N@N

Alegro reports fiscal 2009 second quarter financial results

^{Published on 2009-08-26 14:53:57 - Market Wire}
 

 TORONTO, Aug. 26 /CNW/ - Alegro Health Corp. (TSX-V: AGO), a healthcare services provider, today announced its financial results for the second quarter ended June 30, 2009. "While the base business of the Rehabilitation and Disability Management division grew dramatically, the acquisition of Active Health Management was the obvious highlight in what was a truly transformational quarter for Alegro," said Brenda Rasmussen, President and Chief Executive Officer of Alegro Health Corp. "Beyond the significant organic growth in the second quarter, the addition of Active Health Management helped increase revenues by over eighty percent compared to the same period last year, and that only includes one month of Active Health Management in our second quarter results of operations. The Management and Board of Alegro are enthusiastic about the rapid, and to date, seamless integration of Active Health Management and look forward to continued organic and acquisition-based growth for the Company." Second Quarter 2009 Financial and Operating Highlights - Completed the acquisition of Active Health Management on May 29, 2009. - Revenue increased by 83% or $3,191,000 in the current quarter over the quarter ended June 2008, driven largely by the acquisition of the Active Health Management business. - EBITDA has increased to $860,000 compared with $470,000 for the comparable quarter in 2008. - Earnings per share increased by 57% for the three months ended June 30, 2009 from $0.007 to $0.011 and by 75% for the six months ended June 30, 2009 from $0.012 to $0.021. - Net income of $518,000 for the quarter was double that of the prior year. - At June 30, 2009 the Company had cash on hand of $900,000 and an unused line of credit of $4,000,000. Financial Results Selected Financial Results (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2009 2008 Change 2009 2008 Change --------------------------- -------------------------- Revenue $7,027 $3,836 83% $11,296 $7,565 49% Expenses Direct costs 4,704 1,933 143% 6,969 3,964 76% General and administrative expense 1,463 1,433 2% 2,880 2,760 4% Amortization 61 40 53% 108 91 19% --------------------------- -------------------------- 6,228 3,406 83% 9,957 6,815 46% --------------------------- -------------------------- Income before interest expense 799 430 86% 1,339 750 79% Interest expense 60 - 60 - --------------------------- -------------------------- Income before income taxes $739 $430 72% $1,279 $750 71% --------------------------- -------------------------- EBITDA(1) $860 $470 83% $1,447 $841 72% (1) See comments re non-GAAP measure. Revenue for the quarter ended June 30, 2009 was $7,027,000 and includes one month of operations for the newly acquired Active Health Management business. The combined revenue in the second quarter for the rehabilitation and disability management group of Work Able and Direct Health was $3,876,000 which was $387,000 higher than the comparable period in the prior year. This growth was attributable to customer service strategies that promoted newer and higher repeat business with existing clients. DMSU revenue for the second quarter was flat compared to last year's second quarter. The Active Health Management business generated revenue of $2,820,000 for the one month that it was owned during the second quarter. Direct costs include third party consultant fees associated with the assessment and physiotherapy businesses and salaries and wages of employees working directly in each business segment. Direct costs increased by $2,262,000 due to the acquisition of the Active Health Management business, the remainder of the increase of $509,000 was due to higher fees paid to third party consultants due to higher business volumes in the assessment business and a general increase in fee schedules paid to medical professionals used in the business. Direct costs expressed as a percentage of revenue, are approximately 80% for the Active Health Management business versus 58% for the other business units which reflects the higher labour component in the Active Health Management business. During the second quarter ended June 30, 2009, general and administrative expenses were in-line with the comparable quarter in the prior year; amortization was higher during the period due to the amortization of assets acquired in the Active Health Management acquisition and interest expense was incurred relating to the loan that was arranged for the purchase of the Active Health Management business and includes $11,000 of amortization of financing costs. During the second quarter, Alegro completed a private placement with Global Healthcare Investments and Solutions, Inc. for 20,500,000 shares and a comparable number of warrants, exercisable within five years, at a price of $0.33 per share, for cash consideration of $6,765,000. As part of the purchase price for the acquisition of the Active Health Management business, the vendor was issued 3,333,333 of the Company's common shares valued at $1,000,000. As at June 30, 2009, the Company had total shares outstanding of 60,415,095 compared to 36,581,762 at December 31, 2008 along with the 20,500,000 warrants referred to above. As at June 30, 2009, there were a total of 3,775,000 options outstanding to purchase an equivalent number of common shares at an average exercise price of $0.30, expiring at various dates until 2014. As at June 30, 2009, the Company had total cash on hand of $900,000, a decrease of $2,666,000 during the quarter. This decrease is mainly attributable to the acquisition of Active Health Management. For a complete review of financial statements, please visit [ www.sedar.com ]. Non-GAAP Measure The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is not a recognized measure under Canadian GAAP. Management believes that in addition to net earnings, EBITDA is a useful supplemental measure, as it provides investors with an indication of the Company's performance. EBITDA is used by the Company to analyze performance and compare profitability between periods. Investors should be cautioned, however, that EBITDA should not be construed as an alternative to net earnings determined in accordance with GAAP. The Company's method of calculating EBITDA may differ from other companies and accordingly, EBITDA may not be comparable to measures used by other companies. About Alegro Health Corp. Alegro Health Corp. is a leading healthcare services provider capturing high value opportunities by providing additional access to select quality healthcare services. Through its divisions - Rehabilitation and Disability Management and Surgical/Hospital Services - Alegro is delivering additional resources to the Canadian public healthcare services and addressing the growing demand for private and enhanced out-of-pocket healthcare services. With superior knowledge of the healthcare industry, extensive and trusted relationships with payers, physicians, and government agencies, Alegro is pursuing a vertically integrated approach and an aggressive acquisition strategy to achieve its growth objectives. Alegro is listed on the TSX Venture Exchange under the symbol AGO. For further information, please visit [ www.alegrohealth.com ]. This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements regarding business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Specific forward-looking statements contained in this press release include statements regarding Alegro's proposed acquisition of Active Health Management, the completion of the acquisition and the outcome of the acquisition, as well as statements regarding transaction values, accretion, and ownership levels resulting from the completion of the proposed acquisition. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Alegro and Active Health Management and described in the forward-looking statements contained in this press release. Among the various factors that could cause results to vary materially from those indicated in the forward-looking statements include failure to realize anticipated synergies and the result of the review of the proposed acquisition by regulatory authorities. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Alegro will derive there from. This release was prepared by management of the Company who takes full responsibility for its contents. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release. %SEDAR: 00016656E 

For further information: Peter Walkey, Chief Financial Officer, Alegro Health, (416) 927-8400 ext. 309, [ pwalkey@alegrohealth.com ]; Michael Moore, Investor Relations, Equicom Group, (416) 815-0700 ext. 241, [ mmoore@equicomgroup.com ]