TORONTO, Aug. 3, 2017 /CNW/ - Syncordia
Technologies and Healthcare Solutions, Corp. (TSXV: SYN)
("Syncordia" or the "Company") today reported financial results for
the fiscal year ended March 31,
2017.
Reported results reflect operations of Health Services
Integration Inc. ("HSI"), which was acquired effective October 31, 2014, and carved-out operations of
Paragon Billing LLC, ("Paragon") which was acquired April 24, 2015, and Billing Solutions LLC
("Billing Solutions"), which was acquired March 22, 2016, both of which have been
reclassified to assets held for sale for accounting purposes and in
accordance with International Financial Reporting Standards
("IFRS"). For comparative purposes, 2017 amounts disclosed in
this press release have not been reclassed.
Management Commentary
Syncordia continues to evaluate various strategic alternatives
including, but not limited to, the divestiture of portfolio
companies to reduce debt and put additional cash on the balance
sheet. The divestiture of the behavioral health assets will
certainly involve the departure of a number of key executives given
that there may only be one asset and a suite of software remaining
in the portfolio. The board intends to work to maximize shareholder
value with a limited team, with a divestiture or payment of
dividends for example at the appropriate time in the future with
substantially reduced Corporate, Cloud and public company
expenses.
With newly-signed contracts, Billing Solutions is on an EBITDA
run rate of well over $3 million
essentially doubling EBITDA in under 24 months. Paragon Billing is
on an EBITDA run rate of approximately $700,000 and although essentially doubling EBITDA
in the first few quarters after purchase, HSI still continues to
struggle with many variables, which makes it very difficult for
management to accurately provide a sense of the performance of this
asset over the next 12 months but it will most likely be below
$1.5 million in EBITDA.
Billing Solutions has had great success with its NECTAR software
product which has won great accolades from customers. It has also
built a solid operating protocol and a suite of new operational
toolsets to allow the business to scale meaningfully nationally.
Paragon Billing has also taken great strides to refine and improve
its operating mandate for the benefit of its customers after moving
the billing operations center from Minnesota to Wilmington, North Carolina in an operating
environment and with a new team and support structure to
accommodate scale and a national roll out.
The Company decided not to pursue the book of business it was
evaluating as press released April
7th 2017.
The Company switched auditors from PWC to MNP as a cost
containment measure given what it felt were relatively large audit
fees from PWC. We anticipate annual audit expense will drop below
$100,000.
Business Highlights
- Management is exploring strategic alternatives, including but
not limited to (i) the sale of portfolio RCM company or
companies(ii) strategic alliances with HSI to improve overall
results (iii) licensing or sale of certain intellectual property
(iv) other cash-generating initiatives.
- Paragon signed a customer contract with expected volume of
50,000 annual encounters. This contract commenced in February 2017.
- Rolled out NECTAR version 2.0, a client analytics portal for
our behavioural health customers, consisting of a business
intelligence dashboard showing key medical practice performance
indicators. Syncordia continues to focus on building out its
full-service software suite for Billing Solutions.
Fourth Quarter 2017 Compared to Four Quarter 2016
- Revenue increased by a modest $271 or 9%, with increases to each of Paragon and
Billing Solutions, offset by decreases in HSI, as we wind down the
provision of billing services to this customer group as well as
other payor mix changes at HSI.
- Net loss and comprehensive loss was $12,583 compared to a loss of $1,186 in the comparative period, mainly the
result of $10,489 of impairments to
the Company's goodwill, client lists and intellectual property
assets. In addition, as noted above, gross margin decreased by
$875 and adjusted EBITDA before
Platform Syncordia and Corporate costs, decreased to $811 or 25% from $871.
- Platform Syncordia costs decreased $96 or 22%. Total Platform Syncordia spend
reflects our software development efforts as we continue to
maintain Platform Syncordia.
- Corporate costs decreased $127 or
22% reflecting several cost reduction initiatives.
- Cash and cash equivalents of $973.
Key Performance Indicators
We report Encounters as a key performance indicator to assist
readers in better evaluating our performance. We define an
Encounter as a discrete business activity for which we would submit
a claim. We believe this metric provides investors with a better
proxy for measuring the level of business activity than revenue as
encounters measure the number of distinct services provided in the
period whereas revenue reflects the amount of services recognized
for accounting purposes and is typically a lagging indicator of
business activity.
