LOS ANGELES, CALIFORNIA--(Marketwired - Nov. 1, 2016) -


Convalo Health International, Corp. ("Convalo") (TSX VENTURE:CXV), a leading company in the US addiction recovery industry, released its condensed interim consolidated financial statements for the three and six months ended August 31, 2016 on SEDAR.

Convalo is a leader in the highly fragmented addiction rehabilitation market. The company has operated since May 2014, when it acquired a small outpatient facility in Hollywood. Today, Convalo has nine facilities on the west coast of the United States spanning from Portland, Oregon to San Diego, California.

Quarterly Highlights:

  • Finished build-out of five BLVD branded facilities in the quarter, with an investment in facilities and expenses of over $5 million: San Diego outpatient facility, Portland outpatient facility, Greater Los Angeles detox facility, Central Los Angeles detox facility, and an internal laboratory.
  • Cash balance remained near neutral for the quarter, with cash on hand of $12,215,000 as compared to $12,712,000 at the end of the previous quarter.
  • Revenue of $7,434,000 for the quarter compared to $5,674,000 for the quarter ended Aug 31, 2015 an increase of 31% year over year.
  • Improved enterprise profitability be narrowing net loss before stock based compensation to $1,918,000 from a loss $3,410,000 in the previous quarter as upfront investments and expenses associated with launching five facilities draws to a conclusion.
2016 Facility Build-Out Details:
Month Launched
San Diego IOP April
Portland IOP April
Corona Detox Facility May
Los Angeles Detox Facility May
Internal Laboratory May

Convalo has launched or acquired centers previous to April 2016. Based upon historical data, the typical financial timeline for a center is:

Launch quarter: Heavy investment and expenses to build out the facility

Second quarter: State licensing and other certifications and accreditations

Third quarter: Begin full operations and heavy initial investment in sales and marketing for the facility

Fourth quarter: Cash flow improvement

Fifth quarter: Margin improvement as the facility increases occupancy

"Our heavy upfront investment in more than doubling our capacity is behind us and now we are focused on finalizing the various accreditations for our new centers before we invest in sales and marketing to increase revenues and profits," said Dave Costine, Chairman of Convalo. "Our reported financial results continue to be in line with our growth plans. As expected and communicated last quarter, we saw a significant reduction in spending this quarter as our new centers are mostly finished and ready for accreditation and further licensing in advance of increasing revenues and patient census. Once these facilities are fully open and ramped to our expectation in mid 2017, they are expected to contribute operational cash flow, and more importantly, swing us back into profitability."

Historical Revenue and Facility Operations Details Since Start-up:

Build Phase I (Start-up): May 2014 to February 2015.

Total reported revenues for the phase (10 month period): $1,894,000.

Fully mature centers: 1; centers being built during phase: 3

Revenue Growth Phase I: March 2015 to February 2016.

Total reported revenues for the phase (12 month period): $22,476,000.

Fully mature centers: 4; centers being built during phase: 0

Current Build Phase II: March 2016 to (projected) April 2017.

Total reported revenues for the phase (March 2016 to August 2016, 6 months): $14,722,000.

Fully mature centers: 4; centers being built during phase: 5

Revenue Growth Phase II: Projected May 2017 to July 2018.

Projected matures centers: 9; projected centers being built during phase: 0

Convalo's 2017 second fiscal quarter financial statements and accompanying Management's Discussion & Analysis (MD&A) are available at www.sedar.com.

All amounts are in Canadian dollars and are based on our consolidated financial statements and accompanying MD&A for the quarter ending August 31, 2016 and related notes prepared in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.

About Convalo

Convalo Health International, operating under the brand name BLVD Centers (www.blvdcenters.com), is a leader in the highly fragmented addiction rehabilitation market. Led by a seasoned executive management team, Convalo is well positioned for continued national expansion by launching pods in cities across the US. A pod consists of a residential, detox, and mental health facility (detox facility) and an intensive outpatient (IOP) facility. Convalo, under the BLVD brand, is focused upon becoming the largest national provider of a range of mental health services, including addictive and co-occurring disorders. In conjunction with the long standing 12-Step approach, BLVD also offers supplemental insurance-reimbursed services catering to a variety of communities: gender specific, creatively-oriented, meditation/mindfulness, trauma and LGBT affirmative.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Convalo, Convalo's new centers contributing operational cash flow and profitability in mid-2017, and Convalo projecting nine mature centers between May 2017 and July 2018,, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect Convalo's current views and intentions with respect to future events, and current information available to Convalo, and are subject to certain risks, uncertainties and assumptions, including, all facilities receiving accreditation, completion of the Build Phase II on schedule, completion of the Revenue Growth Phase II on schedule, all facilities contributing cash flow and profits. Material factors or assumptions were applied in providing forward-looking information. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. These factors include, without limitation, changes in law, the ability to implement business strategies and pursue business opportunities, state of the capital markets, the availability of funds and resources to pursue operations, decline of reimbursement rates, dependence on few payors, possible new drug discoveries, a novel business model, dependence on key suppliers, granting of permits and licenses in a highly regulated business, competition, difficulty integrating newly acquired businesses, the outcome and cost of any litigation with the sellers of Hollywood Detox, the outcome and cost of any litigation with insurance providers, low profit market segments, as well as general economic, market and business conditions, amongst others. Should any factor affect Convalo in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Convalo's results and forward-looking information and calculations may be affected by fluctuations in exchange rates. All figures are in Canadian dollars.
Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Convalo does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and Convalo undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information:

Convalo Health International, Corp.
Edward Brann
Corporate Advisor
(323) 844-1298