WELL Health Technologies Corp.
(WELL-T) C$2.76
U.S. Businesses Benefitting from Strong Execution and USD Event
WELL provided a business update highlighting the strength of its U.S. business.
Impact: POSITIVE
Circle Medical and Wisp continue to deliver very strong and profitable growth.
Organic growth accelerated at Circle Medical and Wisp in Q3/F22 to 124% y/ y, with the combined businesses hitting an annualized revenue run-rate of >US $100mm at the end of September, one quarter ahead of WELL's initial guidance of achieving this annualized revenue run-rate by the end of 2022. In Q3, Circle Medical had ~117k patient visits (up >230% y/y) and Wisp had ~187k asynchronous consultations (>50% y/y), both record highs. We note that the combined businesses had an annualized revenue run-rate of ~US$70mm at the start of the year and that their combined revenues at the end of September are tracking >10% ahead of our forecasts.
WELL also indicated that both Circle Medical and Wisp again generated positive Adjusted EBITDA in Q3, highlighting WELL's focus on disciplined, profitable organic growth.
CRH acquires Grand Canyon Anesthesia (GCA), one of its largest acquisitions to date. Phoenix-based GCA has over 100 anesthesia providers that have been delivering >50k surgical cases annually (~10% of CRH's current patient cases). No acquisition price was provided but WELL indicated the acquisition, which closed last month, is expected to generate >US$16mm in annual revenue and >US$2mm in shareholder EBITDA.
GCA has expanded CRH's presence into its 18th state and could help serve as a gateway for further expansion in the western U.S. The practice also offers anesthesia services outside of gastrointestinal procedures including orthopedic, spine, pain, dental, ENT, and ophthalmology procedures.
Benefiting from the stronger US$. The US$ strengthened ~4% y/y in Q3 vs. the C$ and Q4-to-date is up ~9% y/y. WELL's U.S. businesses accounted for ~57% of LTM revenue and ~75% of LTM EBITDA. We expect WELL to benefit further, with the U.S. mix expected to increase in H2/F22 due to the much stronger organic growth from Circle Medical/Wisp, CRH's GCA acquisition, and seasonality (e.g., CRH in Q4).
WELL expects to preview its full Q3 patient visits in the coming weeks ahead of its full Q3 release next month.