NUTEX HEALTH REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS
- Total revenue increased by 13% to $247.6 million in 2023 compared to $219.3 million in 2022.
- Hospital division operating income rose by 142% to $36.3 million for the year ended 2023.
- Net cash from operating activities was $1.3 million for the year ended 2023.
- The company focuses on boosting cash flow through operating expense reductions and portfolio optimization.
- Net loss attributable to Nutex Health Inc. was $31.6 million for the three months ended December 31, 2023.
- Adjusted EBITDA was $3.1 million for the three months ended December 31, 2023, compared to negative $5.9 million in 2022.
- Net loss attributable to Nutex Health Inc. was $45.8 million for the year ended December 31, 2023, including asset impairment charges.
- Adjusted EBITDA decreased to $10.8 million in 2023 from $12.6 million in 2022.
Insights
The reported increase in total revenue for Nutex Health Inc. reflects a positive trajectory in the company's earning power, with a notable 13% growth year-over-year. This is an indicator of potential market expansion or improved monetization of services. However, the net loss attributable to Nutex Health Inc. of $45.8 million, despite being a reduction from the previous year's $424.8 million, raises concerns regarding the company's profitability and cost management strategies.
Scrutinizing the balance sheet, the decrease in cash and cash equivalents from $34.2 million to $22.0 million could signal liquidity constraints, which might influence the company's ability to finance operations and investments without resorting to additional debt or equity financing. The 142% increase in hospital division operating income suggests a significant improvement in operational efficiency or cost control within that segment, which could be a focal point for investors evaluating sector-specific performance.
Considering the Adjusted EBITDA of $10.8 million, a decrease from $12.6 million the previous year, it is important to analyze the underlying factors contributing to this decline, as Adjusted EBITDA is often used to assess a company's operational effectiveness excluding non-recurring items and non-cash charges.
The healthcare industry, particularly the segment that Nutex Health operates in, is highly competitive and capital intensive. The increase in total revenue could be attributed to strategic initiatives such as technology integration and expansion of micro-hospitals, which are designed to provide cost-effective and patient-centric care. The impairment charges related to asset and goodwill, totaling $30.2 million, are indicative of adjustments to the carrying value of the company's assets, potentially due to hospital closures or a reassessment of the long-term profitability of certain operations.
Investors would be interested in the company's strategic plan mentioned for 2024, including a focus on reducing operating expenses and portfolio optimization. These initiatives, if successful, could improve the company's financial health and position it for sustainable growth. The net cash from operating activities of $1.3 million, while positive, is relatively modest and warrants attention to the company's cash flow management practices.
The medical industry is subject to stringent regulations and rapid technological changes, which requires continuous investment in innovation and compliance. The company's ability to adapt and invest in these areas while managing debt and improving profitability will be critical for long-term success.
From a market perspective, the financial performance of Nutex Health Inc. is likely to influence investor sentiment. The reported figures suggest a mixed financial health: on one hand, there is a significant improvement in revenue and hospital division operating income, yet on the other hand, there is a substantial net loss and a decline in cash reserves. Market analysts might speculate on the potential for a turnaround based on the strategic efforts to streamline operations and optimize the portfolio.
The healthcare delivery system is evolving, with a shift toward more decentralized and technology-driven models. Nutex Health's network of micro-hospitals aligns with this trend, which could position the company favorably in the market. However, the effectiveness of their recently implemented strategic plan will be important in determining their market competitiveness and ability to attract investment.
Investors may also scrutinize the company's Adjusted EBITDA in relation to industry benchmarks, as it provides a lens to gauge operational performance excluding non-cash expenses and one-time charges. The slight decrease in Adjusted EBITDA year-over-year could be a point of concern, potentially offset by the positive trend in revenue growth.
