TIDMCHT
RNS Number : 9676S
Constellation Healthcare Tech, Inc
23 March 2016
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
23 March 2016
Constellation Healthcare Technologies, Inc.
("Constellation Healthcare Technologies", "CHT", "Company" or
the "Group")
Preliminary Announcement of Final Results for the Year Ended
31(st) December 2015
Key Performance Indicators
FY- 2015 FY - 2014
----------------------- ------ ------------ ------------
REVENUE +40% $76.7 * $54.6 *
----------------------- ------ ------ ---- ------ ----
Income from
Operations +76% $19.2 25% $10.9 20%
----------------------- ------ ------ ---- ------ ----
Profit Before
Tax +356% $11.4 15% $2.5 5%
----------------------- ------ ------ ---- ------ ----
EBITDA +68% $23.9 31% $14.2 26%
----------------------- ------ ------ ---- ------ ----
RCM Revenue +76% $50.1 65% $28.4 52%
----------------------- ------ ------ ---- ------ ----
RCM EBITDA +115% $16.1 21% $7.5 14%
----------------------- ------ ------ ---- ------ ----
CASH FROM OPERATIONS +91% $15.5 20% $8.1 15%
------------------------ ------ ------ ---- ------ ----
* % of FY15 revenue
All amounts USD$M
Highlights
-- Revenue Increased by 40% to $76.7M ($54.6M in 2014)
-- Cash from Operations increased by 91% to $15.5M ($8.1M in 2014 )
-- 9000+ US Physicians being currently serviced
-- RCM business revenue increased by 76% to $50.1M ($28.4M in 2014)
-- RCM EBITA increased by 115% to $16.1M ($7.5M in 2014)
-- 8.8% organic growth in RCM business
-- Appointment of Sir Rodney Aldridge as Non-Executive Director and Sam Zaharis as CFO
-- Three successful acquisitions and integration to the CHT
platform during the year; Physicians Practice Plus Inc. (PPP),
Phoenix Healthcare, LLC ("Phoenix") and Northstar First Health, LLC
("NorthStar")
Paul Parmar, Chief Executive Officer of Constellation Healthcare
Technologies, commented, "CHT enjoyed a successful year across all
metrics. We increased our revenue base and more importantly,
significantly increased our profitability for the year. Our
acquisition and integration strategy is proven and we are quickly
becoming one of the largest healthcare and technology services
businesses in the U.S, serving the billing requirements of 9,000+
doctors."
Enquiries:
Constellation Healthcare c/o Redleaf Communications
Technologies +44 (0)20 7382
Paul Parmar, Chief Executive 4730
Officer /
Sotirios 'Sam' Zaharis, Chief
Financial Officer
Redleaf Communications - +44 (0)20 7382
PR adviser 4730
Charlie Geller / Harriet constellation@redleafpr.com
Lynch
finnCap - Nominated Adviser
and Joint Broker
Julian Blunt / Scott Mathieson
- corporate finance
Simon Johnson - corporate +44 (0)20 7220
broking 0568
Stifel Nicholas Europe Limited
- Joint Broker +44 (0)20 7710
Jonathan Senior / Ben Maddison 7600
Chief Executive's Review
The Company is always evaluating new acquisitions and we spend
significant time and resources micro analysing potential deals. The
acquisitions we do make must meet very strict and immovable
criteria. Only once this is met can we be confident that we can
achieve the value accretion we require.
Given the strict criteria for making acquisitions it was very
pleasing to complete three accretive transactions in the year. In
March, we acquired PPP for a maximum cash consideration of up to
$20 million. PPP is a New York-based collection of Revenue Cycle
Management businesses for healthcare providers. In September, we
also acquired NorthStar for a maximum consideration of $18M and
Phoenix for $14M.
NorthStar is a New Jersey based RCM business, and we expect to
collect an additional $170m annually from doctors as a result of
this acquisition. Phoenix is a New Jersey based group of RCM
businesses, which also has a national clearing house operating in
the worker's compensation and automobile claims processing vertical
for healthcare providers. These complementary businesses added a
number of new areas of expertise to CHT.
In December of last year we also returned to the equity market
to raise GBP30m (approximately $45.5m) to fund further
acquisitions. This fundraising closed shortly after the New Year
and enabled us to acquire MDRX Medical Billing, LLC ("MDRX") in
February 2016 for an initial consideration of $28.0 million. MDRX
is a US based healthcare service provider primarily operating in
the billing practice management and healthcare consulting space.
