NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
- 23% increase in revenue over the same period last year, reflecting higher patient volumes from the Company’s clinics, telehealth services, MCI Connect virtual healthcare services and the acquisitions of Khure Health (“Khure”) and the Polyclinic Group of Companies (“Polyclinic”) in 2021. Quarterly revenue of $13.8 million, on track for another record year in multiple business units.
- Polyclinic and Khure acquisitions performing well, with revenue growing over 500% for the rare disease data screening product anchored by Khure.
- Patient volumes up over 10% over the same period last year, excluding increases from acquisitions.
- Roll-out of the Company’s Data Insights as a Service offering, as the Company begins servicing customers looking for clinical data insights from its 2.9 million health records, which are highly relevant for pharma, life sciences, health industry, clinical researchers and AI-technology developers.
- Number of physicians in the MCI network at record numbers, ending the second quarter with nearly 280 physicians and specialists providing care in-clinic and virtually, with the Company on track to increase its physician base by over 20% in 2022.
TORONTO, Aug. 15, 2022 (GLOBE NEWSWIRE) -- MCI Onehealth Technologies Inc. (“MCI” or the “Company”) (TSX: DRDR), a clinician-led healthcare technology company focused on increasing access to and quality of healthcare, today released its financial results for the three- and six-month periods ended June 30, 2022.
“Physician-directed healthcare with convenient access to specialists while maintaining top-quality continuity of care is the cornerstone of the patient experience at MCI. As expected, revenue is growing in alignment with the growth of our patient population as we offer additional patient-facing services and connect with patients for the care they might have been missing throughout the pandemic” said Dr. Alexander Dobranowski, CEO of MCI. “We’re now using our innovative data insights infrastructure to help family physicians identify patients within their practice who might be at risk of rare and chronic diseases to ensure they get on the right care pathway. Our patient-centred, data-driven approach can have a significant impact on patients, helping to catch disease early, improve outcomes and enhance quality of life.”
MCI is also nurturing international opportunities to leverage its vast pool of high-quality structured clinical information. MCI is attracting interest from more and more data insight clients who recognize the potential value of the knowledge that can be gained from the full-perspective, real-world patient health journeys that MCI’s tech-enabled network is able to capture.
“We are firmly committed to driving excellence in healthcare in Canada and we are committed to delivering on our strategy and generating value for our shareholders,” added Dobranowski. “The second quarter was a major development and activation period for our data-driven approach. From an investor perspective, not only are we advancing our core strategies of building a high-performance healthcare network of choice and growing our technology and data offerings, but the revenue opportunities that this enables are solidifying, with clients engaging our data insights as a service portfolio.”
A summary of MCI’s financial and operational highlights for the quarter are set out below, and more detailed information is contained in the financial statements and related management discussion and analysis, which are available on MCI’s SEDAR page at www.sedar.com. Financial measures described as “Adjusted” in this news release are non-IFRS financial measures and may not be comparable to other similar measures disclosed by other companies. Please see Non-IFRS Financial Measures below for more information.
Second Quarter 2022 Highlights
Significant financial and operational highlights for MCI during the second quarter of 2022 included:
- Revenue Growth Year-on-year: Revenue for the second quarter of 2022 increased 23% over the same period in 2021, driven by higher patient volumes from the Company’s clinics, telehealth services, MCI Connect virtual healthcare services and the acquisitions of Khure and Polyclinic. Total revenue for the three months ended June 30, 2022, was $13.8 million, compared to total revenue of $11.2 million in the comparable period in 2021.
- Smart Referral System: The Company continues to make significant progress in rolling out its smart referral system, the first application to leverage the data backbone which the Company is developing with a leading data analytics partner, streamlining the flow of patient referrals from general practitioners to specialists within the Company’s network, optimizing patient care pathways and increasing revenue from existing customers.
- Information and Data Analytics: MCI’s data lake of nearly three million clinical records is now fully secured and accessible and being queried for data-driven health insights that may benefit patients and add value to Ontario’s health system. Currently, MCI provides data insights as a service in six categories: rare disease; complex major medical/chronic; patient cohort building; clinical trial recruitment; synthetic health data and bespoke insights. Such services are targeted primarily at pharmaceutical companies, life science companies, precision medicine companies and top-tier university centres.
- Personnel: The Company hired 15 new physicians during the Reporting Period who will begin delivering health services to patients in 2022. MCI anticipates that its physician base will have increased by over 20% by the end of 2022.
- Health Technology & Research Services: The Company’s health technology and research services generated revenues of $1.2 million in the three-month period ended June 30, 2022, up 508% over the same quarter last year, as the Company’s Khure and Polyclinic acquisitions come online, increasing the depth of the Company’s revenue mix.
