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Jack Nathan Medical Corp. (TSXV: JNH, OTCQB: JNHMF) reported significant growth in its Q1-Fiscal 2023 financial results, with total revenues increasing by 207% year-over-year to $3,893,322. The clinic operations revenue surged 632% to $3,145,191, attributed to recent acquisitions and easing pandemic restrictions. Despite a narrowed operating loss of $1,258,176, total operating expenses rose to $5,151,498. The company aims to expand its footprint with a new financing arrangement with Walmart Canada and plans to open up to 13 new clinics in 2022.
Positive
Total revenues rose 207% year-over-year.
Clinic operations revenue increased significantly by 632%.
Plans to open 13 new clinics in Walmart stores.
Reduced adjusted EBITDA loss to $385k compared to $501k in Q1 2022.
Negative
Total operating expenses increased to $5,151,498.
Operating loss for Q1 was $1,258,176, despite the revenue increase.
Q1-Fiscal 2023 Total Revenues Increased 207% over Q1-Fiscal 2022
Q1-Fiscal 2023 Clinic Operations Revenue increased 632% over Q1-Fiscal 2022
TORONTO--(BUSINESS WIRE)--
Jack Nathan Medical Corp. (TSXV: JNH, OTCQB: JNHMF) (“Jack Nathan Health”, “JNH” or the “Company”) announced today its unaudited interim consolidated financial results for the first quarter of fiscal 2023, three months ended April 30, 2022. Jack Nathan Health’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).
Management Commentary
Commenting on the Company’s performance and outlook, Dr. Glenn Copeland, Chief Executive Officer, and Chief Medical Officer stated, “We continued to make progress with pandemic restrictions easing near the end of the first fiscal quarter and we are seeing clinic operations including Rehab and MedSpa start to contribute to our overall results. Now, with 80 Jack Nathan locations across the country, we own and operate 18 medical locations, as well as 2 Rehab and 5 MedSpa locations. We have further plans underway to grow our footprint steadily, in the future, within Walmart stores in Canada, under a new financing arrangement signed with Walmart Canada in May 2022. As previously stated, our goal remains to improve access to high quality healthcare, while enhancing the patient-practitioner experience.”
Dr. Copeland continued, “The Company’s is working to open as many as 13 new clinics in 2022, inside Walmart, with construction in Edmonton, AB and Hillside, B.C. Our team is committed and focused on steady growth and driving added value to all stakeholders.”
David Berman, CFO added: The Company is carefully investing in growth and building a foundation to operate many more corporate owned clinics in the coming years with Walmart’s support. Our clinic construction projects are ramping up and we have reduced our adjusted EBITDA loss to $385k in Q1-Fiscal 2023 compared to $501k in Q1-Fiscal 2022. Looking forward we anticipate further financial progress in coming quarters.”
Financial Highlights for the Three Months Ended April 30, 2022
Operating Results
Three months ended April 30
2022
2021
$
$
Revenues
3,893,322
1,266,787
Total operating expenses
(5,151,498)
(2,836,513)
Income (loss) from operations
(1,258,176)
(1,569,726)
Other income (expense)
(17,529)
(49,859)
Net loss before income taxes
(1,275,705)
(1,619,585)
Adjusted EBITDA
(385,019)
(501,761)
Note: Please see Management Discussion and Analysis for the three months ended April 30, 2022, for the detailed breakdown and commentary on Adjusted EBITDA(1).
For the three months ended April 30, 2022, total revenues were $3,893,322 (2021 - $1,266,787), an increase of $2,626,535 or 207%. The Company saw significant growth in revenues driven from its clinic operations.
Clinic operations revenues of $3,145,191 accounted for 81% of total revenues for the three months ended April 30, 2022, compared to $429,643 or 34% of revenues for the three months ended April 30, 2021. The significant growth in clinic operations during the three months ended April 30, 2022, compared to the same period last year, was driven by clinic operations acquisitions made in fiscal 2022 in Canada. Clinic operations revenues increased significantly due to the newly acquired clinics and MedSpas that were purchased or taken over from prior licensees, in fiscal 2022 and also due to less COVID 19 restrictions which impacted revenues last year. As of April 30, 2022, the Company owned and operated 18 medical clinic locations, 2 rehab and 5 MedSpa locations in Canada and a total of 108 medical clinics in Mexico. The increase in clinic operations is aligned with the Company’s strategic plan of expanding corporate-owned and operated medical centres with strategic partner Walmart.
