Nobilis Health Reports Fourth Quarter and Full Year 2017 Financial Results

Published: Mar 08, 2018

HOUSTON, March 8, 2018 /PRNewswire/ -- Nobilis Health Corp. (NYSE American: HLTH) ("Nobilis" or the "Company") today announced financial and operational results for the fourth quarter and full year ended December 31, 2017.

Full Year and Fourth Quarter Highlights

  • Full year total revenue of $299.7 million, a 4.9% increase over prior year
  • Full year net income of $3.8 million, compared to prior year net income of $6.4 million; net income impacted by $6.2 million deferred tax asset adjustment
  • Full year Adjusted EBITDA1 of $41.4 million, an increase of 21.9% over the prior year Adjusted EBITDA1 of $34.0 million
  • Full year cash from operations of $26.4 million, compared to $1.6 million in the prior year
  • Fourth quarter total revenues of $86.8 million, compared to $101.9 million in the prior year
  • Fourth quarter net income of $3.6 million, compared to $9.4 million in the prior year; net income impacted by $6.2 million deferred tax asset adjustment
  • Fourth quarter Adjusted EBITDA1 of $22.6 million, an increase of 8.9% over the prior year Adjusted EBITDA1 of $20.8 million

"We are pleased to report 2017 year over year growth in revenue and Adjusted EBITDA of 4.9% and 21.9%, respectively," said Harry Fleming, Chief Executive Officer of Nobilis Health. "We made great progress reducing overall costs last year as evidenced by improvements in gross margins, operating income and net income, absent the impact of tax reform. We achieved this despite an estimated loss of $15-$20 million of revenues in the Houston market resulting from Hurricane Harvey. 2017 was a big year for us--we made significant progress on our in-network strategy with the acquisitions of Elite Surgical Affiliates, Hamilton Vein Center, DeRosa Medical and Mountain West Surgery Center. As we enter 2018, we will continue to focus on improving operational efficiency, increasing in-network revenues and expanding the continuum of care we offer our patients through enhanced alignment with primary care physician practices and growth of our vertically integrated services lines."

Fourth Quarter 2017 Financial Results

Total revenue for the fourth quarter of 2017 was $86.8 million, a 14.8% decrease over the same period in the prior year. Revenues in the fourth quarter of 2017 continued to be impacted by Hurricane Harvey (Houston, Texas is our largest market) and the shift away from low margin lab business. Total case volume decreased by 161 cases to 5,846 cases in the fourth quarter of 2017, as compared to the same period in the prior year. Fourth quarter 2017 revenue per case decreased to $14,848 as compared to prior year's revenue per case of $16,966.

Net income attributable to Nobilis for the fourth quarter of 2017 was $3.6 million, or $0.05 per fully diluted share, as compared to the prior period of $9.4 million, or $0.12 per fully diluted share. Fourth quarter net income was impacted by $6.2 million deferred tax asset write-down. Absent of this write-down, net income for the fourth quarter would have been $9.8 million.

Adjusted EBITDA1 for the fourth quarter of 2017, which adds back certain non-cash and non-recurring expenses, was $22.6 million, an increase of 8.9% over Adjusted EBITDA1 of $20.8 million for the same period in the prior year.

Total cash was $22.5 million, accounts receivable was $144.5 million and total debt was $120.9 million as of December 31, 2017, compared to $24.6 million, $125.0 million and $67.8 million, respectively, at December 31, 2016. Operating cash for the year was $26.4 million versus $1.6 million in 2016.

Full Year 2017 Financial Results

Total revenue for 2017 increased to $299.7 million, a 4.9% increase over the prior year. Total case volume decreased by 1,184 cases, or 5.9%, to 18,757 in 2017, compared to the prior year. Revenue per case increased to $15,979 for 2017, as compared to $14,329 in the prior year, reflecting the impact of higher acuity case mix.