- Corporate Health Services: The Company added 20 new corporate health customers in the second quarter of 2022, including one of Canada’s largest retail distributors and a world-renowned private educational institution in Toronto, Ontario. Overall revenue from CHS declined during the three-month period ended June 30, 2022 by 71% to $0.54 million, due to decreased demand for COVID-19 testing, but is expected to recover as more customers are onboarded and new service offerings come online, including MCI’s Shopify-driven online store.
- Net Losses: Net losses for the quarter were $4.2 million, as compared to a loss of $2.8 million in the same quarter in the previous year, reflecting increased research and development expenses relating to the launch of the Company’s data backbone and standing up the Company’s data lake, as the Company continues to focus on rapid growth and expansion in the direction of its Data Insights as a Service offering to national and international targets.
- Adjusted EBITDA: Adjusted EBITDA(1) for the quarter was negative $2.9 million, as compared to an Adjusted EBITDA of negative $0.7 million in the same period last year.
Outlook
MCI expects to accelerate total company revenue growth in fiscal 2022 as it executes its strategic plan on multiple fronts including:
- Continued momentum targeting the $300 billion North America data and analytics market segment opportunity, with MCI’s Data Insights as a Service platform that provides advanced analytics to third parties.
- Organic growth of government insured health services from its omnichannel network of clinics, telehealth, the MCI Connect virtual platform and a substantial increase in its physician base from new physician recruiting efforts.
- Continued organic growth in health services provided to corporate customers, as it expands its customer base, increases the number of available service offerings and ramps up its efforts to service national and Calgary-based customers, including medical and cosmetic botox, mental health services and the addition of more varied specialty practices.
- New technology partnerships and strategic acquisitions to further activate MCI’s pipeline of interests in health data insights from the Company’s data lake.
- More than 15 clinical trial and screening engagements with global pharma companies actively underway.
- Launch of versions of MCI Connect for mobile phones and connected wearables such as Apple iWatch, and expansion of the MCI Connect service to its Alberta-based patients and nationally to corporate clients.
- Acquisitions of specialty clinics to expand its health service offerings and enter new markets by leveraging technology to deliver more services to its large and growing patient and physician base and to gain more patients, fueling further expansion of its clinical records data lake.
Conference Call Details
MCI will hold a conference call and webcast to discuss progress on its key strategic initiatives and financial results for the second quarter of 2022, on August 15, 2022, at 5:30 pm ET. Please be advised that the process for listening to and participating in MCI’s quarterly conference call has changed. MCI strongly encourages attendees to join by webcast.
For attendees who wish to join by webcast, the event can be accessed at: https://edge.media-server.com/mmc/p/5imoge25.
Attendees who wish to join by phone must visit the following link and pre-register: https://register.vevent.com/register/BI2798a2c8c2784d27be139370e7324d96.
Participants are encouraged to access the call or webcast at least 10 minutes prior to start.
Selected Unaudited Financial Information
(In thousands of dollars, except percentages and per share amounts)
| Three months ended | Period over | Six months ended | Period over | ||||||||||||||
| June 30 | period Change | June 30 | period Change | ||||||||||||||
| 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | ||||||||||
| ($ in thousands except percentages) | |||||||||||||||||
| Revenues | $ 13,814 | $ 11,208 | $ 2,606 | 23 | $ 26,834 | $ 21,238 | $ 5,596 | 26 | |||||||||
| Cost of sales | 9,729 | 7,703 | 2,026 | 26 | 18,654 | 14,593 | 4,061 | 28 | |||||||||
| Gross profit | 4,085 | 3,505 | 580 | 17 | 8,180 | 6,645 | 1,535 | 23 | |||||||||
| Research and development | 2,214 | 66 | 2,148 | NM | 4,044 | 66 | 3,978 | NM | |||||||||
| Sales and marketing | 500 | 370 | 130 | 35 | 911 | 473 | 438 | 93 | |||||||||
| General and administrative | 6,435 | 6,376 | 59 | NM | 13,045 | 12,041 | 1,004 | 8 | |||||||||
| 9,149 | 6,812 | 2,337 | 34 | 18,000 | 12,580 | 5,420 | 43 | ||||||||||
| Net finance costs | 182 | 94 | 88 | 94 | 314 | 207 | 107 | 52 | |||||||||
| (Income)/loss on investments | 44 | (12 | ) | 56 | NM | 187 | (12 | ) | 199 | NM | |||||||
| FV changes-contingent consideration | 158 | - | 158 | NM | 158 | - | 158 | NM | |||||||||
| Gain on sublease | (3 | ) | - | (3 | ) | NM | (3 | ) | - | (3 | ) | NM | |||||
