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Focused on the 90 billion dollar home care industry, Nova Leap Health makes 11th acquisition

As the baby boomers grow older the need for home care is accelerating. Since COVID-19 began, more and more people are considering in-home services for aged or incapacitated care, including dementia. The benefits of home care include independence, less exposure to others that might be infectious and surprisingly, often results in lower cost to everyone involved. With almost 80,000 Americans turning 65 years old each week, it is not surprising that the home care industry is one of the fastest-growing industries in the U.S. with a US$89.2 billion market size.

Nova Leap Health Corp. (TSXV: NLH) (“Nova Leap”) is a home health care services company operating in North America. Nova Leap acquires, manages, and builds home care service companies that provide support to clients and their families at home. Some of the home care services include dementia care, companionship, personal and respite care, cooking and meal preparation, light housekeeping, transportation, medication reminders, and medication administration by nursing staff. Nova Leap’s focus is to give their clients independence and quality of life in their own homes.

Currently Nova Leap has home health care services operating in 6 different U.S. states: Vermont, New Hampshire, Massachusetts, Rhode Island, Oklahoma, Ohio as well as Nova Scotia, Canada. In all, Nova Leap has acquired ten home health care businesses across the U.S. and Canada.

This month Nova Leap announced  another acquisition in New England to be made for total consideration of US$660,000. The target company had unaudited revenues of approximately US$1.697 million and EBITDA of approximately US$155,000, for the year ended September 30, 2019. Regarding the new acquisition Nova Leap’s CEO Chris Dobbin said: “Nova Leap is well positioned to capitalize on the demand for private pay in-home care and we expect further growth from the region.”

Location of Nova Leap’s current ten home health care businesses

Source: company presentation

Despite lower revenues impacted by COVID-19, Nova Leap achieved record operating cash flows

As reported in early October 2020, Nova Leap achieved a solid Q2 result despite slightly lower revenues and a small adjusted net loss of US$159,337 for Q2 2020. Investors should recall that Q2 2019 felt the worst impact from COVID-19 due to lockdowns. Nova Leap’s Q2 2020 revenue was US$3,983,402, 6.3% lower than Q2 2019 revenues of US$4,249,781 and 13.6% lower than Q1 2020 revenues of US$4,611,140. At the same time, Nova Leap achieved record operating cash flows of US$596,936 for Q2 2020 and Nova Leap’s cash balance hit a record company level of US$2,754,087 as of June 30, 2020. Gross margins improved slightly from 33.41% in Q1 2020 to 35.10% in Q2 2020 and Nova Leap paid off 21.9% of its combined schedule 1 bank debt and promissory notes relating to prior acquisitions.

Nova Leap Health has been steadily growing revenues (with a recent COVID-19 dip) with a strategy of acquisitions and organic growth

 

Source: company presentation

Approval received for Paycheck Protection Program loans from the CARES ACT in response to the COVID-19 pandemic

In August 2020, the Company was approved for Paycheck Protection Program loans at the low rate of just 1% for a total loan amount of US$1.976 million. The loans are repayable monthly over a five-year period beginning in 2021. If certain conditions are met, the loans may be partially or fully forgiven.

Nova Leap’s President and CEO’s view

“The home care industry has been an expanding industry for several years driven by an aging population,” said Chris Dobbin, President & CEO of Nova Leap. “Our company, like many in our industry, is preparing for an even greater anticipated demand for in-home care that we expect will last for several years. For investors following world events, it is evident that the pandemic has taken an unfortunate toll on many living in senior facilities. As a result, we expect many older adults and their families to opt for in-home care.”

COVID-19 has accelerated interest in at-home health care services, with many not willing to risk visiting a hospital or an assisted-living care facility. Nova Leap is well positioned to supply this increasing need with a growing network of ten home health care businesses. Currently NLH trades on the TSX Venture and has a market cap of approximately C$22m (~US$ 17.6m), which is about the same as their 2019 sales of US$17.4m.




Chris Dobbin on Nova Leap Health’s focus on dementia care

“Dementia care is very important to us. In some of our agencies, upward of 75% of our clients have some form of dementia. After we make an acquisition, we bring a very specific dementia training program to that agency. We train our senior people, they get certified through a third party and then they train all of our caregivers and we pay our caregivers to take that training. It has a tremendous impact both on retention of our caregivers and also directly to the families that we provide service to.” States Chris Dobbin, President and CEO of Nova Leap Health Corp. (TSXV: NLH), in an interview with InvestorIntel’s Tracy Weslosky.

