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Assure Holdings Reports Second Quarter 2018 Financial Results

– Revenue Increases by 46% to $6.0 Million, Net Income Increases to $3.3 Million –

– Management to Discuss Second Quarter Results via Conference Call on Thursday, August 30, 2018, at 11:00 A.M. Eastern Time –

DENVER, Aug. 29, 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 three and six months ended June 30, 2018, and revised results for the three and six months ended June 30, 2017.

Second Quarter 2018 Financial Highlights vs. Revised Second Quarter 2017

  • Total revenue grew 46% to $6.0 million versus a revised $4.1 million.
  • Managed cases increased 97% to 677 versus 344.
  • Gross margin was 82.1% versus a revised 82.3%.
  • Earnings from equity method of investment in Physician Network Entities (PNEs) grew 18% to $0.7 million from a revised $0.6 million.
  • Net income increased to $3.3 million compared to a revised $0.2 million. Revised net income in 2017 was not burdened by tax expense as the Company modified its tax provision methodology at the end of 2017.
  • Diluted earnings per share was $0.07 compared to a revised $0.01 per share. The 2018 number reflects the full impact of the shares issued in conjunction with the Company’s reverse take-over transaction to become a public company on the TSXV and the performance shares.
  • Adjusted EBITDA grew 50% to $4.2 million versus a revised $2.8 million.

Six Months Ended June 2018 Financial Highlights vs. Revised Same Period in 2017

  • Total revenue grew 63% to $11.7 million versus a revised $7.2 million.
  • Gross margin increased 80 basis points to 82.8% versus a revised 82.0%.
  • Net income increased 42% to $6.2 million, or $0.14 per diluted share, compared to a revised $2.5 million, or $0.08 per diluted share.
  • Adjusted EBITDA grew 64% to $8.4 million versus a revised $5.2 million.

Management Commentary

“During the second quarter, we continued to experience strong results driven by a 97% increase in managed case volume,” said John A. Farlinger, Assure’s Executive Chairman and Interim CEO. “This was due to strong growth in our new markets of Louisiana and Texas, while continuing to grow organically in Colorado. Looking to the second half of 2018, we remain well positioned to further penetrate new and existing markets with our unique neuromonitoring platform.”

Second Quarter 2018 Financial Results

Total revenue increased 46% to $6.0 million compared to a revised $4.1 million in the second quarter of 2017. The significant improvement was due to the continued increase in cases generated from the Company’s existing surgeon network, the onboarding of additional surgeons, and the continued expansion in new states. In fact, revenue generated outside Colorado was 35% of total revenue in the second quarter of 2018. Managed cases increased 97% to 677 versus 344 in the second quarter of 2017, primarily driven by the expansion into Louisiana, Texas and Utah.

Gross margin was 82.1% compared to a revised 82.3% in the same quarter last year as the fundamentals of the business sustained the strong revenue growth.

Total operating expenses increased to $1.4 million compared to $1.2 million in the same quarter in 2017 due to expenses associated with growing the business, costs of being a public company and one-time legal expenses related to the Company’s 2018 forensic audit.

Net income increased to $3.3 million or $0.07 per diluted share, compared to net income of $0.2 million or $0.01 per diluted share in the second quarter of 2017. The 2018 per diluted share amount reflects 6.0 million of incremental diluted shares relating to performance shares.

Adjusted EBITDA increased 50% to $4.2 million compared to $2.8 million in the same quarter in 2017 due to the continued increase in cases managed, resulting in improved revenue and earnings from the equity method of investment in Assure’s PNEs.

Six Months Ended June 2018 Financial Results

Total revenue in the first six months of 2018 increased 63% to $11.7 million compared to $7.2 million in the same period in 2017. The increase was primarily driven by the increase in cases managed resulting from the growing number of relationships in Colorado and the continued expansion into new states.

Gross margin increased 80 basis points to 82.8% compared to 82.0% in the year-ago period. The increase was due to the strong year-over-year growth in revenue.

Total operating expenses in the first six months increased to $3.1 million compared to $1.8 million in the year-ago period. The increase was attributed to costs associated with multi-state expansion initiatives and the ongoing corporate expenses of becoming a public company.

Net income in the first six months of 2018 was $6.2 million or $0.14 per diluted share, compared to $2.5 million or $0.08 per diluted share in the year-ago period. The 2018 per diluted share amount reflects 6.0 million of incremental diluted shares relating to performance shares.

Adjusted EBITDA increased 64% to $8.4 million compared to $5.2 million in the first six months of 2017.

Collected $3.5 million of cash from accounts receivable compared to $1.6 million in the prior year period. Cash distributions from PNE entities totaled $0.5 million in the six months ended June 30, 2018, compared to $0.1 million in the same prior year period. Total cash inflows from collections and distributions increased 252% year over year.  

Assure has also filed its unaudited condensed interim financial statements and management discussion & analysis (MD&A) with SEDAR. This information can be found at www.sedar.com.

Conference Call

The Company will hold a conference call Thursday, August 30, 2018, at 11:00 a.m. Eastern time to discuss its second quarter 2018 results.

Date: Thursday, August 30, 2018
Time: 11:00 a.m. Eastern time
Toll-free dial-in number: 1-877-407-0792
International dial-in number: 1-201-689-8263
Conference ID: 13683006

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 Liolios Group 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 September 13, 2018.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13683006

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, share-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 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. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company, including but not limited to the Company obtaining regulatory approval to commence trading. 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 statements in this news release include but are not limited to: Looking to the back half of 2018, we remain well positioned to further penetrate new and existing markets with our unique neuromonitoring platform. 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.

