q3 PR WELL's Diversified Businesses Deliver Record Third Quarter 2020 Results with New Acquisitions Driving Annualized Revenue Run-Rate to $68M
Thursday, November 12, 2020, 8:00 AM ET
-- WELL achieved another record quarter for Q3-2020 with revenue of
$12,245,735 and record Gross profit(1) of $5,045,440, representing 50%
and 75% year-over-year ("YoY") growth respectively. Coupled with recently
completed and announced acquisitions, WELL is currently on a $68M
annualized revenue run-rate and growing quickly.
-- During Q3-2020, WELL completed the acquisition of the Services Division
of Cycura Inc. ("Cycura") and announced its entry into the US market with
a majority stake acquisition of Circle Medical Inc. ("Circle Medical").
Subsequent to quarter end WELL completed: (i) the acquisition of
DoctorCare Inc. ("DoctorCare"); (ii) a majority stake investment in Easy
Allied Health Inc. ("Easy Allied"); and (iii) its 100% acquisition of
Insig Corporation ("INSIG") -- thereby substantially diversifying its
business into several growth oriented business units.
-- WELL's positive third quarter results were driven by a significant
increase in its Clinical patient services revenue from Q2-2020 to Q3-2020
due to a return to physical in-clinic consultations following the
COVID-19 related lockdowns; meanwhile, the Company's virtual care related
revenue continued to grow in the quarter.
-- WELL has a healthy balance sheet, with over $100M of cash and no debt as
a result of the completion of a $23M private placement led by Sir Li
Ka-shing in September and a recently completed $80.5M bought deal
financing closed on October 22, 2020.
VANCOUVER, BC, Nov. 12, 2020 /CNW/ - WELL Health Technologies Corp. (TSX: WELL) (the "Company" or "WELL"), a company focused on consolidating and modernizing clinical and digital assets within the primary healthcare sector, announces it has filed its condensed interim consolidated financial statements and MD&A for Fiscal Third Quarter 2020, representing the three and nine months ended September 30, 2020.
"Third Quarter 2020 was another outstanding record quarter as we experienced a strong rebound of physical in-clinic patient visits following the COVID-19 related lock-downs while continuing to maintain and expand our telehealth patient care volumes demonstrating the value of WELL's resilient clicks-and-bricks hybrid service delivery approach, " said Hamed Shahbazi, Chairman and CEO of WELL. "The Company has also appreciably diversified itself into several business units(3) and made a number of key acquisitions over the past several months. The acquisition of Cycura has added critical expertise in healthcare related cybersecurity, while DoctorCare has allowed us to provide additional billing and back-office services to clinics and practitioners across the country. We are also very pleased to have announced the closing of WELL's 100% ownership of INSIG earlier this morning. We believe the combination of INSIG's Tia Health and WELL's VirtualClinic+ platforms positions WELL as one of the top providers of telehealth services in Canada. Also, in the third quarter the Company launched its apps.health marketplace for healthcare practitioners to browse and engage with integrated EMR apps built by third-party application developers. This marketplace now features 26 apps related to clinical efficiency and improved patient care. WELL is extremely well positioned to continue to carry out its disciplined capital allocation strategy given its strong treasury position and robust pipeline of highly accretive acquisition opportunities."
Third Quarter 2020 Financial Highlights:
-- WELL achieved record quarterly revenue of $12,245,735 during Q3-2020,
compared to revenue of $8,189,678 generated during Q3-2019, an increase
of 50% driven by acquisitions during the past year and the addition of
telehealth related revenue.
-- WELL achieved Digital services revenues of $2,484,862 in Q3-2020,
representing 149% YoY growth as compared to Digital services revenue of
$996,536 in Q3-2019.
-- WELL achieved record Gross Profit(1) of $5,045,440 in Q3-2020,
representing 75% YoY growth driven by an increase in overall revenue and
by its higher margin digital services revenue. WELL achieved record Gross
Margin(1) percentage of 41.2% during Q3-2020 compared to Gross Margin(1)
percentage of 35.2% in Q3-2019.