MDRX has a nationwide presence and added approximately 3,500
doctors to the CHT platform. The majority of these doctors are from
large sized hospital based groups.
The acquisition of MDRX means that CHT is now working with
doctors in new territories, including Alabama, Louisiana, New
Mexico and Utah. As a result of this transaction CHT is also now
collecting approximately $2 billion annually for physicians across
the US. The three acquisitions completed by CHT during the year
together with the acquisition of MDRX after the year-end means that
the Company now has 9,000+ physicians on its platform in the
US.
Following the fundraise and the acquisition of MDRX, CHT has
approximately $15.5M in the bank to fund additional acquisitions
during 2016. In the meantime this money leaves the group net debt
free (excluding deferred consideration) on a proforma basis.
CHT also grew organically and secured a number of new contracts
in the year, including four new contracts in April. These four
contracts were expected to see CHT collect approximately $136
million in billings annually on behalf of nearly 400 new doctors,
resulting in approximately $6 - 7 million in annual revenue and
approximately $2 - 3 million in annual EBITA.
Getting M&A right is just one part of the equation. CHT has
also focused on getting the right team in place. CHT appointed Sir
Rodney Aldridge as a non-executive director in July 2015. Sir
Rodney is a shareholder and we believe his experience of acquiring
and operating businesses will be invaluable. In addition, Sam
Zaharis joined as our President and Chief Financial Officer in
July. Sam brings a wealth of operational experience to our business
and a proven track record in both M&A and, importantly, the
successful integration of those businesses.
Financial Performance
The financial results for 2015 demonstrate that our unique
business model is working successfully. CHT's revenues increased by
40.5% to $76.7M compared with the same period last year and EBITA
increased by 63.3% from $14.2M in 2014 to $23.9M in 2015. The core
Orion business is going from strength to strength and the other
acquired businesses (NEMS, PPP, NorthStar, Phoenix and MDRX) are
performing well.
Conversion of operating profit into cash flow was robust,
demonstrating the cash generative nature of our business model.
Cash Generated from operations increased by 91% from $8.1M in 2014
to $15.5M in 2015. Strong cash generation enabled us to invest
significantly in capital expenditure. We continue to build
efficiencies through better technology including workflow
automation, business analytics, business intelligence, automated
data transfer tools and the management of operations using various
KPI's. The enabling software products, i.e. workflow automation,
business intelligence and data extraction tools have reached a
significant maturity in terms of their functionalities. We expect
very little development and mostly maintenance expense going
forward. The quality and cost of our operations, enabled by these
proprietary technologies, continues to be superior to our
competition and forms a fundamental part of our strategy.
Strategy
CHT is focused on acquiring healthcare service businesses across
the U.S and improving revenue generation and profitability by
utilizing CHT's proprietary technology. This is coupled with our
efficient processing operation to give CHT a competitive edge.
Organic growth is also a key driver going forward. CHT continues to
increase the number of doctors using its platform and as of
December 2015, it has over 10,000 independent practicing and
hospital/contracting Physicians groups using its various service
offerings. We expect that number will continue to grow this year
and next.
Outlook
The U.S healthcare system remains complex while the number of
people who continue to receive healthcare insurance and utilize the
system continuously increases. This provides an excellent back drop
for CHT to operate in and consolidate the sector in a major
way.