- TOTAL REVENUE OF
$247.6 MILLION $219.3 MILLION 13% - HOSPITAL DIVISION OPERATING INCOME OF
$36.3 MILLION $15.0 MILLION 142% - NET CASH FROM OPERATING ACTIVITIES OF
$1.3 MILLION - CONTINUED FOCUS ON INCREASED CASH FLOW THROUGH REDUCTION IN OPERATING EXPENSES AND PORTFOLIO OPTIMIZATION
Financial Highlights for the Three Months Ended December 31, 2023:
- Total revenue of
$69.7 million $53.7 million 30% . - Net loss attributable to Nutex Health Inc. of
$31.6 million $29.1 million $1.1 million $14.8 million - Adjusted EBITDA of
$3.1 million $5.9 million
Financial Highlights for the Year Ended December 31, 2023:
- Total revenue of
$247.6 million $219.3 million - Net loss attributable to Nutex Health Inc. of
$45.8 million $29.1 million $1.1 million $424.8 million $398.1 million - Adjusted EBITDA of
$10.8 million $12.6 million - Net cash from operating activities of
$1.3 million - As of December 31, 2023, the Company had total assets of
$398.2 million $22.0 million
Note: EBITDA and Adjusted EBITDA are non-GAAP financial metrics. A reconciliation of non-GAAP to GAAP measures is included below in this earnings release.
"We are pleased to report
"We had a solid 4th Quarter in 2023. In January of 2024, our management team and Board of Directors initiated a streamlined strategic plan that included a targeted reduction in annual cash operating expenses as well as a more focused allocation of resources and portfolio optimization. Some of these initiatives have already been executed while others are in the process of being implemented. Our goal for 2024 is to continue to be the leader and innovator in our industry, and to provide a very unique platform for selected growth opportunities," stated Tom Vo, M.D., MBA, Chairman and Chief Executive Officer of Nutex Health.
"We are intensely focused on our goal to deliver profitability on a net income basis to our investors. We believe that we are well positioned to improve our financial performance over the medium and long-term," stated Warren Hosseinion, M.D., President of Nutex Health.
For more details on the Company's Fourth Quarter and Fiscal Year 2023 financial results, please refer to our Annual Report on Form 10-K filed with the
NUTEX HEALTH INC. | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
December 31, | ||||||
2023 | 2022 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 22,002,056 | $ | 34,255,264 | ||
Accounts receivable | 58,624,301 | 57,777,386 | ||||
Accounts receivable - related parties | 4,152,068 | 538,183 | ||||
Inventories | 3,390,584 | 3,533,285 | ||||
Prepaid expenses and other current assets | 2,679,394 | 1,869,806 | ||||
Total current assets | 90,848,403 | 97,973,924 | ||||
Property and equipment, net | 81,387,649 | 82,094,352 | ||||
Operating right-of-use assets | 11,853,082 | 20,466,632 | ||||
Financing right-of-use assets | 176,146,329 | 192,591,624 | ||||
Intangible assets, net | 20,512,636 | 21,191,390 | ||||
Goodwill, net | 17,066,263 | 17,010,637 | ||||
Other assets | 431,135 | 423,426 | ||||
Total assets | $ | 398,245,497 | $ | 431,751,985 | ||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 18,899,196 | $ | 23,614,387 | ||
Accounts payable - related parties | 6,382,197 | 3,915,661 | ||||
Lines of credit | 3,371,676 | 2,623,479 | ||||
Current portion of long-term debt | 10,808,721 | 12,546,097 | ||||
Operating lease liabilities, current portion | 1,579,987 | 1,703,014 | ||||
Financing lease liabilities, current portion | 4,315,979 | 4,219,518 | ||||
