WELL Health Technologies Corp T.WELL

Alternate Symbol(s): WHTCF | T.WELL.DB

Healthcare

WELL Health Technologies Corp. is a practitioner-focused digital healthcare company. The Company develops technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. Its business units include Canadian Patient Services, WELL Health USA Patient Services and SaaS and Technology Services. WELL Health USA Patient and Provider Services includes Primary Circle Medical, Primary WISP, Specialized CRH Medical, and Specialized Provider Staffing. Its healthcare and digital platform includes front and back-office management software applications that help physicians run and secure their practices. Its focused markets include the gastrointestinal market, women's health, primary care and mental health. Its solutions enable 34,000 healthcare providers between the United States and Canada and power owned and operated healthcare’s in Canada with 165 clinics supporting primary care, specialized care and diagnostic services.

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WELL Health Technologies Corp

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Post by ace1mccoyon May 11, 2021 9:33am

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Post# 33172583

TD's Take on Q1

Q1/F21 First Take - Revenue Beats, Adj. EBITDA In-Line

Event

WELL released its Q1/F21 results.

Conference Call: 1:00pm ET; 1-888-664-6383/416-764-8650; Conf. ID: 5652 9388

Impact: NEUTRAL

Q1 revenue beats expectations, Adj. EBITDA is in-line. WELL reported Q1

revenue of $25.6mm, ahead of our $24.8mm estimate and consensus at $24.3mm.

Adj. EBITDA of $0.5mm was in-line with consensus at $0.6mm but slightly below our

$0.8mm estimate. The MD&A and full financial statements have not been published

yet but below are our initial observations:

Revenue grew 150% y/y and 49% q/q, driven in particular by the record M&A

activity last quarter.

Gross margin was 39.3%, up from 38.5% last year but down from 46.5% last

quarter and below our 45.1% estimate. We believe gross margins were likely

hurt in part by a higher contribution from lower margin equipment sales in its

cybersecurity business. Recall, WELL indicated last quarter that a large shipment

of equipment was delayed until early Q1 F2021.

Adj. EBITDA margin was 2.1%, up from (2.4%) last year but down from 4.5% last

quarter and below our 3.1% forecast, with the slight miss due to the lower-thanexpected gross margins. We believe an increase in growth investments at Circle

Medical offset ongoing solid profitability gains in its Canadian operations, which

generated $1.1mm in Adj. EBITDA.

This was WELL's second consecutive quarter of positive Adj. EBITDA and we

note that Adj. EBITDA margins should surge next quarter due to the acquisition

of CRH (we estimate Adj. EBITDA margins should reach the mid-20%).

WELL indicated that CRH is on-track to meet or exceed its 2021 business plan

goal of generating over US$150mm in revenue, US$60mm in EBITDA (40%

margin), and US$40mm in FCF before leverage and tax costs. Accordingly,

WELL's pro-forma revenue is now approaching $300mm with over $80mm in

EBITDA on a run-rate basis.

We note that consensus estimates for 2H F2021 imply WELL hitting the revenue

run-rate but falling a bit short of the EBITDA (which could be due estimates