|
34,684
|
|
Net income
(loss)
|
611
|
(1,244)
|
(7,801)
|
|
(3,409)
|
(26,841)
|
|
Adjusted net income
(3)
|
14,753
|
17,528
|
9,849
|
|
41,211
|
6,254
|
|
Net loss per share,
basic and diluted (in $)
|
(0.02)
|
(0.03)
|
(0.06)
|
|
(0.09)
|
(0.19)
|
|
Adjusted Net
(loss)/income per share, basic and diluted (in $)
(3)
|
0.07
|
0.08
|
0.05
|
|
0.19
|
0.03
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding, basic and diluted
|
226,783,493
|
216,181,083
|
203,959,885
|
|
217,721,268
|
185,103,512
|
|
Weighted average number
of common shares outstanding, diluted
|
187,778,646
|
187,778,646
|
126,181,778
|
|
175,519,058
|
126,181,778
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to Adjusted EBITDA(2)
|
|
|
|
|
|
|
|
Net income (loss) for
the period
|
611
|
(1,244)
|
(7,801)
|
|
(3,409)
|
(26,841)
|
|
Depreciation and
amortization
|
13,918
|
13,810
|
13,632
|
|
41,103
|
25,023
|
|
Income tax expense
(recovery)
|
2,979
|
(2,398)
|
2,924
|
|
2,534
|
4,452
|
|
Interest
income
|
(200)
|
(109)
|
(71)
|
|
(411)
|
(485)
|
|
Interest
expense
|
7,122
|
5,254
|
3,141
|
|
17,530
|
4,950
|
|
Rent expense on finance
leases
|
(2,339)
|
(2,227)
|
(1,909)
|
|
(6,718)
|
(3,575)
|
|
Stock-based
compensation
|
5,883
|
8,527
|
9,447
|
|
19,549
|
16,749
|
|
Foreign exchange (gain)
loss
|
1,088
|
(439)
|
(387)
|
|
608
|
4,466
|
|
Time-based earn-out
expense
|
2,669
|
4,515
|
1,393
|
|
9,705
|
3,280
|
|
Change in fair value of
investments
|
-
|
-
|
-
|
|
(602)
|
-
|
|
Gain on disposal of
subsidiaries
|
(5,240)
|
-
|
-
|
|
(5,240)
|
-
|
|
Share of net loss of
associates
|
195
|
90
|
97
|
|
433
|
153
|
|
Transaction,
restructuring, & integration costs expensed
|
772
|
655
|
1,809
|
|
2,303
|
6,512
|
|
Adjusted
EBITDA(2)
|
27,458
|
26,434
|
22,275
|
|
77,385
|
34,684
|
|
|
|
|
|
|
|
|
Attributable to
WELL shareholders
|
20,240
|
19,187
|
16,449
|
|
55,523
|
24,157
|
|
Attributable to
Non-controlling interests
|
7,218
|
7,247
|
5,826
|
|
21,862
|
10,527
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(2)
|
|
|
|
|
|
|
|
Canada and
others
|
5,254
|
3,957
|
3,483
|
|
10,695
|
1,843
|
|
US
operations
|
22,204
|
22,477
|
18,792
|
|
66,690
|
32,841
|
|
Adjusted
EBITDA(2) attributable to WELL
shareholders
|
|
|
|
|
|
|
|
Canada and
others
|
5,008
|
3,796
|
3,277
|
|
10,099
|
1,208
|
|
US
operations
|
15,232
|
15,391
|
13,172
|
|
45,424
|
22,949
|
|
Adjusted
EBITDA(2) attributable to Non-controlling
interests
|
|
|
|
|
|
|
|
Canada and
others
|
246
|
161
|
206
|
|
596
|
635
|
|
US
operations
|
6,972
|
7,086
|
5,620
|
|
21,266
|
9,892
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to Adjusted Net Income (3)
|
|
|
|
|
|
|
|
Net income (loss) for
the period
|
611
|
(1,244)
|
(7,801)
|
|
(3,409)
|
(26,841)
|
|
Amortization of
intangible assets
|
10,620
|
10,841
|
11,116
|
|
31,818
|
20,773
|
|
Time-based earn-out
expense
|
2,669
|
4,515
|
1,393
|
|
9,705
|
3,280
|
|
Stock-based
compensation
|
5,883
|
8,527
|
9,447
|
|
19,549
|
16,749
|
|
Change in fair value of
investments
|
-
|
-
|
-
|
|
(602)
|
-
|
|
Non-controlling
interest included in net income
|
(5,030)
|
(5,111)
|
(4,306)
|
|
(15,850)
|
(7,707)
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(3)
|
14,753
|
17,528
|
9,849
|
|
41,211
|
6,254
|
|
|
|
|
|
|
|
|
Adjusted Net Income
per share (3)
|
0.07
|
0.08
|
0.05
|
|
0.19
|
0.03
|
Notes:
|
(1)
|
Non-GAAP financial
measure and ratio. Adjusted gross profit and
adjusted gross margin do not have any standardized meaning
under IFRS and therefore may not be comparable to similar measures
presented by other issuers. The Company defines adjusted