Accrued expenses and other current liabilities | 12,955,296 | 6,240,813 | ||||
Total current liabilities | 58,313,052 | 54,862,969 | ||||
Long-term debt, net | 26,314,733 | 23,051,152 | ||||
Operating lease liabilities, net | 15,479,639 | 19,438,497 | ||||
Financing lease liabilities, net | 213,886,213 | 203,619,756 | ||||
Deferred tax liabilities | 5,145,754 | 10,452,211 | ||||
Total liabilities | 319,139,391 | 311,424,585 | ||||
Commitments and contingencies (Note 10) | ||||||
Equity: | ||||||
Common stock, | 676,680 | 650,224 | ||||
Additional paid-in capital | 469,849,049 | 458,498,402 | ||||
Accumulated deficit | (409,072,539) | (363,285,925) | ||||
Nutex Health Inc. equity | 61,453,190 | 95,862,701 | ||||
Noncontrolling interests | 17,652,916 | 24,464,699 | ||||
Total equity | 79,106,106 | 120,327,400 | ||||
Total liabilities and equity | $ | 398,245,497 | $ | 431,751,985 | ||
NUTEX HEALTH INC. | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended December 31 | Year ended December 31 | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenue: | ||||||||||||
Hospital division | $ | 62,585,167 | $ | 46,532,019 | $ | 218,070,397 | $ | 198,508,245 | ||||
Population health management division | 7,084,306 | 7,192,054 | 29,575,919 | 20,786,061 | ||||||||
Total revenue | 69,669,473 | 53,724,073 | 247,646,316 | 219,294,306 | ||||||||
Operating costs and expenses: | ||||||||||||
Payroll | 28,807,419 | 26,466,650 | 108,377,938 | 111,785,110 | ||||||||
Contract services | 14,377,128 | 9,809,286 | 42,349,982 | 35,913,441 | ||||||||
Medical supplies | 3,402,926 | 2,791,779 | 14,151,140 | 12,118,893 | ||||||||
Insurance expense | - | 2,284,377 | - | - | ||||||||
Depreciation and amortization | 4,682,724 | 3,271,861 | 17,591,572 | 13,131,374 | ||||||||
Other | 5,185,964 | 8,569,796 | 30,401,513 | 30,923,750 | ||||||||
Total operating costs and expenses | 56,456,161 | 53,193,749 | 212,872,145 | 203,872,568 | ||||||||
Gross profit | 13,213,312 | 530,324 | 34,774,171 | 15,421,738 | ||||||||
Corporate and other costs: | ||||||||||||
Facilities closing costs | - | - | 217,266 | - | ||||||||
Acquisition costs | - | - | 43,464 | 3,885,666 | ||||||||
Stock-based compensation | 637,159 | - | 2,835,971 | 189,581 | ||||||||
Impairment of assets | 29,082,203 | - | 29,082,203 | - | ||||||||
Impairment of goodwill | 1,139,297 | - | 1,139,297 | 398,135,038 | ||||||||
General and administrative expenses | 8,499,550 | 6,309,235 | 33,229,718 | 19,810,607 | ||||||||
Total corporate and other costs | 39,358,209 | 6,309,235 | 66,547,919 | 422,020,892 | ||||||||
Operating income (loss) | (26,144,897) | (5,778,911) | (31,773,748) | (406,599,154) | ||||||||
Interest expense, net | 4,236,553 | 2,862,071 | 16,317,869 | 12,490,260 | ||||||||
Other expense (income) | 328,461 | 212,426 | 399,182 | 559,299 | ||||||||
Income (loss) before taxes | (30,709,911) | (8,853,408) | (48,490,799) | (419,648,713) | ||||||||
Income tax expense (benefit) | (2,998,554) | 1,805,176 | (5,067,084) | 13,090,905 | ||||||||
Net income (loss) | (27,711,357) | (10,658,584) | (43,423,715) | (432,739,618) | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 3,906,540 | 4,093,593 | 2,362,899 | (7,959,172) | ||||||||
Net income (loss) attributable to Nutex Health Inc. | $ | (31,617,897) | $ | (14,752,177) | $ | (45,786,614) | $ | (424,780,446) | ||||
Earnings (loss) per common share | ||||||||||||
Basic | (0.05) | (0.02) | (0.07) | (0.67) | ||||||||
Diluted | (0.05) | (0.02) | (0.07) | (0.67) | ||||||||
