Nobilis Health Corp. (NYSEMKT:HLTH) (TSX:NHC) (“Nobilis” or the “Company”) today announced financial results for the third quarter ended September 30, 2016. All financial results are expressed in U.S. dollars.
Third Quarter Highlights
| • | Revenues Increase 34.7% to $70.7 million |
| • | Net Loss of $2.8 million, Compared to Prior Period Net Income of $10.9 million |
| • | Adjusted EBITDA1 of $4.3 million, Compared to Prior Period of $5.3 million |
| • | Cash Increases 25.2% to $19.6 million Compared to Year End 2015 |
| • | $4.7 million in Additional Incremental Sales, Marketing and Ancillary Expenses |
| • | Reiterates Full Year 2016 Guidance for Revenue and Adjusted EBITDA1 |
“Nobilis made significant progress in the third quarter both financially and operationally. We continued our strong revenue performance for the year, realizing organic revenue growth as well as growth at the hospitals acquired in 2015,” said Harry Fleming, Chief Executive Officer of Nobilis.
“Our new credit facility, announced in October, significantly strengthens our balance sheet and substantially increases our financial resources, giving us the flexibility we need to help us achieve our acquisition goals. We also made significant progress integrating recently acquired facilities, including the five clinics and four surgery centers acquired as part of our acquisition of ‘Arizona Vein and Vascular Clinics’ and our new Galveston-area surgery center. We remain on track to deliver the full year 2016 financial guidance we previously provided,” continued Harry Fleming, Chief Executive Officer of Nobilis.
Kenneth Efird, President, Nobilis said, “Our third quarter Adjusted EBITDA1 of $4.3 million was impacted by expenses for direct-to-consumer marketing, physician marketing, physician recruitment, and ancillary service line expansion. We deployed in the third quarter a portion of direct-to-consumer marketing expenses budgeted for the fourth quarter. This marketing expense acceleration allowed us to avoid higher fourth quarter premiums for digital online, social media and direct response television expenses, resulting from the U.S. presidential election.”
“We also increased our physician marketing expense with the recruitment of several new physicians. Finally, we expanded our anesthesia footprint and launched a new laboratory division. These efforts support our strategic growth initiatives and the marketing of our specialty services to hospitals acquired in 2015. These additional third quarter expenses will drive cases in the fourth quarter, our most profitable quarter,” continued Kenneth Efird, President of Nobilis.
Third Quarter 2016 Financial Results
Total revenue for the third quarter of 2016 increased to $70.7 million, a 34.7% increase over the same period the prior year. Total case volume increased by 679 cases, or 15.4%, to 5,097 cases in the third quarter of 2016, as compared to the same period the prior year. Revenue per case increased to $13,256 in the third quarter of 2016, as compared to $11,392 in the same period the prior year, reflecting the impact of a higher acuity case mix performed in hospitals. The increase in total revenue and total case volume in the third quarter compared to the same quarter the prior year was primarily organic growth.
Net loss attributable to Nobilis for the third quarter of 2016 was $2.8 million, or $0.04 per basic and fully diluted share, as compared to a prior period net income attributable to Nobilis of $10.9 million, or $0.15 and $0.14 per basic and fully share, respectively. Net income in the third quarter of 2015 included a $4.4 million bargain purchase gain and a $6.4 million change in fair value of warrants and stock options.
Adjusted EBITDA1 for the third quarter of 2016, which adds back certain non-cash and non-recurring expenses, was $4.3 million, a decrease of 18.3% over Adjusted EBITDA1 of $5.3 million for the same period the prior year.
Total cash was $19.6 million, accounts receivable was $86.2 million and total debt was $23.8 million as of September 30, 2016, compared to $15.7 million, $92.6 million and $22.7 million, respectively, at December 31, 2015.
As of September 30, 2016, the Company owned and/or managed four acute care surgical hospitals and five ambulatory surgical centers, and had affiliations with an additional 36 facilities.
Nine Months Ended 2016 Financial Results
Total revenue for the first nine months of 2016 increased to $183.8 million, a 32.1% increase over the same period the prior year. Total case volume for the first nine months of 2016 increased by 1,385 cases, or 11.0%, to 13,934 in the first nine months of 2016, compared to the same period the prior year. Revenue per case increased to $13,193 for the first nine months of 2016, as compared to $11,093 in the same period the prior year, reflecting the impact of a higher acuity case mix from the purchase of three new hospitals in 2015. The increase in total revenue and total case volume for the first nine months of 2016 compared to the same period the prior year was due primarily to the acquisitions of three hospitals in 2015.
Net loss attributable to Nobilis for the first nine months of 2016 was $2.9 million, or $0.04 per basic and fully diluted share, as compared to net income attributable to Nobilis of $6.0 million, or $0.09 per basic and fully diluted share, in the same period the prior year.
Adjusted EBITDA1 for the first nine months of 2016, which adds back certain non-cash and non-recurring expenses, was $13.2 million, a decrease of 20.5% compared to Adjusted EBITDA1 of $16.6 million for the same period the prior year.
Full Year 2016 Guidance
For full year 2016, Nobilis is reiterating the guidance previously provided on October 28, 2016 when we completed the acquisition of Arizona Vascular Clinics. Full year 2016 total revenues are expected to be $281.0 million, and Adjusted EBITDA1 is expected to be $53.0 million.
Conference Call Information
Nobilis will host a conference call on November 7, 2016 at 8:00 a.m. CDT (9:00 a.m. EDT) to discuss its financial results for the third quarter of 2016. To participate in the conference call, please dial (877) 201-0168 in the U.S. and Canada, and +1 (647) 788-4901 internationally. Please enter conference ID 13721251. There will be a livestream of the conference call available at: http://investors.nobilishealth.com/investors/events-and-presentations/.
About Nobilis Health Corp.
Nobilis (www.NobilisHealth.com) is a full-service healthcare development and management company which currently owns or manages fourteen surgical facilities and six clinics, partners with thirty-six additional facilities throughout the country, and markets seven independent brands. Deploying a unique patient acquisition strategy driven by direct-to-consumer marketing, Nobilis is focused on a specified set of procedures that are performed at our centers by local physicians.
