PHM Announces Intention to Make Normal Course Issuer Bid (Share Buy Back); Highlights Record Revenue and EBITDA for the Quarter; Appoints New CEO and President
LOS ANGELES, CALIFORNIA--(Marketwired - July 13, 2015) -
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Patient Home Monitoring (PHM) (TSX VENTURE:PHM), a profitable company focused on rolling-up annuity-based healthcare service companies in the U.S., announced today that, subject to the approval of the TSX Venture Exchange (the "Exchange"), it intends to make a normal course issuer bid to purchase up to 14,511,207 common shares of the issued and outstanding common shares of PHM.
PHM also highlighted its revenue and Adjusted EBITDA for the quarter ending June 30, 2015. Total quarterly revenue for PHM, including June 2015 revenue for Sleep Management, exceeded $19 million, as compared to PHM's revenue of $13.04 million for the quarter ending March 31, 2015, a 48% growth rate quarter-over-quarter. See financial highlights below for more details on total quarterly accounting.
Additionally, PHM announced it has appointed Casey Hoyt as Chief Executive Officer and Mike Moore as President, subject to Exchange approval. Michael Dalsin and Roger Greene, Chairman and Vice-Chairman respectively, will transition to non-executive board members.
Share Buy Back (NCIB)
The normal course issuer bid will commence three trading days after Exchange approval and will terminate 12-months thereafter or the date by which PHM has acquired the maximum shares which may be purchased under the bid. The common shares will be acquired through the facilities of the Exchange and the purchase and payment for the shares will be made by PHM in accordance with the requirements of the Exchange and all other applicable laws. The price paid by PHM for any common shares acquired by it will be the market price of the shares at the time of acquisition. In addition, the directors of PHM have ensured PHM will not pay more than $1.50 per share. All shares acquired by PHM under this bid will be cancelled. Purchases made pursuant to the bid may be made by Mackie Research Capital Corporation, GMP Securities and Beacon Securities on behalf of PHM. Pursuant to the Exchange's policies, up to 5,804,483 of PHM's common shares will be purchasable over any 30-day period within the bid period, being 2% of PHM's issued and outstanding common shares.
PHM is engaging in a normal course issuer bid because it believes that, from time to time, the market price of its common shares may not fully reflect the underlying value of its business and its future business prospects. As a result, depending upon future price movements and other factors, PHM believes that its outstanding common shares may represent an attractive investment, since a portion of PHM's excess cash can be invested for an attractive risk adjusted return on capital through its bid.
Both for the NCIB and for future acquisitions, PHM has executed an additional $15,750,000 loan facility at 6% annual interest rate. This will bring PHM's debt total to just under $21,000,000.
Highlights for the Quarter Ending June 30, 2015
The company provided highlights of its revenue and profitability for the third quarter of fiscal 2015. Full results are expected to be posted on Sedar before their due date of August 31, 2015.
FYQ3 2015 Highlights
-- Revenue for the quarter rose to more than $19,350,000 which included
only June revenue of Sleep Management, as compared to $13,036,000 for
the quarter ended March 31, 2015, a 48% increase from the previous
quarter and a 250% increase year over year.
-- July revenue is expected to exceed $9,700,000 or more than $116,400,000
in annualized run rate revenue.
-- Adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA) rose to more than $4,600,000 for the quarter, more than a 60%
increase from the previous quarter. This includes $1,500,000 of Adjusted
EBITDA for Sleep Management for the month of June 2015.(1)
-- Cash on the Balance Sheet as of July 10, 2015 was approximately
$56,000,000, prior to the $15,750,000 loan facility.
-- PHM expects to have total debt of $24,400,000 comprised of two loans
upon total drawn-down: $8,650,000 (7.5% annual interest) in August of
2014 and $15,750,000 (6% annual interest) planned in August of 2015.
Appointment of Chief Executive Officer and President
With the recent acquisition of Sleep Management, a company with $42 million in annualized run-rate revenue, PHM has adopted an additional strategy to generate organic growth through geographic expansion by opening new territories de novo. As a result of this additional strategy, the PHM board of directors is pleased to announce it has appointed Casey Hoyt and Mike Moore, founders of Sleep Management, as Chief Executive Officer and President, respectively. David Hayes will remain on as a key senior executive and member of the executive committee focused on revenue growth.
Additionally, Michael Dalsin and Roger Greene, Chairman and Vice Chairman, respectively will transition to non-executive board members as Casey Hoyt and Mike Moore take over as lead spokesmen for PHM.
