WELL Health Technologies Reports Record Revenue for First Quarter of 2023, Q1 Revenue Up 34% YoY to $169.4 Million, Company Increases GuidanceMonday, June 5, 2023
Vancouver, BC, June 5, 2023--(T-Net)--WELL Health Technologies Corp. (TSX: WELL, OTCQX: WHTCF), a digital healthcare company, announced its interim consolidated financial results for the quarter ended March 31, 2023.
Hamed Shahbazi, Chairman & Chief Executive Officer, WELL Health Technologies Corp.
Hamed Shahbazi, Founder and CEO of WELL commented, "Q1-2023 was an exceptional quarter that exceeded all expectations and demonstrated the strength, depth and quality of our technology enabled care delivery platforms. WELL achieved 34% Year-over-Year revenue growth, largely driven by our organic growth which accelerated to 21% in the first quarter, the highest level of organic growth we've had in several quarters. This quarter also marks our 17th consecutive quarter of record revenue. Our profitability and cashflow profile continue to be robust, as we achieved $10.8 million in Adjusted Free Cash Flow(1) to shareholders in Q1-2023, notwithstanding elevated interest fees. Given the strength of our outlook, we are pleased to increase revenue guidance again as we have for each of the past five quarters."
Mr. Shahbazi further added, "At the heart of our culture, is our purpose to passionate care and support healthcare providers. WELL exited Q1 2023 with over 3,000 providers and clinicians delivering care in our physical and virtual clinics and more than 28,000 providers supported by our SaaS and Technology Services. We are determined to faithfully support and 'tech enable' healthcare professionals with the very best technology available which now includes significant investments in Artificial Intelligence, or AI, based products and services that enhance provider productivity and effectiveness."
Eva Fong, Chief Financial Officer, WELL Health Technologies Corp.
Eva Fong, WELL's Chief Financial Officer, added, "WELL has continued to demonstrate continuous growth, can drive significant cashflow to shareholders and lower its leverage levels effectively. I am pleased to announce that we have reduced our leverage ratio(4) of net debt to shareholder Adjusted EBITDA from 3.5x at the end of Q1-2022 to 2.6x as of the end of Q1-2023. With our leadership position in the digital healthcare industry and continued cash flow generation, we are well positioned for continued success in 2023 and beyond."
First Quarter 2023 Financial Highlights:
First Quarter 2023 Patient Visit Metrics:
WELL achieved a total of 1.4 million patient interactions(3) in Q1-2023, representing approximately 5.6 million patient interactions on an annualized run-rate. WELL achieved a total of 975,500 patient visits in Q1-2023, an increase of 25% as compared to 778,910 patient visits in Q1-2022. Canadian Patient Services visits increased 14% while US Patient Services visits increased 40%, on a year-over-year basis. Growth in patient visits over the past year was primary driven by organic growth but included some acquisition related activity as well.
First Quarter 2023 Business Highlights:
On March 1, 2023, the Company completed the acquisition of 51% interest in Affiliated Tampa Anesthesia Associates, LLC ("ATAA") for cash consideration of $6.1 million plus transaction costs. ATAA services two ASCs and is staffed by thirty-four credentialled practitioners.
On March 2, 2023, the Company's venture capital arm, WELL Ventures, led an investment round alongside its partner Horizon Ventures and a syndicate of leading venture capital firms, in doctorly GmbH ("doctorly"), a medical practice management software provider based in Germany. As part of the investment and strategic alliance agreements, the Ocean platform, created by WELL's wholly owned subsidiary OceanMD, will be used as the exclusive booking and practice engagement platform for doctorly.
Events Subsequent to March 31, 2023:
On April 26, 2023, WELL Ventures announced the launch of its AI Investment program, focused on artificial intelligence and its applications in helping support healthcare providers with next generation tools. The WELL AI Investment Program will provide investees with capital as well as extensive support from WELL's ecosystem to help develop, test, refine, secure, de-risk and integrate the most promising such technologies into the Canadian healthcare ecosystem at scale. WELL's goal is to make a minimum of ten AI related investments of at least $250,000 each.
On May 10, 2023, the Company launched WELL AI Voice, a transformational ambient scribe product that leverages generative AI to dramatically reduce a provider's administrative burden by privately and securely capturing a patient encounter conversation and automatically generating a succinct and medically relevant chart note for the patient interaction.
WELL says it is expecting its strong performance in the first quarter to continue across all its business units and for the entire Company as a whole. WELL's objective is to invest in and achieve significant growth while effectively managing its costs and delivering cashflow to shareholders. Management provided the following guidance for 2023:
WELL expects to continue to grow its Canadian Patient Services business both organically and inorganically and increase its market leadership as the country's first pan-Canadian clinical network with a highly integrated network of tech-enabled outpatient healthcare clinics across the country. Meanwhile, growth in the Company's US Patient Services business is expected to be primarily driven by organic growth while executing on highly disciplined capital allocation opportunities.
As a company with deep tech experience and capabilities, WELL has also made investments in AI technologies a key priority within the Company and expects to develop compelling new products and enhancements to roll out to WELL's vast provider network.
