Kovo HealthTech Reports 2021 Annual Financial Results
Vancouver, British Columbia--(Newsfile Corp. - March 28, 2022) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" "Kovo") — a leader in healthcare technology and Billing-as-a-Service — today reported its annual financial results for the fiscal year ending December 31, 2021.
96% YOY Revenue Growth
Kovo posted 96% year-over-year ("YoY") revenue growth in 2021 driven by a combination of organic growth of its core SaaS-style medical billing software and services business — and two strategic acquisitions that delivered accretive growth throughout the year.
Kovo finished 2021 with Annualized Recurring Revenue ("ARR") of approximately $15 million CAD ($12 million USD) — which represents +243% growth over 2020 and an increase of +600% over the past two years — reflecting a combination of organic growth and accretive growth related to the Company's successful acquisition strategy. During 2021, the Company posted the largest revenue in its history, achieving on the higher range of its 2021 guidance and closing out the year with revenues of $7.3 milllion CAD ($5.9 million USD). Adjusted EBITDA* margin for 2021 was approximately 4%, in-line with the prior year — and, as previously disclosed, the Company anticipates Adjusted EBITDA of approximately 10% in 2022.
Kovo Now Processing $250M CAD ($200M USD) in Medical Billing Annually
"In addition to successfully going public, integrating two accretive acquisitions, securing financing to power future growth and expanding our clients served to more than 1700+ healthcare providers, Kovo and its subsidiaries are now processing over $250 million CAD in total billing claims annually," explains Kovo CEO Greg Noble. "As the Company officially closes out 2021 in a position of strength, we anticipate 2022 to be a step-change year for Kovo, our clients and our shareholders," he says.
RCM Operations Generating Consistent, Positive Monthly Cash Flow
"Kovo has now reached a new milestone of predictable growth where the Company continues to consistently and reliably deliver positive cash flow from its RCM operations, adding to — and improving — our working capital month-over-month," explains CFO Inder Saini, adding that the company is on-track to meet the 30% organic growth target (exclusive of acquisitions) outlined in its initial 2022 guidance earlier this year.
Listed in thousands USD unless otherwise specified
Revenue for the year ended December 31, 2021 was $5,904, the largest in the Company's history and 96% higher than revenues of $3,019 for the year ended December 31, 2020. Results were on the higher end of the guidance provided in Q3 2021 of $5,300-$5,700.
ARR as at December 31, 2021 was approximately $11,800, a 243% increase over 2020, reflecting the combination of organic and accretive growth related to the completion of two successful acquisitions in 2021.
Annual and quarterly revenue growth was generated by a combination of new sales and the acquisition of new clients via the M&A transactions.
The Company completed its 12th consecutive quarter of positive Adjusted EBITDA reflecting the long-term operating discipline with the organization. Adjusted EBITDA increased to $242 for the year ended December 31, 2021 relative to Adjusted EBITDA of $135 for the year ended December 31, 2020. Increase in Adjusted EBITDA reflects the impacts of efficiencies extracted from the acquisitions as well as organic growth for the Billing-as-a-Service business. Adjusted EBITDA margin was 4% for the year-ended December 31, 2021 (year-ended December 31, 2020 — 4%).
The Company successfully completed its public company listing on the TSXV in June 2021.
The Company completed two acquisitions in the year of Midwest Medical Billing ("Midwest") and The Cvikota Company ("Cvikota") adding revenue and positive earnings as the Company builds on its core Revenue Cycle Management ("RCM") business.
Kovo filed a non-offering prospectus on May 26, 2021 as part of its go-public plans. The firm's common shares began trading June 4, 2021 under the symbol 'KOVO.'
Kovo was successful in acquiring new debt in 2021 through a non-revolving senior secured multi-draw term facility with Flow Capital Corp which has a maximum loan amount of $7,000 and a $600 Paycheck Protection Program loan which became 100% forgivable when the Company used the proceeds to cover qualified expenses.
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
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 more than 1700 US healthcare providers. Kovo helps healthcare providers digitally track and manage complex patient care registration, services, billing and payments in a seamless way, using its industry-leading OneRev technology platform. Currently, through its clients, Kovo processes over $250 million CAD ($200M USD) in annual billing transactions for more than 3.5 million patients. By offering effective billing practices and technology through long-term SaaS-style contracts, Kovo helps healthcare practitioners get paid so they can 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" "ARR" 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
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