For the three months ended April 30, 2022, total operating expenses were $5,151,498 (April 30, 2021 - $2,836,513) in Q1 fiscal 2022. The Q1 quarter-over-quarter increase was driven by the growth in Clinic Operation revenues of $3.9m noted above, that resulted in increases in several new expenses related to clinic operations including higher associate fees for new medical services, higher clinic operation costs, higher salaries and wages and professional fees, new acquisition related costs and an increase in non-cash charges of $675k, including Share Compensation Expense, Depreciation and Amortization. The operational increases are primarily attributable to the rapid expansion of medical clinics, medical and paramedical practitioners added, and new Rehab and MedSpa services provided.
For the three months ended April 30, 2022, the Company reported a loss from operations of $1,258,176 (April 30, 2021 - $1,569,726) a decrease of $311,550. The overall decrease in Q1 loss from operations is attributable to the specific reductions in Consulting expense and Development Costs while variable operating expenses increased as they relate to a large growth in Clinic revenues. In addition, there were non-cash charges of $675k including Share Compensation Expense, Depreciation and Amortization contributing to the loss.
Balance Sheet as of April 30, 2022
Cash of $0.8 million (January 31, 2022 - $1.1 million)
Total assets of $7.3 million (January 31, 2022 - $8.1 million)
Total liabilities of $4.1 million (January 31, 2022 - $4.1 million)
Shares Outstanding
As of June 29, 2022, the Company had 83,956,343 common shares outstanding, 7,625,000 stock options outstanding, 397,304 warrants outstanding, 3,250,000 RSUs outstanding and 502,506 DSUs outstanding.
For further information regarding the Company’s financial results for Q1 fiscal 2023, please refer to the unaudited interim financial statements for the 3 months ended April 30, 2022 together with corresponding MD&A, available at www.sedar.com and the JNH website https://www.jacknathanhealth.com
About Jack Nathan Medical Corp.
Jack Nathan Medical Corp., operating as Jack Nathan Health®, is one of Canada’s largest healthcare networks. Jack Nathan Health® is an innovative healthcare company that is improving access for millions of patients by co-locating physician and ancillary medical services conveniently located inside Walmart® stores.
Jack Nathan Health® provides an exceptional level of patient care, made possible through patient-centric physicians, a variety of medical services, technology, and programs, designed to put patients first. Our mission is to provide everyone access to the finest quality retail medical centres, with both in-clinic physicians and digital telemedicine, so you and your loved ones can “Live Your Best Life”.
Jack Nathan Health® was established in 2006 and continues to expand its international footprint, delivering exceptional, state-of-the-art, turn-key medical centres. In Canada, the Company has 76 clinics in Walmart locations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Quebec and 4 clinics outside Walmart. 18 medical clinics, 2 Rehab and 5 MedSpa are corporate owned and operated and 62 clinic locations are currently licensed to primarily medical as well as, dental, rehab, telemedicine, and imaging licensees. In Mexico, the Company has 108 corporate owned and operated clinics in Walmart locations. including servicing Walmart associates at three clinics inside Walmart’s Distribution Centres.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Appendix:
Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Jack Nathan are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to them, and are subject to certain risks, uncertainties, and assumptions Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Such factors include but are not limited to: changes in economic conditions or financial markets; increases in costs; litigation; legislative and other judicial, regulatory, political, and competitive developments; the economic and business impact of COVID-19 and operational difficulties. This list is not exhaustive of the factors that may affect forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking information. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward- looking information, other than as required by applicable law.
(1)Adjusted EBITDA
We believe Adjusted EBITDA is a useful measure to assess the ongoing performance of our Company as it provides more meaningful operating results by excluding the effects of expenses that are not reflective of our underlying business performance as well as one-time or non-recurring expenses. We define Adjusted EBITDA as EBITDA adjusted to add back or deduct, as applicable, certain expenses, costs, charges, or benefits incurred in the period, which in management’s view, are not indicative of normal operations, including: (i) non-capitalized development costs, (ii) acquisition related costs, (iii) share compensation expense, (iv) bad debt expense(recovery), (v) finance costs (income), and (vi) foreign exchange gain or loss
Non-GAAP measure: Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and Adjusted EBITDA should not be construed as alternatives to net income (loss) determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.