gross profit as revenue less cost of sales (excluding depreciation
and amortization) and adjusted gross margin as adjusted gross
profit as a percentage of revenue. Adjusted gross profit and
adjusted gross margin should not be construed as an alternative for
revenue or net loss determined in accordance with IFRS. The
Company does not present gross profit in the financial statements
as it is a non-GAAP financial measure. The Company believes
that adjusted gross profit and adjusted gross margin are meaningful
metrics that are often used by readers to measure the Company's
efficiency of selling its products and services.
|
|
|
|
(2)
|
Non-GAAP financial
measure. Earnings before interest, taxes, depreciation,
and amortization ("EBITDA") and Adjusted EBITDA should not
be construed as alternatives to net income/loss determined in
accordance with IFRS. EBITDA and Adjusted EBITDA do not have
any standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers.
The Company defines Adjusted EBITDA as EBITDA (i) less net
rent expense on premise leases considered to be finance leases
under IFRS and (ii) before transaction, restructuring, and
integration costs, time-based earn-out expense, change in fair
value of investments, gain on disposal of assets, share of loss of
associates, foreign exchange gain/loss, and stock-based
compensation expense, and (iii) Revenue precluded from recognition
under IFRS 15 that relates to certain patient services revenue that
the Company believes should be recognized as revenue based on its
contractual relationships. The Company considers Adjusted
EBITDA a financial metric that measures cash that the Company can
use to fund working capital requirements, service future interest
and principal debt repayments and fund future growth
initiatives.
|
|
|
|
(3)
|
Non-GAAP financial
measure and ratio. The Company defines Adjusted Net
Income as net income, after excluding the effects of
stock-based compensation expense, amortization of acquired
intangibles, time-based earnout expense, change in fair value of
investments, non-controlling interests, and revenue precluded from
recognition under IFRS 15 that relates to certain patient services
revenue that the Company believes should be recognized as revenue
based on its contractual relationships. Adjusted Net
Income Per Share is Adjusted Net Income dividend by weighted
average number of shares outstanding. The Company believes
that these non-GAAP financial measure and ratio provide useful
information to analyze our results, enhance a reader's
understanding of past financial performance and allow for greater
understanding with respect to key metrics used my management in
decision making. More specifically, WELL believes Adjusted
Net Income is a financial metric that tracks the earning power of
the business that is available to WELL shareholders. Adjusted Net
income and Adjusted Net income Per Share are not recognized measure
and ratio for financial statement presentation under IFRS and do
not have a standardized meaning. As such, these measures may not be
comparable to similar measures or ratios presented by other
companies. Adjusted Net Income and Adjusted Net Income Per Share
should be considered a supplement to, and not as a substitute for,
or superior to, the corresponding measures calculated in accordance
with IFRS.
|
|
|
|
(4)
|
Non-GAAP financial
measure and ratio. The Company defines Free Cash Flow
Attributable to Shareholders as Adjusted EBITDA Attributable to
Shareholders, less cash interest, less cash taxes and less capital
expenditures.
|
WELL HEALTH TECHNOLOGIES CORP.
