Nova Leap Health Corp. Posts Q1 2023 Results
11 Maio 2023 - 7:00PM
NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or “the Company”),
a growing home health care organization, is pleased to announce the
release of financial results for the quarter ended March 31, 2023.
All amounts are in United States dollars unless otherwise
specified.
Nova Leap Q1 2023 Financial
Results
Financial results for the first quarter ended
March 31, 2023 include the following:
- Q1 2023 revenues of
$6,396,076 decreased by 5.7% relative to Q4 2022 revenues of
$6,780,083 and by 12.3% relative to Q1 2022 revenues of
$7,296,609.
- Q1 2023 Adjusted EBITDA increased to $86,025 from $71,313 in Q4
2022 and was lower than Q1 2022 Adjusted EBITDA of $227,562 (see
calculation of Adjusted EBITDA below).
-
Gross profit margin as a percentage of revenues remained strong at
35.2% in Q1 2023. Gross profit margin percentage was 35.6% in Q4
2022 and 34.8% in Q1 2022.
-
Head office and operations management expense decreased by $101,942
in Q1 2023 as compared to Q1 2022 and $115,892 as compared to Q4
2022 due to the elimination of targeted support functions in Head
office late in Q2 2022 and management’s efforts since Q3 2022 to
streamline our US operations.
-
The loss from operating activities in Q1 2023 decreased to $182,864
from $321,424 in Q4 2022 and $198,829 in Q1 2022.
-
Q1 2023 net loss decreased to $296,876 from $970,395 in Q4 2022 and
$389,674 in Q1 2022.
-
The Company had available cash of $894,365 as of March 31, 2023 as
well as full access to the unutilized revolving credit facility of
$1,108,402 (CAD$1,500,000).
President & CEO’s
Comments
“The message to shareholders is that we continue
to deliver prudent fiscal management which should provide us with
flexibility to restart our acquisition strategy and improve results
in future quarters,” said Chris Dobbin, President & CEO of Nova
Leap. “This past quarter was focused on two initiatives —
continuing our capital allocation strategy of paying down the
Company’s debt while further restructuring the U.S. operations and
working with U.S. leadership on the changes implemented during the
latter part of 2022 and Q1 2023 — both of which I will speak
to further.
From a capital allocation perspective, we have
been paying down a substantial portion of our debt and remain on
track to have approximately $290,000 of bank debt at the end of the
year. We believe this will provide the Company with much greater
flexibility with future expansion opportunities. I have referenced
this previously and our approach to debt repayment has been
consistent.
Let me collectively address the revenue decline
and restructuring of operations. With respect to the quarter over
quarter revenue decline from Q4 2022 to Q1 2023, just under 40% of
the decline relates to two less days in the quarter for which we
had to perform services. Given that we charge on a per hour basis,
that has a big impact. The remainder was a decrease in hours, most
of which we anticipate to be temporary. Some of the decrease in
hours was expected given the closure of one of our physical
locations which was not producing the results intended and for
which we had previously recognized a goodwill impairment. We have
been prudently restructuring operations for the past three quarters
throughout the organization and that restructuring continued well
into Q1 2023. We have been very diligent with this approach so as
to have minimum disruption to our staff and clients.
We began to see the positive results of the
restructuring from the latter part of 2022 in Q1 2023 such that
even with a drop in revenue, Adjusted EBITDA increased. The
restructuring that occurred well into Q1 2023 will be more fully
reflected in Q2 results. Notwithstanding all the changes that have
been made, there are still many areas in the U.S. for which we can
produce improved results. In fact, many of the changes that were
made were done in order to increase organic revenue going forward.
I believe we have the leadership team in place to achieve this and
I believe that we will see further positive impacts of these
changes in the quarters ahead.”
This news release should be read in conjunction
with the Unaudited Condensed Interim Consolidated Financial
Statements for the three months ended March 31, 2023 and 2022
including the notes to the financial statements and Management's
Discussion and Analysis dated May 11, 2023, which have been filed
on SEDAR.