|
Encounters
|
Sequential
Quarterly Change
(Q3 to
Q4)
|
Quarter
|
Q1
FY2017
|
Q2
FY2017
|
Q3
FY2017
|
Q4
FY2017
|
Total
|
#
|
%
|
|
Air/SCT
|
2,744
|
3,903
|
3,125
|
2,767
|
12,569
|
(328)
|
(10%)
|
|
Ground
|
7,202
|
12,231
|
15,708
|
16,576
|
51,717
|
868
|
6%
|
|
HSI
|
9,946
|
16,134
|
18,833
|
19,373
|
64,286
|
540
|
4%
|
|
Paragon
|
82,430
|
63,809
|
65,737
|
72,454
|
284,430
|
6,717
|
10%
|
|
Billing
Solutions
|
46,697
|
48,052
|
45,697
|
41,474
|
181,920
|
(4,223)
|
(9%)
|
|
|
|
|
|
|
|
|
|
|
|
Forward Looking Statements
Certain statements herein may be "forward looking" statements
that involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or
achievements of Syncordia or the industry to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Forward
looking statements involve significant risks and uncertainties,
should not be read as guarantees of future performance or results,
and will not necessarily be accurate indications of whether or not
such results will be achieved. A number of factors could cause
actual results to vary significantly from the results discussed in
the forward looking statements. These forward looking statements
reflect current assumptions and expectations regarding future
events and operating performance and are made as of the date hereof
and we assume no obligation, except as required by law, to update
any forward looking statements to reflect new events or
circumstances.
Cautionary Note Regarding Non-IFRS Measures
This press release contains references to "EBITDA," "Adjusted
EBITDA," "Gross margin," and "Adjusted EBITDA before Platform
Syncordia and Corporate costs."
Earnings before Interest, Taxes, Depreciation and Amortization
("EBITDA") and Adjusted Earnings before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") are non-IFRS
measures used by management to provide additional insight into our
performance and financial condition. We believe that these
non-IFRS measures are important as they provide an indication of
the results generated by our RCM business prior to taking into
consideration how those activities are financed as well as the
other items listed in their respective definitions.
Accordingly, we are presenting EBITDA, Adjusted EBITDA and Adjusted
EBITDA before Platform Syncordia and Corporate costs in this
MD&A to enhance the usefulness of our MD&A. We have
provided below a reconciliation of EBITDA, Adjusted EBITDA and
Adjusted EBITDA before Platform Syncordia Corporate costs to the
most directly comparable IFRS figures, disclosure of the purpose of
the non-IFRS measure, and how the non-IFRS measures is used in
managing the business.
EBITDA, Adjusted EBITDA and Adjusted EBITDA before Platform
Syncordia and Corporate costs are not calculations based on IFRS
and should not be considered an alternative to operating income or
net income (loss) in measuring the our performance, nor should it
be used as an exclusive measure of cash flow, because it does not
consider the impact of working capital growth, capital
expenditures, debt principal reductions and other sources and uses
of cash which are disclosed in the consolidated statements of cash
flows. Investors should carefully consider the specific items
included in our computation of these measures.
Management defines EBITDA as Earnings before Interest, Taxes,
Depreciation and Amortization.
Management defines Adjusted EBITDA as Earnings before Interest,
Taxes, Depreciation, Amortization, Transaction Costs, Fair Value
Gains/Losses, Foreign Exchange Gains/Losses, Stock Based
Compensation and Cash based Share Compensation Arrangements.
Transaction costs include professional fees associated with
business transactions.
Management defines Adjusted EBITDA before Platform Syncordia and
Corporate costs as Earnings before Interest, Taxes, Depreciation,
Amortization, Transaction Costs, Fair Value Gains/Losses, Foreign
Exchange Gains/Losses, Stock Based Compensation, Cash based Share
Compensation Arrangements and costs of our Platform Syncordia and
Corporate segment. This metric is used to assess the performance of
RCM and Platform Syncordia segments.
Gross margin is a non-IFRS measure defined by management to
reflect revenue less direct cost of sale, excluding amortization of
intellectual property, customer lists, other amortizations and fair
value gains/losses.
Platform Syncordia and Corporate costs include sales and
marketing, general and administrative and research and development,
less amortization and depreciation, foreign exchange gains and
losses, and stock-based compensation expense indexed to our share
price.
About Syncordia Technologies and Healthcare Solutions,
Corp.
We are a technology enhanced revenue cycle management ("RCM")
company focused on underserved niche segments of the healthcare
industry. We are building a diversified software and services
business by consolidating healthcare billing providers. Our growth
strategy is to acquire RCM businesses with and without software
and, improve their profitability by increasing revenues and
operating efficiencies using our software, and in time,
commercializing Platform Syncordia, our cloud-based software
offering, to provide customer demanded turn-key solutions from a
single provider and to address compelling RCM market
opportunities.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Syncordia Technologies and Healthcare Solutions,
Corp.