DENVER, May 29, 2019 (GLOBE NEWSWIRE) -- Assure Holdings Corp. (the “Company” or “Assure”) (TSXV: IOM; OTCQB: ARHH), a provider of intraoperative neuromonitoring services, reported financial results for the first quarter ended March 31, 2019.
Previously Disclosed Cash Collections Analysis
During the fourth quarter of 2018, as it did at the end of each prior year, Assure reviewed its own collection experience for technical and professional cases in 2016-2018. The previously disclosed analysis determined that the original estimate of revenue was higher than the Company’s actual cash collection experience during that time. As such, the Company revised its estimate of revenue for each open technical and professional case downward to the actual cash collection experience being realized and began recording revenue at a lower amount per case starting on January 1, 2019.
Due to the entire revenue adjustment being recorded in the fourth quarter of 2018, the operating results for the first quarter of 2018 were not restated. However, the Company is providing revised pro forma numbers for the first quarter of 2018 to account for the adjustment as if the revenue was recorded at the lower amount for each technical and professional case beginning on January 1, 2018. Further details of these adjustments have been provided in the tables at the end of this press release. On a go-forward basis, the Company will be reviewing its cash collection experience for technical and professional cases at the end of the first six months and year-end.
First Quarter 2019 Financial Highlights vs. Revised First Quarter 2018
- Total revenue increased 92% to $6.0 million versus a revised pro forma revenue of $3.2 million.
- Managed cases increased 97% to 1,184 versus 600.
- Earnings from equity method of investment in PNEs were $0.2 million compared to a revised pro forma amount of $0.6 million.
- Net income increased 59% to $1.7 million compared to a revised pro forma net income of $1.1 million.
- Net income per diluted share increased to $0.04 compared to a revised pro forma amount of $0.02 per diluted share.
- Adjusted EBITDA increased 90% to $3.0 million versus a revised pro forma adjusted EBITDA of $1.6 million.
Management Commentary
“During the first quarter, we continued to make progress expanding our platform while improving the controls around our billing and collections process,” said John A. Farlinger, Assure’s executive chairman and interim CEO. “Our services continued to experience strong adoption rates as evident by our 97% increase in managed case volume. We also continued our rapid growth in the state of Louisiana, which now includes 15 doctors across 10 facilities accounting for 42% of our total revenue.
“We completed several internal initiatives during the quarter that we believe will provide a strong foundation to support the expansion of our platform into new geographies and verticals. We secured a $3 million loan facility that we can use for growth capital and selective acquisitions. As important, we also engaged with a second billing and collections vendor to bolster our current process and reduce our business risk. In fact, our new vendor is now billing approximately 50% of our revenue and we expect to begin collecting our first payments in the coming days. Additionally, we added two full-time regional vice presidents of sales to further increase our footprint.
“Looking to the remainder of the year, we will continue expanding into new markets and verticals while further bolstering our internal collections processes. In the upcoming months, we expect to enter four new states as we have already received approval to operate in Nevada, Georgia, Oklahoma and Arizona. As a result, we are fully on track to manage over 5,000 cases in 2019. We have also established an increased focus on M&A as we look to not only strengthen our core competencies, but opportunistically accelerate the scaling of our core IONM business.”
First Quarter 2019 Financial Results
Total revenue increased 92% to $6.0 million compared to a revised pro forma revenue of $3.2 million in the first quarter of 2018. The increase was driven by the continued increase in cases generated from the Company’s existing surgeon network, along with additional referrals from current partners and the expansion of its physician network.
Revenue generated outside Colorado was 56% of total revenue in the first quarter of 2019. In the first quarter of 2018, nearly all revenues were generated from the Colorado market. Managed cases increased 97% to 1,184 versus 600 in the first quarter of 2018, primarily driven by continued expansion efforts.
Gross margin in the first quarter of 2019 increased 100 basis points to 76.1% compared to a revised pro forma gross margin of 75.1% in the same quarter last year due to higher utilization of technologists during the quarter.
Total operating expenses increased to $2.3 million compared to $1.7 million in the year-ago quarter. This increase was primarily due to staffing additions and other related costs to support the growth of the business.
Net income increased 59% to $1.7 million or $0.04 per diluted share, compared to a revised pro forma net income of $1.1 million or $0.02 per diluted share in the first quarter of 2018.
Adjusted EBITDA increased 90% to $3.0 million compared to a revised pro forma adjusted EBITDA of $1.6 million in the same quarter of 2018 due to the nearly doubling of cases during the first quarter of 2019 compared to the first quarter of 2018.
