Dear shareholders and investors,
I am pleased to report Premier Health’s results for our third quarter ended June 30, 2021, and to share the quarter’s activities and achievements.
Third Quarter Results and Operations
We are following our growth trajectory by increasing our revenues organically and through acquisitions. The consolidation of Solution Nursing for a full quarter had an impact on the company’s revenues that reached $18.6M for the 3-month period ended June 30, 2021 ($49.0M for the 9-month period compared to $13.8M for the same period in 2020). This translated in an adjusted EBITDA of $1.3M ($4.2M for the 9-month period compared to $1.5M for the same period in 2020) and a net income of $0.6M ($2.2M for the 9-month period compared to -$0.2M for the same period in 2020). Our average gross margin of 24.0% for the quarter and 24.1% for the first 9 months of FY2021 was slightly below our initial objective of 25% due in part to the reclassification of travel expenses related to the Nordik division.
Over the quarter, our 3 main business units showed continued organic growth. There are approximately 4,600 healthcare professionals currently active on our platform and the company reached a total of 277,800 billable hours in the third quarter (739,225 for the 9-month period) and we are now confident that we will reach the milestone of 1,000,000 hours billed for the current fiscal year.
COVID-19 Update
The speed and scope of the COVID-19 pandemic has forced health care organizations to address several unexpected and critical challenges in parallel. Healthcare workers have been the visible tip of the iceberg of the pandemic and health organization discovered that their workforce planning and deployment models had limitations. Workers now face physical, mental, and emotional exhaustion, and organizations need to adapt to this reality.
As a direct impact on our business, most of our long-term agreements maturing in 2021 have been renewed for an additional period of one year with the objective to keep a certain level of stability in the healthcare organizations over what is anticipated to be a 1 to 2 years post COVID recovering and planning period. Over that planning period, workforce models will need to transform to become agile, data-driven, and oriented toward an extended care model. We strongly believe that a better integration of public infrastructure and private solutions can leverage available resources to enable a better continuity of service to the population.
Currently, Premier Health and similar organizations benefit from an open channel of communication with representatives of different ministries in the form of COVID management committees. For health care leaders on both sides, this is an opportunity to be tracking the lessons and liabilities of the general response efforts and to be looking for future actions and investments that could help their respective organizations prepare for similar events, and potentially shape the future of health services delivery. During this time of rebuilding, we believe there are opportunities for health organizations to rethink existing models and accelerate transformation.
Nordik Division
We acquired Solutions Nursing L.F.C. Inc. and Formation Solutions Nursing Inc., for a total consideration of C$2,7M on March 17, 2021. We are now at the end of the 100-day integration cycle and have been able to align Solution Nursing’s operations with Nordik’s general strategic direction. With a wider spectrum of available personnel, we are now looking at different initiatives to increase Nordik division’s turnover. Solution Nursing is well positioned in terms of training for nursing extended roles in remote locations and this acquisition consolidated Premier Health’s Nordik division market position in Canada’s northern regions. To emphasize that fact, during the third quarter, we have renewed an important contract with the Ungava Tulattavik Health Center for a period of 3 years with 2 renewal options of one year each. This contract alone, for personnel placement and training activities, secures an annual revenue of over $500,000 for the Division.
Transport Division
The transport division was launched in June following the awards in March 2021 of two long-term contracts representing an estimated 28,000 transport segments per year. Premier Health has currently 21 specialized vehicles with staff specifically trained for adapted transportation and customer service actively responding to customer requests. Our PSWeb platform fully supports the delivery of these new services, and the financial results of the transport division will be consolidated for a full quarter in the 4th quarter of our fiscal year. The launch of this new service and the ensuing non-recurring expenses put temporary pressure on the company’s EBITDA but we expect this business unit’s performance to be in line with our performance indicators within a short period of time.
Technology
We are currently at the last stage of the technology roadmap exercise we initiated in the spring. The purpose of this exercise, which includes the participation of our technical team, our strategic committee and third-party guidance, is to perform a thorough analysis of our current platform’s performance and existing features to identify future development axes. It is also a benchmark exercise through which we were able to compare ourselves with other players in different spaces such as the SPaaS (Staffing platform as a service) players, global placement agencies, and other non-healthcare and non-placement agency technology-based models to articulate a technology development strategy for the next foreseeable future. I expect to be able to share the broad lines of our conclusions and our technology strategy when we release our September 30th fiscal yearend results in a few months.
Moving Forward
We are actively pursuing our three development axes, namely technology, recruitment, and acquisitions. In the short term, we expect a good level of stability in demand for our services over what is anticipated to be a 12 to 24 months COVID recovery period, over which healthcare organizations will address the increasing backlog of non critical surgeries and other care services, while healthcare workers will also generally need to recuperate form physical, mental, and emotional exhaustion.
The company is moving forward with its short-term technology strategy, but we are also developing a technology roadmap aimed at positioning ourselves at the forefront of healthcare services delivery trends, with the objective to extend the capabilities of our platform and the width of our services.
We are actively seeking transaction opportunities in other Canadian provinces. Ontario represents the biggest market in Canada for our type of services and we were able to gather enough datapoints to build a deployment strategy that has the potential to lead us into becoming an important actor in the delivery of care in this market. At this point the company has the critical mass and the liquidities to be an active consolidator. We had an excellent track record in terms of integration and so far, we see no factors that could mitigate our growth path across the country in the foreseeable future.
I wish you all the best,
Martin Legault
Chief Executive Officer