- WELL achieved record quarterly revenues of $169.4 million in Q1-2023, an increase of 34% as
compared to Q1-2022 driven by accelerating organic growth of
21%.
- WELL achieved Adjusted EBITDA(1) of $26.7 million in Q1-2023, an increase of 14% as
compared to Q1-2022.
- WELL achieved a total of 1.4 million patient
interactions(3) in Q1-2023 representing an annualized
run-rate of approximately 5.6 million.
- WELL increases its 2023 annual guidance for revenue to be
between $690 million and $710 million, and reaffirms its guidance for 2023
Adjusted EBITDA increasing by more than 10% over 2022 levels.
VANCOUVER, BC, May 12, 2023
/CNW/ - 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 interim consolidated
financial results for the quarter ended March 31, 2023.
Hamed Shahbazi, Founder and CEO
of WELL commented, "Q1-2023 was an exceptional quarter that
exceeded all expectations and demonstrated the strength, depth and
quality of our technology enabled care delivery platforms. WELL
achieved 34% Year-over-Year revenue growth, largely driven by our
organic growth which accelerated to 21% in the first quarter, the
highest level of organic growth we've had in several quarters. This
quarter also marks our 17th consecutive quarter of
record revenue. Our profitability and cashflow profile continue to
be robust, as we achieved $10.8
million in Adjusted Free Cash Flow(1) to
shareholders in Q1-2023, notwithstanding elevated interest fees.
Given the strength of our outlook, we are pleased to increase
revenue guidance again as we have for each of the past five
quarters."
Mr. Shahbazi further added, "At the heart of our culture, is our
purpose to passionate care and support healthcare providers. WELL
exited Q1 2023 with over 3,000 providers and clinicians delivering
care in our physical and virtual clinics and more than 28,000
providers supported by our SaaS and Technology Services. We are
determined to faithfully support and 'tech enable' healthcare
professionals with the very best technology available which now
includes significant investments in Artificial Intelligence, or AI,
based products and services that enhance provider productivity and
effectiveness."
Eva Fong, WELL's Chief Financial
Officer, added, "WELL has continued to demonstrate continuous
growth, can drive significant cashflow to shareholders and lower
its leverage levels effectively. I am pleased to announce that we
have reduced our leverage ratio(4) of net debt to
shareholder Adjusted EBITDA from 3.5x at the end of Q1-2022 to 2.6x
as of the end of Q1-2023. With our leadership position in the
digital healthcare industry and continued cash flow generation, we
are well positioned for continued success in 2023 and beyond."
First Quarter 2023 Financial Highlights:
- WELL achieved record quarterly revenue of $169.4 million in Q1-2023, an increase of 34% as
compared to revenue of $126.5 million
generated in Q1-2022. This growth was mainly driven by organic
growth of 21% but also included inorganic growth during the past
year.
- Canadian Patient Services revenue was $50.9 million in Q1-2023, an increase of 23% as
compared to $41.3 million in
Q1-2022.
- US Patient Services revenue was $99.2
million in Q1-2023, an increase of 38% as compared to
$72.1 million in Q1-2022.
- SaaS and Technology Services revenue was $19.3 million in Q1-2023, an increase of 47% as
compared to $13.1 million in
Q1-2022.
- Adjusted Gross Profit(1) was $86.2 million in Q1-2023, an increase of 24% as
compared to Adjusted Gross Profit(1) of $69.4 million in Q1-2022.
- Adjusted Gross Margin(1) percentage was 50.9% during
Q1-2023 compared to Adjusted Gross Margin(1) percentage
of 54.8% in Q1-2022.
- Adjusted EBITDA(1) was $26.7
million in Q1-2023, an increase of 14% as compared to
Adjusted EBITDA(1) of $23.5
million in Q1-2022 which was supported by more than
$1.7 million in pandemic related
government incentives.
- Adjusted EBITDA to WELL shareholders was $20.6 million in Q1-2023, an increase of 28% as
compared to Adjusted EBITDA to WELL shareholders of $16.1 million in Q1-2022.
- Adjusted Net Income(1) was $14.1 million, or $0.06 per share in Q1-2023, as compared to
Adjusted Net Income(1) of $8.9
million, or $0.04 per share in
Q1-2022.
First Quarter 2023 Patient Visit Metrics:
WELL achieved a total of 1.4 million patient
interactions(3) in Q1-2023, representing approximately
5.6 million patient interactions on an annualized run-rate. WELL
achieved a total of 975,500 patient visits in Q1-2023, an increase
of 25% as compared to 778,910 patient visits in Q1-2022. Canadian
Patient Services visits increased 14% while US Patient Services
visits increased 40%, on a year-over-year basis. Growth in patient
visits over the past year was primary driven by organic growth but
included some acquisition related activity as well.
