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 MCIMCI 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
StatementsCertain 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.
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