NUTEX HEALTH INC. | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(Unaudited) | |||||||||
Year ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | (43,423,715) | $ | (432,739,618) | $ | 168,525,285 | |||
Adjustment to reconcile net income (loss) to net cash from operating activities: | |||||||||
Depreciation and amortization | 17,591,572 | 13,131,374 | 7,662,464 | ||||||
Debt accretion expense | 1,209,981 | 1,952,829 | 50,273 | ||||||
Impairment of assets | 29,082,203 | - | - | ||||||
Impairment of goodwill | 1,139,297 | 398,135,038 | - | ||||||
Stock-based compensation expense | 2,835,971 | 189,581 | - | ||||||
Rescission of warrant exercise expense | - | 561,651 | - | ||||||
Other income - gain on PPP loan forgiveness | - | - | (5,546,597) | ||||||
Deferred tax expense (benefit) | (5,707,323) | 4,996,209 | - | ||||||
(Gain) loss on lease termination | 58,210 | - | (109,494) | ||||||
Non-cash lease expense | 131,582 | 64,143 | 97,578 | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (969,761) | 56,622,133 | (5,392,614) | ||||||
Accounts receivable - related party | (3,613,885) | 1,454,934 | (1,229,940) | ||||||
Inventories | 142,701 | (719,107) | (1,088,489) | ||||||
Prepaid expenses and other current assets | (817,297) | (1,419,139) | (233,114) | ||||||
Accounts payable | (4,715,101) | 10,018,100 | 6,365,978 | ||||||
Accounts payable - related party | 2,466,536 | (329,155) | (97,985) | ||||||
Accrued expenses and other current liabilities | 5,845,481 | (1,311,865) | 4,429,141 | ||||||
Net cash from operating activities | 1,256,452 | 50,607,108 | 173,432,486 | ||||||
Cash flows from investing activities: | |||||||||
Acquisitions of property and equipment | (9,496,832) | (14,632,414) | (36,926,591) | ||||||
Acquired cash in reverse acquisition with Clinigence | - | 12,716,228 | - | ||||||
Payments for acquisitions of businesses, net of cash acquired | (703,893) | - | - | ||||||
Cash related to deconsolidation of Real Estate Entities | (1,039,157) | (2,421,212) | (48,853) | ||||||
Net cash from investing activities | (11,239,882) | (4,337,398) | (36,975,444) | ||||||
Cash flows from financing activities: | |||||||||
Proceeds from lines of credit | 2,340,911 | 2,623,479 | - | ||||||
Proceeds from notes payable | 16,952,905 | 815,881 | 19,614,372 | ||||||
Proceeds from convertible notes | 4,909,864 | - | - | ||||||
Repayments of lines of credit | (1,592,714) | (72,055) | (864,659) | ||||||
Repayments of notes payable | (16,479,512) | (7,237,094) | (20,715,235) | ||||||
Repayments of finance leases | (3,484,683) | (1,721,224) | (1,255,486) | ||||||
Payment of debt issuance costs | - | - | (47,875) | ||||||
Rescission of warrant exercise | - | (588,042) | - | ||||||
Common stock issued for exercise of warrants | - | 4,119,141 | - | ||||||
Common stock issued for exercise of options | - | 644,974 | - | ||||||
Members' contributions | 298,032 | 4,513,867 | 21,753,773 | ||||||
Members' distributions | (5,214,581) | (51,231,657) | (144,337,923) | ||||||
Net cash from financing activities | (2,269,778) | (48,132,730) | (125,853,033) | ||||||
Net change in cash and cash equivalents | (12,253,208) | (1,863,020) | 10,604,009 | ||||||
Cash and cash equivalents - beginning of the year | 34,255,264 | 36,118,284 | 25,514,275 | ||||||
Cash and cash equivalents - end of the year | $ | 22,002,056 | $ | 34,255,264 | $ | 36,118,284 | |||
Non-GAAP Financial Measures (Unaudited)
Adjusted EBITDA. Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.
