|By Marketwired .||
|March 25, 2014 05:52 PM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 03/25/14 -- Prism Medical Ltd. ("Prism Medical" or "the Company") (TSX VENTURE:PM), a leading provider of durable medical equipment and related services to the mobility challenged, today reported financial results for the fourth quarter (Q4) and fiscal year ended November 30, 2013.
Three months ended Year ended (in thousands of Canadian dollars) November 30 November 30 ---------------------------------------------------------------------------- 2013 2012 2013 2012 $ $ $ $ ---------------------------------------------------------------------------- Revenues 20,423 18,270 75,823 76,027 Gross margin 8,958 6,435 30,803 29,193 (as % of revenues) 43.9% 35.2% 40.6% 38.4% Net income (loss) 1,781 (142) 4,471 2,275 (as % of revenues) 8.7% (0.8%) 5.9% 3.0% Adjusted EBITDA 3,318 671 10,534 6,514 (as % of revenues) 16.2% 3.7% 13.9% 8.6% Earnings (loss) per share Basic 0.21 (0.02) 0.53 0.27 Diluted 0.21 (0.02) 0.53 0.27 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Q4 and Fiscal Year 2013 Highlight:
-- We achieved a record EBITDA performance for the year; -- Gross margin rate of 43.9% for the quarter is a significant improvement over prior quarters; -- The MedCare supply agreement is performing in line with expectations; -- SG&A costs are in line with expectations and well below prior year levels; -- Earnings per share for the year increased from $0.27 to $0.53; -- Cash provided by operating activities decreased from $7,291 in fiscal 2012 to $5,765 in part as a result of the MedCare transaction; -- Four dividends of $0.08 per share have been paid this fiscal year.
Revenues for the three months and twelve months ended November 30, 2013 increased by $2,153 or 11.8% and decreased $204 or 0.3% respectively. Details below:
United Kingdom (UK)
Revenues for the three months ended November 30, 2013 increased $371 or 3.4% over the same period last year. Revenues for the year ended November 30, 2013 decreased $1,167 or 2.8% versus last year. The prior year included the positive impact of sales from the Leonard Cheshire contract which did not continue in 2013 causing the year's shortfall in sales. The small 3.4% increase in comparable fourth quarter sales reflects the modest gains made in a tight market due to reduced government expenditures. New products introduced in the 4th quarter and the successful development of new European dealers should positively affect sales in 2014.
United States (US)
For the three months ended November 30, 2013, US revenues increased $1,267 or 31.4% versus the same period last year. For the year ended November 30, 2013, revenues increased $5,077 or 28.7% versus the same period last year. This growth has been caused by MedCare sales, increased independent homecare dealers and additional contracts with substantial acute care facilities.
In December 2012, the beginning of the 2013 fiscal year, the Company acquired the manufacturing assets of MedCare. As part of the transaction, the Company entered into a 10-year agreement to exclusively supply all the products MedCare sells in the moving and handling industry and purchased 49% of the Company. MedCare's operations are based in Minneapolis, Minnesota, USA. The company's product offering will expand with the acquisition of the MedCare product ranges which the Company intends to market in other world geographies. In addition, the Company will leverage MedCare's strong base of dealer business in the long-term care sector and continue to build the hospital group customer base in new geographies with the inclusion of several world-renowned hospital groups. Subsequent to year end, the Company acquired the remaining 51% of MedCare.
For the 3 months ended November 2013, sales increased 16% versus the same period in the previous year, reversing the decline experienced in the first 3 quarters of fiscal 2013. This increase was driven by a market wide uptick in the acute care market, in particular in Eastern Canada and Ontario. Government spending is still restrained but some new facilities are being funded and built, largely to meet the ongoing demand fueled by the aging baby boom demographics. Revenues for the year ended November 30, 2013 decreased $4,114 or 24.3% reflecting tighter provincial budgetary spending on a comparative basis, particularly in B.C. where in the first half of fiscal 2012, we received a large end-of-life replacement order.
