It is with renewed pleasure that I am communicating with you to summarize the activities of our first quarter ended December 31, 2020. I am proud to report that Premier Health’s results for this quarter are above our budget and that we are continuing on our growth path.
First Quarter Results and Operations
Our financial results for Q1-2021 have exceeded our initial forecasts. The company had revenues of $13.4M for the 3 months period (297% increase from $3.4M for Q1-2020) which translated in an EBITDA of $1.3M (512% increase from $215,545 for Q1-2020). Our gross average margin of 28.5% (26.2% for Q1-2020) was again well above our industry target of 25%. The single most important factor for this performance was the consolidation of the Code Bleu acquisition. We concluded the transaction on November 6, 2020, and accordingly Premier Health’s results include the consolidation of 55 days of Code Bleu results in a 92-day quarter. The impact of Code Bleu will be fully accounted for in the second quarter of 2021 when Code Bleu results will be consolidated for the entire quarter.
Over the quarter, each of the 3 divisions of Premier Health showed important organic growth. The company has now reached a critical mass that enables it to operate with a level of efficiently that we believe to be above industry average and this translates into recurring growth and better margins.
Premier Health is in constant communication with federal and provincial ministries of health in order to be able to adapt quickly to an environment that is changing on a weekly basis. We are starting to sense that COVID-19 is gradually changing work protocols and management orientation at different levels including governments entities and institutions. Decision makers are already starting to address the different issues exposed by the pandemic and how to cope with a similar situation in the future. This includes the realisation across the healthcare network that a better integration of public infrastructure and private solutions enables a better continuity of service to the population. The pandemic has also been a test bed for healthcare technological solutions. Most of the time these technologies have been successfully rolled out in other sectors but faced a refractory attitude in a healthcare sector that is often prone to resistance to change. There is now a general understanding that technology increases the quality and efficiency of care delivery. We believe that regulators will eventually embark in this quest for efficiencies and that Premier Health’s corporate strategy is well aligned with this long-term trend.
Nordik Division Performance
Premier Health’s Nordik division was created with the acquisition of Excel Santé in 2018. Since then, the division has experienced tremendous growth, was awarded a federal government contract in 2020, and recently won a call for tender in Nunavik. Nordik specializes in healthcare services delivery in Nordic regions. Selected nurses undergo a specific training to be able to provide extended care in remote environments, including medical acts normally performed by doctors. These highly trained individuals are often retained for longer assignments and play a critical role in isolated communities. Longer assignments and additional training translate in revenue stability and better margins. Nordik represents approximately 24% of Premier Health’s revenues and has an increasingly positive impact on the company’s average gross margin. Nordik’s market share has been increasing steadily, our training is recognized by personnel and institutions, and the impact of our presence in the field is well established.
Integration of Code Bleu
The integration of the Code Bleu acquisition is moving forward smoothly. At the time of closing the management of both entities agreed on a 100 day integration process and I’m glad to say that the process is on track with critical steps being rigorously followed, and that we are having the entire collaboration of Code Bleu’s management. So far, the integration has produced minimum overlapping in terms of medical personnel and a churn rate well within the industry average statistics. We are very satisfied with the work that has been performed and I am more than ever convinced that Code Bleu represented an excellent acquisition for Premier Health and that we are well positioned to grow our market share for the next few years.
Premier Health recently concluded its previously announced bought deal offering for gross proceeds of close to $7.5M. The objective of the offering was twofold. In current market conditions Premier Health has access to affordable conventional debt to finance its acquisitions program. But as we expend in other geographies, we expect the size and conditions of potential transactions to vary from one province to another and we must be able to act quickly and efficiently. We believe that access to conventional debt plus the added liquidities from the offering give us the flexibility and agility we need to achieve our goals. Second, the management owns a significant percentage of the outstanding shares of the company, which is positive in several respects, but reduces the possible daily volume of transactions on the shares. We believe that the added float can increase daily transactions on the company’s shares and improve liquidity for shareholders.
As I wrote before, Premier Health’s corporate strategy evolves around three development axes, namely technology, recruitment and acquisitions. In the next quarters the management will seek transaction opportunities in other Canadian provinces, namely in Ontario which represents the biggest market in Canada for our type of services. The company now has the critical mass and the liquidities to be active in this highly fragmented market that is ripe for consolidation.
The company is also moving forward with its technology development strategy aimed at extending the capabilities of its platform to address different aspect of healthcare services delivery. Availability and retention of medical personnel is the industry’s bottle neck and accordingly our short term focus will be put on accelerating, facilitating, and automating recruitment. We believe that this specific focus will give the company an important edge in terms of organic growth and will facilitate our involvement in different healthcare systems across the country.
With the achievement of important milestones and our recent successes, I am convinced that Premier Health will continue on its growth path in the foreseeable future.
I wish you all the best,
Martin Legault Chief Executive Officer Premier Health Of America