EX-99.1 2 exhibit99-1xearningsreleas.htm EXHIBIT 99.1 Exhibit
Nobilis Health Reports Fourth Quarter and Full Year 2017 Financial Results

Full Year 2017 Total Revenues of $299.7 million Increased 4.9% Over Prior Year

HOUSTON, TX--(PRNewswire-March 8, 2018) - Nobilis Health Corp. (NYSE American: HLTH) ("Nobilis" or the "Company") today announced financial and operational results for the fourth quarter and full year ended December 31, 2017.

Full Year and Fourth Quarter Highlights

•
Full year total revenue of $299.7 million, a 4.9% increase over prior year
•
Full year net income of $3.8 million, compared to prior year net income of $6.4 million; net income impacted by $6.2 million deferred tax asset adjustment
•
Full year Adjusted EBITDA1 of $41.4 million, an increase of 21.9% over the prior year Adjusted EBITDA1 of $34.0 million
•
Full year cash from operations of $26.4 million, compared to $1.6 million in the prior year
•
Fourth quarter total revenues of $86.8 million, compared to $101.9 million in the prior year
•
Fourth quarter net income of $3.6 million, compared to $9.4 million in the prior year; net income impacted by $6.2 million deferred tax asset adjustment
•
Fourth quarter Adjusted EBITDA1 of $22.6 million, an increase of 8.9% over the prior year Adjusted EBITDA1 of $20.8 million

"We are pleased to report 2017 year over year growth in revenue and Adjusted EBITDA of 4.9% and 21.9%, respectively," said Harry Fleming, Chief Executive Officer of Nobilis Health. "We made great progress reducing overall costs last year as evidenced by improvements in gross margins, operating income and net income, absent the impact of tax reform. We achieved this despite an estimated loss of $15-$20 million of revenues in the Houston market resulting from Hurricane Harvey. 2017 was a big year for us--we made significant progress on our in-network strategy with the acquisitions of Elite Surgical Affiliates, Hamilton Vein Center, DeRosa Medical and Mountain West Surgery Center. As we enter 2018, we will continue to focus on improving operational efficiency, increasing in-network revenues and expanding the continuum of care we offer our patients through enhanced alignment with primary care physician practices and growth of our vertically integrated services lines."

Fourth Quarter 2017 Financial Results

Total revenue for the fourth quarter of 2017 was $86.8 million, a 14.8% decrease over the same period in the prior year. Revenues in the fourth quarter of 2017 continued to be impacted by Hurricane Harvey (Houston, Texas is our largest market) and the shift away from low margin lab business. Total case volume decreased by 161 cases to 5,846 cases in the fourth quarter of 2017, as compared to the same period in the prior year. Fourth quarter 2017 revenue per case decreased to $14,848 as compared to prior year's revenue per case of $16,966.

Net income attributable to Nobilis for the fourth quarter of 2017 was $3.6 million, or $0.05 per fully diluted share, as compared to the prior period of $9.4 million, or $0.12 per fully diluted share. Fourth quarter net income was impacted by $6.2 million deferred tax asset write-down. Absent of this write-down, net income for the fourth quarter would have been $9.8 million.

Adjusted EBITDA1 for the fourth quarter of 2017, which adds back certain non-cash and non-recurring expenses, was $22.6 million, an increase of 8.9% over Adjusted EBITDA1 of $20.8 million for the same period in the prior year.




Total cash was $22.5 million, accounts receivable was $144.5 million and total debt was $120.9 million as of December 31, 2017, compared to $24.6 million, $125.0 million and $67.8 million, respectively, at December 31, 2016. Operating cash for the year was $26.4 million versus $1.6 million in 2016.

Full Year 2017 Financial Results

Total revenue for 2017 increased to $299.7 million, a 4.9% increase over the prior year. Total case volume decreased by 1,184 cases, or 5.9%, to 18,757 in 2017, compared to the prior year. Revenue per case increased to $15,979 for 2017, as compared to $14,329 in the prior year, reflecting the impact of higher acuity case mix.

Net income attributable to Nobilis for 2017 was $3.8 million, or $0.05 per fully diluted share, as compared to $6.4 million, or $0.08 per fully diluted share, in the same period the prior year. Absent the effects of recent tax reform legislation, net income for 2017 would have been $10.0 million.