Net income attributable to Nobilis for 2017 was $3.8 million, or $0.05 per fully diluted share, as compared to $6.4 million, or $0.08 per fully diluted share, in the same period the prior year. Absent the effects of recent tax reform legislation, net income for 2017 would have been $10.0 million.

Adjusted EBITDA1 for the year ended 2017, which adds back certain non-cash and non-recurring expenses, was $41.4 million, a 21.9% increase over Adjusted EBITDA1 of $34.0 million for the prior year.

Full Year 2018 Guidance

  • Revenue in the range of $345.0 million to $355.0 million
  • Adjusted EBITDA of $57.0 million to $62.0 million

Conference Call Information

Nobilis Health will host a conference call on March 8, 2018, at 8:00 a.m. CT (9:00 a.m. ET) to discuss its financial results for the fourth quarter and full year 2017. To participate in the conference call, please dial (866) 393-4306 in the U.S. and Canada, and +1 (734) 385-2616 internationally. Please enter conference ID 9329879. There will be a livestream of the conference call available at: http://investors.nobilishealth.com/investors/events-and-presentations/.

About Nobilis Health Corp.

Nobilis Health (www.Nobilishealth.com) is a full-service healthcare development and management company, with more than 30 locations across Texas and Arizona, including hospitals, ambulatory surgery centers, and multi-specialty clinics. In addition, Nobilis Health partners with more than 30 facilities across the country. Marketing nine independent brands, Nobilis Health deploys a unique patient acquisition strategy driven by proprietary, direct-to-consumer marketing technology, focusing on a specified set of procedures that are performed at its facilities by local physicians. Nobilis Health's business model connects patients with physicians and delivers the highest quality healthcare.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of Canadian and United States securities laws, including the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts and may be identified by the use of words such as "may," "believe," "will," "expect," "project," "estimate," "anticipate," "plan" or "continue." These forward-looking statements are based on current plans and expectations and are subject to a number of risks, uncertainties and other factors which could significantly affect current plans and expectations and our future financial condition and results. These factors, which could cause actual results, performance and achievements to differ materially from those anticipated, include, but are not limited to our ability to successfully maintain effective internal controls over financial reporting; our ability to implement our business strategy, manage the growth in our business, and integrate acquired businesses; the risk of litigation and investigations, and liability claims for damages and other expenses not covered by insurance; the risk that payments from third-party payers, including government healthcare programs, may decrease or not increase as costs increase; adverse developments affecting the medical practices of our physician limited partners; our ability to maintain favorable relations with our physician limited partners; our ability to grow revenues by increasing case and procedure volume while maintaining profitability at the Nobilis Facilities; failure to timely or accurately bill for services; our ability to compete for physician partners, patients and strategic relationships; the risk of changes in patient volume and patient mix; the risk that laws and regulations that regulate payments for medical services made by government healthcare programs could cause our revenues to decrease; the risk that contracts are canceled or not renewed or that we are not able to enter into additional contracts under terms that are acceptable to us; and the risk of potential decreases in our reimbursement rates. The foregoing are significant factors we think could cause our actual results to differ materially from expected results. However, there could be additional factors besides those listed herein that also could affect us in an adverse manner.

We have not undertaken any obligation to publicly update or revise any forward-looking statements. All of our forward-looking statements speak only as of the date of the document in which they are made or, if a date is specified, as of such date. Subject to any mandatory requirements of applicable law, we disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any changes in events, conditions, circumstances or information on which the forward-looking statement is based. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing factors and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed by March 16, 2018, as updated by other filings with the Securities and Exchange Commission.

                                                 NOBILIS HEALTH CORP.