During the first quarter of 2019, Assure collected $2.4 million of cash from its accounts receivable balance compared to $1.7 million in the first quarter of 2018. Additionally, the Company closed on a $2 million term loan and a $1 million line of credit during the first quarter of 2019.
Assure has also filed its first quarter financial statements and management discussion & analysis (MD&A) with SEDAR and the OTC. This information can be found at www.sedar.com and www.OTCmarkets.com.
Conference Call
The Company will hold a conference call today, May 29, 2019, at 11:00 a.m. Eastern time to discuss its first quarter 2019 results.
Date: Wednesday, May 29, 2019
Time: 11:00 a.m. Eastern time (9:00 a.m. Mountain time)
Toll-free dial-in number: 1-877-407-0792
International dial-in number: 1-201-689-8263
Conference ID: 13691167
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.
The conference call will be broadcast live and available for replay here.
A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through June 12, 2019.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13691167
About Assure Holdings
Assure Holdings Corp. is a Colorado-based company that works with neurosurgeons and orthopedic spine surgeons to provide a turnkey suite of services that support intraoperative neuromonitoring activities during invasive surgeries. Assure employs its own staff of technologists and uses its own state-of-the-art monitoring equipment, handles 100% of intraoperative neuromonitoring scheduling and setup, and bills for all technical services provided. While Assure focuses primarily on supporting spinal and vascular surgeries, plans are in place to support other classes of medicine that rely on the standard of care that intraoperative neuromonitoring provides. For more information, visit the company’s website at www.assureneuromonitoring.com.
Non-IFRS Measures
Adjusted EBITDA is defined as net income/(loss) excluding interest, taxes, depreciation, share-based compensation, performance share compensation, provision for broker warrant fair value and provision for stock option fair value.
Forward-Looking Statements
This news release contains certain statements that may constitute forward-looking information and forward-looking statements under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Assure anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information and forward-looking statements. Such information or statements may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company. Often, but not always, forward-looking information or forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information and forward-looking statements are based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Assure to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information and the forward-looking statements. Such factors may be based on information currently available to Assure, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements in this news release speak only as of the date of this release and Assure undertakes no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this release. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement.
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
John Farlinger, Executive Chairman
Assure Holdings Corp.
1-604-763-7565
John.Farlinger@assureiom.com
Cody Slach, Managing Director
Gateway Investor Relations
1-949-574-3860
IOM@gatewayir.com
| ASSURE HOLDINGS INC. | ||||||||
| CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||||
| (in United States Dollars) | ||||||||
| March 31, 2019 (unaudited) | December 31, 2018 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 1,854,124 | $ | 830,966 | ||||
| Accounts receivable, net | 25,732,524 | 22,175,379 | ||||||
| Prepaid expenses | 94,687 | 85,238 | ||||||
| Due from related parties | 1,058,355 | 2,965,630 | ||||||
| Total current assets | 28,739,690 | 26,057,213 | ||||||
| Equity method investments | 2,037,445 | 2,255,819 | ||||||
| Equipment and furniture, net | 657,246 | 679,881 | ||||||
| Total assets | $ | 31,434,381 | $ | 28,992,913 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 2,906,981 | $ | 3,015,794 | ||||
| Debt | 633,147 | 273,699 | ||||||
| Current portion of lease liability | 284,975 | 205,841 | ||||||
| Income taxes payable | 905,027 | 267,190 | ||||||
| Total current liabilities | 4,730,130 | 3,762,524 | ||||||
| Lease liability, net of current portion | 532,969 | 381,453 | ||||||