WELL says it's strong organic growth and robust cash flow profile allows the Company to continue to successfully execute on its acquisition plans. Management expects additional cash flows generated by the Company will be re-invested in the business and allocated in a disciplined manner.
WELL is a purpose-driven business that aims to transform the world for the better, as such the Company has embarked on an ongoing ESG (Environmental, Social and Governance) program. The Company is on track to publishing its annual ESG report in mid-2023 highlighting WELL's ESG strategy, reporting initiatives and targeted actions.
Selected Unaudited Financial Highlights:
Please see SEDAR for complete copies of the Company's condensed interim consolidated financial statements and interim MD&A for the quarter ended March 31, 2023.
About WELL Health Technologies Corp.
WELL is a practitioner-focused digital healthcare company. WELL's overarching mission is to positively impact health outcomes by leveraging technology to empower healthcare practitioners and their patients globally. WELL exists to enable healthcare practitioners with best-in-class technology and services. WELL has built the most comprehensive end-to-end healthcare system across Canada including the nation's largest network of clinics supporting primary care, specialized care, and diagnostics services.
In the United States, WELL provides omni-channel healthcare services and solutions targeting specialized markets such as the gastrointestinal market, women's health, primary care, and mental disorders.
In addition to providing patient services, WELL develops, integrates, and sells its own suite of technology software and solutions to medical clinics and healthcare practitioners. WELL's practitioner enablement platform includes: Electronic Medical Records ("EMR"), telehealth platforms, practice management, billing, Revenue Cycle Management ("RCM"), digital health apps and data protection solutions. WELL is publicly traded on the Toronto Stock Exchange under the symbol "WELL" and on the OTC Exchange under the symbol "WHTCF". To learn more about the Company, please visit: www.well.company.
Adjusted Net Income and Adjusted Net Income per Share
The Company defines Adjusted Net Income as net income (loss), after excluding the effects of stock-based compensation expense, amortization of acquired intangible assets, time-based earnout expense, change in fair value of investments, non-controlling interests, and revenue precluded from recognition under IFRS 15 that relates to certain patient services revenue that the Company believes should be recognized as revenue based on its contractual relationships. Adjusted Net Income Per Share is Adjusted Net Income divided by weighted average number of shares outstanding. The Company believes that these non-GAAP financial measures provide useful information to analyze our results, enhance a reader's understanding of past financial performance and allow for greater understanding with respect to key metrics used by management in decision making. More specifically, the Company believes Adjusted Net Income is a financial metric that tracks the earning power of the business that is available to WELL shareholders.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA represents net income (loss) before interest, taxes, depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA (i) less net rent expense on premise leases considered to be finance leases under IFRS and before (ii) transaction, restructuring, and integration costs, time-based earn-out expense, change in fair value of investments, share of income (loss) of associates, foreign exchange gain/loss, and stock-based compensation expense, (iii) revenue precluded from recognition under IFRS 15 that relates to certain patient services revenue that the Company believes should be recognized as revenue based on its contractual relationships, and (iv) gains/losses that are not reflective of ongoing operating performance. The Company considers Adjusted EBITDA to be a financial metric that measures cash that the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. EBITDA and Adjusted EBITDA should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance in accordance with IFRS.
Adjusted Gross Profit and Adjusted Gross Margin
The Company defines Adjusted Gross Profit as revenue less cost of sales (excluding depreciation and amortization) and Adjusted Gross Margin as adjusted gross profit as a percentage of revenue. Adjusted gross profit and adjusted gross margin should not be construed as an alternative for revenue or net income (loss) determined in accordance with IFRS. The Company does not present gross profit in its consolidated financial statements as it is a non-GAAP financial measure. The Company believes that adjusted gross profit and adjusted gross margin are meaningful metrics that are often used by readers to measure the Company's efficiency of selling its products and services.
Adjusted Free Cash Flow
The Company defines Adjusted Free Cash Flow Attributable to Shareholders as Adjusted EBITDA Attributable to Shareholders, less cash interest, less cash taxes and less capital expenditures.
Adjusted Net income, Adjusted Net Income per Share, Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin and Adjusted Free Cash Flow are not recognized measures for financial statement presentation under IFRS and do not have standardized meanings. As such, these measures may not be comparable to similar measures presented by other companies and should be considered as supplements to, and not as substitutes for, or superior to, the corresponding measures calculated in accordance with IFRS.
Notice Regarding Forward Looking Information
Certain statements in this news release related to the Company are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. [ MORE ]
Notice Regarding Forward Looking Information
Certain statements in this news release related to the Company are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.
These statements generally can be identified by the use of forward-looking words such as "may", "should", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements in this news release include statements regarding the prospective lead order and the intended use of proceeds of the Offering.
There are numerous risks and uncertainties that could cause actual results and WELL's plans and objectives to differ materially from those expressed in the forward-looking information, including: (i) adverse market conditions; (ii) risks inherent in the primary healthcare sector in general; (iii) that the proceeds of the Offering may need to be used other than as set out in this news release and other factors beyond the control of the Company. Actual results and future events could differ materially from those anticipated in such information.
These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
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