                                              CONSOLIDATED BALANCE SHEETS

                                         (in thousands, except share amounts)

                                                      (unaudited)


                                               December 31, 2017                 December 31, 2016
                                               -----------------               -----------------

    Assets

    Current Assets:

    Cash                                                               $22,536                        $24,572

    Trade accounts
     receivable, net of
     allowance for bad debts
     of $2,598 and $750 at
     December 31, 2017 and
     2016, respectively                                  144,522                             124,951

    Medical supplies                                       3,356                               4,468

    Prepaid expenses and
     other current assets                                 14,472                              10,083
                                                          ------                              ------

    Total current assets                                 184,886                             164,074

    Property and equipment,
     net                                                  51,559                              36,723

    Intangible assets, net                                65,990                              19,618

    Goodwill                                             116,072                              62,018

    Deferred tax asset                                     9,951                              21,652

    Other long-term assets                                 2,580                               1,350
                                                           -----                               -----

    Total Assets                                                      $431,038                       $305,435
                                                                      ========                       ========

    Liabilities and Shareholders' Equity

    Current Liabilities:

    Trade accounts payable                                             $24,312                        $22,184

    Accrued liabilities                                   35,393                              30,145

    Current portion of
     capital leases                                        3,249                               3,985

    Current portion of long-
     term debt                                             3,766                               2,220

    Current portion of
     convertible promissory
     note                                                  4,250                                   -

    Current portion of
     warrant and stock option
     derivative liabilities                                    -                                  3

    Other current liabilities                             16,324                               7,561
                                                          ------                               -----

    Total current liabilities                             87,294                              66,098

    Lines of credit                                       18,000                              15,000

    Long-term capital
     leases, net of current
     portion                                              12,667                              12,387

    Long-term debt, net of
     current portion                                      90,619                              48,323

    Convertible promissory
     note, net of current
     portion                                               4,250                               2,250

    Warrant and stock option
     derivative liabilities,
     net of current portion                                  384                                 899

    Other long-term
     liabilities                                           3,036                               3,999
                                                           -----                               -----

    Total liabilities                                    216,250                             148,956
                                                         -------                             -------

    Commitments and contingencies

    Contingently redeemable
     noncontrolling interest                              17,161                              14,304

    Shareholders' Equity:

    Common shares, no par
     value, unlimited shares
     authorized, 78,183,802
     and 77,805,014 shares
     issued and outstanding
     at December 31, 2017 and
     2016, respectively                                        -                                  -

    Additional paid in
     capital                                             225,790                             222,240

    Accumulated deficit                                 (75,245)                           (79,042)
                                                         -------                             -------

    Total shareholders'
     equity attributable to
     Nobilis Health Corp.                                150,545                             143,198

    Noncontrolling interests                              47,082                             (1,023)


    Total shareholders'
     equity                                              197,627                             142,175
                                                         -------                             -------

    Total Liabilities and
     Shareholders' Equity                                             $431,038                       $305,435
                                                                      ========                       ========

 

                                                                   NOBILIS HEALTH CORP.

                                                             CONSOLIDATED STATEMENTS OF INCOME

                                                    (in thousands, except share and per share amounts)

                                                                        (unaudited)


                                       Three Months Ended                                        Year Ended
                                          December 31,                                        December 31,

                                  2017                  2016                      2017                          2016
                                  ----                  ----                      ----                          ----


    Revenues:

    Patient and net
     professional fees                    $80,752                                        $97,012                       $282,240        $264,211

    Contracted marketing
     revenues                    3,045                              2,592                                8,208            13,346

    Factoring revenues           3,004                              2,313                                9,269             8,187
                                 -----                              -----                                -----             -----

    Total revenues              86,801                            101,917                              299,717           285,744

    Operating expenses:

    Salaries and benefits       17,336                             14,397                               63,809            52,774

    Drugs and supplies          13,167                             17,341                               48,876            57,011

    General and
     administrative             27,615                             41,170                              124,024           126,848

    Bad debt (recovery)
     expense                     2,402                              (385)                               2,402             (385)

    Depreciation and
     amortization                3,478                              2,077                               11,260             8,539
                                 -----                              -----                               ------             -----

    Total operating
     expenses                   63,998                             74,600                              250,371           244,787

