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Assure Holdings Reports 2017 and Restated 2016 Financial Results

– 2017 Revenue Increases by 149% to $15.8 Million –

PARKER, Colo., Aug. 07, 2018 (GLOBE NEWSWIRE) -- Assure Holdings Corp. (the “Company” or “Assure”) (TSXV:IOM) (OTCQB:ARHH), a provider of intraoperative neuromonitoring services, reported financial results for the 12 months ended December 31, 2017 and restated results for the 12 months ended December 31, 2016.

Assure has also filed its audited annual financial statements and management discussion & analysis (MD&A) with SEDAR. This information can be found at www.sedar.com. The Company will provide an update in due course with respect to the expected timing to file unaudited financial statements and MD&A for the first quarter ended March 31, 2018, at which time it will schedule an investor call to review financial and operational performance, as well as address its outlook..

2017 Financial Summary vs. Restated 2016

  • Total revenue up 149% to $15.8 million versus $6.4 million.
  • Gross margin was 83.4% versus 83.8%.
  • Earnings from equity method of investment in Physician Network Entities (PNEs) grew 55% to $2.3 million from $1.5 million.
  • Net loss was $5.5 million or $(0.17) per diluted share, compared to net income of $3.6 million or $0.14 per diluted share.
  • Net loss in 2017 included a $16.0 million non-cash, one-time equity compensation expense for the performance stock grant for achieving the adjusted EBITDA threshold for 2017 and other one-time non-cash expenses.
  • Net income excluding the effects of non-cash expenses related to equity compensation, share costs related to the reverse takeover merger and provisions for broker warrants and stock option fair value was $13.6 million or $0.40 per diluted share, compared to $3.9 million or $0.16 per diluted share, an increase of 162%.
  • Adjusted EBITDA up 102% to $12.0 million versus $5.9 million.

Management Commentary

“Completing the restatement is an important milestone for Assure Holdings,” said John A. Farlinger, Assure’s Executive Chairman and interim CEO. “First, I want to acknowledge and thank our shareholders for their patience and support as we have worked through this difficult process. Further, I want to thank our dedicated board of independent directors, as well as our employees, who have continued to deliver outstanding service to patients and partner physicians. While the events over the past five months have been challenging, as they have put our financial reporting and our trading on hold, we have continued to focus on improving our governance process, profitably growing our business and launching new partners.

“Despite the disruption, the fundamentals of our business are sound, which is a testament to the depth of our field-level talent and our operational model. Our strong revenue and adjusted EBITDA growth supports the continued commercial acceptance of our neuromonitoring platform and our belief in the future of this business. We look forward to discussing these results in more detail after our first quarter filing is completed.”

Peter Csapo, Assure’s CFO, commented, “We are focused on managing our business with rigor and discipline. We are improving our internal control environment, and we expect to continue to achieve growth, while focusing on the acceleration of cash collections.”

2017 Financial Results

Total revenue in 2017 increased 149% to $15.8 million compared to $6.4 million in 2016. The increase was due to increased cases generated from the Company’s existing surgeon network and the onboarding of additional surgeons.

Gross margin remained robust at 83.4% compared to 83.8% in 2016 as scaling the business has not disrupted margins.

Total operating expenses in 2017 increased to $19.7 million compared to $1.2 million in 2016. The increase was primarily driven by a one-time, non-cash expense of $16.0 million due to equity compensation expense for the performance stock grant for achieving an adjusted EBITDA threshold in 2017. The main beneficiary of this stock grant is in discussions with the board to modify and defer the grant until the cash is collected for cases in 2017 to support the equivalent adjusted EBITDA threshold established for fiscal year 2017. Excluding this charge, operating expenses increased due to multi-state expansion initiatives, key personnel hires, as well as ongoing corporate expenses in the wake of becoming a public company and an ongoing reporting issuer as of May 29, 2017.

Net loss in 2017 was $5.5 million or $(0.17) per diluted share, compared to net income of $3.6 million or $0.14 per diluted share in 2016. The 2017 per diluted share amount reflects 8.1 million of incremental diluted shares relating to the Company’s merger with Montreux Capital and subsequent public listing.

Adjusted EBITDA increased 102% to $12.0 million compared to $5.9 million in 2016 due to the increase in cases performed, which improved revenue and earnings from the equity method of investment in Assure’s PNEs. The Company defines adjusted EBITDA as net income/(loss) excluding interest, taxes, depreciation, stock-based compensation, performance share compensation, provision for broker warrant fair value, provision for stock option fair value and deemed shares costs related to the reverse takeover merger.