Per: "Hamed
Shahbazi"
Hamed Shahbazi
Chief Executive Officer, Chairman and Director
About WELL Health Technologies Corp.
WELL is a practitioner focused digital healthcare company whose
overarching objective is to positively impact health outcomes to
empower and support healthcare practitioners and their patients.
WELL has built an innovative practitioner enablement platform that
includes comprehensive end to end practice management tools
inclusive of virtual care and digital patient engagement
capabilities as well as Electronic Medical Records (EMR), Revenue
Cycle Management (RCM) and data protection services. WELL uses this
platform to power healthcare practitioners both inside and outside
of WELL's own omni-channel patient services offerings. As such,
WELL owns and operates Canada's
largest network of outpatient medical clinics serving primary and
specialized healthcare services and is the provider of a leading
multi-national, multi-disciplinary telehealth offering. WELL is
publicly traded on the Toronto Stock Exchange under the symbol
"WELL" and on OTCQX under the symbol "WHTCF". To learn more about
the Company, please visit: www.well.company.
Forward-Looking Information
This news release may contain "Forward-Looking Information"
within the meaning of applicable Canadian securities laws,
including, without limitation: information regarding the Company's
goals, strategies and growth plans; expectations regarding
continued revenue and EBITDA growth; the expected benefits and
synergies of completed acquisitions; capital allocation plans in
the form of more acquisitions or share repurchases; the
expected financial performance as well as information in the
"Outlook" section herein. Forward-Looking Information are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties,
and contingencies. Forward-Looking Information generally can be
identified by the use of forward-looking words such as "may",
"should", "will", "could", "intend", "estimate", "plan",
"anticipate", "expect", "believe" or "continue", or the negative
thereof or similar variations.
Forward-Looking Information involve known and unknown risks,
uncertainties and other factors that may cause future results,
performance, or achievements to be materially different from the
estimated future results, performance or achievements expressed or
implied by the Forward-Looking Information and the Forward-Looking
Information are not guarantees of future performance. WELL's
comments expressed or implied by such Forward-Looking Information
are subject to a number of risks, uncertainties, and conditions,
many of which are outside of WELL 's control, and undue reliance
should not be placed on such information. Forward-Looking
Information are qualified in their entirety by inherent risks and
uncertainties, including: direct and indirect material adverse
effects from the COVID-19 pandemic; adverse market conditions;
risks inherent in the primary healthcare sector in general;
regulatory and legislative changes; that future results may vary
from historical results; inability to obtain any requisite future
financing on suitable terms; any inability to realize the expected
benefits and synergies of acquisitions; that market competition may
affect the business, results and financial condition of WELL and
other risk factors identified in documents filed by WELL under its
profile at www.sedar.com, including its most recent Annual
Information Form. Except as required by securities law, WELL does
not assume any obligation to update or revise any forward-looking
information, whether as a result of new information, events or
otherwise.
Future-Oriented Financial Information
This news release contains future-oriented financial information
and financial outlook information (collectively, "FOFI") about
estimated annual run-rate revenue, Adjusted EBITDA(2),
and expected profitability for the full year of 2022, all of which
are subject to the same assumptions, risk factors, limitations, and
qualifications as set out in the above paragraph. The actual
financial results of WELL may vary from the amounts set out herein
and such variation may be material. WELL and its management believe
that the FOFI has been prepared on a reasonable basis, reflecting
management's best estimates and judgments. However, because this
information is subjective and subject to numerous risks, it should
not be relied on as necessarily indicative of future results.
Except as required by applicable securities laws, WELL undertakes
no obligation to update such FOFI. FOFI contained in this news
release was made as of the date hereof and was provided for the
purpose of providing further information about WELL's anticipated
future business operations on an annual basis. Readers are
cautioned that the FOFI contained in this news release should not
be used for purposes other than for which it is disclosed
herein.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in policies of the TSX) accepts responsibility for
the adequacy or accuracy of this release.
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SOURCE WELL Health Technologies Corp.