News! ... Financial Results
Continental Home Healthcare Ltd.Announces Financial Results
June 25, 1999 02:38 PM
VANCOUVER, British Columbia--(BUSINESS WIRE)--June 25, 1999-- Continental Home Healthcare Ltd. (the "Company")CA:CHT announced today its financial results for the year ending December 31st, 1998.
The Company is pleased to report both record revenues and income for the period.
The year 1998 was a turning point for the Company. Revenues grew to $13.7 million for the year, compared to $2.7 for the prior year, a greater than 400 percent increase. As the Company changed its fiscal year end from April 30th to December 31st, effective 1997, the comparative audited values are for the abbreviated period ending December 31st, 1997. The full year annual revenues for 1997 reached $3.3 million.
The Company reported net income for the first time in its history. From a loss of $450,000 in the previous period, net income grew to over $270,000 in fiscal 1998. Cash flow from operations showed a dramatic increase from a previous period loss of $395,000 to positive cash flow of $786,000. Most impressive is the 1998 fiscal year result of earnings before interest, taxes, depreciation and amortization (EBITDA) of $1,024,000 compared to a previous period loss of $360,000, representing a near $1.4 million positive change in the financial category most commonly analyzed for growth companies.
This successful performance was the result of two overriding factors. The Company implemented an acquisition program in October 1997, which resulted in three successful purchases over the ensuing 12 months. These companies are now fully integrated into the Company's operations on a profitable basis. Secondly, management has overseen significant internal growth from each of these acquired entities. Of the total revenues for the Company for 1998, $11.0 million was generated from these new acquisitions.
Equally important to a Company's revenue growth is how management utilizes its assets to ensure continuing cash flow and shareholder equity growth. The Company experienced significant balance sheet improvement over the prior year. Total assets increased by 68 percent to $10.3 million while shareholders' equity grew to over $7.0 million compared to $4.2 million a year earlier, a 64 percent increase. Total liabilities were $3.3 million at year-end, an increase of $1.4 million over 1997. Current assets climbed to $7.4 million compared to $4.4 million for fiscal 1997. With the moderate increase in current liabilities, working capital improved to $4.6 million, almost double the 1997 levels of $2.6 million.
There was significant improvement, as well, in gross margins and expense ratios for the Company's operations during the latest fiscal year. Gross margins improved to 54 percent of revenues compared to 46 percent a year earlier. While all expenses rose due to the acquisitions completed, the ratio of total expenses to total revenues dropped to 51 percent from 62 percent in the previous year. The Company's general and administrative expenses dropped from 61 percent of revenues in 1997 to 48 percent of revenues in the latest fiscal period. Each of these factors have contributed toward making the Company profitable for the first time in its history.
On the Company's results, Mr. Rob Thornton, Chief Executive Officer, commented, "this past year was gratifying in that the Company reached many of its goals, one of which was attaining profitability. More importantly, though, we proved that our acquisition strategy has, in its initial stages, proven effective. Management focused in identifying certain profitable durable medical equipment acquisition targets in the southwestern United States and acquired them well within our established criteria. We will continue to use the same discipline in future acquisitions. At the same time, management met its internal growth targets for the year and was able to accomplish immediate and effective cost saving programs. We look forward to continuing this strategy in the future and look for greater improvement in 1999."
During the year the Company accomplished a number of milestones:
- Changed its name to Continental Home Healthcare Ltd.
- Acquired two durable medical equipment operations.
- Hopson's Health Equipment Centre in Indian Wells, California.
- Mesa Medical Equipment in Las Vegas, Nevada.
- Completed a $2.5 million equity financing.
- Consolidated its Canadian operations.
- Obtained provider agreements with some of the largest national
insurance and health maintenance organizations in the U.S. and
one of southern California's largest hospitals.
- Added to its senior management team two highly experienced
individuals, Greg Apostolou, Vice President of Finance for U.S.
operations, and William Atkinson, Executive Vice President of
the parent company.
Mr. Thornton further commented, "combining responsible growth with a commitment to expanding its investor base, the Company is well positioned to make considerable gains in 1999. By broadening our product lines and increasing our aggressive marketing efforts, we are optimistic of continuing strong internal growth as well as external increases through acquisition."
Continental Home Healthcare Ltd. is a provider of durable and home medical equipment to individuals and healthcare institutions with branches in Glendale and Indian Wells, California; The Company is a provider of durable and home medical equipment to both individuals and healthcare institutions, with branches in Glendale and Indian Wells, California; Las Vegas, Nevada; and Vancouver British Columbia.
ON BEHALF OF THE BOARD ROBERT THORNTON, CHIEF EXECUTIVE OFFICER
EDITOR'S NOTE: The Vancouver Stock Exchange has neither approved nor disapproved the contents contained herein.
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