Kovo HealthTech Corporation Reports Second Quarter Results; Company On-Track to Meet 2021 Revenue Targets
2nd Quarter organic revenue increased by 43% year-over-year
Kovo completes 10th consecutive quarter of positive Adjusted EBITDA
Year-over-year revenue for the 3 and 6 months ended June 30, 2021 increased 21% and 32%
Vancouver, British Columbia--(Newsfile Corp. - August 11, 2021) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" "Kovo") — a leader in healthcare technology and Revenue Cycle Management ("RCM") software and services — today announced financial results for its fiscal 2021 quarter ending June 30, 2021.
Kovo posted 43% year-over-year (YOY) quarterly organic revenue growth on its core RCM software and services business. The Company remains on-track to meet guidance of between USD$4,700,000 to USD$5,100,000 for the year ending December 31, 2021 — which it expects to translate into revenue growth in the range of 56% to 69% versus 2020.
Second Quarter Highlights
Reported in USD$ unless otherwise specified
- Revenue for the three and six months ended June 30, 2021 was $931,000 and $1,751,000 — 21% and 32% higher than revenues of $772,000 and $1,330,000 for the three and six months ended June 30, 2020.
- Quarterly RCM organic revenue increased by 43% year-over-year ("YOY"), primarily due to the on-boarding of two new healthcare clients, consistent with Kovo's focus on larger, higher margin customers for its core RCM software and services business. This growth is in-line with the Company's previously disclosed guidance target for the quarter.
- The Company completed its 10th consecutive quarter of positive Adjusted EBITDA reflecting the long-term operating discipline with the organization.
- Adjusted EBITDA* increased to $60,000 for the three months ended June 30, 2021; relative to Adjusted EBITDA of $33,000 for the three months ended June 30, 2020. The increase in Adjusted EBITDA reflects the impacts of organic growth from new RCM customers.
- Kovo's recurring revenue business currently generates Annual Recurring Revenue ("ARR") of $6,000,000 based on estimated August revenues of $500,000, including the company's recently completed acquisition of Midwest Medical Billing, Service Inc.
"This quarter was filled with milestones as our team took the company public, completed and smoothly integrated an acquisition in less than one month — all while staying disciplined and focused on the bottom line and delivering a strong quarter," says CEO Greg Noble. "I'm proud of our team's work to grow organic revenue growth on our core RCM software and services business by over 40% this quarter, while simultaneously adding instant, accretive growth through an important strategic acquisition," he says, adding that the Company's leadership team and Board continues to seek and explore potential acquisition opportunities.
Investor Call — August 12, 2021 - 8:30am ET
An Investor Call will be hosted by Kovo CEO Greg Noble, Executive Chairman Dr. Peter Bak and CFO Inder Saini on Thursday, August 12th at 8:30 am ET.
Investors are invited to contact firstname.lastname@example.org for more information.
Detailed Quarterly financials and the Company's Management Discussion and Analysis can be accessed at www.sedar.com.
Revenue & Adjusted EBITDA by Quarter
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Non-GAAP measure. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines Adjusted EBITDA as EBITDA before goodwill or customer list impairment costs, equity and stock-based expenses, unrealized foreign exchange gains or losses, non-recurring transaction and financings costs and recurring government loans that are eligible to be 100% forgiven by government mandate. The Company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives on a normalized earnings basis.
About Revenue Cycle Management (RCM)
Kovo HealthTech Corporation is a growing healthcare technology company that specializes in RCM services and software for US healthcare clinics, hospitals and private practices. RCM is a process used by healthcare providers in the US and globally to digitally track and manage patient care registration, services, billing and payments in a seamless way.
Effective RCM practices are essential to ensure health care settings maintain the financial viability that allows them to provide ongoing quality care for their patients. The Company's focus is organic growth of its core RCM business and acquiring profitable RCM related businesses and systems within the US. Kovo optimizes acquired businesses by leveraging its over 20 years of operating experience and proprietary technology. 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.
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