We define Adjusted EBITDA as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for stock-based compensation, certain defined items of expense, any acquisition-related costs and impairments. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to
Year ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Reconciliation of net income (loss) attributable to Nutex Health | |||||||||
Net income (loss) attributable to Nutex Health Inc. | $ | (45,786,614) | $ | (424,780,446) | $ | 132,593,328 | |||
Depreciation and amortization | 17,591,572 | 13,131,374 | 7,662,464 | ||||||
Interest expense, net | 16,317,869 | 12,490,260 | 6,196,026 | ||||||
Income tax expense | (5,067,084) | 13,090,905 | 965,731 | ||||||
Allocation to noncontrolling interests | (5,546,263) | (4,837,514) | (5,751,066) | ||||||
EBITDA | (22,490,520) | (390,905,421) | 141,666,483 | ||||||
Facility closing costs | 217,266 | - | - | ||||||
Acquisition costs | 43,464 | 3,885,666 | 3,553,716 | ||||||
Stock-based compensation | 2,835,971 | 189,581 | - | ||||||
Rescission of warrant exercise | - | 1,243,059 | - | ||||||
Impairment of assets | 29,082,203 | - | - | ||||||
Impairment of goodwill | 1,139,297 | 398,135,038 | - | ||||||
Adjusted EBITDA | $ | 10,827,681 | $ | 12,547,923 | $ | 145,220,199 | |||
Three months ended | Three months ended | |||||
December 31, 2023 | December 31, 2022 | |||||
Unaudited | Unaudited | |||||
Reconciliation of net income (loss) attributable to Nutex Health Inc. to | ||||||
Net loss attributable to Nutex Health Inc. | $ | (31,617,897) | $ | (14,752,177) | ||
Depreciation and amortization | 4,682,724 | 3,271,861 | ||||
Interest expense, net | 4,236,553 | 2,862,071 | ||||
Income tax expense | (2,998,554) | 1,805,176 | ||||
Allocation to noncontrolling interests | (2,045,390) | (392,290) | ||||
EBITDA | (27,742,564) | (7,205,359) | ||||
Stock-based compensation | 637,159 | 54,166 | ||||
Rescission of warrant exercise | - | 1,243,059 | ||||
Impairment of assets | 29,082,203 | - | ||||
Impairment of goodwill | 1,139,297 | - | ||||
Adjusted EBITDA | $ | 3,116,095 | $ | (5,908,134) | ||
About Nutex Health Inc.
Headquartered in
The Hospital Division owns, develops and operates innovative health care models, including micro-hospitals, specialty hospitals, and hospital outpatient departments (HOPDs). This division owns and operates 20 facilities in 8 states.
The Population Health Management division owns and operates provider networks such as Independent Physician Associations (IPAs). Through our Management Services Organization (MSO), we provide management, administrative and other support services to our affiliated hospitals and physician groups. Our cloud-based proprietary technology platform aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers, allowing us to deliver greater quality care more efficiently.
Forward-Looking Statements
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. When used in this press release, the words or phrases "will", "will likely result," "expected to," "will continue," "anticipated," "estimate," "projected," "intend," "goal," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, many of which are beyond the control of the Company. Such uncertainties and risks include, but are not limited to, our ability to successfully execute our growth strategy, changes in laws or regulations, including the interim final and final rules implemented under the No Surprises Act , economic conditions, dependence on management, dilution to stockholders, lack of capital, the effects of rapid growth upon the Company and the ability of management to effectively respond to the growth and demand for products and services of the Company, newly developing technologies, the Company's ability to compete, conflicts of interest in related party transactions, regulatory matters, protection of technology, lack of industry standards, the effects of competition and the ability of the Company to obtain future financing. An extensive list of factors that can affect future results are discussed in the Annual Report on Form 10-K for the year ended December 31, 2023 under the heading "Risk Factors" in Part I, Item IA thereof, and other documents filed from time to time with the Securities and Exchange Commission. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release.
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SOURCE Nutex Health, Inc.
FAQ
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