Kovo HealthTech Reports Third Quarter Results: 94% YOY Quarterly Revenue Growth; Annual Recurring Revenue Grows 157% to $9M USD in October
11th Consecutive Quarter of Positive Adjusted EBITDA
Year-End Guidance Revised Upward to $5.3- $5.7 million USD
Vancouver, British Columbia--(Newsfile Corp. - November 15, 2021) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" "Kovo") — a leader in healthcare technology and Billing-as-a-Service — today reported financial results for its fiscal 2021 third quarter ending September 30, 2021.
Strong Revenue Growth
Kovo posted 94% year-over-year ("YoY") revenue growth during the quarter thanks to a combination of organic growth of its core SaaS-style medical billing software and services business — and a strategic acquisition that delivered immediate accretive growth during the quarter.
Compelling Growth Metrics and Increased Year-End Guidance
Based on its strong third quarter results — driven by:
- Strong organic growth
- The acquisition of Midwest Medical Billing, Services Inc. in July 2021
- Estimated October revenues of $650,000 USD, and
- Its recently announced acquisition of The Cvikota Company**,
Kovo is now reporting Annualized Recurring Revenue ("ARR") of approximately $9,000,000 USD — an increase of 157% versus December 2020 ARR. Based on these results, the Company is raising its year end revenue guidance to $5.3 - $5.7 million USD. Adjusted EBITDA guidance remains unchanged at 10%.
SaaS-Style Business Model Driving Momentum
"Kovo is gaining momentum every quarter and our team continues to be fueled by a combination of strong organic growth in our core business and a disciplined acquisition strategy which targets buying $1 of ARR for every $1 investment of debt or equity," explains Kovo CEO Greg Noble. Noble adds that the Company recently closed a loan agreement for up to $7 million USD (approximately $8.8 million CAD) which positions the Company for continued accretive growth by acquisition, while minimizing dilution for shareholders.
Third Quarter Highlights
Reported in USD$ unless otherwise specified
- Revenue for the three and nine months ended September 30, 2021 was $1,654,000 and $3,405,000 which is 94% and 56% higher than the same period in fiscal 2020.
- The strategic acquisition and successful integration of Midwest Medical in July 2021 contributed an immediate $446,000 to quarterly revenue compared to the same period last year. It continues to drive organic growth for the Company.
- The Company completed its 11th consecutive quarter of positive Adjusted EBITDA reflecting the long-term operating discipline within the organization. Adjusted EBITDA for the nine months ending September 30, 2021 was $137,000 versus $85,000 in 2020.
- During the quarter, the Company generated a net loss of $476,000 and $1,368,000 during the three and nine months ended September 30, 2021.
- The Company previously provided 2021 pro-forma revenue guidance of $4,700,000 to $5,100,000. Following the recently announced agreement to acquire The Cvikota Company and its current run rate, the Company is increasing its 2021 pro-forma revenue guidance to $5,300,000 to $5,700,000.
Investor Call - November 16, 2021 at 8:30am ET
To learn more about the company's financial performance and business model, investors are invited to join CEO Greg Noble, Executive Chairman Dr. Peter Bak and CFO Inder Saini on Tuesday, November 16th at 8:30 am ET.
Canada/USA TF: 1-800-319-4610
Toronto Toll: +1-416-915-3239
International Toll: +1-604-638-5340
To view an enhanced version of this graphic, please visit:
Detailed Quarterly Financial Statements, the Company's MD&A and related documents can be accessed at www.sedar.com
**Subject to TSXV final approval.
About Kovo HealthTech Corporation and US Healthcare Billing-as-a-Service
Kovo HealthTech Corporation is a growing healthcare technology company that specializes in Billing-as-a-Service offering SaaS-style recurring revenue contracts and software for US healthcare clinics, hospitals and private practices. Kovo helps healthcare providers digitally track and manage complex patient care registration, services, billing and payments in a seamless way, using its proprietary OneRev technology platform. By offering effective billing practices and technology through long-term SaaS-style contracts, Kovo helps healthcare practitioners focus on offering quality care. To learn more about Kovo and to keep up-to-date on Kovo news, visit www.kovo.co
For more information:
Greg Noble, CEO
Forward-Looking Information and Statements
This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") concerning the Company and its subsidiaries within the meaning of applicable securities laws. Forward-looking information may relate to the future financial outlook and anticipated events or results of the Company and may include information regarding the Company's financial position, business strategy, growth strategies, acquisition prospects and plans, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding the Company's expectations of future results, performance, achievements, prospects or opportunities or the markets in which the Company operates is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects", "budgets", "scheduled", "estimates", "outlook", "forecasts", "projects", "prospects", "strategy", "intends", "anticipates", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will" occur. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances.
Many factors could cause the Company's actual results, performance, or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking information, including, without limitation, those listed in the "Risk Factors" section of the final prospectus of the Company dated May 26, 2021. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this press release.
Forward-looking information, by its nature, is based on the Company's opinions, estimates and assumptions in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company currently believes are appropriate and reasonable in the circumstances. Those factors should not be construed as exhaustive. Despite a careful process to prepare and review forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking information. Although the Company bases its forward-looking information on assumptions that it believes were reasonable when made, which include, but are not limited to, assumptions with respect to the Company's future growth potential, results of operations, future prospects and opportunities, execution of the Company's business strategy, there being no material variations in the current tax and regulatory environments, future levels of indebtedness and current economic conditions remaining unchanged, the Company cautions readers that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates may differ materially from the forward-looking statements contained in this press release. In addition, even if the Company's results of operations, financial condition and liquidity, and the development of the industry in which it operates are consistent with the forward-looking information contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. The Company's definitions of non-IFRS measures used in this release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses non-IFRS financial measures, including "EBITDA", "Adjusted EBITDA" and "Adjusted EBITDA Margin" to provide investors with supplemental measures of its operating performance and to eliminate items that have less bearing on operating performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. "EBITDA" means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes. *"Adjusted EBITDA" adjusts EBITDA for stock-based compensation expense, transactional gains or losses on assets, asset impairment charges, interest income, net foreign exchange gains or losses, income tax expense or recovery, forgivable one-time government financial payments related to the COVID-19 pandemic ("PPP Loans"), and any transactional expenses. Specifically, the Company believes that Adjusted EBITDA, when viewed with the Company's results under IFRS and the accompanying reconciliations, provides useful information about the Company's business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as depreciation and amortization methods and restructuring, impairment and other charges, the Company believes that Adjusted EBITDA can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. The Company's management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period.
Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only as of the date made (or as of the date they are otherwise stated to be made). Any forward-looking statement that is made in this press release speaks only as of the date of such statement.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/103522