Assure Holdings Reports First Quarter 2018 Financial Results

– Revenue Increases by 86% to $5.7 Million, Net Income up 30% to $3.0 Million –

– Management to Discuss First Quarter Results via Conference Call on Monday, August 20, 2018, at 11:30 A.M. Eastern Time –

DENVER, Aug. 17, 2018 (GLOBE NEWSWIRE) — Assure Holdings Corp. (the “Company” or “Assure”) (TSXV: IOM; OTCQB: ARHH), a provider of intraoperative neuromonitoring services, reported financial results for the three months ended March 31, 2018, and revised results for the three months ended March 31, 2017.

First Quarter 2018 Financial Summary vs. Revised First Quarter 2017

  • Total revenue grew 86% to $5.7 million versus a revised $3.1 million.
  • Managed cases increased 74% to 565 versus 325.
  • Gross margin up 180 basis points to 83.5% versus a revised 81.7%.
  • Earnings from equity method of investment in Physician Network Entities (PNEs) grew 109% to $0.9 million from a revised $0.4 million.
  • Net income increased 30% to $3.0 million compared to a revised net income of $2.3 million. Revised net income in 2017 was not burdened by tax expense as the Company modified its tax provision methodology at the end of 2017.
  • Diluted earnings per share was $0.07 per share compared to a revised $0.08 per share. The 2018 number reflects the full impact of the shares issued in conjunction with the Company’s reverse take-over transaction to become a public company on the TSXV and the performance shares.
  • Adjusted EBITDA grew 80% to $4.2 million versus a revised $2.3 million.

Management Commentary

“During the first quarter, Assure expanded beyond its historical Colorado base, growing significantly in Louisiana and expanding into Utah,” said John A. Farlinger, Assure’s Executive Chairman and Interim CEO. “Case volumes grew in Texas—a market that the Company entered last November. The expansion into these new markets helped drive strong first quarter results, and Assure continued to experience improving case volumes into the second quarter of 2018. We look forward to carrying this momentum in the remainder of the year as we continue to drive the commercial acceptance of our unique neuromonitoring platform.

“Our strong first quarter 2018 results, on the heels of our recent filing of our positive 2017 results, continues to demonstrate broad market adoption and the strong operational performance of our business model.”

First Quarter 2018 Financial Results

Total revenue in 2018 increased 86% to $5.7 million compared to a revised $3.1 million in the first quarter of 2017. The significant improvement was due to increased cases generated from the Company’s existing surgeon network, the onboarding of additional surgeons throughout 2017, and the expansion into new states. In fact, revenue generated outside Colorado was 18% of total revenue in the first quarter of 2018. Managed cases increased 74% to 565 versus 325 in the first quarter of 2017, primarily driven by expansion beyond the Colorado market.

Gross margin increased 180 basis points to 83.5% compared to a revised 81.7% in the same quarter last year as the fundamentals of the business sustained the strong revenue growth.

Total operating expenses increased to $1.7 million compared to $0.6 million in the same quarter in 2017 due to additional sales and marketing investments, onboarding new executives, share-based compensation expense, as well as ongoing corporate expenses in the wake of becoming a public company in the second quarter of 2017.

Net income in 2018 increased to $3.0 million or $0.07 per diluted share, compared to net income of $2.3 million or $0.08 per diluted share in the first quarter of 2017. The 2018 per diluted share amount reflects 17.6 million of incremental diluted shares relating to the Company’s merger with Montreux Capital and subsequent public listing and performance shares.

Adjusted EBITDA increased 80% to $4.2 million compared to $2.3 million in the same quarter in 2017 due to the increase in cases managed, which improved revenue and earnings from the equity method of investment in Assure’s PNEs.

Collected $1.4 million of cash from accounts receivable compared to $1.1 million in the first quarter of 2017. Cash distributions from PNE entities totaled $0.3 million in the three months ended March 31, 2018, compared to $0.027 million in the same prior year period. Total cash inflows from collections and distributions increased 49% year over year, as collections from 2017 growth accelerated.

Assure has also filed its unaudited condensed interim financial statements and management discussion & analysis (MD&A) with SEDAR. This information can be found at www.sedar.com.

Subsequent Events: Debt Settlement Agreement with Preston Parsons and Resignation of Peter Csapo, CFO

On August 16, 2018, the Company entered into a Release, Pledge and Security Agreement (“the Agreement”) with Preston Parsons. The Agreement provides for a secured promissory note whereby Mr. Parsons agrees to repay the Company $2,086,886 by December 31, 2018. The repayment includes amounts attributed to third-party costs incurred by the Company and imputed interest of 8%. The secured promissory note is secured by a pledge of 5,600,000 common shares of stock held by Mr. Parsons. The Agreement provides for a mutual release.

At the close of business on August 17, 2018, Peter P. Csapo, Chief Financial Officer, tendered his resignation, indicating his plans to join another healthcare company that is not a competitor to Assure. Farlinger commented: “We appreciate Peter staying on to navigate the Company through its recent restatement and becoming current in its filings. During his tenure, he in-sourced our accounting function to a new internal team and we are now appropriately resourced to handle the second quarter filing. It has been a pleasure to work with Peter and we wish him the best in his new undertaking.”

Conference Call

The Company will hold a conference call Monday, August 20, 2018, at 11 30 a.m. Eastern time to discuss its first quarter 2018 results.

Date: Monday, August 20, 2018
Time: 11:30 a.m. Eastern time
Toll-free dial-in number: 1-877-407-0792
International dial-in number: 1-201-689-8263
Conference ID: 13682790

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay here.