Contact

Cody Slach, Managing Director
Liolios Investor Relations
1-949-574-3860
IOM@Liolios.com


ASSURE HOLDINGS INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in United States Dollars)
 
  June 30, 2018 (unaudited) December 31, 2017
ASSETS    
Current assets    
Cash $  440,008 $  215,326 
Accounts receivable, net    24,784,275    16,624,006 
Prepaid expenses    170,983    130,060 
Due from related parties     2,110,911    2,256,117 
  Total current assets    27,506,177    19,225,509 
Equity method investments     3,328,868    2,259,663 
Equipment and furniture, net    481,766    499,123 
  Total assets $  31,316,811 $  21,984,295 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
LIABILITIES    
Current liabilities    
Accounts payable and accrued liabilities  $  3,049,346 $  2,504,519 
Current portion of finance leases    230,969    181,787 
Income taxes payable     2,095,460    22,475 
Line of credit     500,000    -  
  Total current liabilities    5,875,775    2,708,781 
Finance leases, net of current portion     317,678    291,063 
Provision for fair value of stock options     214,415    325,515 
Provision for performance share issuance     16,011,500    16,011,500 
Provision for fair value of broker warrants     59,751    128,062 
Deferred tax liability, net     92,276    92,276 
  Total liabilities    22,571,395    19,557,197 
SHAREHOLDERS' EQUITY    
Capital stock     35,555    35,505 
Additional paid-in capital     6,155,742    6,079,115 
Retained earnings/(accumulated deficit)    2,554,119    (3,687,522)
  Total shareholders' equity    8,745,416    2,427,098 
Total liabilities and shareholders' equity $  31,316,811 $  21,984,295 
 

 

ASSURE HOLDINGS INC.
CONSOLIDATED STATEMENT OF INCOME
(in United States Dollars)
 
  Three months ended June 30, 2018  Three months ended June 30, 2017 (revised) Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 (revised)
Revenue        
  Out-of-Network fees $  5,895,319  $  4,006,183  $  11,484,160  $  6,994,689 
  Contract fees    138,689     112,818     250,999     190,883 
Total revenue    6,034,008     4,119,001     11,735,159     7,185,572 
Cost of revenues    (1,082,926)    (727,792)    (2,021,804)    (1,290,426)
Gross margin    4,951,082     3,391,209     9,713,355     5,895,146 
Operating expenses        
General and administrative    1,100,392     1,103,892     2,454,541     1,638,519 
Depreciation and amortization    99,494     46,352     186,423     91,910 
Sales and marketing    151,475     83,503     446,630     148,336 
  Total operating expenses    1,351,361     1,233,747     3,087,594     1,878,765 
Income from operations    3,599,721     2,157,462     6,625,761     4,016,381 
Other income/(expenses)        
Earnings from equity method investments    665,599     565,633     1,561,900     995,262 
Provision for broker warrant fair value    -      (930,189)    68,311     (930,189)
Provision for stock option fair value    -      (36,589)    111,100     (36,589)
Deemed share costs related to RTO    -      (1,551,126)    -      (1,551,126)
Interest, net    (26,711)    (5,586)    (52,446)    (21,802)
  Total other income/(expenses)    638,888     (1,957,857)    1,688,865     (1,544,444)
Income before income taxes    4,238,609     199,605     8,314,626     2,471,937 
Income tax expense    961,799     -      2,072,985     -  
Net income $  3,276,810  $  199,605  $  6,241,641  $  2,471,937 
Basic income per common share  $  0.09  $  0.01  $  0.18  $  0.09 
Fully diluted income per common share  $  0.07  $  0.01  $  0.14  $  0.08 

 

ASSURE HOLDINGS CORP.
ADJUSTED EBITDA
(in United States Dollars)
 
 Three Months Ended June 30, 2018Three Months Ended June 30, 2017 (revised)Six Months Ended June 30, 2018Six Months Ended June 30, 2017 (revised)
Reported net income$  3,276,810 $  199,605$  6,241,641 $  2,471,937
Interest   26,711    5,586   52,446    21,802
Depreciation   99,494    46,352   186,423    91,910
Share based compensation   (126,387)   50,609   74,177    50,609
Income tax expense   961,799    -    2,072,985    - 
Deemed share costs related to RTO   -     1,551,126   -     1,551,126
Provision for broker warrant fair value   -     930,189   (68,311)   930,189
Provision for stock option fair value   -     36,589   (111,100)   36,589
 $  4,238,427 $  2,820,056$  8,448,261 $  5,154,162

 

ASSURE HOLDINGS CORP. 
EARNINGS PER SHARE 
(in United States Dollars) 
         
 Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 (revised) Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 (revised) 
Income attributable to common shareholders        
Basic$3,276,810 $199,605 $6,241,641 $2,471,937 
Weighted average common  share outstanding 35,555,105  34,953,213  35,527,571  27,617,716 
Basic earnings per common share$0.09 $0.01 $0.18 $0.09 
         
Income attributable to common shareholders        
Basic$3,276,810 $199,605 $6,241,641 $2,471,937 
Weighted average common shares outstanding 35,555,105  34,953,213  35,527,571  27,617,716 
Dilutive effect of stock options, warrants, and performance shares 9,341,000  3,655,364  9,341,000  3,655,364 
Weighted average common shares outstanding assuming dilution 44,896,105  38,608,577  44,868,571  31,273,080 
Fully diluted earnings per common share$0.07 $0.01 $0.14 $0.08 


Wednesday, August 29, 2018 - 18:32