    Corporate expenses:

    Salaries and benefits        2,695                              1,897                               11,706             6,974

    General and
     administrative              2,739                              3,913                               12,839            18,897

    Legal expenses                 506                                645                                2,149             4,755

    Depreciation                    87                                 84                                  343               293
                                   ---                                ---                                  ---               ---

    Total corporate
     expenses                    6,027                              6,539                               27,037            30,919
                                 -----                              -----                               ------            ------

    Income from
     operations                 16,776                             20,778                               22,309            10,038

    Other (income) expense:

    Change in fair value
     of warrant and stock
     option derivative
     liabilities                  (74)                           (1,014)                               (432)          (2,580)

    Interest expense             2,009                              1,884                                6,007             3,999

    Other (income)
     expense, net              (6,762)                                41                              (6,547)          (2,970)
                                ------                                ---                               ------            ------

    Total other (income)
     expense                   (4,827)                               911                                (972)          (1,551)
                                ------                                ---                                 ----            ------

    Income before income
     taxes and
     noncontrolling
     interests                  21,603                             19,867                               23,281            11,589

    Income tax expense
     (benefit)                  12,372                                         $6,253                          13,000            4,487
                                ------                                         ------

    Net income                   9,231                             13,614                               10,281             7,102
                                 -----                             ------                               ------             -----

    Net income
     attributable to
     noncontrolling
     interests                   5,635                                         $4,247                           6,484              653
                                 -----                                         ------                           -----              ---

    Net income
     attributable to
     Nobilis Health Corp.                  $3,596                                         $9,367                         $3,797          $6,449
                                           ======                                         ======                         ======          ======

    Net income per basic
     common share                           $0.05                                          $0.12                          $0.05           $0.08
                                            =====                                          =====                          =====           =====

    Net income per fully
     diluted common share                   $0.05                                          $0.12                          $0.05           $0.08
                                            =====                                          =====                          =====           =====

    Weighted average
     shares outstanding
     (basic)                77,994,408                         77,070,944                           77,852,752        76,453,128
                            ==========                         ==========                           ==========        ==========

    Weighted average
     shares outstanding
     (fully diluted)        78,248,772                         77,844,014                           78,188,597        77,562,495
                            ==========                         ==========                           ==========        ==========

 

                                          NOBILIS HEALTH CORP.

                                 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                             (in thousands)

                                              (unaudited)


                                                  Years ended December 31,

                                               2017                  2016
                                               ----                  ----

    CASH FLOWS FROM OPERATING
     ACTIVITIES:

    Net income                                         $10,281                        $7,102

    Adjustments to reconcile net
     income to net cash provided
     by operating activities:

    Depreciation
     and
     amortization                            11,603                            8,832

    Provision
     (recoupment)
     for bad debts,
     net                                      2,402                            (385)

    Share-based
     compensation                             2,706                            6,192

    Change in fair
     value of
     warrant and
     stock option
     derivative
     liabilities                              (432)                         (2,580)

    Deferred income
     taxes                                   11,701                            3,383

    Impairment
     charges                                  1,500                              688

    Gain on sale of
     property and
     equipment                                    -                           (265)

    Gain on
     derecognition
     of liabilities
     through
     settlement                             (3,711)                               -

    Loss (earnings)
     from equity
     method
     investment                                 108                            (938)

    Amortization of
     deferred
     financing fees                             734                            1,034

    Changes in operating assets
     and liabilities, net of
     assets acquired and
     liabilities assumed:

    Trade accounts
     receivable                            (14,737)                        (28,517)

    Medical
     supplies                                 1,407                              216

    Prepaid
     expenses and
     other current
     assets                                 (4,042)                         (7,106)

    Other long-
     term assets                              (219)                             (6)

    Trade accounts
     payable and
     accrued
     liabilities                              5,010                           11,031

    Other current
     liabilities                              2,400                            1,293

