Dear Shareholders and Prospective Shareholders,
As we enter the second half of the year, we would like to update you on our progress during the quarter ended June 30, 2017.
First Quarter 2017 Results
Below are a few highlights of our first quarter results, which we announced on April 27, 2017:
- We completed two anesthesia transactions and now have 27 ASCs under contract:
- We invested $4.1 million to acquire a 51% interest in DDAB LLC in Decatur Georgia
- We invested $3.4 million to acquire a 60% interest in OGAA in Kissimmee, Florida
- We signed an agreement with Puget Sound Gastroenterology, in Washington State, to develop our first Monitored Anesthesia Care (“MAC”) program. The agreement includes a clause that allows us to acquire a 51% interest in the new anesthesia business in 2018
- We served 42,363 patient cases compared to 24,440 patient cases served a year ago
- We increased consolidated revenues to $22.5 million, up 63% from the first quarter of 2016
- We increased adjusted operating EBITDA to $11.0 million, up 63% from the first quarter of 2016
- We generated approximately $3.2 million in free cash flow
- At March 31, 2017 we had trained 2,490 physicians to use the O’Regan System, at 963 practices, compared to 2,240 physicians trained at 842 practices at March 31, 2016
To view our first quarter 2017 financial report, please visit the Financial Information section of our website. You can also view a transcript of the corresponding conference call in the Investors section of our website.
Expanded Credit Facility
On June 26, 2017, we announced a new credit facility, replacing the existing $55.0 million facility to a new $100 million facility. Our new credit facility now consists of a $75 million credit revolving facility and a $25 million term facility. The syndicate of lenders, led by the Bank of Nova Scotia, includes US Bank and JP Morgan Chase. We are extremely pleased that JP Morgan Chase, after a very thorough review of our business, joined the lending syndicate. Highlights of the new credit facility are:
- Provides increased access to low cost capital at approximately 3.5%/year interest
- Allowed us to repay the Crown Capital Debt (which bears an interest of 12%/year)
- Provides an accordion feature which allows us to access an additional $25.0 million
- Extends the maturity date of our credit facility to June 26, 2020
- Gives us financial flexibility to execute on our strategic growth plans
Click here to read the complete announcement.
We continued to actively engage the investment community throughout the second quarter of 2017. On May 2, 2017 we returned to the Bloom Burton & Co Health Care Investment Conference in Toronto, where our CEO, Edward Wright presented a company update. We also held several one-on-ones with existing and prospective investors during this conference.
On May 3, 2017 our CEO, Edward Wright and our CFO Richard Bear, met with investors in Toronto during a non-deal roadshow hosted by Scotiabank.
On May 4, 2017 our CEO, Edward Wright and our CFO, Richard Bear, met with investors in Montreal during a non-deal roadshow hosted by CIBC.
Finally, on June 20 and 21, 2017 our CEO, Edward Wright and our CFO, Richard Bear met with investors in Baltimore, Pennsylvania and New York during a non-deal roadshow hosted by Canaccord.
We also had several conference calls with both Canadian and US investors.
Annual General Meeting (“AGM”)
We hosted our 2017 Annual General Meeting of Shareholders on Thursday, June 8th in Vancouver, BC. Shareholder participation was good and approximately 58.3% of total eligible votes were cast. Following the formal part of the meeting, our executive team had a chance to answer questions from shareholders present at the meeting.
All of management’s appointees to our Board of Directors were elected. In addition, shareholders voted in favour of reappointing KPMG LLP as our auditors, and our Company’s 2017 Share Unit Plan was approved. Detailed voting results for the AGM have been filed and can be viewed on SEDAR.
We will announce our second quarter 2017 operating and financial results in early August. We will issue a news release in the coming weeks to inform you of the announcement date and the details of the ensuing conference call.
Other scheduled marketing activities for the second half of 2017 include our participation in the Canaccord Global Health Conference in Boston in August, the Cantor Fitzgerald conference in New York, in September, and the RBC Small Cap Conference in Toronto in September. We will also conduct non-deal-roadshows and meetings with investors in and around these conferences. As more details of these and other events become available, we will post them in the Events section of our website.
If you have any questions or comments, please feel free to email me at email@example.com.