First Quarter 2023 Business Highlights:
On March 1, 2023, the Company
completed the acquisition of 51% interest in Affiliated Tampa
Anesthesia Associates, LLC ("ATAA") for cash consideration
of $6.1 million plus transaction costs. ATAA services two ASCs
and is staffed by thirty-four credentialled practitioners.
On March 2, 2023, the Company's
venture capital arm, WELL Ventures, led an investment round
alongside its partner Horizon Ventures and a syndicate of leading
venture capital firms, in doctorly GmbH ("doctorly"), a
medical practice management software provider based in Germany. As part of the investment and
strategic alliance agreements, the Ocean platform, created by
WELL's wholly owned subsidiary OceanMD, will be used as the
exclusive booking and practice engagement platform for
doctorly.
Events Subsequent to March 31,
2023:
On April 26, 2023, WELL Ventures
announced the launch of its AI Investment program, focused on
artificial intelligence and its applications in helping support
healthcare providers with next generation tools. The WELL AI
Investment Program will provide investees with capital as well as
extensive support from WELL's ecosystem to help develop, test,
refine, secure, de-risk and integrate the most promising such
technologies into the Canadian healthcare ecosystem at scale.
WELL's goal is to make a minimum of ten AI related investments of
at least $250,000 each.
On May 10, 2023, the Company
launched WELL AI Voice, a transformational ambient scribe product
that leverages generative AI to dramatically reduce a provider's
administrative burden by privately and securely capturing a patient
encounter conversation and automatically generating a succinct and
medically relevant chart note for the patient interaction.
Outlook:
WELL is expecting its strong performance in the first quarter to
continue across all its business units and for the entire Company
as a whole. WELL's objective is to invest in and achieve
significant growth while effectively managing its costs and
delivering cashflow to shareholders. Management is pleased to
provide the following guidance for 2023:
- Annual revenue between $690
million and $710 million,
representing 21% to 25% annual growth as compared to 2022. Annual
revenue guidance only includes announced acquisitions.
- Annual Adjusted EBITDA is expected to increase by more than 10%
over 2022 levels allowing the company to invest in growth and
continue to acquire market share.
WELL expects to continue to grow its Canadian Patient Services
business both organically and inorganically and increase its market
leadership as the country's first pan-Canadian clinical network
with a highly integrated network of tech-enabled outpatient
healthcare clinics across the country. Meanwhile, growth in the
Company's US Patient Services business is expected to be primarily
driven by organic growth while executing on highly disciplined
capital allocation opportunities.
As a company with deep tech experience and capabilities, WELL
has also made investments in AI technologies a key priority within
the Company and expects to develop compelling new products and
enhancements to roll out to WELL's vast provider network.
WELL's strong organic growth and robust cash flow profile allows
the Company to continue to successfully execute on its acquisition
plans. Management expects additional cash flows generated by the
Company will be re-invested in the business and allocated in a
disciplined manner.
WELL is a purpose-driven business that aims to transform the
world for the better, as such the Company has embarked on an
ongoing ESG (Environmental, Social and Governance) program. The
Company is on track to publishing its annual ESG report in mid-2023
highlighting WELL's ESG strategy, reporting initiatives and
targeted actions. For more information on WELL's ESG program,
please visit: https://well.company/esg-report
Conference Call:
WELL will hold a conference call to discuss its 2023 First
Quarter financial results on Friday, May 12,
2023, at 1:00 pm ET
(10:00 am PT). Please use the
following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local), 1-888-664-6383 (Toll-Free)
or +1-416-764-8650 (International).
The conference call will also be simultaneously webcast and can
be accessed at the following audience URL:
https://well.company/events.
