Nobilis Health Corp revenue and net income soar in Q4Nobilis Health Corp (TSE:NHC) (NYSEMKT:HLTH) delivered a stellar fourth quarter and year end results after markets closed Wednesday, demonstrating unequivocally that the company’s model of rolling up ambulatory health care centres in the southern United States has legs. Total revenue for the full year of 2015 was $229.2 million, representing an increase of 172.8 per cent from $84.0 million in the full year 2014. Overall revenue growth was attributable to a 104 per cent increase in case volume as compared to the prior corresponding period, as well as a more favourable specialty mix. Net income for the full year of 2015 was $50.8 million, representing a $47.9 million increase from $2.9 million for the full year of 2014. This net income figure considers a $25.0 million income tax benefit.
The 2015 full year adjusted EBITDA increased to $42.1 million from $11.1 million in 2014, increasing 280.1 per cent. Adjusted EBITDA for the full year 2015 includes $1.6 million of interest, ($23.2) million of net tax benefit, $4.7 million of depreciation, $13.1 million of non-cash compensation, $2.4 million of deal costs, $1.6 million of non-recurring expenses and ($9.0) million due to the change in fair value of warrants and options.Nobilis is a little bit different than most health companies out there. If you look at the traditional business that owns ASCs (Ambulatory Service Centers), they bring in doctor partners who would then bring their business into the facility. Nobilis wanted to drive business to the facility in a more proactive way, and so built a model where they generally own either all or a majority of the facility, but also deploy marketing to drive cases to the doctors within their network.
Nobilis discovered as soon as they started rolling out this model that the doctors love it. Formerly, doctors who sold their interest in a surgery centre could only hope to get some distributions from their equity ownership. In the Nobilis model, doctors are assisted in the building and maintenance of their practice.
“You know, I think we are on a growth track that is very aggressive,” says Fleming. “I think organically we’re very strong, but I believe our model is also dependent upon acquisitions, because we believe we’ve got this national, scalable marketing program. So we need to grab portfolio companies.”
Analysts tend to agree. Russell Stanley at Mackie Research Capital reiterated a “buy” recommendation in January this year, stipulating a target price of $12.50 a share.