- Increased revenue to
$20.8 millioncompared to $16.1 millionin the previous quarter and 152% growth Year over Year.
- Net loss from continuing operations reduced by 16% from the previous quarter to
$4.3 million compared to $5.2 million in the previous quarter.
- Adjusted EBITDA loss reduced by 27% from the previous quarter to
$3.97 millioncompared to $5.4 millionin the previous quarter.
- Established new Medicare Advantage (“MA”) plans in
Floridawith expected 2023 participation in ACO Reach with traditional Medicare members moving to full-risk.
- As of the date of this release on an unaudited basis, the Company has already reduced its annual cost base by over
$10 millionand expects further operational improvements by year end.
Prad Sekar, CEO of
- Revenues for the three and nine months ended
September 30, 2022were $20.8 million and $44.6 million, respectively, compared to $8.7 million and $17.7 million, for the three and nine months ended September 30, 2021(excluding revenue from discontinued operations of $2.8 million and $8.7 million, respectively), an increase of $12.1 million and $26.9 million, respectively. This increase was primarily a result of a full quarter of revenue from the acquisition of NMD in Q2 2022. The primary driver included the new capitated business segment from value-based-care, where the Company earns a fixed or capitated fee per member per month at a significant premium to traditional FFS;
- Gross profit was
$3.8 million and $11.2 million, respectively, for the three and nine months ended September 30, 2022, compared to $4.7 million and $9.8 million, respectively, for the three and nine months ended September 30, 2021(excluding gross profit from discontinued operations of $2.2 million and $6.7 million, respectively);
- Gross margin was 18% and 25%, respectively, for the three and nine months ended
September 30, 2022, compared to 55% for both the three and nine months ended September 30, 2021(discontinued operations gross margin was 77% for both the three and nine months ended September 30, 2021). The margins in Q3 2022 were lower due to the change in how Gross profits are calculated in a traditional FFS model versus a VBC or capitated model at risk. The Company expects to see improvements in its gross profit margin in the near term through patient marketing efforts and improvements to the medical loss ratios and accurate coding for its lives at risk;
- Adjusted EBITDA for the three and nine months ended
September 30, 2022was a loss of $3.97 million and $16.1 million, respectively, compared to a loss of $4.3 million and $9.5 million, respectively, during the three and nine months ended September 30, 2021. Compared to Q2 2022, the Company has seen an improvement in Adjusted EBITDA from its cost-saving and integration efforts. The adjusted EBITDA of Q2 2022 was a loss of $5.4 million. The Company anticipates that it will continue to see improvements in the coming quarters. The Company is committed to continuing working towards adjusted EBITDA break-even by the end of the year;
- Net loss from continuing operations during the three and nine months ended
September 30, 2022was $4.3 million and $17.8 million, respectively (three and nine months ended September 30, 2021: $4.9 million and $14.0 million, respectively, excluding net income from discontinued operations of $0.8 million and $2.6 million), the improvement in Q3 2022 was primarily due to reductions in professional fees, foreign exchange gain and gain in fair value of financial liabilities. In Q2 2022, the Net loss from continuing operations was $5.2 million. The significant improvement in Q3 2022 was primarily due to continued operational efficiencies, reductions in salaries and wages, professional fees, office and administration costs and foreign exchange gain. The Company anticipates that it will continue to see improvements in the coming quarters.
- The Company closed the non-brokered private placement (the “Offering”), issuing 2,355 units of unsecured convertible debentures (“Debentures”). The principal sum of Debentures issued totals
$2.35 million. The Debentures have a maturity date of thirty (30) months from the date of issuance and shall bear interest at the rate of 8% per annum, paid quarterly in shares. Skylight Health Researchcontinues to see momentum and growth through 2022. Since April 2022, two studies have been completed and one new study has been awarded. Four studies are currently ongoing at three clinics, and the newest study awarded will be conducted at three clinics launched in September 2022. Two awarded studies are on hold with the sponsors and are pending launch. Continued success has been seen through Skylight’s partnership with ClinEdge. This vital partnership was expanded further in September 2021when ClinEdge was acquired by Elligo. Skylight Health Researchhas also recently partnered with Endominance for their Microbiome, Anxiety, & Cognitive Orientation (MACO) study to assist with their patient recruitment.
- Announced the expansion of one of its current Medicare Advantage (“MA”) plans AvMed from
South Floridainto Central Florida, increasing value-based care coverage. Additionally, the amendment to expand coverage also includes a shift in the current reimbursement model from fee-for-service to a value-based care capitation fee with shared savings opportunities. Since the announcement, the Company has also secured new MA contracts with Alignment and Ultimate health plans in Floridafor 2023.
- Announced an update on the addendum to its current Medicaid contract into Colorado’s new Alternative Payment Model 2 (APM 2) for effective start date
January 2023. The Company continues to see opportunities to expand value-based contracting efforts beyond traditional Medicare and Medicare Advantage. The Company currently has over 20K Medicaid members in Colorado.
- Announced a strategic commitment of
US$ 5 millionin the form of a convertible debenture from a multi-billion dollar growth-oriented healthcare institutional investment firm in the United States. The financing is set to close in two tranches. The first tranche of US$ 3.37 millionhas been completed as of the date of this release, and the second tranche for the remaining US$ 1.63 millionis not closed yet.
