Premier Health of America Inc V.PHA

Results

[BrokeStocker]

I thought we may have received an early Christmas present since I wasn't expecting results until late next week, but what we got was a mixed bag. Although a paper loss driven by the write down, a loss nonetheless. The increase to revenue is nice to see but it really means nothing if the bottom line keeps coming up negative. I didn't see anything on FY23 results from SSI which is disappointing as well, though admittedly I haven't read through the full MD&A yet so may have missed it. On a positive note they continue to strike a very optimistic outlook for Quebec. Will be interesting to see over the next year or so if the predicted migration and increase in billable hours unfolds.

[CauseWhyNot]

I'm more worried about the lack of cash flow that could start paying down debt. Without Solutions, there operational results are weak. Hopefully they don't mismanage solutions. They need to show they can pay down debt.

[colourama]

CauseWhyNot, if I am reading correctly their cash flow from operations before changes in working capital was $4.3m for the year. That seems to be okay to me in terms of managing debt, no? As far as I have read, all their subsidiaries are run independently, so I don't forsee them messing significantly with the management infrastructure in place with SSI.

[snootchybootchy]

Given all my holdings that are interest-rate sensitive except PHA has rallied on the Fed announcement this afternoon, maybe debt is not a concern?

[CauseWhyNot]

Unfortunately all that is found in recievables. Which went up with revenue. To finance operations they needed a net investment of 1.27 million just to support themselves.  People will argue that receivable will be converted to cash and that's a timing issue, but we haven't seen it yet. Receivables seem to be flat compared to revenue (I'll double check that tomorrow).  I

[Torontojay]

The receivables to revenue ratio increased compared to last year which is concerning. If the receivables never get collected (hypothetical) then it would wipe out the entire equity of the company and go negative.  When you factor the non cash working capital, then free cash flow was negative for the year. It is impossible to pay down debt without cash collected from receivables.  As

[apainter]

Most of the receivables are from provincial govt as they supply Nurses to hospitals. Also I am assuming that the auditors would have satisfied that the receivable numbers are good as I think they do confirm the larger bills outstanding im my opinion

[apainter]

Also Q4 Rev was 23.4M while the receivable is 20.66M so the outstanding is for about 90 days Further more, the notes to FS says this about trade recievables- Based on the Company’s business model, expected credit losses over the life of the trade receivables are considered immaterial since the potential for default at any time during the life of the financial instrument is deemed almost nil, based

[colourama]

Appreciate all the points made here by everyone. I assume the slow collection on receivables is due to government taking a long time to pay their bills - something that PHA needs to manage more effectively I think regarding cash flow.

[colourama]

I still think this will take some time with Quebec still to be fully clarified, and then expenses related to the SSI acquisition impacting financials. It looks like for the most part existing contracts have been renewed at various subsidiaries which is good to see. I don't think we will attract investor interest in the short term though.

[MrBeast]

Last numbers we seen from SSI was September 2022, in 3 months time we will get a much better idea of what the entire landscape looks like