Paul Parmar
Chief Executive Officer
Constellation Healthcare Technologies
CONSTELLATION HEALTHCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS FOR YEAR ENDED DECEMBER 31,
2015
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:01 ET (07:01 GMT)
Consolidated Balance Sheets
December December
31, 2015 31, 2014
------------------------- -----------------------------
Current assets
Cash and cash equivalents $ 2,516,379 $ 18,136,336
Accounts receivable, net 15,060,632 8,601,001
Inventory 249,433 382,745
Prepaid expenses and other
current assets 605,744 663,644
Deferred finance costs 409,455 329,894
Deferred tax asset 252,000 252,000
------------------------- -----------------------------
Total current assets 19,093,643 28,365,620
------------------------- -----------------------------
Property and equipment, net 9,546,085 4,170,363
------------------------- -----------------------------
Other long-term assets
Intangible assets, excluding
goodwill 35,263,534 15,419,629
Goodwill 37,982,340 13,722,379
Deferred tax asset 5,596,995 4,018,178
Deferred finance costs 307,088 577,309
Deferred offering costs 60,202 -
Other assets, net 278,156 223,796
------------------------- -----------------------------
Total other long-term assets 79,488,315 33,961,291
Total assets $ 108,128,043 $ 66,497,274
========================= =============================
Current liabilities
Accounts payable $ 4,496,760 $ 3,024,679
Accrued expenses 4,423,110 1,823,586
Income taxes payable 2,832,298 1,271,858
Current portion of capital
lease obligation 2,172 29,107
Current portion of long-term
debt 11,579,428 4,631,771
Current portion of contingent
consideration - 638,700
Payable to Sellers 1,967,141 -
Total current liabilities 25,300,909 11,419,701
------------------------- -----------------------------
Long-term liabilities
Long-term debt, net of
current portion 3,342,921 16,327,108
Contingent consideration 10,453,631 -
Deferred rent liability 605,149 532,349
Deferred tax liability 7,510,042 4,156,491
Total long-term liabilities 21,911,743 21,015,948
------------------------- -----------------------------
Commitments and Contingencies
Stockholders' equity (deficit)
Common stock, par value
$0.0001; 150,000,000 shares
authorized at December
31, 2015 and 111,226,912
shares authorized at December
31, 2014; 64,990,623 shares
issued and outstanding
at December 31, 2015 and
55,615,056 shares issued
and outstanding at December
31, 2014. 6,500 5,562
Additional paid-in capital 49,163,637 29,488,953
Retained earnings 11,575,405 4,567,110
Accumulated other comprehensive
loss (79,519) -
Total stockholders' equity
(deficit) 60,666,023 34,061,625
Non-controlling interest
in consolidated entity 249,368 -
Total liabilities and
stockholders' equity (deficit) $ 108,128,043 $ 66,497,274
========================= =============================
Consolidated Statements of Operations
Year ended Year ended
----------------------------- -------------------------------
December December
31, 2015 31, 2014
----------------------------- -------------------------------
Revenues $ 76,735,069 $ 54,605,827
----------------------------- -------------------------------
Operating expenses:
Salaries and benefits 21,465,227 17,334,464
Facility rent and related
costs 3,318,017 2,538,546
Depreciation 1,327,392 1,363,293
Amortization 3,378,174 1,887,247
Professional and consulting
fees 15,629,191 10,139,620
Insurance 444,081 651,211
Provision for doubtful
accounts 733,764 427,643
Vaccines and medical
supplies 4,417,260 4,371,464
Office and computer
supplies 232,443 288,622
Postage and courier 1,807,249 1,891,431
Other 4,783,213 2,728,127
Total operating expenses 57,536,011 43,621,668
----------------------------- -------------------------------
Income from operations 19,199,058 10,984,159
----------------------------- -------------------------------
Other income (expenses):
Interest expense (2,579,398) (3,035,955)
Change in fair value
of contingent consideration (1,075,899) -
Fees paid to debt providers - (2,164,089)
Debt related expenses - (3,213,194)
Other expense, net (4,192,337) (44,997)
----------------------------- -------------------------------
Total other income (expenses),
net (7,847,634) (8,458,235)
----------------------------- -------------------------------
Income before provision for
income taxes 11,351,424 2,525,924
Provision for income taxes 4,392,347 888,071
----------------------------- -------------------------------
Net income $ 6,959,077 $ 1,637,853
============================= ===============================
Loss from consolidated entity
attributable to non-controlling
interest (49,217) -
Net Income attributable to
the company 7,008,294 1,637,853
Other Comprehensive Loss,
net of tax
Foreign currency translation
adjustments (79,519) -
Other Comprehensive Loss (79,519)
Comprehensive Income $ 6,928,775 $ 1,637,853
============================= ===============================
Income per common shares
Basic
Common Stock $ 0.11 $ 0.45