Chris went on to provide an update on Nova Leap’s expansion into South Central USA with an acquisition in Oklahoma. He said that the company has been very successful in New England and saw an opportunity in a home care business in Oklahoma. Nova Leap considers the acquisition to be a meaningful investment in a new geographic area that it intends to expand upon. Chris also said that Nova Leap has announced record financial results for the third quarter and has seen nine consecutive quarters of revenue growth. The company has made two meaningful acquisitions at the beginning of the fourth quarter and expects to deliver a record revenue growth going forward.

To access the complete interview, click here

Disclaimer: Nova Leap Health Corp. is an advertorial member of InvestorIntel Corp.




Chris Dobbin on Nova Leap’s record financial results for third quarter 2019

“When it comes to our (business) model. Essentially we are looking for small home care businesses primarily in the US. They are generally between a million to three million dollars in revenue. They are in secondary market where its less competitive. We have been buying in New England and most recently in South Central. These businesses have been around for 10 to 15 years. They are predominantly owned by a founder who is looking for a succession plan. We identify these businesses as part of our role up strategy. We look to make incremental improvement weather it be revenue or expense management or training or marketing. Every agency is little bit different and unique but we bring those incremental improvements and as we add these small businesses to a larger platform we start to see payoffs from a financial perspective.” States Chris Dobbin, President and CEO of Nova Leap Health Corp. (TSXV: NLH), in an interview with InvestorIntel’s Tracy Weslosky.

Chris went on to say that Nova Leap has had nine consecutive quarters of revenue growth and the management is delivering results that they said they would do. Chris further added that Nova Leap has made three aquisitions this year and it continues to pursue more acquisitions. The company recently made an acquisition in Massachusetts and expanded to South Central USA with an acquisition in Oklahoma.

To access the complete interview, click here

Disclaimer: Nova Leap Health Corp. is an advertorial member of InvestorIntel Corp.




Chris Dobbin on Nova Leap’s 877% increase in revenue in 2018

“We were pretty open with the market in terms of what our plans were. In the tail end of 2017 we said that we would do up to four acquisitions in 2018. We ended up doing five. Our operations are performing well in the US. We made one acquisition in Canada in Halifax last June. We have come back out and said we plan on doing up to four acquisitions again in 2019. So, a lot of our revenue has been driven by the acquisitions. We have made some really good acquisitions which will lead to some long-term growth for the company.” States Chris Dobbin, President and CEO of Nova Leap Health Corp. (TSXV: NLH), in an interview with InvestorIntel’s Tracy Weslosky.

Tracy Weslosky: Chris you have one of the best performing stocks. In 2017 you had a million in revenue and you have jumped to over 10 million in one year. Is that correct?

Chris Dobbin: That is right. Close to 900% improvement in revenue which we report in US dollars.

Tracy Weslosky: I think I read in your most recent fourth quarter results, a 877% lift. Can you tell us a little about the highlights from this fourth quarter?

Chris Dobbin: It really goes back to our strategy to be honest. We were pretty open with the market in terms of what our plans were. In the tail end of 2017 we said that we would do up to four acquisitions in 2018. We ended up doing five. Our operations are performing well in the US. We made one acquisition in Canada in Halifax last June. We have come back out and said we plan on doing up to four acquisitions again in 2019. So, a lot of our revenue has been driven by the acquisitions. We have made some really good acquisitions which will lead to some long-term growth for the company.

Tracy Weslosky: If you did ten times last year. What do we expect for 2019? Are you going to do it again?

Chris Dobbin: Ten times might be a bit aggressive, but we have certainly indicated to the market that we plan of growing by at least 50-100%. That’s not really from the US$ 10 million that we reported in 2018. That really has to do more with our annualized revenue run rate now which is north of US$ 15 million and with the latest acquisition that we just announced, yet to close but we are getting it close, we would be close to US$ 18 million in revenue.

Tracy Weslosky: For those of you out there in InvestorIntel may not understand or have never heard about Nova Leap Health story before. Chris can you give us kind of an overview about what the company vision is because people like me, we are fallen in love with your story.

Chris Dobbin: We are in the home care services industry. We help people, usually seniors, within their home. A lot of our client base has some form of dementia, but we are really after a demographic that is fast growing. It is sort of the biggest change in our lifetime from a demographic perspective. We have people that have some form of long term chronic condition that need assistance within their home and we provide it…to access the complete interview, click here

Disclaimer: Nova Leap Health Corp. is an advertorial member of InvestorIntel Corp.