2016 Financial Restatement Summary

  • Revenue increased by $0.8 million from the previously reported amount or 15% additional revenue.
  • Earnings from the equity method of investment in our PNEs increases $0.4 million or 41% additional earnings from our partners.
  • Income before taxes increases $1.2 million or a 27% increase in earnings before taxes, however, net income after taxes declined $0.4 million. Net income declined due to a change in the tax provision for the restated financials based on a cash basis rather than previously utilized accrual method for tax purposes. The change in the provision method has a near-term benefit, which is realized in the 2017 financials.
  • The diluted income per share declined by $0.02 due to the tax provision change previously mentioned.

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 assureIOM.com.

Non-IFRS Measures

Adjusted EBITDA is defined as net income/(loss) excluding interest, taxes, depreciation, stock-based compensation, performance share compensation, provision for broker warrant fair value, provision for stock option fair value and deemed shares costs related to the reverse takeover merger.

Forward-Looking Statements

This news release contains certain statements that may constitute forward-looking information uner 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. Such information 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 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 is 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. 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. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement.

Investors are cautioned that, except as disclosed in the Filing Statement any information released or received with respect to the reverse take-over may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

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.

The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Contacts

Peter Csapo, Chief Financial Officer
Assure Holdings Corp.
(720) 287-3093
Peter.Csapo@assureiom.com

Cody Slach, Managing Director
Liolios Investor Relations
(949) 574-3860
IOM@Liolios.com

ASSURE HOLDINGS INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in United States Dollars)
     
  December 31,
2017
 December 31,
2016 (restated)
ASSETS    
Current assets    
Cash $215,326  $88,883
Accounts receivable, net  16,624,006   5,150,039
Deferred share issue costs  -   123,757
Prepaid expenses  130,060   -
Due from related parties  2,323,704   23,450
Total current assets  19,293,096   5,386,129
Equity method investments  2,259,663   1,127,229
Equipment and furniture, net  499,123   265,657
Total assets $22,051,882  $6,779,015
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
LIABILITIES    
Current    
Accounts payable and accrued liabilities $2,504,519  $890,585
Current portion of finance leases  181,787   44,370
Current income taxes payable  22,475   167,660
Note payable  -   184,658
Due to related parties  67,587   164,039
Total current liabilities  2,776,368   1,451,312
Finance leases, net of current portion  291,063   131,396
Provision for fair value of stock options  325,515   -
Provision for performance share issuance  16,011,500   -
Provision for fair value of broker warrants  128,062   -
Deferred tax liability, net  92,276   1,767,934
Total liabilities  19,624,784   3,350,642
SHAREHOLDERS' EQUITY    
Capital stock  35,505   675,556
Additional paid-in capital  6,079,114   324,547
Retained earnings/(accumulated deficit)  (3,687,521)  2,428,270
Total shareholders' equity  2,427,098   3,428,373
Total liabilities and shareholders' equity $22,051,882  $6,779,015
     


ASSURE HOLDINGS INC.
CONSOLIDATED STATEMENT OF INCOME/(LOSS)
(in United States Dollars)
     
  Year Ended
December 31, 2017
 Year Ended
December 31, 2016
(restated)
Revenue    
Out-of-Network fees $15,394,640  $6,149,693 
Contract fees  401,180   201,443 
Total revenue  15,795,820   6,351,136 
Cost of revenues  (2,618,715)  (1,028,350)
Gross margin  13,177,105   5,322,786 
Operating expenses    
General and administrative  3,092,222   1,014,254 
Provision for performance share compensation  16,011,500   - 
Depreciation and amortization  205,836   66,493 
Sales and marketing  398,731   163,138 
Total operating expenses  19,708,289   1,243,885 
Income/(loss) from operations  (6,531,184)  4,078,901 
Other income/(expenses)    
Earnings from equity method investments  2,266,035   1,464,364 
Provision for stock option fair value  (261,866)  - 
Provision for broker warrant fair value  (1,195,080)  - 
Deemed share costs related to RTO  (1,551,126)  - 
Interest, net  (48,780)  (17,544)
Total other income/(expenses)  (790,817)  1,446,820 
Income/(loss) before income taxes  (7,322,001)  5,525,721 
Income tax benefit/(expense)  1,820,843   (1,935,594)
Net income/(loss) $(5,501,158) $3,590,127 
Basic income/(loss) per common share $(0.17) $0.16 
Fully diluted income/(loss) per common share $(0.17) $0.14 
     