Adjusted EBITDA1 for the year ended 2017, which adds back certain non-cash and non-recurring expenses, was $41.4 million, a 21.9% increase over Adjusted EBITDA1 of $34.0 million for the prior year.

Full Year 2018 Guidance

▪
Revenue in the range of $345.0 million to $355.0 million
▪
Adjusted EBITDA of $57.0 million to $62.0 million

Conference Call Information

Nobilis Health will host a conference call on March 8, 2018, at 8:00 a.m. CT (9:00 a.m. ET) to discuss its financial results for the fourth quarter and full year 2017. To participate in the conference call, please dial (866) 393-4306 in the U.S. and Canada, and +1 (734) 385-2616 internationally. Please enter conference ID 9329879. There will be a livestream of the conference call available at: http://investors.nobilishealth.com/investors/events-and-presentations/.

About Nobilis Health Corp.

Nobilis Health (www.Nobilishealth.com) is a full-service healthcare development and management company, with more than 30 locations across Texas and Arizona, including hospitals, ambulatory surgery centers, and multi-specialty clinics. In addition, Nobilis Health partners with more than 30 facilities across the country. Marketing nine independent brands, Nobilis Health deploys a unique patient acquisition strategy driven by proprietary, direct-to-consumer marketing technology, focusing on a specified set of procedures that are performed at its facilities by local physicians. Nobilis Health's business model connects patients with physicians and delivers the highest quality healthcare.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of Canadian and United States securities laws, including the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts and may be identified by the use of words such as "may," "believe," "will," "expect," "project," "estimate," "anticipate," "plan" or "continue." These forward-looking statements are based on current plans and expectations and are subject to a number of risks, uncertainties and other factors which could



significantly affect current plans and expectations and our future financial condition and results. These factors, which could cause actual results, performance and achievements to differ materially from those anticipated, include, but are not limited to our ability to successfully maintain effective internal controls over financial reporting; our ability to implement our business strategy, manage the growth in our business, and integrate acquired businesses; the risk of litigation and investigations, and liability claims for damages and other expenses not covered by insurance; the risk that payments from third-party payers, including government healthcare programs, may decrease or not increase as costs increase; adverse developments affecting the medical practices of our physician limited partners; our ability to maintain favorable relations with our physician limited partners; our ability to grow revenues by increasing case and procedure volume while maintaining profitability at the Nobilis Facilities; failure to timely or accurately bill for services; our ability to compete for physician partners, patients and strategic relationships; the risk of changes in patient volume and patient mix; the risk that laws and regulations that regulate payments for medical services made by government healthcare programs could cause our revenues to decrease; the risk that contracts are canceled or not renewed or that we are not able to enter into additional contracts under terms that are acceptable to us; and the risk of potential decreases in our reimbursement rates. The foregoing are significant factors we think could cause our actual results to differ materially from expected results. However, there could be additional factors besides those listed herein that also could affect us in an adverse manner.

We have not undertaken any obligation to publicly update or revise any forward-looking statements. All of our forward-looking statements speak only as of the date of the document in which they are made or, if a date is specified, as of such date. Subject to any mandatory requirements of applicable law, we disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any changes in events, conditions, circumstances or information on which the forward-looking statement is based. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing factors and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed by March 16, 2018, as updated by other filings with the Securities and Exchange Commission.




NOBILIS HEALTH CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
 
December 31, 2017
 
December 31, 2016
Assets
 
 
 
Current Assets:
 
 
 
Cash
$
22,536

 
$
24,572

Trade accounts receivable, net of allowance for bad debts of $2,598 and $750 at December 31, 2017 and 2016, respectively
144,522

 
124,951

Medical supplies
3,356

 
4,468

Prepaid expenses and other current assets
14,472

 
10,083

Total current assets
184,886

 
164,074

Property and equipment, net
51,559

 
36,723

Intangible assets, net
65,990

 
19,618

Goodwill
116,072

 
62,018

Deferred tax asset
9,951

 
21,652

Other long-term assets
2,580

 
1,350

Total Assets
$
431,038

 
$
305,435

Liabilities and Shareholders' Equity
 
 
 