| 381 | 82 | 299 | 365 | 656 | 195 | 461 | 236 | ||||||||||
| Income (loss) before taxes | (5,445 | ) | (3,389 | ) | (2,056 | ) | 61 | (10,476 | ) | (6,130 | ) | (4,346 | ) | 71 | |||
| Income taxes | (1,216 | ) | (556 | ) | (660 | ) | 119 | (2,031 | ) | (835 | ) | (1,196 | ) | 143 | |||
| Net Income (loss) | (4,229 | ) | (2,833 | ) | (1,396 | ) | 49 | (8,445 | ) | (5,295 | ) | (3,150 | ) | 59 | |||
| Adjusted gross profit(2) | 4,243 | 3,505 | 738 | 21 | 8,497 | 6,645 | 1,852 | 28 | |||||||||
| Adjusted gross margin(2) | 30.7 | % | 31.3 | % | 31.7 | % | 31.3 | % | |||||||||
| Adjusted EBITDA(1) | (2,936 | ) | (703 | ) | (2,233 | ) | 318 | (5,766 | ) | (1,310 | ) | (4,456 | ) | 340 | |||
| Adjusted EBITDA margin(1) | (21.3 | %) | (6.3 | %) | (21.5 | %) | (6.1 | %) | |||||||||
| Weighted average number of | |||||||||||||||||
| Of Share outstanding: Basic and diluted | 50,075,202 | 48,163,664 | 50,075,202 | 46,932,118 | |||||||||||||
| Net income (loss) per share -Basic and diluted | $ (0.08 | ) | $ (0.06 | ) | $ (0.17 | ) | $ (0.11 | ) | |||||||||
(1), (2) Financial measures described as “Adjusted” in the table above are non-IFRS financial measures and may not be comparable to other similar measures disclosed by other companies, please see Non-IFRS Financial Measures below for more information.
Selected Statement of Financial Position Data
| June 30, 2022 | December 31, 2021 | |||
| $ in thousands | ||||
| Cash | 1,009 | 7,142 | ||
| Accounts receivable | 5,976 | 6,328 | ||
| Accounts payable and accrued liabilities | (8,163 | ) | (9,527 | ) |
| Bank loan | (1,180 | ) | - | |
| Lease liabilities | (14,247 | ) | (14,347 | ) |
| Other liabilities | (130 | ) | (130 | ) |
| Non-controlling interest redeemable liability | (1,305 | ) | (1,305 | ) |
| Liability for contingent consideration | (3,280 | ) | (3,122 | ) |
Non-IFRS Financial Measures
The terms Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit and Adjusted Gross Margin used in this document do not have any standardized meaning under IFRS, may not be comparable to similar financial measures disclosed by other companies and should not be considered a substitute for, or superior to, IFRS financial measures. Readers are advised to review the section entitled “Non-IFRS Financial Measures” in the Company’s management discussion and analysis for the quarter ended June 30, 2022, available on MCI’s SEDAR page at www.sedar.com, for a detailed explanation of the composition of these measures and their uses.
(1) The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss) for the three- and six-month periods ended June 30, 2022, and June 30, 2021:
| Three months ended | Six months ended | |||||||||||
| June 30 | June 30 | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| $ in thousands | ||||||||||||
| Total Revenue | $ 13,814 | $ 11,208 | $ 26,834 | $ 21,238 | ||||||||
| Net income (loss) | (4,229 | ) | (2,833 | ) | (8,445 | ) | (5,295 | ) | ||||
| Add back (deduct) | ||||||||||||
| Depreciation and amortization | 1,249 | 967 | 2,470 | 1,683 | ||||||||
| Net finance charges | 196 | 107 | 344 | 232 | ||||||||
| Loss/(income) from investments | 44 | (12 | ) | 187 | (12 | ) | ||||||
| Expected credit losses | 29 | - | 29 | 56 | ||||||||
| Income taxes expense (recovery) | (1,216 | ) | (556 | ) | (2,031 | ) | (835 | ) | ||||
| Gain on sublease contracts | (3 | ) | - | (3 | ) | - | ||||||
| Share-based payment expense | 850 | 1,400 | 1,555 | 2,648 | ||||||||
| Lease interest revenue | (14 | ) | (14 | ) | (30 | ) | (25 | ) | ||||
| Acquisition related legal expenses | - | 238 | - | 238 | ||||||||
| Fair value changes in contingent consideration | 158 | - | 158 | - | ||||||||
| Adjusted EBITDA | $ (2,936 | ) | $ (703 | ) | $ (5,766 | ) | $ (1,310 | ) | ||||
| Adjusted EBITDA Margin | (21.3 | %) | (6.3 | %) | (21.5 | %) | (6.2 | %) | ||||
(2) The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to revenue and cost of sales for the three- and six-month periods ended June 30, 2022, and June 30, 2021:
| Three months ended | Period over | Six months ended | Period over | |||||||||||||||||||||
| June 30 | period Change | June 30 | period Change | |||||||||||||||||||||
| 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | |||||||||||||||||
| ($ in thousands except percentages) | ||||||||||||||||||||||||
| Revenue | $ 13,814 | $ 11,208 | $ 2,606 | 23 | % | $ 26,834 | $ 21,238 | $ 5,596 | 26 | % | ||||||||||||||
| Cost of sales | 9,729 | 7,703 | 2,026 | 26 | % | 18,654 | 14,593 | 4,061 | 28 | % | ||||||||||||||
| Less: | ||||||||||||||||||||||||
| Depreciation and amortization | (158 | ) | - | (158 | ) | NM | (317 | ) | - | (317 | ) | NM | ||||||||||||
| $ 9,571 | $ 7,703 | $ 1,868 | 24 | % | $ 18,337 | $ 14,593 | $ 3,744 | 26 | % | |||||||||||||||
| Adjusted gross profit | $ 4,243 | $ 3,505 | $ 8,497 | $ 6,645 | ||||||||||||||||||||