Selected Unaudited Financial Highlights:
Please see SEDAR for complete copies of the Company's condensed
interim consolidated financial statements and interim MD&A for
the quarter ended March 31, 2023.
|
|
Quarter ended
|
|
March 31,
2023
|
December
31,
2022
|
March
31,
2022
Restated
|
$'000
|
$'000
|
$'000
|
Revenue
|
169,425
|
156,513
|
126,508
|
Cost of
sales (excluding depreciation and amortization)
|
(83,256)
|
(76,276)
|
(57,120)
|
Adjusted
Gross Profit(1)
|
86,169
|
80,237
|
69,388
|
Adjusted
Gross Margin(1)
|
50.9 %
|
51.3 %
|
54.8 %
|
Adjusted
EBITDA(1)
|
26,683
|
27,174
|
23,493
|
Net income (loss)
|
(10,627)
|
22,084
|
(2,776)
|
Adjusted
Net Income (1)
|
14,125
|
12,493
|
8,930
|
Earnings (loss) per share, basic and diluted (in $)
|
(0.06)
|
0.09
|
(0.04)
|
Adjusted
Net Income per share, basic
and diluted (in
$) (1)
|
0.06
|
0.05
|
0.04
|
|
|
|
|
Weighted
average number of
common shares outstanding, basic and
diluted
|
232,171,126
|
229,505,226
|
210,014,960
|
|
|
|
|
Reconciliation of net income (loss) to Adjusted EBITDA:
|
|
|
|
Net income
(loss) for the period
|
(10,627)
|
22,084
|
(2,776)
|
Depreciation and
amortization
|
14,522
|
14,100
|
13,375
|
Income
tax expense (recovery)
|
192
|
(3,684)
|
1,953
|
Interest
income
|
(188)
|
(238)
|
(102)
|
Interest
expense
|
7,774
|
7,761
|
5,154
|
Rent
expense on finance
leases
|
(2,490)
|
(2,458)
|
(2,152)
|
Stock-based
compensation
|
6,599
|
4,934
|
5,139
|
Foreign
exchange (gain) loss
|
(284)
|
61
|
(41)
|
Time-based
earnout expense
|
10,854
|
(25,472)
|
2,521
|
Change in fair
value of investments
|
-
|
-
|
(602)
|
Gain
on disposal of
subsidiaries
|
-
|
34
|
-
|
Share of
net loss
(income) of associates
|
97
|
(37)
|
148
|
Loss
on transition of
billings service provider (2)
|
-
|
8,495
|
-
|
Transaction,
restructuring and integration costs expensed
|
234
|
192
|
876
|
Other
items
|
-
|
1,402
|
-
|
Adjusted EBITDA(1)
|
26,683
|
27,174
|
23,493
|
Attributable
to WELL shareholders
|
20,632
|
21,090
|
16,096
|
Attributable
to Non-controlling interests
|
6,051
|
6,084
|
7,397
|
Adjusted EBITDA(1)
|
|
|
|
WELL
Corporate
|
(4,525)
|
(4,086)
|
(4,114)
|
Canada
and others
|
12,238
|
9,094
|
5,598
|
US
operations
|
18,970
|
22,166
|
22,009
|
Adjusted EBITDA(1) attributable to WELL shareholders
|
WELL
Corporate
|
(4,525)
|
(4,086)
|
(4,114)
|
Canada
and others
|
11,773
|
8,916
|
5,409
|
US
operations
Adjusted EBITDA(1) attributable to Non-controlling interests
|
13,384
|
16,260
|
14,801
|
Canada
and others
|
465
|
178
|
189
|
US
operations
|
5,586
|
5,906
|
7,208
|
Reconciliation of net income (loss) to Adjusted Net Income:
|
|
|
|
Net income
(loss) for the period
|
(10,627)
|
22,084
|
(2,776)
|
Amortization
of intangible assets
|
11,030
|
11,001
|
10,357
|
Time-based
earnout expense
|
10,854
|
(25,472)
|
2,521
|
Stock-based
compensation
|
6,599
|
4,934
|
5,139
|
Change in fair
value of investments
|
-
|
-
|
(602)
|
Other
items
|
-
|
1,402
|
-
|
Non-controlling interest included in
net income (loss)
|
(3,731)
|
(1,456)
|
(5,709)
|
Adjusted Net Income (1)
|
14,125
|
12,493
|
8,930
|
Adjusted Net Income
per share (1)
|
0.06
|
0.05
|
0.04
|
Footnotes:
(1) This is a non-GAAP financial measure
and ratio.
In addition to results reported in accordance with IFRS, the
Company uses certain non-GAAP financial measures as supplemental
indicators of its financial and operating performance. These
non-GAAP financial measures include Adjusted Net Income, Adjusted
Net Income Per Share, Adjusted EBITDA, Adjusted Gross Profit,
Adjusted Gross Margin, and Adjusted Free Cash Flow. The Company
believes these supplementary financial measures reflect the
Company's ongoing business in a manner that allows for meaningful
period-to-period comparisons and analysis of trends in its
business.