Current Liabilities:
 
 
 
Trade accounts payable
$
24,312

 
$
22,184

Accrued liabilities
35,393

 
30,145

Current portion of capital leases
3,249

 
3,985

Current portion of long-term debt
3,766

 
2,220

Current portion of convertible promissory note
4,250

 
—

Current portion of warrant and stock option derivative liabilities
—

 
3

Other current liabilities
16,324

 
7,561

Total current liabilities
87,294

 
66,098

Lines of credit
18,000

 
15,000

Long-term capital leases, net of current portion
12,667

 
12,387

Long-term debt, net of current portion
90,619

 
48,323

Convertible promissory note, net of current portion
4,250

 
2,250

Warrant and stock option derivative liabilities, net of current portion
384

 
899

Other long-term liabilities
3,036

 
3,999

Total liabilities
216,250

 
148,956

Commitments and contingencies
 
 
 
Contingently redeemable noncontrolling interest
17,161

 
14,304

Shareholders' Equity:
 
 
 
Common shares, no par value, unlimited shares authorized, 78,183,802 and 77,805,014 shares issued and outstanding at December 31, 2017 and 2016, respectively
—

 
—

Additional paid in capital
225,790

 
222,240

Accumulated deficit
(75,245
)
 
(79,042
)
Total shareholders’ equity attributable to Nobilis Health Corp.
150,545

 
143,198

Noncontrolling interests
47,082

 
(1,023
)
Total shareholders' equity
197,627

 
142,175

Total Liabilities and Shareholders' Equity
$
431,038

 
$
305,435





NOBILIS HEALTH CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(unaudited)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Patient and net professional fees
$
80,752

 
$
97,012

 
$
282,240

 
$
264,211

Contracted marketing revenues
3,045

 
2,592

 
8,208

 
13,346

Factoring revenues
3,004

 
2,313

 
9,269

 
8,187

Total revenues
86,801

 
101,917

 
299,717

 
285,744

Operating expenses:
 
 
 
 
 
 
 
Salaries and benefits
17,336

 
14,397

 
63,809

 
52,774

Drugs and supplies
13,167

 
17,341

 
48,876

 
57,011

General and administrative
27,615

 
41,170

 
124,024

 
126,848

Bad debt (recovery) expense
2,402

 
(385
)
 
2,402

 
(385
)
Depreciation and amortization
3,478

 
2,077

 
11,260

 
8,539

Total operating expenses
63,998

 
74,600

 
250,371

 
244,787

Corporate expenses:
 
 
 
 
 
 
 
Salaries and benefits
2,695

 
1,897

 
11,706

 
6,974

General and administrative
2,739

 
3,913

 
12,839

 
18,897

Legal expenses
506

 
645

 
2,149

 
4,755

Depreciation
87

 
84

 
343

 
293

Total corporate expenses
6,027

 
6,539

 
27,037

 
30,919

Income from operations
16,776

 
20,778

 
22,309

 
10,038

Other (income) expense:
 
 
 
 
 
 
 
Change in fair value of warrant and stock option derivative liabilities
(74
)
 
(1,014
)
 
(432
)
 
(2,580
)
Interest expense
2,009

 
1,884

 
6,007

 
3,999

Other (income) expense, net
(6,762
)
 
41

 
(6,547
)
 
(2,970
)
Total other (income) expense
(4,827
)
 
911

 
(972
)
 
(1,551
)
Income before income taxes and noncontrolling interests
21,603

 
19,867

 
23,281

 
11,589

Income tax expense (benefit)
12,372

 
$
6,253

 
13,000

 
4,487

Net income
9,231

 
13,614

 
10,281

 
7,102

Net income attributable to noncontrolling interests
5,635

 
$
4,247

 
6,484

 
653

Net income attributable to Nobilis Health Corp.
$
3,596

 
$
9,367

 
$
3,797

 
$
6,449

Net income per basic common share
$
0.05

 
$
0.12

 
$
0.05

 
$
0.08

Net income per fully diluted common share
$
0.05

 
$
0.12

 
$
0.05

 
$
0.08

Weighted average shares outstanding (basic)
77,994,408

 
77,070,944

 
77,852,752

 
76,453,128

Weighted average shares outstanding (fully diluted)
78,248,772

 
77,844,014

 
78,188,597

 
77,562,495

 
 