Diluted
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:01 ET (07:01 GMT)
Common Stock $ 0.11 $ 0.45
Weighted average number of
shares for basic
Common Stock 61,061,591 3,657,815
Weighted average number of
shares for Diluted
Common Stock 61,061,591 3,657,815
Consolidated Statements of Cash Flows
Year ended Year ended
------------------------------- -----------------------------
December 31, 2015 December 31, 2014
------------------------------- -----------------------------
Cash Flow from operating activities:
Net Income $ 6,928,775 $ 1,637,853
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for doubtful accounts 733,764 427,643
Depreciation 1,327,392 1,363,293
Amortization 3,378,174 1,887,247
Deferred Tax 1,761,921 (208,282)
Provision for taxes 2,630,426 1,096,353
Change in fair value of contingent
consideration 1,075,899 -
Foreign currency exchange loss 39,498 -
Conversion of PIK interest to principal - 54,708
Amortization of deferred finance fees 363,044 1,759,984
Debt related expenses paid by parent - 2,905,000
Loss from consolidated entity
attributable to non-controlling interest (49,217) -
Changes in operating assets and
liabilities:
Accounts receivable (5,279,143) (3,346,577)
Inventory 133,314 (42,755)
Prepaid expenses and other assets 57,900 632,530
Deferred offering cost (60,202) -
Other assets (54,360) 624
Accounts payable, accrued expenses 5,895,190 (12,456)
Income tax payable (2,893,572) -
Change in fair value of contingent
consideration (537,199) -
Other liabilities - (97,000)
Net cash provided by operating activities 15,451,604 8,058,164
------------------------------- -----------------------------
Cash flows from investing activities
Cash outlay for property and equipment (6,703,114) (68,662)
Cash acquired from acquisition - 11,900
Development of software tool (3,078,701) (4,960,714)
Net deposits to restricted cash - 97,000
Capital Paid for Acquisition (34,650,000) -
Net cash used in investing activities (44,431,815) (4,920,476)
------------------------------- -----------------------------
Cash flows from financing activities
Payments of capital lease obligations (26,935) (21,174)
Borrowings on line of credit - -
Payments on line of credit - (500,000)
Payments on long term loan (6,036,530) (24,072,889)
Net proceeds from long term debt - 23,000,000
Cash outlay for deferred finance costs (172,384) (414,541)
Distribution to parent - (4,389,756)
Dividends paid (176,390) -
Contribution from parent 1,000,000 3,910,350
Proceeds from sale of stock, net of related
fees 18,852,012 13,466,231
Net cash provided by financing activities 13,439,773 10,978,222
------------------------------- -----------------------------
Effect of exchange rate changes in cash (79,519) -
Net increase in cash and cash equivalents (15,619,957) 14,115,910
Cash and cash equivalents, beginning of
period 18,136,336 4,020,426
Cash and cash equivalents, end of period $ 2,516,379 $ 18,136,336
=============================== =============================
Year ended Year ended
----------------------------- ------------------------------------
December December
31, 2015 31, 2014
----------------------------- ------------------------------------
Supplemental Cash Flow Information
Cash Paid for interest $ 2,579,398 $ 2,931,240
Cash Paid for Income Taxes 1,050,000 -
Supplemental Schedule of Non-Cash
Investing and Financing Activities
Notes payable issued for accrued
interest $ - $ 162,716
YEAR ENDED DECEMBER 31, 2015
Common Stock
-----------------------------------------------
Shares Amount Paid-in Retained Accumulated Non-controlling Total
Capital Earnings other interest
comprehensive in consolidated
loss entity
----------------- ----------------------- ----------------- ------------------------- ------------------------- ------------------------- -----------------
Balances, January
1, 2014 1,000 $ 1 $ 16,214,070 $ 2,929,257 $ - $ - $ 19,143,328
Proceeds from
sale
of stock, net of
related
fees 55,614,056 5,561 13,460,670 - - - 13,466,231
Distributions to
parent - - (4,389,756) - - - (4,389,756)
Contribution from
parent - - 3,910,350 - - - 3,910,350
Deal fees and
deferred
financing fees
paid
by parent - - 4,623,315 - - - 4,623,315
Effect of push
down
accounting - - (4,329,696) - - - (4,329,696)
Net income for
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:01 ET (07:01 GMT)
2014 - - - 1,637,853 - - 1,637,853
----------------- ----------------------- ----------------- ------------------------- ------------------------- ------------------------- -----------------
Balances,
December
31, 2014 55,615,056 $ 5,562 $ 29,488,953 $ 4,567,110 $ - $ - $ 34,061,625
================= ======================= ================= ========================= ========================= ========================= =================
Proceeds from
sale
of stock, net of
related
fees 9,375,567 $ 938 $ 18,851,074 $ - $ - $ - $ 18,852,012
Contribution from
parent - - 1,000,000 - - - 1,000,000
Dividends Paid - - (176,390) - - - (176,390)