For the quarter ended November 30, 2013, gross margin increased $2,523 or 39.2% compared to the same period last year. For the year ended November 30, 2013, gross margin increased $1,610 or 5.5% compared to the same periods last year. As a percentage of revenues, gross margin increased from 35.2% to 43.9% in the quarter and from 38.4% to 40.6% for the year ended November 30, 2013. Margin improvements for the year were driven by MedCare sales, greater efficiency in the provision of installation services, more favourable product mix and considerable cost reductions in fixed UK overheads partially offset by higher research and development spending. In the last quarter, the more substantial margin percentage of sales increase was also affected by a much higher utilization of North American fixed overheads.
Selling, general and administrative expenses for the three months and year ended November 30, 2013 increased by $189 or 2.9% and decreased by $1,554 or 6.1% respectively compared to the same periods last year. The increase in SG&A in the fourth quarter relates to costs associated with various strategic initiatives. On a year to date basis, SG&A costs have decreased as a percentage of sales, reflecting restructuring initiatives taken in 2012.
Interest expense was significantly higher in the three months and year ended November 30, 2013 compared with the same period last year due to the utilization of the acquisition line for our investment in MedCare.
Net Income for the three months ended November 30, 2013 increased $1,923 compared to a loss of $142 in the three months ended November 30, 2012. For the year ended November 30, 2013, net income increased $2,196 or 97% compared to net income of $2,275 for the year ended November 30, 2012.
For the three months and year ended November 30, 2013, adjusted EBITDA increased $2,647 or 394% to $3,318 and $4,020 or 62% to $10,534 respectively compared to the same periods last year.
Prism intends to grow sales, profitability and return on shareholders' equity. The Company believes that performance will be positively affected by continued North American institutional demand for our products, improved manufacturing efficiencies, greater geographic coverage, and revenues and profits from new product introductions. Through additional distribution, both through independent dealers and Company-owned platforms and MedCare, Prism hopes to achieve continued growth in UK and North American profitability even with the ongoing uncertain economic environment.
The demand for our core products and services, in management's estimation, continues to experience growth at different rates in the geographic markets in which we participate. Government funding for our products, particularly in Canada and the UK is a key driver of sales. Although government policies related to health care in the markets in which we operate continues to change, we believe that our ability to deliver cost effective solutions to the health care providers combined with the aging demographics, mean the long term trends continue to be favorable.
In the Company's view, the US market holds the greatest long-term potential to provide above-average revenue growth. Institutional penetration for safe patient moving and handling equipment is well below what is witnessed in mature markets such as the UK and the homecare market is similarly underdeveloped. While budget constraints and the cyclicality of the institutional order pipeline can cause variability in the timing of US revenues, our customers are committed to creating safe patient handling environments in their facilities. Our efforts to build a larger footprint in this market have already translated into strong revenue growth. Additionally Prism is actively growing its dealer footprint in the US and designing affordable products for the private-pay home care market.
About Prism Medical Ltd.
Prism Medical Ltd. is one of the largest providers and manufacturers of durable medical equipment and related services to the mobility challenged in Canada, the US and the UK, with more than 110,000 installations and 200,000 product solutions sold. The Prism Medical brands include Waverley Glen and ErgoSafe, North America's leading supplier of lifting, handling and repositioning aid products and services across Canada and the US. Freeway and Prism Service & Repair are leading suppliers of moving and handling products and services in the UK. For further information visit Prism Medical's website at www.prismmedicalltd.com or www.sedar.com.
(1) Non-IFRS Financial Measures
Prism Medical's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Company also uses non-IFRS measures such as Adjusted EBITDA to measure its financial performance. Adjusted EBITDA consists of earnings before interest, income taxes, depreciation, amortization, stock-based compensation expense and equity gains or losses from investments in associates accounted on an equity basis. Adjusted EBITDA is a financial metric used by many investors to compare companies on the basis of operating results, asset value and the ability to incur and service debt. Management believes that Adjusted EBITDA is a useful measure for evaluating the performance of the Company. Adjusted EBITDA is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS and may not be comparable to similarly titled financial metrics reported by other companies.
This document contains forward-looking statements relating to our operations and to the environment in which we operate and our strategy, action plans and investments, which may involve estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond our control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in this report and our other public filings. Consequently, readers should not place any undue reliance on such forward-looking statements. These forward-looking statements are made as of the date of this report. Prism Medical is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. All forward-looking statements attributable to Prism Medical are expressly qualified by these cautionary statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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