Adjusted Net Income and Adjusted Net Income per
Share
The Company defines Adjusted Net Income as net income
(loss), after excluding the effects of stock-based compensation
expense, amortization of acquired intangible assets, 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 divided by weighted average number of shares
outstanding. The Company believes that these non-GAAP financial
measures 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 by
management in decision making. More specifically, the Company
believes Adjusted Net Income is a financial metric that tracks the
earning power of the business that is available to WELL
shareholders.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA
are non-GAAP measures. EBITDA represents net income (loss)
before interest, taxes, depreciation and amortization. The Company
defines Adjusted EBITDA as EBITDA (i) less net rent expense on
premise leases considered to be finance leases under IFRS and
before (ii) transaction, restructuring, and integration costs,
time-based earn-out expense, change in fair value of investments,
share of income (loss) of associates, foreign exchange gain/loss,
and stock-based compensation expense, (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, and (iv) gains/losses that
are not reflective of ongoing operating performance. The Company
considers Adjusted EBITDA to be 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. EBITDA and Adjusted EBITDA
should not be considered alternatives to net income (loss), cash
flow from operating activities or other measures of financial
performance in accordance with IFRS.
Adjusted Gross Profit and Adjusted Gross Margin
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 income (loss) determined in
accordance with IFRS. The Company does not present gross profit in
its consolidated 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.
Adjusted Free Cash Flow
The Company defines Adjusted
Free Cash Flow Attributable to Shareholders as Adjusted EBITDA
Attributable to Shareholders, less cash interest, less cash taxes
and less capital expenditures.
Adjusted Net income, Adjusted Net Income per Share, Adjusted
EBITDA, Adjusted Gross Profit, Adjusted Gross Margin and Adjusted
Free Cash Flow are not recognized measures for financial statement
presentation under IFRS and do not have standardized meanings. As
such, these measures may not be comparable to similar measures
presented by other companies and should be considered as
supplements to, and not as substitutes for, or superior to, the
corresponding measures calculated in accordance with IFRS.
(2) In the quarter ended December 31, 2021, the Company's wholly-owned
subsidiary, CRH, entered into a relationship with a new billing
service provider. Due to the one-time implementation and transition
of billings from the previous billing service provider to the new
billing service provider, CRH experienced significant delays in its
cash collections, including delays in and non-payment of accounts
receivable relating to those services billed and collected by the
billing service providers. Subsequently, the predecessor billing
service provider has also become inoperative. As a result of this
transition, CRH incurred credit losses on accounts receivable
billed under the predecessor billing provider and was precluded
from recognizing certain patient services revenue under IFRS 15 due
to the temporary decline in the pace of historical collection
activity. The loss of $8,495 has been
excluded from the calculation of Adjusted EBITDA for the year ended
December 31, 2022 as the Company
believes this is non-recurring and not reflective of ongoing
operations.
(3) Patient Interactions are defined as
Patient Visits plus Technology Interactions.
(4) Leverage ratio is defined as Net Debt
divided by trailing twelve months (TTM) Shareholder Adjusted
EBITDA, where Net Debt is calculated as Total Debt less cash and
excluding convertible debt.
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.
WELL's overarching mission is to positively impact health outcomes
by leveraging technology to empower healthcare practitioners and
their patients globally. WELL exists to enable healthcare
practitioners with best-in-class technology and services. WELL has
built the most comprehensive end-to-end healthcare system across
Canada including the nation's
largest network of clinics supporting primary care, specialized
care, and diagnostics services. In the
United States, WELL provides omni-channel healthcare
services and solutions targeting specialized markets such as the
gastrointestinal market, women's health, primary care, and mental
disorders. In addition to providing patient services, WELL
develops, integrates, and sells its own suite of technology
software and solutions to medical clinics and healthcare
practitioners. WELL's practitioner enablement platform includes:
Electronic Medical Records ("EMR"), telehealth platforms, practice
management, billing, Revenue Cycle Management ("RCM"), digital
health apps and data protection solutions. WELL is publicly traded
on the Toronto Stock Exchange under the symbol "WELL" and on
the OTC Exchange under the symbol "WHTCF". To learn more
about the Company, please visit: www.well.company.
Forward-Looking Statements
This news release may contain "Forward-Looking Information"
within the meaning of applicable Canadian securities laws,
including, without limitation: its patient interaction run-rate and
annual guidance; 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.
This news release contains future-oriented financial information
and financial outlook information (collectively, "FOFI") about
estimated annual run-rate revenue and Adjusted EBIDTA, 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.