Full year total revenue of $299.7 million, a 4.9% increase over prior year
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
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SOURCE Nobilis Health Corp.
Company Codes: AMEX:HLTH |