ASSURE HOLDINGS CORP.
ADJUSTED EBITDA
(in United States Dollars)
   
 Year ended
December 31, 2017
Year ended
December 31, 2016
(restated)
Reported net income/(loss)$(5,501,158)$3,590,127
Interest 48,780  17,544
Taxes (1,820,843) 1,935,594
Depreciation and amortization 205,836  66,493
Share based compensation 74,148  324,547
Deemed share costs related to RTO 1,551,126  -
Performane share compensation 16,011,500  -
Provision for broker warrant fair value 1,195,080  -
Provision for stock option fair value 261,866  -
Adjusted EBITDA$12,026,335 $5,934,305
   


ASSURE HOLDINGS CORP.
EARNINGS PER SHARE
(in United States Dollars)
    
 December 31,
2017
 December 31,
2016 (restated)
Income attributable to common shareholders   
Basic$(5,501,158) $3,590,127 
Weighted average common  share outstanding 33,225,195   23,114,746 
Basic earnings per common share$(0.17) $0.16 
    
Income attributable to common shareholders   
Basic$(5,501,158) $3,590,127 
Weighted average comon shares outstanding 33,225,195   23,114,746 
Shares repurchaseable -   (1,009,517)
Dilutive effect of stock options, warrants, and performance shares -   3,000,000 
Weighted average comon shares outstanding assuming dilution 33,225,195   25,105,229 
Fully diluted earnings per common share$(0.17) $0.14 
    


ASSURE HOLDINGS CORP.
2016 RESTATEMENT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in United States Dollars)
           
       As filed  Adjusting entries Restated
ASSETS          
Current assets         
Cash     88,883 -  88,883
Accounts receivable, net   4,328,551 821,488  5,150,039
Deferred share issue costs   123,757 -  123,757
Total current assets   4,541,191 821,488  5,362,679
Equity method investments   703,363 423,866  1,127,229
Due from related parties   23,450 -  23,450
Deferred tax asset    164,778 (164,778) -
Equipment and furniture, net   265,657 -  265,657
Total assets    5,698,439 1,080,576  6,779,015
           
LIABILITIES AND SHAREHOLDERS' EQUITY    
LIABILITIES         
Current          
Accounts payable and accrued liabilities  817,928 72,657  890,585
Current portion of finance leases  44,370 -  44,370
Current income taxes payable   504,023 (336,363) 167,660
Note payable    184,658 -  184,658
Due to related parties   164,039 -  164,039
Total current liabilities   1,715,018 (263,706) 1,451,312
Deferred tax liability   - 1,767,934  1,767,934
Finance leases, net of current portion  131,396 -  131,396
Total liabilities    1,846,414 1,504,228  3,350,642
           
SHAREHOLDERS' EQUITY       
Capital stock    675,556 -  675,556
Additional paid-in capital   324,547 -  324,547
Retained earnings    2,851,922 (423,652) 2,428,270
Total shareholders' equity   3,852,025 (423,652) 3,428,373
Total liabilities and shareholders' equity  5,698,439 1,080,576  6,779,015
           


ASSURE HOLDINGS CORP.
2016 RESTATEMENT
CONSOLIDATED STATEMENT OF INCOME/(LOSS)
(in United States Dollars)
         
    As filed Adjusting entries Restated
Revenue       
Out-of-Network fees $5,328,205  $821,488  $6,149,693 
Contract fees   201,443   -   201,443 
Total revenue   5,529,648   821,488   6,351,136 
Cost of revenues   (931,693)  (96,657)  (1,028,350)
Gross margin   4,597,955   724,831   5,322,786 
Operating expenses      
General and administrative  1,010,340   3,914   1,014,254 
Depreciation and amortization  66,493   -   66,493 
Sales and marketing   191,052   (27,914)  163,138 
Total operating expenses  1,267,885   (24,000)  1,243,885 
Income from operations  3,330,070   748,831   4,078,901 
Other income/(expenses)      
Earnings from equity method investments 1,040,498   423,866   1,464,364 
Interest, net   (17,544)  -   (17,544)
Total other income/(expenses) 1,022,954   423,866   1,446,820 
Income before income taxes  4,353,024   1,172,697   5,525,721 
Income taxes   (339,245)  (1,596,349)  (1,935,594)
Net income  $4,013,779  $(423,652) $3,590,127 
Basic income per common share$0.17  $(0.01) $0.16 
Diluted income per common share$0.16  $(0.02) $0.14 
         


 

Tuesday, August 7, 2018 - 13:05