-- Adjusted EBITDA(2) loss was $153,488 for Q3-2020, compared to Adjusted
EBITDA(2) loss of $512,076 for Q3-2019. Adjusted EBITDA(2) was negatively
impacted in the quarter by WELL's marketing and promotion program related
to the VirtualClinic+ telehealth program and the launch of its new
apps.health marketplace. The Company would have experienced an Adjusted
EBITDA(2) profit without these promotional costs.
Third Quarter 2020 Business Highlights:
-- During the quarter WELL converted all outstanding debentures to common
shares, resulting in the Company having no debt or debt instruments on
its balance sheet as at September 30, 2020.
-- On August 1, 2020, WELL completed its acquisition of Cycura for $2.55M
(less working capital holdback) in an all cash transaction.
-- On September 1, 2020, WELL announced its majority stake investment in
Circle Medical for total consideration of US$14M, which marks WELL's
expansion into the US healthcare market. Circle Medical is the owner of
two primary care healthcare clinics in the San Francisco Bay Area and
provider of a national US telehealth service that has served patients in
35 states across the US in the past few months.
-- On September 29, 2020, WELL launched its app marketplace called
apps.health for connecting healthcare professionals with new and
pioneering solutions which are integrated securely and seamlessly with a
clinic's EMR software.
-- On September 30, 2020, WELL announced the closing of a non-brokered
private placement with a group of investors led by Sir Li Ka-shing for
gross proceeds of $23M, in which the Company issued 4,821,803 common
shares at a price of $4.77 per share.
Subsequent Events:
-- On October 22, 2020, WELL completed a bought deal public offering of
11,927,800 common shares at a price of $6.75 for gross proceeds of
approximately $80.5M. Certain members of the WELL management team,
including but not limited to the CEO, CFO and Chief Medical Officer
participated in the offering in the aggregate of 138,400 shares.
-- On November 1, 2020, WELL completed the acquisition of DoctorCare, a
market leader in providing "Billing as a Service" for doctors in Canada.
WELL acquired all the shares of DoctorCare for approximately $11M
(subject to certain holdbacks/ adjustments) and a multi-year performance
earnout of up to $7M. This acquisition serves as a new business unit for
WELL focused on providing billing and back-office services to physicians.
DoctorCare currently has an annualized revenue run-rate of approximately
$3.5M.
-- On November 1, 2020, WELL completed the majority stake acquisition of
Easy Allied, a mobile integrated care provider in the fields of
physiotherapy, occupational therapy, kinesiology and clinical
counselling. WELL acquired a 51% majority ownership stake in Easy Allied
for total consideration of $1.1M, which includes a 3-year time based
earn-out and is subject to certain holdbacks/adjustments. Easy Allied's
current annualized run-rate is approximately $1.0M.
-- On November 11, 2020, WELL completed the acquisition of the remaining
shares of INSIG that WELL doesn't already own, for approximately $23.3M
paid in WELL common shares (subject to certain holdback/adjustments) and
will also pay a multi-year performance earn-out of up to $7.1M. This
acquisition is expected to result in the addition of approximately $6.5M
in annual revenues to WELL.
Outlook:
The Company's outlook for Q4-2020 is boosted from the benefit of having recently completed acquisitions of Cycura, Easy Allied, DoctorCare, INSIG and the imminent closing of the Circle Medical transaction. Thus far in Q4-2020, WELL has experienced steady growth in its patient services revenue with an increase of both in-clinic patient visits as well as virtual care consultations.
WELL's goals for the foreseeable future, are to: (i) achieve organic revenue growth in its operating businesses; (ii) continue to follow a disciplined acquisition and capital allocation strategy; and (iii) increase market share and awareness of its digital health initiatives.
Conference Call:
WELL will hold a conference call to discuss its 2020 Third Quarter financial results on Thursday, November 12, 2020 at 1:00 pm ET (10:00 am PT). Please use the following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local) or 1-888-664-6383 (Toll-Free), with Conference ID: 4908 2239. The conference call will also be simultaneously webcast and can be accessed at the following audience URL: https://www.well.company/for-investors/events/
Selected Unaudited Interim Financial Highlights:
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