| Debt, net of current portion | 1,255,760 | - | ||||||
| Provision for fair value of stock options | 252,253 | 245,525 | ||||||
| Provision for performance share issuance | 16,011,500 | 16,011,500 | ||||||
| Provision for fair value of broker warrants | 15,242 | 56,130 | ||||||
| Deferred tax liability, net | 765,740 | 665,839 | ||||||
| Total liabilities | 23,563,594 | 21,122,971 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Capital stock | 34,137 | 35,562 | ||||||
| Additional paid-in capital | 5,464,506 | 7,202,134 | ||||||
| Retained earnings | 2,372,144 | 632,246 | ||||||
| Total shareholders' equity | 7,870,787 | 7,869,942 | ||||||
| Total liabilities and shareholders' equity | $ | 31,434,381 | $ | 28,992,913 | ||||
| ASSURE HOLDINGS INC. | ||||||||||||
| CONDENSED INTERIM CONSOLIDATED STATEMENT OF INCOME | ||||||||||||
| (in United States Dollars) | ||||||||||||
| Actual Three Months Ended March 31, 2019 | Actual Three Months Ended March 31, 2018 | Proforma Three Months Ended March 31, 2018 | ||||||||||
| Revenue | ||||||||||||
| Out-of-Network fees, net | $ | 5,571,485 | $ | 5,588,841 | $ | 3,038,000 | ||||||
| Contract fees | 472,477 | 112,310 | 112,310 | |||||||||
| Total revenue | 6,043,962 | 5,701,151 | 3,150,310 | |||||||||
| Cost of revenues | (1,446,844 | ) | (989,872 | ) | (785,805 | ) | ||||||
| Gross margin | 4,597,118 | 4,711,279 | 2,364,505 | |||||||||
| Operating expenses | ||||||||||||
| General and administrative | 1,980,888 | 1,303,155 | 1,303,155 | |||||||||
| Depreciation and amortization | 101,663 | 86,929 | 86,929 | |||||||||
| Sales and marketing | 256,690 | 295,155 | 295,155 | |||||||||
| Total operating expenses | 2,339,241 | 1,685,239 | 1,685,239 | |||||||||
| Income from operations | 2,257,877 | 3,026,040 | 679,266 | |||||||||
| Other income/(expenses) | ||||||||||||
| Earnings from equity method investments | 185,155 | 896,301 | 625,660 | |||||||||
| Provision for broker warrant fair value | (21,182 | ) | 68,311 | 68,311 | ||||||||
| Provision for stock option fair value | (6,728 | ) | 111,100 | 111,100 | ||||||||
| Interest, net | (37,387 | ) | (25,735 | ) | (25,735 | ) | ||||||
| Total other income | 119,858 | 1,049,977 | 779,336 | |||||||||
| Income before income taxes | 2,377,735 | 4,076,017 | 1,458,602 | |||||||||
| Income tax expense | (637,837 | ) | (1,111,186 | ) | (362,605 | ) | ||||||
| Net income | $ | 1,739,898 | $ | 2,964,831 | $ | 1,095,997 | ||||||
| Basic income per common share | $ | 0.05 | $ | 0.08 | $ | 0.03 | ||||||
| Diluted income per common share | $ | 0.04 | $ | 0.07 | $ | 0.02 | ||||||
| ASSURE HOLDINGS CORP. | ||||||||
| ADJUSTED EBITDA | ||||||||
| (in United States Dollars) | ||||||||
| Actual Three Months Ended March 31, 2019 | Actual Three Months Ended March 31, 2018 | Proforma Three Months Ended March 31, 2018 | ||||||
| Reported net income | $ | 1,739,898 | $ | 2,964,831 | $ | 1,095,997 | ||
| Interest, net | 37,387 | 25,735 | 25,735 | |||||
| Depreciation and amortization | 101,663 | 86,929 | 86,929 | |||||
| Share based compensation | 476,601 | 200,564 | 200,564 | |||||
| Income tax expense | 637,837 | 1,111,186 | 362,605 | |||||
| Provision for broker warrant fair value | 21,182 | (68,311 | ) | (68,311 | ) | |||
| Provision for stock option fair value | 6,728 | (111,100 | ) | (111,100 | ) | |||
| $ | 3,021,296 | $ | 4,209,834 | $ | 1,592,419 | |||
| ASSURE HOLDINGS CORP. | |||||||||
| EARNINGS PER SHARE | |||||||||
| (in United States Dollars) | |||||||||
| Actual Three Months Ended March 31, 2019 | Actual Three Months Ended March 31, 2018 | Proforma Three Months Ended March 31, 2018 | |||||||
| Income attributable to common shareholders | |||||||||
| Basic | $ | 1,739,898 | $ | 2,964,831 | $ | 1,095,997 | |||
| Weighted average common share outstanding | 34,364,136 | 35,515,105 | 35,515,105 | ||||||
| Basic earnings per common share | $ | 0.05 | $ | 0.08 | $ | 0.03 | |||
| Income attributable to common shareholders | |||||||||
| Basic | $ | 1,739,898 | $ | 2,964,831 | $ | 1,095,997 | |||
| Weighted average common shares outstanding | 34,364,136 | 35,515,105 | 35,515,105 | ||||||
| Dilutive effect of stock options, warrants, and performance shares | 9,388,800 | 9,566,000 | 9,566,000 | ||||||
| Weighted average common shares outstanding assuming dilution | 43,752,936 | 45,081,105 | 45,081,105 | ||||||
| Fully diluted earnings per common share | $ | 0.04 | $ | 0.07 | $ | 0.02 | |||