VANCOUVER, B.C. – October 29, 2015 – CRH Medical Corporation (TSX: CRH) (NYSE MKT:CRHM) (“CRH” or the “Company”), a North American medical company that provides physicians with innovative products and services for the treatment of gastrointestinal diseases, today announced its unaudited interim financial results for the quarter ended September 30, 2015. All financial results are expressed in U.S. dollars.
Q3 and YTD 2015 Financial Highlights
(All amounts in US$)
| September 30 | September 30 | YTD | YTD | |||||
| 2015 | 2014 | Change | 2015 | 2014 | Change | |||
| Anesthesia services | 9,195,363 | – | NA | 25,166,336 | – | NA | ||
| Product sales | 2,414,512 | 2,200,342 | 10% | 6,944,613 | 6,237,782 | 11% | ||
| Total Revenue | 11,609,875 | 2,200,342 | 428% | 32,110,949 | 6,237,782 | 415% | ||
| Operating expenses – adjusted1 | ||||||||
| Anesthesia services | 4,023,334 | – | NA | 10,467,372 | – | NA | ||
| Product sales | 888,395 | 1,034,365 | -14% | 2,773,890 | 2,891,043 | -4% | ||
| Corporate | 798,197 | 444,608 | 80% | 2,101,259 | 1,320,592 | 59% | ||
| Total operating expenses – adjusted1 | 5,709,926 | 1,478,973 | 286% | 15,342,521 | 4,211,635 | 264% | ||
| Operating EBITDA1 – non-controlling interest2 | 141,475 | – | NA | 141,475 | – | NA | ||
| Operating EBITDA1 – shareholders of the Company | 5,758,474 | 721,369 | 698% | 16,626,953 | 2,026,147 | 721% | ||
| 1 | Non-IFRS Measure. Refer to page 5 of this document for reconciliation of reported results to non-IFRS measures. | |||||||
| 2 | Non-controlling interest reflects the ownership interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company. | |||||||
“With two acquisitions and an NYSE listing, we are very pleased with the operational progress we have made in the third quarter. To generate record revenue and operating EBITDA for another quarter, reinforces the financial strength of our underlying business,” said Edward Wright, Chief Executive Officer of CRH. Mr. Wright added, “We believe there is a significant opportunity for CRH to continue to grow”.
Third Quarter 2015, Conference Call Notification
CRH Medical will host a telephone conference call to discuss the quarter on Thursday, October 29, 2015 at 10 am ET. The telephone numbers for the conference call are (877) 291-4570 or (647) 788-4919.
At the call’s completion, an audio replay will be available by calling (800) 585-8367 or (416) 621-4642 and using passcode 67557794. The phone replay will be available until November 12, 2015.
Q3 and YTD 2015 Financial Results
Except where otherwise indicated, all financial information discussed below is 100% of the consolidated results of the Company and includes both the Company’s interest in subsidiaries, as well as the interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company.
Total revenues for the three months ended September 30, 2015 were $11,609,875 compared to $2,200,342 for the three months ended September 30, 2014. Revenues for the nine months ended September 30, 2015 were $32,110,949 compared to $6,237,782 for the nine months ended September 30, 2014.
Revenues from anesthesia services were $9,195,363 in the quarter. This represents two months of activity from the ADH acquisition in August, and one month of activity from the KGAA acquisition in September. Anesthesia revenues in the year to date period were $25,166,336. During the quarter, the anesthesia services segment serviced 18,787 patient cases, and serviced 46,523 patient cases in the year to date.
Revenues from product sales for the quarter were $2,414,512 compared to $2,200,342 for the third quarter of 2014. The 10% increase in product sales is the result of the continuing successful execution of the Company’s direct to physician program that provides physicians the ability to purchase our hemorrhoid banding technology, treatment protocols, marketing and operational experience. Revenues from product sales for the nine months ended September 30, 2015 were $6,944,613, an increase of 11% over the prior year comparable period. As of September 30, 2015 the Company had trained 2,117 physicians to use the CRH O’Regan System, representing 791 clinical practices, which compares to 1,845 physicians trained, representing 682 clinical practices, as of September 30, 2014.
