-THIRD QUARTER REVENUE INCREASES 51%-
VANCOUVER, October 26, 2011 – CRH Medical Corporation (TSX-V: CRM, OTCQX: CRMMF), a North American medical company focussed on providing physicians with innovative products for the treatment of gastrointestinal diseases, today announced its unaudited financial results for the three and nine months ended September 30, 2011. All financial results are expressed in U.S dollars.
Third Quarter Financial Highlights
| (in 000’s of US$) |
Q3 2011 |
Q3 2010 |
Change |
9-Month 2011 |
9-Month 2010 |
Change |
| Revenue |
$1,399 |
$928 |
+51% |
$ 4,005 |
$ 2,508 |
+60% |
| Net income/loss |
$301 |
($229) |
– |
$650 |
($994) |
– |
| Total operating expenses |
$1,115 |
$933 |
+20% |
$3,386 |
$2,827 |
+20% |
“The Company’s increase in revenue and net income indicate that our business strategy of selling directly to physicians is gaining momentum as evidenced by our third consequent profitable quarter,” said Edward Wright, Chief Executive Officer of CRH Medical. “Looking ahead, we believe we are poised for more growth as we continue to strategically market our effective and safe lead product, the CRH O’Regan System, to an expanding direct-to-physician distribution network. Historically, our product adoption rate among clinical practices that have received training has been more than 90%. As our training efforts for new gastroenterologists in the U.S. gain traction, and our existing network of physicians increase their product usage, we feel there is a compelling opportunity for CRH Medical going forward.”
The O’Regan System is a single use, disposable, hemorrhoid treatment that is safe and highly effective in treating hemorrhoid grades I – IV. The Company’s goal is to establish the O’Regan System as the standard of care for hemorrhoid treatment. In addition to the product, CRH Medical delivers clinical, marketing and operational support directly to its partner physicians.
Operational Highlights
CRH Medical will hold a conference call on October 26, 2011 to discuss its third quarter. The call will take place at 4:15 pm EST and can be accessed by dialing 1-888-231-8191. At the call’s completion, an audio replay will be available by calling 1-855-859-2056 and using pass code 21262796. The phone replay will be available through November 10, 2011.
Financial Results
Revenues for the three months ended September 30, 2011 were $1,399,190 compared to $927,775 for the three months ended September 30, 2010. Revenues for the nine months ended September 30, 2011 were $4,005,189 compared to $2,508,008 for the nine months ended September 30, 2010.
The increase in revenue is the result of the Company’s sales of its O’Regan System direct to physicians. In January of 2009, the Company initiated its direct-to-physician program that provides physicians the ability to purchase our hemorrhoid banding technology, treatment protocols, marketing and operational experience. The increase in product sales is the result of the continuing successful execution of this program, training additional physicians and supporting physicians with marketing material and other practice support to increase use of our technology.
Product sales expenses for the three months ended September 30, 2011 were $673,226 compared to $455,274 for the three months ended September 30, 2010. Product sales expenses for the nine months ended September 30, 2011 were $1,982,824 compared to $1,403,839 for the nine months ended September 30, 2010. The increase in product sales expenses is a result of increased sales of the Company’s O’Regan System and the cost to train and support additional physicians and practices. Product sales expenses primarily include physician wages and travel associated with training, the cost of manufacturing the O’Regan System, cost of quality systems and programs, consulting expenses, web marketing, marketing material, business development and legal expenses.
Corporate expenses for the three months ended September 30, 2011 were $442,023 compared to $477,775 for the three months ended September 30, 2010. Corporate expenses for the nine months ended September 30, 2011 were $1,403,839 compared to $1,462,726 for the nine months ended September 30, 2010. Corporate expenses include payroll and related expenses of the executive management team, investor relations and administrative functions. Corporate expenses also includes cost associated with being a public company including audit fees, listing expenses, legal fees, insurance and board of director cost.
For the three months ended September 30, 2011, the Company reported net income of $301,087 ($0.006 and $0.006 per share basic and diluted) compared to a net loss of $228,919 ($0.005 per share basic) for the three months ended September 30, 2010. Net income for the nine months ended September 30, 2011 was $649,768 ($0.013 and $0.013 per share basic and diluted) compared to a loss of $994,157 ($0.02 per share basic) for the same period in 2010.
The Company’s September 30, 2011 financial report and corresponding MD&A will be available on www.sedar.com and the Company website www.crhmedcorp.com.
Subsequent Event
Subsequent to quarter end, the Company retained The Equicom Group (“Equicom”) to provide strategic investor relations and financial communications services. Under the terms of the agreement, CRH Medical will pay Equicom a monthly retainer fee of $7,000 for select strategic communications services. The initial contract term is 12 months. Neither Equicom nor any of its principals have an ownership interest, directly or indirectly, in CRH Medical or its securities, and CRH Medical has not granted Equicom or its principals any right to acquire such an interest. Equicom is a wholly-owned subsidiary of TMX Group Inc.
About CRH Medical Corporation:
CRH Medical Corporation specializes in the distribution of innovative medical products directly to physicians, particularly those in the gastroenterologist community. The Company’s lead product, the CRH O’Regan System, is a single use, disposable, hemorrhoid treatment that is safe and highly effective in treating hemorrhoid grades I – IV. The O’Regan System is rapidly emerging as the standard of care with gastroenterologists who treat hemorrhoids. In addition to the product, CRH Medical delivers clinical, marketing and operational support directly to its partner physicians. CRH utilizes its web-based platform to connect doctors with patients as well as educating its ever increasing install base of physicians.
For more information, please contact:
Dean Linden, Corporate Communications
CRH Medical Corporation
604.633.1440
Or
Adam Peeler, Media and Investor Relations
TMX Equicom
416.815.0700 x 225
apeeler@equicomgroup.com
Forward looking statements:
The information in this news release contains so-called “forward-looking” statements. These include statements regarding CRH Medical’s expectations and plans relating to its business, statements about CRH Medical’s expectations, beliefs, intentions or strategies for the future, which may be indicated by words or phrases such as “anticipate”, “expect”, “intend”, “plan”, “will”, “we believe”, “CRH Medical believes”, “management believes”, and similar language. All forward-looking statements are based on CRH Medical’s current expectations and are subject to risks and uncertainties and to assumptions made. Assumptions include: (i) that the growth of CRH’s product sales will continue in a consistent manner; (ii) CRH’s costs will not escalate significantly; and (iii) CRH does not incur any extraordinary costs.
Important risk factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include: (i) we may not continue to attract Gastroenterologists and other licensed providers to purchase and use the CRH O’Regan System; (ii) the policies of health insurance carriers in the United States may affect the amount of revenue the Company receives; (iii) changes in United States federal or state laws, rules, and regulations; (iv) our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management; (v) economic dependence on suppliers and our contract manufacturer; (vi) changes in the industry and the economy may affect the Company’s business; (vii) evolving regulation of corporate governance and public disclosure may result in additional corporate expenses; (viii) we may be subject to competition and technological risk which may impact the price and amount of product we can sell; (ix) we may be subject to product liability which may adversely affect our operations; (x) we may need to raise additional capital to fund future operations; (xi) our business may be impacted by health care reform in the United States; (xii) we may not have the expertise required to expand internationally. As a single product company, any adverse event directly or indirectly related to the CRH O’Regan System will have a material impact on the Company’s financial performance. CRH Medical bases its forward-looking statements on information currently available to it, and assumes no obligation to update them, except as required by law.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.