- Announced its common shares (the “Shares”) commenced trading on the OTCQX Best Market on
October 13, 2022under the symbol “SLHGF” following a voluntary delisting from Nasdaq. The Company’s common shares will continue to trade on the TSX Venture Exchangeunder the symbol “SLHG.V”. The Company’s shares are eligible for electronic clearing and settlement in the United Statesthrough the Depository Trust Company(“DTC“).
Third Quarter Performance:
Q3 2022 was focused on executing the Company’s plans to get to adjusted EBITDA break-even. Efforts made in Q3 2022 have resulted in an adjusted EBITDA improvement of approximately
The Company is pleased to announce that while cost-saving initiatives have been the primary focus, it has continued to see a normalized patient volume since its loss of COVID-19 related cases industry wide at the start of Q1 2022. Further, the visits are of higher acuity, thereby improving the per-visit charges associated with fee-for-service visits. A growth in its research division also drove increased revenue from its existing business prior to the acquisition of NMD.
Moving forward, the Company is most excited about the growth it can organically expect to realize from the foundation laid in 2021 and 2022 year to date. While historically the Company has been focused on growth primarily through mergers and acquisitions (“M&A”), the Company has now built sufficient scale and size to benefit from strong organic growth. The existing infrastructure of practices, providers and support teams means the Company can expect to add meaningful revenue and EBITDA without the need to rely heavily on M&A. These areas of growth come from continued expansion of its FFS business model, and more importantly, from the growth of its managed care business line including Medicare and Medicare Advantage programs at risk which generate capitated revenue.
The Company expects that its primary driver to organic growth will be through value-based-care contribution in Medicare and Medicare Advantage growth. Medicare lives have been historically based on 100% fee-for-service with limited to no benefit in shared savings or total cost of care. The Company is working with its JV partner CHS/Centene in the participation through the ACO Reach program for 2023. Through this program and the JV, the Company can expect to shift from fee-for-services to global capitated risk on its existing traditional Medicare population.
Medicare Advantage offers strong growth in the
As the Company continues to focus on achieving its goal of adjusted EBITDA break even towards the end of the year, the goal for 2023 will be cash flow positivity. While organic growth efforts remain the focus, the Company believes it will be in a good position in the near to medium term to utilize its own cash flow from operations to continue strategic M&A to grow market density and expand on its Medicare lives at risk population.
Q3 2022 Financial Highlights**
|(in 000s of dollars)||Three months ended
||Nine months ended
|Cost of sales||17,088||3,948||33,480||7,989|
|Total operating expenses||9,362||10,118||31,007||23,970|
|Loss from continuing operations||(5,601)||(5,369)||(19,849)||(14,211)|
|Net loss from continuing operations||(4,324)||(4,911)||(17,799)||(13,964)|
|Net income from discontinued operations||─||789||─||2,633|
*Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and amortization, adjusted by significant nonrecurring, nonoperational expenses and partially offset by the cash impact of certain accounting treatments during the period. Please see the Company’s Management Discussion & Analysis for a detailed reconciliation to loss from continuing operations.
** Certain prior period financial information on the consolidated statements of loss and comprehensive loss, and consolidated statements of cash flows have been updated to present the Legacy Business as discontinued operations and has therefore been excluded from continuing operations for all periods presented in this MD&A. This press release reflects only the results of continuing operations, unless otherwise noted.
Conference Call Details
The Company will host a conference call at
|US/Canada Toll Free Dial In:||1-800-319-4610|
|Toronto Local Dial In:||416-915-3239|
|International Dial In:||+1-604-638-5340|
||Skylight Health Group Third Quarter 2022 Financial Results|
Series A Preferred Stock Cash Dividend and Share issuance
The Board of Directors of the Company has authorized, and the Company has declared, a dividend on its 9.25% Series A Cumulative Redeemable Perpetual Preferred Shares (the “Series A Preferred Shares”) for the month of
The Company also announces the issuance of 581,438 shares to an employee pursuant to the terms of the employment agreement. The shares are issued at
For more information, please visit www.skylighthealthgroup.com or contact:
Currency Usage, Cautionary and Forward-Looking Statements
All currency contained in this Press Release represent Canadian Dollars unless otherwise stated.
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in
There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release.
Non-GAAP Financial Measures
This Press Release contains references to EBITDA and Adjusted EBITDA. These financial measures are not measures that have any standardized meaning prescribed by IFRS and are therefore referred to as non-GAAP measures. The non-GAAP measures used by the corporation may not be comparable to similar measures used by other companies. EBITDA is defined as “income (loss) before interest expenses, taxes, expenses related to listing on the Canadian Securities Exchange, depreciation, foreign exchange and financial expenses.
Adjusted EBITDA excludes the effect of share-based compensation expenses and related payroll taxes as well as removes substantial one-time costs for unusual business activities. Additional discussion on this can be found in the Skylight Health Management Discussion and Analysis filed on SEDAR.
The Company uses these non-GAAP measures because they provide additional information on the performance of its commercial operations. Such tools are frequently used in the business world to analyze and compare the performance of businesses; however, the Company’s definition of these metrics may differ from those of other businesses.
Such non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the corresponding measures calculated in accordance with IFRS. See the Company’s unaudited Financial Statements for a reconciliation of the non-GAAP measures.
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