For the quarter ended September 30, 2015, total adjusted operating expenses were $5,709,926 compared to $1,478,973 for the third quarter of 2014, an increase of $4,230,953. For the nine months ended September 30, 2015, total adjusted operating expenses were $15,342,521 compared to $4,211,635 for the nine months ended September 30, 2014.
Anesthesia services adjusted operating expenses for the quarter ended September 30, 2015 were $4,023,334. Anesthesia services adjusted operating expenses for the nine months ended September 30, 2015 were $10,467,372. Anesthesia services expenses primarily include labor related cost for the certified registered nurse anesthetists and medical director, medical drugs and supplies, and billing and management related expenses.
Product sales adjusted operating expenses for the quarter were $888,395 compared to $1,034,365 for the quarter ended September 30, 2014. Product sales adjusted operating expenses for the year to date were $2,773,890 compared to $2,891,043 for the comparable period in 2014. The decrease in expenses is a reflection of the additional professional fees incurred in the third quarter of 2014. Product sales expenses primarily include employee wages, product cost and support, marketing programs, office expenses, professional fees, and insurance.
Corporate adjusted operating expenses for the quarter were $798,197 compared to $444,608 for the quarter ended September 30, 2014. This reflects a growth in expenses of $353,589 from the third quarter of 2014. Corporate adjusted operating expenses for the nine months ended September 30, 2015 were $2,101,259 compared to $1,320,592 in the same period of 2014, a growth of $780,667. The growth in corporate expenses is primarily the result of an increase in employee related costs, professional fees, travel and entertainment costs, and insurance and, in general, is reflective of the additional activities incurred in support of the Company’s expanded service offering. Also contributing to the increase are additional professional fees incurred in relation to the Company’s listing on the NYSE of $154,138 during the third quarter of 2015.
Operating EBITDA attributable to shareholders of the Company for the quarter was $5,758,474, an increase of $5,037,105 over the third quarter of 2014. Operating EBITDA attributable to shareholders of the Company for the nine months ended September 30, 2015 was $16,626,953, an increase of $14,600,806 from the comparable period in the prior year. The increases are primarily a reflection of the Company’s newly acquired anesthesia service providers offset by a net increase in product and corporate operating expenses.
Operating EBITDA attributable to non-controlling interest was $141,475 in the three and nine months ended September 30, 2015. This comprises revenues of $218,941 and adjusted operating expenses of $77,466.
The Company’s September 30, 2015 financial report and corresponding MD&A are available on www.sedar.com and the Company’s website at www.crhmedcorp.com.
About CRH Medical Corporation:
CRH Medical Corporation is a North American company that provides physicians with innovative products and services for the treatment of gastrointestinal diseases. The Company’s product distribution strategy focuses on physician education, patient outcomes, and patient awareness. The Company’s first product, the CRH O’Regan System, is a single use, disposable, hemorrhoid banding technology that is safe and highly effective in treating hemorrhoid grades I – IV. CRH distributes the CRH O’Regan System, treatment protocols, operational and marketing expertise as a complete, turnkey package directly to physicians, allowing CRH to create meaningful relationships with the physicians it serves. CRH also operates a full service anesthesia services division serving the gastroenterology community, which provides anesthesia services for patients undergoing endoscopies and colonoscopies. Performing these procedures under anesthesia makes these procedures more comfortable for patients and allows gastroenterologists to perform more procedures than in the absence of anesthesia. CRH expects to leverage the capabilities it acquired through these gastroenterology anesthesia companies to consolidate the highly fragmented gastroenterology anesthesia provider business. The Company’s goal is to establish CRH as the premier provider of innovative products and essential services to gastroenterologists throughout the United States.
For more information, please contact:
David Matousek, Director of Investor Relations
CRH Medical Corporation
800.660.2153 x1030
dmatousek@crhmedcorp.com