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Protech Home Medical Acquires Riverside Medical and Central Oxygen
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN
CINCINNATI, Dec. 17, 2018 (GLOBE NEWSWIRE) -- Protech Home Medical Corp. (“PHM” or the “Company”) (TSXV: PHM), a healthcare services company with operations in the U.S., is pleased to announce that it has closed the acquisitions of Riverside Medical, Inc. (“Riverside Medical”) and Central Oxygen, Inc. (“Central Oxygen”). Both of these acquisitions are expected to be immediately accretive to the Company on a revenue and EBITDA basis.
Riverside Medical is focused on the provision of superior home respiratory services and equipment throughout West Tennessee, Southern Middle Tennessee and Northern Mississippi. The Riverside Medical acquisition is the Company’s first entry into the State of Tennessee, which neighbors the Company’s two largest business units and gives it immediate access to the insurance contracts necessary to serve patients within the state. Riverside Medical will give the Company access to the largest populations in the State.
Central Oxygen is also focused on the respiratory business and is located in up-state Indiana. The acquisition will allow the Company to expand its current operations in Indiana from a geographic perspective and brings additional insurance contracts into the Company’s domain.
Under the terms of definitive purchase agreements, the Company acquired Riverside Medical and Central Oxygen for total consideration of approximately $871,000 (including assumed debt and including 1,137,456 common shares issued at a deemed price of $0.14 per share). The securities issued are subject to a four month hold period. When combined with existing operations, the Company expects annualized run-rate revenue to exceed $86 million and Adjusted EBITDA to exceed $15 million, before any expected additional revenue generated from organic growth, cross selling and corporate synergies.
“I am pleased to continue to deliver on the strategy that we have articulated to the market place of rolling in strategic and well-priced assets when they make sense for the Company,” said Greg Crawford, Chairman and CEO of the Company. “Both of these acquisitions will be immediately accretive to revenue and EBITDA and Riverside Medical provides us with our first entry point into the State of Tennessee, which borders several other states in which we already have a material presence in. Consistent with our acquisition strategy, we will focus on achieving sustainable revenue and profit growth through our integration platform and expanding the product offering available to these new business units. I remain extremely optimistic about our financial position, our operations and what lies ahead in 2019 for our Company.”
M&A Pipeline Update
As previously announced, the Company is focused on the implementation of its revised corporate strategy that incorporates technology, organic growth and strategic acquisitions to continue to improve upon its recent financial results. The Company is currently pursuing several corporate initiatives that may include further strategic acquisitions of varying sizes and materiality.
“We have now closed three acquisitions in the last several months and will continue to pursue both large and small opportunities as they arise,” said Hardik Mehta, Chief Financial Officer of the Company. “We continue to be very optimistic about the level and quality of opportunities we are seeing in the market and look forward to a very active 2019 in this regard. With the additional funds raised in our recent financing, we have strengthened the balance sheet further allowing us to capitalize on these opportunities when we render them attractive.”
ABOUT PROTECH HOME MEDICAL CORP.
The Company provides in-home monitoring and disease management services for patients in the United States healthcare market. The primary business objective of the Company is to create shareholder value by offering a broader range of services to patients in need of in-home monitoring and chronic disease management. The Company’s organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient’s services and making life easier for the patient.
For further information please visit our website at www.protechhomemedical.com, or contact:
Chief Financial Officer
Protech Home Medical Corp.
Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to the Company, including: the results and benefits anticipated from the acquisitions; expected annualized run-rate revenue and Adjusted EBITDA; proposed acquisitions; and the Company’s revised corporate strategy improving overall financial results on a go forward basis; are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions, including, without limitation: the Company’s ability to maintain or slightly increase its collections ratios; the Company maintaining its gross margins and maintaining its revenue growth; the Company’s ability to increase gross margins at or below 70%; the Company’s ability to increase patient compliance and collections; the Company’s ability to decrease SG&A compared to trailing twelve months pre-acquisition and the Company achieving organic revenue growth of at least 5%; and the Company maintaining its selling, general and administrative expenses. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Examples of such risk factors include, without limitation: credit; market (including equity, commodity, foreign exchange and interest rate); liquidity; operational (including technology and infrastructure); reputational; insurance; strategic; regulatory; legal; environmental; capital adequacy; the general business and economic conditions in the regions in which the Company operates; the ability of the Company to execute on key priorities, including the successful completion of acquisitions, business retention, and strategic plans and to attract, develop and retain key executives; difficulty integrating newly acquired businesses; the ability to implement business strategies and pursue business opportunities; low profit market segments; disruptions in or attacks (including cyber-attacks) on the Company's information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behavior to which the Company is exposed; the failure of third parties to comply with their obligations to the Company or its affiliates; the impact of new and changes to, or application of, current laws and regulations; decline of reimbursement rates; dependence on few payors; possible new drug discoveries; a novel business model; dependence on key suppliers; granting of permits and licenses in a highly regulated business; the overall difficult litigation environment, including in the U.S.; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the availability of funds and resources to pursue operations; critical accounting estimates and changes to accounting standards, policies, and methods used by the Company; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events; as well as those risk factors discussed or referred to in the Company’s disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
This press release refers to “Adjusted EBITDA” which is a non-GAAP and non-IFRS financial measure that does not have a standardized meaning prescribed by GAAP or IFRS. The Company’s presentation of this financial measure may not be comparable to similarly titled measures used by other companies. This financial measure is intended to provide additional information to investors concerning the Company’s performance. Adjusted EBITDA is defined as EBITDA excluding stock based compensation and gains/losses on financial derivatives. Adjusted EBITDA is a Non-IFRS measure the Company uses as an indicator of financial health, and excludes several items which may be useful in the consideration of the financial condition of the Company, including interest expense, taxes, depreciation, amortization, stock based compensation, good will impairment and gain/losses on financial derivatives.
Management uses these non-GAAP measures as key metrics in the evaluation of the Company’s performance and the consolidated financial results. The Company believes these non-GAAP measures are useful to investors in their assessment of the operating performance and the valuation of the Company. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data, the Company has determined that it is appropriate to make this data available to all investors. However, non-GAAP financial measures are not prepared in accordance with GAAP, and the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.
The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.
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