Nova Leap Health Corp. Reports Second Quarter 2018 Financial Results and Provides Corporate Update
August 23, 2018 (Source) — NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”), a company focused on the home health care industry, is pleased to announce the release of financial results for the second quarter ended June 30, 2018. All amounts are in United States dollars unless otherwise specified.
Nova Leap Second Quarter Financial Results
Financial highlights for the quarter ended June 30, 2018 included the following:
|Revenue||$ 2,425,066||$1,265,021||+ 91.7%|
|Gross Margin||$786,321||$444,544||+ 76.9%|
|Net loss||$171,463||$438,742||– 60.9%|
|Total one-time or non-cash items included in net loss comprised of the following:||$135,364||$255,688||-47.0%|
|• Acquisition related expenses||$41,255||$171,412||– 75.9%|
|• Amortization||$151,514||$63,616||+ 138.2%|
|• Stock-based compensation||$26,567||$81,580||– 67.4%|
|• Foreign exchange gain||($83,972)||($60,920)||+ 37.8%|
|Annual recurring revenue run rate (defined below)||$11,400,000||$7,600,000||+ 50.0%|
Other highlights for the quarter ended June 30, 2018 included the following:
- The Company reported double digit revenue growth for the fourth consecutive quarter;
- Nova Leap expanded into Canada as it closed the previously announced acquisition of Always Home Homecare Services Inc., located in Halifax, Nova Scotia, on June 1, 2018;
- Each of the United States and Canadian operating segments were profitable during the second quarter;
- Closed the previously announced acquisition of Home Health Solutions located in Holyoke, Massachusetts on April 14, 2018;
- Closed the first tranche of a brokered private placement in April 2018 and raised gross proceeds of $798,643 ($1,006,050 CAD);
- Closed the final tranche of a brokered private placement in May 2018 and raised gross proceeds of $1,843,837 ($2,387,400 CAD);
- Closed a non-brokered private placement in May 2018 and raised gross proceeds of $671,269 ($869,160 CAD).
“Our expansion in New England has been going very well,” said Chris Dobbin, President and CEO of Nova Leap, “It was an opportune time for us to expand into Canada and we expect our growth to continue.”
This news release should be read in conjunction with the interim condensed consolidated financial statements for the three and six months ended June 30, 2018, notes to the financial statements, and management’s discussion and analysis, which have been filed on SEDAR.
- Management had previously announced its updated plans, during the release of Q1 results and the Company’s corporate update, to complete up to five acquisitions in 2018. Three acquisitions have been closed in 2018 to date;
- On August 13, 2018, subsequent to Q2, Nova Leap announced the execution of a definitive agreement for the acquisition of a New England based home health care business;
- On August 20, 2018, subsequent to Q2, Nova Leap announced the execution of a definitive agreement for the acquisition of a Massachusetts based home care business;
- Management continues to explore and evaluate further opportunities for the acquisition of profitable home health care businesses;
- Management had previously indicated that it anticipated Nova Leap would exceed a $10 million revenue run rate by the end of Q2 2018 and is pleased to report that has been accomplished as the Q2 revenue run rate was $11.4 million;
- Management had also previously indicated that it was targeting to exit 2018 with a revenue run rate range of $14 million to $15 million. The two most recent definitive agreement announcements place the Company on track to achieve this target.
About Nova Leap
The Home Care Providers industry is one of the fastest growing healthcare industries in Canada and the United States. Home care saves patients billions of dollars every year by treating them in their own homes instead of in hospitals. An aging population, the prevalence of chronic disease, growing physician acceptance of home care, medical advancements and a movement toward cost-efficient treatment options from public and private payers have all fostered industry growth. Nova Leap is focused on a highly fragmented market of small privately-held companies providing patients one on one care in their homes, facilities or hospice. Nova Leap’s post-acquisition organic growth strategy is to increase annual revenue per location through a combination of increased employee investment, including training, focused sales and marketing efforts, billing rate increases, expansion of geographical coverage, and improved referral sources.
Annual recurring revenue run rate is the expected annualized recurring revenue based on the most recent month’s actual revenue for current operations multiplied by 12.
For acquisitions that closed subsequent to the reporting period or are expected to close and have been disclosed in a press release as material information, annual recurring revenue run rate is the expected annualized recurring revenue based on the most recent month’s revenue for current operations multiplied by 12 plus the annual revenue based on the most recent financial information available for the newly acquired operations or operations which are expected to close and have been disclosed in a press release as material information.
FORWARD LOOKING INFORMATION:
Certain information in this press release may contain forward-looking statements, such as statements regarding future expansions and cost savings, the Company’s expected 2018 revenue run rate and plans regarding future acquisitions and financings. This information is based on current expectations and assumptions, including assumptions concerning the Company’s ability to integrate its acquired businesses and maintain previously achieved service hour and revenue levels, that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Risks that could cause results to differ from those stated in the forward-looking statements in this release include regulatory changes affecting the home care industry, unexpected increases in operating costs and competition from other service providers. All forward-looking statements, including any financial outlook or future-oriented financial information, contained in this press release are made as of the date of this release and included for the purpose of providing information about management’s current expectations and plans relating to the future. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company’s filings with the Canadian securities regulators, which filings are available at www.sedar.com.
Neither 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.