Other
Comprehensive
Loss - - - - (79,519) - (79,519)
Non-controlling
interest
in consolidated
entity - - - - - 298,585 298,585
Net income for
2015 - - - 7,008,295 - (49,217) 6,959,078
Balances,
December
31, 2015 64,990,623 $ 6,500 $ 49,163,637 $ 11,575,405 $ (79,519) $ 249,368 $ 60,915,391
================= ======================= ================= ========================= ========================= ========================= =================
1. Segment reporting information
Year ended Year ended
December December
31, 2015 31, 2014
------------------------------------ ---------------------------------
Revenue Cycle Management
Revenues $ 50,131,907 $ 28,425,915
Depreciation, Depletion
and Amortization 3,769,051 2,249,960
Operating Income before
Depreciation & Amortization 16,145,524 7,549,170
GP & Corporate
Revenues 7,666,437 7,048,604
Depreciation, Depletion
and Amortization 930,444 991,481
Operating Income before
Depreciation & Amortization 6,338,577 5,179,558
Practice Management:
Revenues 18,936,725 19,131,308
Depreciation, Depletion
and Amortization 6,071 9,099
Operating Income before
Depreciation & Amortization 1,420,523 1,505,971
Corporate expenses that are incurred for the company's general
administration have not been apportioned to other business
segments. These costs are grouped under General Purchasing and
Corporate segment.
The operating segments are identified and reported on the basis
of internal reports about components of the group that are
regularly reviewed by the Management Board to assess the
performance of the segments.
The group's internal management reporting is structured
primarily on the basis of the market segments in which the 3
operating segments - Revenue Cycle Management, Practice Management
and General Purchasing (GP) & Corporate - operate.
Management assesses the performance of segments based on the
measures of revenue and earnings before depreciation, interest and
taxes (EBDIT), whereby the EBDIT measure includes allocations of
expenses from supporting functions within the group.
Company runs shared services for each of its three segments. All
resources, who form part of general management &
administration, HR, finance and accounting, IT, call center are
part of shared services that are used by one or more segments and
have been included in the reallocation.
Such allocations have been determined by the best management
estimates based on number of resources served, volume of
transactions processed and or relevant measures that reflect the
level of benefits of these functions to each of the operating
segments. As the 3 operating segments serve only external
customers, there is no inter-segment revenue. Interest income and
expenses and tax are not allocated to the segments. There is no
measure of segment (non-current) assets and/or liabilities provided
to the Management Board.
Reconciliation of reportable segment revenues and profit to the
consolidated totals
Year ended Year ended
December 31, December
2015 31, 2014
------------------------------------- -----------------------------------
Total Revenues for
reportable segments $ 76,735,069 $ 54,605,827
Total Consolidated
revenues $ 76,735,069 $ 54,605,827
===================================== ===================================
Operating profit before
depreciation and amortization
for reportable segments $ 23,904,624 $ 14,234,699
Depreciation & amortization (4,705,566) (3,250,540)
Interest expense (2,216,354) (3,035,955)
Contingent consideration
adjustment (1,075,899) -
Fees paid to debt providers - (2,164,089)
Amortization of deferred
finance fees (363,044) (3,213,194)
Other income (expense),
net (4,192,337) (44,997)
Provision for income
taxes (4,392,347) (888,071)
Net income (loss) $ 6,959,077 $ 1,637,853
===================================== ===================================
2. Intangible Assets, excluding Goodwill, net
Intangible assets, excluding goodwill, net consist of the
following at December 31, 2015 and 2014:
December December
31, 2015 31, 2014
----------------------------- --------------------------------
Software tool - work
in progress $ 17,083,401 $ 7,056,043
Client relationships 11,862,138 8,380,000
Management service
agreements 2,000,000 2,000,000
Group Purchasing
agreements 600,000 600,000
Trade Name 3,349,536 220,000
Non-Compete 6,598,047 15,000
----------------------------- --------------------------------
41,493,122 18,271,043
Less accumulated
amortization (6,229,588) (2,851,414)
----------------------------- --------------------------------
Net amount $ 35,263,534 $ 15,419,629
----------------------------- --------------------------------
Estimated future annual amortization of our identifiable
intangible assets is as follows:
(MORE TO FOLLOW) Dow Jones Newswires
March 23, 2016 03:01 ET (07:01 GMT)
Constellation Healthcare (LSE:CHT)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Constellation Healthcare (LSE:CHT)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024