A replay of the conference call will be available after 2:30 p.m. Eastern time on the same day through September 3, 2018.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13682790

About Assure Holdings

Assure Holdings Corp. is a Colorado-based company that works with neurosurgeons and orthopedic spine surgeons to provide a turnkey suite of services that support intraoperative neuromonitoring activities during invasive surgeries. Assure employs its own staff of technologists and uses its own state-of-the-art monitoring equipment, handles 100% of intraoperative neuromonitoring scheduling and setup, and bills for all technical services provided. While Assure focuses primarily on supporting spinal and vascular surgeries, plans are in place to support other classes of medicine that rely on the standard of care that intraoperative neuromonitoring provides. For more information, visit the company’s website at assureIOM.com.

Non-IFRS Measures

Adjusted EBITDA is defined as net income/(loss) excluding interest, taxes, depreciation, share-based compensation, performance share compensation, provision for broker warrant fair value, provision for stock option fair value and deemed shares costs related to the reverse takeover merger

Forward-Looking Statements

This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Assure anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company, including but not limited to the Company obtaining regulatory approval to commence trading. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Assure to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to Assure, including information obtained from third-party industry analysts and other third-party sources, and are based on management’s current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement.

Investors are cautioned that, except as disclosed in the Filing Statement any information released or received with respect to the reverse take-over may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Contacts

Cody Slach, Managing Director
Liolios Investor Relations
1-949-574-3860
IOM@Liolios.com

 
ASSURE HOLDINGS INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in United States Dollars)
 
    March 31, 2018
(unaudited)
  December 31,
2017
 
ASSETS          
Current assets        
Cash   $   318,886     $   215,326    
Accounts receivable, net       20,713,887         16,624,006    
Prepaid expenses       95,940         130,060    
Due from related parties        2,082,875         2,256,117    
    Total current assets       23,211,588         19,225,509    
Equity method investments        2,857,896         2,259,663    
Equipment and furniture, net       573,867         499,123    
    Total assets   $   26,643,351     $   21,984,295    
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
LIABILITIES          
Current liabilities          
Accounts payable and accrued liabilities   $   2,447,065     $   2,504,519    
Current portion of finance leases       230,969         181,787    
Income taxes payable        1,133,661         22,475    
Line of credit        500,000         –     
    Total current liabilities       4,311,695         2,708,781    
Finance leases, net of current portion        358,721         291,063    
Provision for fair value of stock options       214,415         325,515    
Provision for performance share issuance       16,011,500         16,011,500    
Provision for fair value of broker warrants       59,751         128,062    
Deferred tax liability, net        92,276         92,276    
    Total liabilities       21,048,358         19,557,197    
SHAREHOLDERS’ EQUITY          
Capital stock       35,555         35,505    
Additional paid-in capital        6,282,129         6,079,115    
Accumulated deficit       (722,691 )       (3,687,522 )  
    Total shareholders’ equity       5,594,993         2,427,098    
Total liabilities and shareholders’ equity   $   26,643,351     $   21,984,295    
 

 

ASSURE HOLDINGS INC.
CONSOLIDATED STATEMENT OF INCOME/(LOSS)
(in United States Dollars)
 
    Three Months Ended
March 31, 2018
  Three Months Ended
March 31, 2017
(revised)
Revenue        
    Out-of-Network fees   $   5,588,841     $   2,988,506  
    Contract fees       112,310         78,065  
Total revenue       5,701,151         3,066,571  
Cost of revenues       (938,878 )       (562,634 )
Gross margin       4,762,273         2,503,937  
Operating expenses        
General and administrative       1,354,149         534,627  
Depreciation and amortization       86,929         45,558  
Sales and marketing       295,155         64,833  
    Total operating expenses       1,736,233         645,018  
Income from operations       3,026,040         1,858,919  
Other income/(expenses)        
Earnings from equity method investments       896,301         429,629  
Provision for broker warrant fair value       68,311         –   
Provision for stock option fair value       111,100         –   
Interest, net       (25,735 )       (16,216 )
    Total other income/(expenses)       1,049,977         413,413  
Income before income taxes       4,076,017         2,272,332  
Income tax expense       1,111,186         –   
Net income   $   2,964,831     $   2,272,332  
Basic income per common share    $   0.08     $   0.09  
Fully diluted income per common share    $   0.07     $   0.08  
 

 

ASSURE HOLDINGS CORP.  
ADJUSTED EBITDA  
(in United States Dollars)  
 
  Three Months Ended
March 31, 2018
Three Months
Ended March 31,
2017 (revised)
 
Reported net income $   2,964,831   $   2,272,332  
Interest     25,735       16,216  
Depreciation and amortization     86,929       45,558  
Share based compensation     200,564       –   
Income tax expense     1,111,186      
Provision for broker warrant fair value     (68,311 )     –   
Provision for stock option fair value     (111,100 )     –   
  $   4,209,834   $   2,334,106  
   

 

ASSURE HOLDINGS CORP.  
EARNINGS PER SHARE  
(in United States Dollars)  
         
  March 31,
2018
  March 31, 2017
(revised)
 
Income attributable to common shareholders        
    Basic $   2,964,831   $   2,272,332  
    Weighted average common  share outstanding     35,515,105       24,507,862  
Basic earnings per common share $   0.08   $   0.09  
         
Income attributable to common shareholders        
    Basic $   2,964,831   $   2,272,332  
    Weighted average common shares outstanding     35,515,105       24,507,862  
    Dilutive effect of stock options, warrants, and performance shares     9,566,000       3,000,000  
    Weighted average common shares outstanding assuming dilution     45,081,105       27,507,862  
Fully diluted earnings per common share $   0.07   $   0.08  
             

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