"PHM is at an important and exciting inflection point," said Casey Hoyt, Incoming CEO of PHM. "We feel this is a great entry point for us to get involved with a company like PHM. PHM is only at its infancy and we see tremendous growth opportunities so we're excited to get to work. Mike and I are looking forward to applying the same successful organic growth methodology to all of PHM that resulted in 100% year-over year organic growth for Sleep Management."
"Because we decided to take a significant stake in PHM, cumulatively well over 10%, this share buy back is important to us," continued Mr. Hoyt. "While PHM needed to issue shares for acquisitions and capital to get to this point, we are committed to controlling the number of shares in the market going forward. For future acquisitions, we will look to do cash buy-outs. After this quarter is posted on Sedar, we look forward to meeting our fellow shareholders both in the US and Canada face-to-face."
About Casey Hoyt
Casey Hoyt co-founded Sleep Management in 2006 with the objective of becoming the leading respiratory disease management company in the United States. His vision then and now is to enable patients to live better lives through clinical excellence, education and technology. Prior to starting Sleep Management, Casey had a successful track record of running successful businesses, most recently a worldwide organization, Nimlok Louisiana, offering a comprehensive line of tradeshow display and marketing services. Mr. Hoyt views his most important roles as recruiting, motivating, and managing the quality employees that Sleep Management has become respected for throughout the healthcare industry.
About Mike Moore
Mike Moore, CRT, co-founded Sleep Management with his business mentor Max Hoyt and Casey Hoyt, combining his clinical and healthcare expertise with the Hoyt's marketing and operational knowledge. Mr. Moore began his career as a Respiratory Therapist and later as an Account Executive with organizations such as Praxair and Home Care Supply where he continually exceeded sales goals and finished in the top 5 nationally of all AE's. Mr. Moore's experience as a clinician as well as his understanding of healthcare trends formulated the strategy that has enabled Sleep Management to become the diverse respiratory disease company it is today. In addition to strategic planning for the company, Mr. Moore's key responsibilities include overseeing the clinical and sales infrastructure and staying attuned to changes in the healthcare industry.
Total Quarterly Accounting
PHM's purchase agreement with Sleep Management was made effective June 1, 2015 with all final paperwork completed in early July. PHM is working with its independent auditors to confirm that June revenue of $4 million and Adjusted EBITDA of $1.5 million for Sleep Management will be included in the quarterly total. Without Sleep Management, PHM total revenue is in excess of $15,350,000. Final details regarding inclusion of Sleep Management's June revenue will appear in the final quarterly report posted on Sedar at the end of August 2015.
The explosive growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs. PHM fills this need by delivering a growing number of specialized products and services to achieve these goals. PHM is a positive cash flow and profitable company that serves patients with heart disease and other chronic health conditions, this operation is a platform for acquisitions and organic growth. PHM is focused on a highly fragmented and developing market of small privately-held companies servicing chronically ill patients with multiple disease states caused mainly by age and obesity. Because of the new and highly fragmented nature of the market, PHM is actively working to identify and evaluate profitable, annuity-based companies to acquire their patient databases and technical expertise at favorable prices. PHM's post acquisition 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. The expected result is growing EPS with each acquisition and growing revenue and profits from the cross selling efforts.
(1) Adjusted EBITDA is defined as EBITDA excluding Stock Based Compensation and transactional and non-recurring costs.
These Adjusted EBITDA figures are unaudited and may change subject to due diligence and closing procedures. They are intended only as an estimate of trailing twelve month Adjusted EBITDA of the combined entities and are not meant to convey forward looking information. 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, and owner compensation.
Forward Looking Statements
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, including the approval of the normal course issuer bid by the Exchange and the number, if any, and prices at which shares are purchased during the bid period. Implicit in this information, particularly in respect of the future outlook of PHM and anticipated events or results, are assumptions based on beliefs of PHM's senior management as well as information currently available to it. While these assumptions were considered reasonable by PHM at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue acquisitions, the ability of PHM to close acquisitions and effectively integrate such acquisitions, 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, competition, difficulty integrating newly acquired businesses, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected. There can be no assurance that forward-looking statements will prove to be accurate. The forward-looking statements contained herein are presented for the purposes of assisting investors in understanding PHM's plan, objectives and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements.
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.
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Patient Home Monitoring Corp.