About Nova Leap
Nova Leap is an acquisitive home health care
services company operating in one of the fastest-growing industries
in the U.S. & Canada. The Company performs a vital role within
the continuum of care with an individual and family centered focus,
particularly those requiring dementia care. Nova Leap achieved the
#42 ranking on the 2021 Report on Business ranking of Canada’s Top
Growing Companies, the #2 ranking on the 2020 Report on Business
ranking of Canada’s Top Growing Companies and the #10 Ranking in
the 2019 TSX Venture 50™ in the Clean Technology & Life
Sciences sector. The Company is geographically diversified with
operations in 10 different U.S. states within the New England,
Southeastern, South Central and Midwest regions as well as in Nova
Scotia, Canada.
NON-IFRS AND OTHER
MEASURES:
This release contains references to certain
measures that do not have a standardized meaning under IFRS as
prescribed by the International Accounting Standards Board (“IASB”)
and are therefore unlikely to be comparable to similar measures
presented by other companies. Rather, these measures are provided
as additional information to complement IFRS measures by providing
a further understanding of operations from management’s
perspective. Accordingly, non-IFRS financial measures should not be
considered in isolation or as a substitute for analysis of
financial information reported under IFRS. The Company presents
non-IFRS financial measures, specifically Adjusted EBITDA (as such
term is hereinafter defined), as well as supplementary financial
measures such as annualized revenue. The Company believes these
non-IFRS financial measures are frequently used by lenders,
securities analysts, investors and other interested parties as a
measure of financial performance, and it is therefore helpful to
provide supplemental measures of operating performance and thus
highlight trends that may not otherwise be apparent when relying
solely on IFRS financial measures.
Adjusted Earnings before interest, taxes,
amortization and depreciation (“Adjusted EBITDA”), is calculated as
loss from operating activities plus amortization and depreciation
and stock-based compensation expense. The most directly comparable
IFRS measure is loss from operating activities.
Annualized revenue is calculated as actual
revenue extrapolated from the beginning of the year or date of
acquisition over 365 days.
The reconciliation of Adjusted EBITDA to the
loss from operating activities is as follows:
|
Q1 2023 $ |
|
Q1 2022 $ |
|
Q4 2022 $ |
|
Loss from operating activities |
(182,864 |
) |
(198,829 |
) |
(321,424 |
) |
Amortization and depreciation |
234,027 |
|
330,888 |
|
307,717 |
|
Stock-based compensation |
34,862 |
|
95,503 |
|
85,020 |
|
Adjusted EBITDA |
86,025 |
|
227,562 |
|
71,313 |
|
FORWARD LOOKING
INFORMATION:
Certain information in this press release may
contain forward-looking statements, such as statements regarding
future expansions and cost savings, timing of receipt of ERC, and
plans regarding future acquisitions and business growth, including
anticipated annualized revenue or annualized recurring revenue run
rate growth and anticipated consolidated Adjusted EBITDA margins.
This information is based on current expectations and assumptions,
including assumptions described elsewhere in this release and those
concerning general economic and market conditions, availability of
working capital necessary for conducting Nova Leap’s operations,
availability of desirable acquisition targets and financing to fund
such acquisitions, and Nova Leap’s ability to integrate its
acquired businesses and maintain previously achieved service hour
and revenue levels, that are subject to significant risks and
uncertainties that are difficult to predict. Actual results might
differ materially from results suggested in any forward-looking
statements. Risks that could cause results to differ from those
stated in the forward-looking statements in this release include
the impact of the COVID-19 pandemic or any recurrence, including
staff and supply shortages, regulatory changes affecting the home
care industry or government programs utilized by the Company (such
as ERC), other unexpected increases in operating costs and
competition from other service providers. All forward-looking
statements, including any financial outlook or future-oriented
financial information, contained in this press release are made as
of the date of this release and included for the purpose of
providing information about management's current expectations and
plans relating to the future, and these statements may not be
appropriate for other purposes. The Company assumes no obligation
to update the forward-looking statements, or to update the reasons
why actual results could differ from those reflected in the
forward-looking statements unless and until required by securities
laws applicable to the Company. Additional information identifying
risks and uncertainties is contained in the Company's filings with
the Canadian securities regulators, which filings are available at
www.sedar.com.
CAUTIONARY STATEMENT:
Neither 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.
For further information:
Chris Dobbin, CPA, CA, ICD.D
Director, President and CEO
T: 902 401 9480
E:cdobbin@novaleaphealth.com
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