Press Release

Akumin Inc. Announces Third Quarter 2019 Financial Results

News Provided by Akumin Inc. / Nov 14, 2019. 7:00am ET

November 14, 2019 – Toronto, ON – Akumin Inc. (TSX: AKU, AKU.U) (“Akumin” or the “Corporation”) announced today its financial results for the quarter ended September 30, 2019 (“Q3 Fiscal 2019”).

Summary Consolidated Financial Results (in thousands, except for per share amounts)

3-month period
ended
Sep. 30, 2019
3-month period
ended
Sep. 30, 2018
9-month period
ended
Sep. 30, 2019
9-month period
ended
Sep. 30, 2018

RVUs

1,435

850

3,664

2,271

Revenue

68,874

39,131

170,410

109,331

EBITDA (1)

19,323

4,278

42,612

14,168

Adjusted EBITDA (1)

18,039

8,285

39,581

23,353

EPS –Diluted

0.03

0.00

0.05

0.05

Adjusted EPS – Diluted (1)

0.06

0.05

0.17

0.16

(1) See “Non-IFRS Measures” below.

Commenting on the Q3 Fiscal 2019 financial results, Riadh Zine, President and Chief Executive Officer of the Corporation, said, “The quarter ending September 30, 2019 represents another fiscal quarter of growth and financial performance in-line with management’s expectation, including revenue of $68.9 million and Adjusted EBITDA of $18.0 million.

“Akumin’s volume in Q3 Fiscal 2019 was approximately 1,435,000 RVUs, compared to approximately 850,000 RVUs in Q3 Fiscal 2018, an increase of 69%.  On an organic volume basis, RVUs increased by 10% compared to Q3 Fiscal 2018. The Corporation reports the volume of procedures performed in its diagnostic imaging centers based on relative-value units, or RVUs, instead of the number of procedures.  RVUs are a standardized measure of value used in the U.S. Medicare reimbursement formula for physician services which provides weighting to distinguish the complexity of different procedures.

“Q3 Fiscal 2019 includes partial contribution of the recently announced acquisition in El Paso, Texas, completed on August 16, 2019.  In early October 2019, the Corporation also completed a tuck-in acquisition in West Palm Beach, Florida, which is not reflected in the quarter.”

Akumin would like to remind interested parties of the Corporation’s Third Quarter Fiscal 2019 Financial Results Call, to be held today from 8:30 a.m. to 9:00 a.m. Eastern Time. To access the conference call, dial toll-free in Canada or the U.S. 888-231-8191 or, for international callers, 647-427-7450. A related presentation will be available for download on Akumin’s website at https://akum.in/Q3-presentation. Participants are asked to connect at least 10 minutes prior to the beginning of the call to ensure participation.

The Corporation has retained the services of Hinge Markets Inc., led by Jeffrey White, to provide investor relations services and to increase awareness of the Corporation and its activities with its existing and potential shareholders. Mr. White, founder of Hinge Markets Inc., and a lawyer by training, has spent more than 20 years in the capital markets as a professional and a senior executive in both corporate finance and institutional equity sales.

Unless otherwise indicated, all amounts are expressed in U.S. dollars. Certain metrics, including those expressed on an adjusted or comparable basis, are non-IFRS measures. See “Non-IFRS Measures” and “Selected Consolidated Financial Information” of this press release for further details.  The Corporation’s consolidated financial statements for Fiscal 2018 and related management’s discussion and analysis are available under Akumin’s profile on SEDAR (www.sedar.com).

About Akumin

Akumin is a leading provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States with a network of owned and/or operated imaging centers located in Florida, Texas, Pennsylvania, Delaware, Illinois, Kansas and Georgia. By combining our clinical expertise with the latest advances in technology and information systems, our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, minimizing the cost and amount of care for patients. Our imaging procedures include MRI, CT, positron emission tomography (PET), ultrasound, diagnostic radiology (X-ray), mammography, and other interventional procedures.

Non-IFRS Measures

This press release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under the International Financial Reporting Standards (“IFRS”) and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these non-IFRS measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these non-IFRS measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS financial measures, including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin” , “Adjusted net income (loss) attributable to shareholders of Akumin” and “Adjusted EPS – Diluted”. These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management compensation. Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found in our Management’s Discussion and Analysis dated November 13, 2019 available at www.sedar.com.

We define such non-IFRS measures as follows:

EBITDA” means net income (loss) attributable to shareholders of the Corporation before interest expense (net), income tax expense (recovery) and depreciation and amortization.

Adjusted EBITDA” means EBITDA, as further adjusted for stock-based compensation, impairment of property and equipment, provisions for certain credit losses, settlement costs, provisions, acquisition-related and public offering costs, gains (losses) in the period, one-time adjustments and IFRS 16 impact on leases.

Adjusted EBITDA Margin” means Adjusted EBITDA divided by the revenue in the period.

“Adjusted net income (loss) attributable to shareholders of Akumin” means Adjusted EBITDA less depreciation and amortization and interest expense (excluding IFRS 16 impact on depreciation and interest expense), taxed at Akumin’s estimated effective tax rate, which is a blend of U.S. federal and state statutory tax rates for Akumin for the period.

Forward-Looking Information

Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.

Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Akumin as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of our Annual Information Form dated March 28, 2019, which is available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Akumin; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Akumin expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

For further information: R. Jeffrey White, Investor Relations, 1-866-640-5222, jeffrey.white@akumin.com

< Financial tables follow. >

Selected Consolidated Financial Information

Three-month period ended

Three-month period ended

(in thousands)

Sep 30, 2019

Sep 30, 2018

Service fees – net of allowances and discounts

68,223

38,317

Other revenue

651

814

Revenue

68,874

39,131

Employee compensation

23,794

14,734

Reading fees

9,476

5,143

Rent and utilities

2,736

4,292

Third party services and professional fees

5,122

3,004

Administrative

3,253

1,779

Medical supplies and other expenses

1,797

1,383

Depreciation and amortization

8,142

2,577

Stock-based compensation

853

1,424

Interest expense

9,591

1,482

Settlement costs (recoveries)

(208)

(99)

Acquisition related costs

444

256

Financial instruments revaluation and other (gains) losses

1,693

2,426

Income before income taxes

2,181

730

Income tax provision (recovery)

(398)

24

Non-controlling interests

591

511

Net income attributable to shareholders of Akumin

1,988

195

 

Adjusted EBITDA

Three-month period ended

Three-month period ended

(in thousands)

Sep 30, 2019

Sep 30, 2018

Revenue

68,874

39,131

Less:

Employee compensation

23,794

14,734

Reading fees

9,476

5,143

Rent and utilities

2,736

4,292

Third party services and professional fees

5,122

3,004

Administrative

3,253

1,779

Medical supplies and other expenses

1,797

1,383

IFRS 16 impact on leases

4,066

Sub-total

50,244

30,335

Non-controlling interests

591

511

Adjusted EBITDA

10,039

8,285

Adjusted EBITDA Margin

26%

21%

Nine-month period ended

Nine-month period ended

(in thousands)

Sep 30, 2019

Sep 30, 2018

Service fees – net of allowances and discounts

168,588

107,244

Other revenue

1,822

2,087

Revenue

170,410

109,331

Employee compensation

60,458

38,387

Reading fees

24,242

14,796

Rent and utilities

6,935

11,461

Third party services and professional fees

12,637

8,706

Administrative

8,898

6,361

Medical supplies and other expenses

4,939

4,105

Depreciation and amortization

20,907

6,849

Stock-based compensation

2,805

4,465

Interest expense

18,361

4,201

Impairment of property and equipment

638

Settlement costs (recoveries)

(1,439)

29

Acquisition related costs

2,994

920

Public offering costs

814

Financial instruments revaluation and other (gains) losses

3,745

2,319

Income before income taxes

4,928

5,280

Income tax provision (recovery)

148

327

Non-controlling interests

1,584

2,162

Net income attributable to shareholders of Akumin

3,196

2,791

 

Adjusted EBITDA

Nine-month period ended

Nine-month period ended

(in thousands)

Sep 30, 2019

Sep 30, 2018

Revenue

170,410

109,331

Less:

Employee compensation

60,458

38,387

Reading fees

24,242

14,796

Rent and utilities

6,935

11,461

Third party services and professional fees

12,637

8,706

Administrative

8,898

6,361

Medical supplies and other expenses

4,939

4,105

IFRS 16 impact on leases

11,136

Sub-total

129,245

83,816

Non-controlling interests

1,584

2,162

Adjusted EBITDA

39,581

23,353

Adjusted EBITDA Margin

23%

21%

 

Reconciliation of Non-IFRS Measures

3-month period
ended

3-month period
ended

6-month period
ended

6-month period
ended

(in thousands)

Sep 30, 2019

Sep 30, 2018

Sep 30, 2019

Sep 30, 2018

Net income attributable
to shareholders of Akumin

1,988

195

3,196

2,791

Income tax provision (recovery)

(398)

24

148

327

Depreciation and amortization

8,142

2,577

20,907

6,849

Interest expense

9,591

1,482

18,361

4,201

EBITDA

19,323

4,278

42,612

14,168

Adjustments:

Stock-based compensation

853

1,424

2,805

4,465

Impairment of property and equipment

638

Settlement costs (recoveries)

(208)

(99)

(1,439)

29

Acquisition-related costs

444

256

2,994

920

Public offering costs

814

Financial instruments revaluation and other (gains) losses

1,693

2,426

3,745

2,319

Sub-total

22,105

8,285

50,717

23,353

IFRS 16 impact on leases

(4,066)

(11,136)

Adjusted EBITDA

18,039

8,285

39,581

23,353

Revenue

68,874

39,131

170,410

109,331

Adjusted EBITDA Margin

26%

21%

23%

21%

Adjusted EBITDA

18,039

8,285

39,581

23,353

Less:

Depreciation and amortization

8,142

2,577

20,907

6,849

Interest expense

9,591

1,482

18,361

4,201

Add:

IFRS 16 impact on depreciation and interest expense

5,370

14,753

Sub-total

5,676

4,226

15,066

12,303

Effective tax rate (1)

24.3%

24.7%

24.3%

24.7%

Tax effect

1,376

1,043

3,654

3,038

Adjusted net income attributable to shareholders of Akumin

4,300

3,183

11,412

9,265

(1) Effective tax rate is the U.S. federal and state blended statutory tax rate estimated for Akumin for the period.