• Total revenue increased by 22% to $15.6 million in the quarter
• Same-clinic revenue growth(1) of 10% for the year ended December 31, 2021
• Adjusted EBITDA growth(1) of 27% vs fiscal 2020
• 12th consecutive quarter of positive adjusted EBITDA(1)
• Construction complete on 3 new fluoroscopy suites in Red Deer, Alberta and Hamilton, Ontario
TORONTO, ONTARIO, March 17, 2022 – NeuPath Health Inc. (TSXV:NPTH), (“NeuPath” or the “Company”), owner and operator of a network of clinics delivering category-leading chronic pain treatment, today announced its financial and operating results for the three months and year ended December 31, 2021. All figures are in Canadian dollars, unless otherwise noted.
Financial and Operational Highlights
• Strong quarterly revenue of $15.6 million compared to $12.8 million in the comparable quarter;
• For the year ended December 31, 2021, revenue grew by 28% to $60.9 million compared to $47.6 million for the year ended December 31, 2020;
• Adjusted EBITDA was $148,000 for the three months ended December 31, 2021 compared to $116,000 for the comparable quarter;
• Year-over-year adjusted EBITDA growth of 27% for the year ended December 31, 2021; and
• On November 30, 2021, the Company announced it had entered into a partnership with Central Alberta Orthopedics (“CAO”), a leading provider of multidisciplinary care in musculoskeletal trauma and reconstructive surgery, to open an interdisciplinary pain institute in Red Deer, Alberta. The clinic is expected to be open to patients in May 2022 and ownership of the newly formed corporation is split 50/50 between NeuPath and CAO.
“NeuPath continues to deliver profitable growth while also building a strong foundation for future growth,” stated Grant Connelly, NeuPath’s Chief Executive Officer. “We completed the first phase of our clinic rebrand, while also investing in technology, the patient experience, and adding talent to our leadership team. These investments will drive future financial performance while also delivering value to patients, healthcare providers, payors, and investors.”
Corporate Developments
NeuPath’s board of directors has appointed Jeff Zygouras, CPA, CA as Chief Financial Officer and Corporate Secretary effective March 17, 2022. Mr. Zygouras is an accomplished financial professional who has served as NeuPath’s Corporate Controller since 2019, and most recently as Interim Chief Financial Officer. Prior to joining NeuPath, Mr. Zygouras held senior financial roles at Nuvo Pharmaceuticals Inc. and Crescita Therapeutics Inc. and was an auditor at EY Canada. Mr. Zygouras is a Chartered Professional Accountant and holds a Master of Management and Professional Accounting from the University of Toronto.
Q4 2021 Financial Results
Total revenue was $15.6 million for the three months ended December 31, 2021 compared to $12.8 million for the three months ended December 31, 2020. Clinic revenue for the current quarter increased by 20% to $14.7 million compared to $12.2 million in the comparative quarter. The increase in total revenue was related to the acquisition of HealthPointe Medical Centres Ltd. (“HealthPointe”) and improvement in capacity utilization across the Company’s clinic network. For the year ended December 31, 2021, total revenue was $60.9 million compared to $47.6 million for the year ended December 31, 2020.
Gross margin %(1) was 17.9% for the three months ended December 31, 2021 compared to 19.7% for the three months ended December 31, 2020. For the year ended December 31, 2021, gross margin % was 18.2% compared to 20.4% for the comparative year. Gross margin was impacted by remuneration payment accruals associated with the HealthPointe acquisition, restricted share unit award accruals related to the HealthPointe physician vendors and Canada Emergency Wage Subsidy (“CEWS”) payroll subsidies. Excluding these transaction-related accruals and CEWS, adjusted gross margin %(1) would have been 18.0% and 20.0% for the three months and the year ended December 31, 2021 compared to 19.1% and 19.5% for the three months and year ended December 31, 2020.
For the three months ended December 31, 2021, adjusted EBITDA was $148,000 compared to $116,000 in the three months ended December 31, 2020. For the year ended December 31, 2021, adjusted EBITDA was $2.5 million compared to $2.0 million for the year ended December 31, 2020.
Non-IFRS Financial and Other Measures
The Company discloses non-IFRS measures (such as EBITDA, adjusted EBITDA, gross margin and adjusted gross margin), non-IFRS ratios (such as gross margin % and adjusted gross margin %) and supplementary financial measures (such as same-clinic revenue growth) that do not have standardized meanings prescribed by International Financial Reporting Standards (IFRS). The Company believes that shareholders, investment analysts and other readers find such measures helpful in understanding the Company’s financial performance. Non-IFRS financial measures and other measures do not have any standardized meaning prescribed by IFRS and may not have been calculated in the same way as similarly named financial measures presented by other reporting issuers and therefore unlikely to be comparable to similar measures presented by other companies. Furthermore, these non-IFRS measures and other measures should not be considered in isolation or as a substitute for measures of performance or cash flows as prepared in accordance with IFRS. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.
EBITDA and Adjusted EBITDA
EBITDA refers to net income (loss) determined in accordance with IFRS, before depreciation and amortization, net interest expense (income) and income tax expense (recovery). The Company defines adjusted EBITDA, as EBITDA, plus stock-based compensation expense, restructuring costs, fair value adjustments, listing expense and transaction costs, impairment charges and finance income. Management believes EBITDA and adjusted EBITDA are useful supplemental non-GAAP measures to determine the Company’s ability to generate cash available for working capital, capital expenditures, debt repayments, interest expense and income taxes.