 
 
 
 
 
 





NOBILIS HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Years ended December 31,
 
2017
 
2016
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$
10,281

 
$
7,102

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
11,603

 
8,832

Provision (recoupment) for bad debts, net
2,402

 
(385
)
Share-based compensation
2,706

 
6,192

Change in fair value of warrant and stock option derivative liabilities
(432
)
 
(2,580
)
Deferred income taxes
11,701

 
3,383

Impairment charges
1,500

 
688

Gain on sale of property and equipment
—

 
(265
)
Gain on derecognition of liabilities through settlement
(3,711
)
 
—

Loss (earnings) from equity method investment
108

 
(938
)
Amortization of deferred financing fees
734

 
1,034

Changes in operating assets and liabilities, net of assets acquired and liabilities assumed:
 
 
 
Trade accounts receivable
(14,737
)
 
(28,517
)
Medical supplies
1,407

 
216

Prepaid expenses and other current assets
(4,042
)
 
(7,106
)
Other long-term assets
(219
)
 
(6
)
Trade accounts payable and accrued liabilities
5,010

 
11,031

Other current liabilities
2,400

 
1,293

Other long-term liabilities
(321
)
 
508

Distributions from equity investments
—

 
1,085

Net cash provided by operating activities
26,390

 
1,567

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchase of property and equipment
(5,152
)
 
(5,541
)
Purchase of equity method investment
—

 
(609
)
Note receivable, net
—

 
150

Acquisitions, net of cash acquired
(62,268
)
 
(17,239
)
     Net cash used for investing activities
(67,420
)
 
(23,239
)
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Distributions to noncontrolling interests
(2,646
)
 
(7,059
)
Proceeds from exercise of stock options
—

 
2,322

Proceeds from exercise of stock warrants
—

 
130

Payments on capital lease obligations
(4,467
)
 
(3,613
)
Proceeds from line of credit
3,000

 
23,213

Payments from line of credit
—

 
(11,213
)
Proceeds from debt
50,000

 
58,940

Payments on debt
(2,013
)
 
(29,713
)



Deferred financing fees
(4,880
)
 
(2,429
)
     Net cash provided by financing activities
38,994

 
30,578

 
 
 
 
NET (DECREASE) INCREASE IN CASH
(2,036
)
 
8,906

CASH — Beginning of year
24,572

 
15,666

CASH — End of year
$
22,536

 
$
24,572


NOBILIS HEALTH CORP.
RECONCILIATION ON NON-GAAP FINANCIAL MEASURES
(in thousands)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Net income attributable to Nobilis Health Corp.
 
$
3,596

 
$
9,367

 
$
3,797

 
$
6,449

Interest
 
2,009

 
1,884

 
6,007

 
3,999

Income taxes
 
12,372

 
$
6,253

 
13,000

 
4,487

Depreciation and amortization
 
3,565

 
2,161

 
11,603

 
8,832

EBITDA
 
$
21,542

 
$
19,665

 
$
34,407

 
$
23,767

 
 
 
 
 
 
 
 
 
Non-cash compensation expenses
 
$
(68
)
 
$
966

 
$
2,705

 
$
6,191

Change in fair value of warrant and stock option derivative liabilities
 
(74
)
 
(1,014
)
 
(432
)
 
(2,580
)
Acquisition expenses
 
1,530

 
496

 
3,294

 
2,315

Non-recurring expenses
 
(296
)
 
674

 
1,441

 
4,292

Adjusted EBITDA1
 
$
22,634

 
$
20,787

 
$
41,415

 
$
33,985


1 Use of Non-GAAP Financial Measures  
Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, non-cash compensation expenses, change in fair value of warrant and stock option derivative liabilities, acquisition expenses, bargain purchase gain and non-recurring expenses. Adjusted EBITDA should not be considered a measure of financial performance required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA is an analytical indicator used by management and the health care industry to evaluate company performance, allocate resources and measure leverage and debt service capacity. Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with U.S. GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.
Contact Information:
Tuan Tran
Vice President, Investor Relations
IR@nobilishealth.com
713-355-8614