| Adjusted gross margin | 30.7 | % | 31.3 | % | 31.7 | % | 31.3 | % | ||||||||||||||||
About MCI
MCI is a healthcare technology company focused on empowering patients and doctors with advanced technologies to increase access, improve quality, and reduce healthcare costs. As part of the healthcare community for over 30 years, MCI operates one of Canada’s leading primary care networks with nearly 280 physicians and specialists, serves more than one million patients annually and had nearly 300,000 telehealth visits last year, including online visits via mciconnect.ca. MCI additionally offers an expanding suite of occupational health service offerings that support a growing list of nearly 600 corporate customers. Led by a proven management team of doctors and experienced executives, MCI remains focused on executing a strategy centered around acquiring technology and health services that complement the company’s current roadmap. For more information, visit mcionehealth.com.
For media enquiries please contact:
Nolan Reeds | nolan@mcionehealth.com | +1 (416) 440-4040 ext. 158
Forward Looking Statements
Certain statements in this press release, constitute “forward-looking information” and "forward looking statements" (collectively, "forward looking statements") within the meaning of applicable Canadian securities laws and are based on assumptions, expectations, estimates and projections as of the date of this press release. Forward-looking statements include statements with respect to projected revenues, earnings, growth rates, targets, revenue mix, product plans, use of proceeds, new business ventures, commercial arrangements and potential acquisitions, as well as MCI's future growth, strategic transformation plan, results of operations, performance and business prospects and opportunities. The words “plans”, “expects”, “projected”, “estimated”, “forecasts”, “anticipates”, “intend”, “guidance”, “outlook”, “potential”, “prospects”, “seek”, “aim”, “strategy”, “targets” or “believes”, “for use in”, “growth”, “expansion”, “to pursue”, “to develop”, “future”, “later”, “on track”, “pipeline”, “to be gained”, “poised”, “continues to”, “facilitate”, “is developing”, “coming online” or variations of such words and phrases or statements that certain future conditions, actions, events or results “will”, “may”, “could”, “would”, “should”, “might” or “can”, or negative versions thereof, “occur”, “continue” or “be achieved”, and other similar expressions, identify forward-looking statements. Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by MCI as of the date of such statements, are outside of MCI's control and are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being entirely or partially incorrect or untrue. Forward looking statements contained in this press release are based on various assumptions, including, but not limited to, the following: MCI's ability to achieve its growth strategy; the demand for MCI's products and fluctuations in future revenues; the availability of future business ventures, commercial arrangement and acquisition targets or opportunities and MCI’s ability to consummate them; MCI’s ability to effectively roll out its smart referral system and stand-up its data lake; MCI’s ability to effectively integrate existing and future acquisition targets into its platform; the effects of competition in the industry; the requirement for increasingly innovative product solutions and service offerings; trends in customer growth; sufficiency of current working capital to support future operating and working capital requirements; the stability of general economic and market conditions; currency exchange rates and interest rates; equity and debt markets continuing to provide MCI with access to capital; MCI's ability to comply with applicable laws and regulations; MCI's continued compliance with third party intellectual property rights; the anticipated effects of COVID-19; and that the risk factors noted below, collectively, do not have a material impact on MCI's business, operations, revenues and/or results. By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved.
Known and unknown risk factors, many of which are beyond the control of MCI, could cause the actual results of MCI to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Such risk factors include but are not limited to those factors which are discussed under the section entitled “Risk Factors” in MCI's annual information form dated March 31, 2022, each of which is available under MCI's SEDAR profile at www.sedar.com. The risk factors are not intended to represent a complete list of the factors that could affect MCI and the reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. MCI disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. All of the forward-looking statements contained in this press release are qualified by these cautionary statements.
