WELL Health Technologies Reports Record Results for 2nd Quarter 2023, Q2 Revenue Up 21.8% to $170.9 MillionMonday, August 21, 2023
Vancouver, BC, August 21, 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 June 30, 2023.
Hamed Shahbazi, Chairman & Chief Executive Officer, WELL Health Technologies Corp.
Hamed Shahbazi, Founder and CEO of WELL commented, "We had a great quarter, our record revenue, Adjusted EBITDA(1) and patient visits are a testament to the Company's continued focus on tech enabling healthcare providers and supporting them in simplifying their work lives, modernizing, and digitizing their clinical practices and delivering the best healthcare possible."
"WELL exited Q2-2023 with over 3,200 providers and clinicians representing more than 40% growth in providers and delivering a milestone of over 1 million quarterly patient visits delivered by our own team of providers for the first time in the Company's history. During the past few months, we also launched several key initiatives related to Artificial Intelligence ("AI"), including WELL AI Voice and the WELL AI Investment Program which includes a recent investment in AI-enabled disease detection capabilities."
"This is only the beginning as we have a compelling pipeline of opportunities, we are pursuing that leverage the power of AI to give healthcare providers clinical decision support tools that will give them their time back, enhance clinic productivity and provide better patient outcomes. We are determined to faithfully support healthcare professionals with the very best technology available which now includes significant investments in AI-based products and services."
Mr. Shahbazi further added, "The recently announced acquisitions of CarePlus and the clinical assets of MCI OneHealth, coupled with OceanMD's momentous contract win in the Province of British Columbia gives us confidence in increasing our expectations for 2023 revenue to be over $750 million and pave the way for our push to surpass $1 billion in revenues within a couple of years."
Eva Fong, Chief Financial Officer, WELL Health Technologies Corp.
Eva Fong, WELL's Chief Financial Officer, added, "Our profitability and cashflow profile continue to be robust. I am also pleased to announce that we have further reduced our leverage ratio(3) of net bank debt to shareholder Adjusted EBITDA from 3.0x at the end of Q2-2022 to 2.3x as of the end of Q2-2023. Our organic growth profile remains strong, and the M&A pipeline continues to be active, allowing us to provide a positive outlook for the remainder of 2023 and beyond."
Second Quarter 2023 Financial Highlights:
Second Quarter 2023 Business Highlights:
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.
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. Since its launch, WELL AI Voice has been integrated in thousands of patient visits.
On June 1, 2023, the Company completed the acquisition of five multi-disciplinary primary care clinics based in Calgary, Alberta from MCI Medical Clinics Inc., a subsidiary of MCI Onehealth Technologies Inc. (TSX: DRDR), offering a range of primary care services, including family medicine, women's health, and other specialties. This acquisition marks a significant milestone in WELL's expansion into Alberta and supports the Company's national clinic expansion strategy.
On June 22, 2023, the Company announced that CRH Medical has made a strategic investment in Graphium Health a leading EMR or Electronic Medical Records company focused on Anesthesia Practices. The investment is part of a Strategic Alliance designed to further digitize and modernize CRH's billing and back-office processes. Based on a recent pilot project with Graphium Health, CRH had demonstrated that it improved its time to capture billable charges by 58% or 5.6 days and reduced its overall accounts receivable ("AR") balance at the pilot project sites by 24%.
Events Subsequent to June 30, 2023:
On July 1, 2023, the Company through its subsidiary CRH, acquired a 100% interest in CarePlus Medical Corporation ("CarePlus").
On July 19, 2023, the Company entered into an agreement to acquire clinic assets located in Southern Ontario from MCI and a subscription agreement for a convertible debenture financing in MCI which is now strategically focused on its leading AI, Data Science and Rare & Complex Disease Detection platform.
On July 27, 2023, the Company announced that it has re-branded CRH Medical Corporation as WELL Health USA. WELL Health USA's goal is to mirror WELL's mission of tech enabling care providers in the United States while digitizing and modernizing healthcare businesses. In addition, WELL Health USA will leverage its deep US based healthcare expertise and structural advantages to create a whole new category of shared services that will benefit and deliver improved integration with WELL's US based lines of business. WELL USA will be used henceforth to reflect WELL's total US based financial activity which includes lines of business such as CRH, Radar, Circle Medical and Wisp.
On August 10, 2023, WELL announced that it had signed a $38.5 million contract with British Columbia's Public Health Services Authority to provide an array of digital services such as eReferrals, eConsults and eOrders to help further empower providers with best-in-class interoperability tools. This is the third Canadian province, in addition to Ontario and Nova Scotia, that has materially partnered with OceanMD.
WELL is expecting its strong performance to continue into the second half of 2023 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 strong growth and sustained cashflow to shareholders. Management provided the following update to its 2023 annual guidance:
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 WELL Health USA Patient Services business is expected to be primarily driven by organic growth, augmented by the Company's recent acquisition of CarePlus.
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'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. On July 7, 2023, the Company released its second ESG report titled "Taking Care of the Care Providers", which highlights 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 June 30, 2023.
About WELL Health Technologies Corp.
WELL's mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL's comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices.
WELL's solutions enable more than 31,000 healthcare providers between the US and Canada and power the largest owned and operated healthcare ecosystem in Canada with more than 148 clinics supporting primary care, specialized care, and diagnostic services. In the United States WELL's solutions are focused on specialized markets such as the gastrointestinal market, women's health, primary care, and mental health.
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.
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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