    Other long-
     term
     liabilities                              (321)                             508

    Distributions
     from equity
     investments                                  -                           1,085
                                                ---                           -----

    Net cash
     provided by
     operating
     activities                              26,390                            1,567
                                             ------                            -----


    CASH FLOWS FROM INVESTING
     ACTIVITIES:

    Purchase of
     property and
     equipment                              (5,152)                         (5,541)

    Purchase of
     equity method
     investment                                   -                           (609)

    Note
     receivable,
     net                                          -                             150

    Acquisitions,
     net of cash
     acquired                              (62,268)                        (17,239)

         Net cash used
          for investing
          activities                       (67,420)                        (23,239)
                                            -------                          -------


    CASH FLOWS FROM FINANCING
     ACTIVITIES:

    Distributions
     to
     noncontrolling
     interests                              (2,646)                         (7,059)

    Proceeds from
     exercise of
     stock options                                -                           2,322

    Proceeds from
     exercise of
     stock warrants                               -                             130

    Payments on
     capital lease
     obligations                            (4,467)                         (3,613)

    Proceeds from
     line of credit                           3,000                           23,213

    Payments from
     line of credit                               -                        (11,213)

    Proceeds from
     debt                                    50,000                           58,940

    Payments on
     debt                                   (2,013)                        (29,713)

    Deferred
     financing fees                         (4,880)                         (2,429)

         Net cash
          provided by
          financing
          activities                         38,994                           30,578
                                             ------                           ------


    NET (DECREASE)
     INCREASE IN
     CASH                                   (2,036)                           8,906

    CASH -
     Beginning of
     year                                    24,572                           15,666
                                             ------                           ------

    CASH -End of
     year                                              $22,536                       $24,572
                                                       =======                       =======

 

                                                              NOBILIS HEALTH CORP.

                                                 RECONCILIATION ON NON-GAAP FINANCIAL MEASURES

                                                                 (in thousands)

                                                                  (unaudited)


                                      Three Months Ended                                   Twelve Months Ended
                                       December 31,                                     December 31,

                                 2017                 2016                   2017                  2016
                                 ----                 ----                   ----                  ----


    Net income attributable to
     Nobilis Health Corp.                $3,596                                      $9,367                        $3,797         $6,449

    Interest                    2,009                          1,884                             6,007               3,999

    Income taxes               12,372                                     $6,253                          13,000           4,487

    Depreciation and
     amortization               3,565                          2,161                            11,603               8,832
                                                              -----

    EBITDA                              $21,542                                     $19,665                       $34,407        $23,767


    Non-cash compensation
     expenses                             $(68)                                       $966                        $2,705         $6,191

    Change in fair value of
     warrant and stock option
     derivative liabilities      (74)                       (1,014)                             (432)            (2,580)

    Acquisition expenses        1,530                            496                             3,294               2,315

    Non-recurring expenses      (296)                           674                             1,441               4,292
                                 ----                            ---                             -----               -----

    Adjusted EBITDA(1)                  $22,634                                     $20,787                       $41,415        $33,985
                                        =======                                     =======                       =======        =======

    1 Use of Non-GAAP
     Financial Measures

Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, non-cash compensation expenses, change in fair value of warrant and stock option derivative liabilities, acquisition expenses, bargain purchase gain and non-recurring expenses. Adjusted EBITDA should not be considered a measure of financial performance required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA is an analytical indicator used by management and the health care industry to evaluate company performance, allocate resources and measure leverage and debt service capacity. Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with U.S. GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.

Contact Information:

Tuan Tran
Vice President, Investor Relations
IR@nobilishealth.com
713-355-8614

 

 

 

View original content with multimedia:http://www.prnewswire.com/news-releases/nobilis-health-reports-fourth-quarter-and-full-year-2017-financial-results-300610475.html

SOURCE Nobilis Health Corp.

     
 
Company Codes: AMEX:HLTH
 

Back to news