Mr. Hamed Shahbazi reports

WELL HEALTH REPORTS RECORD REVENUE, ADJUSTED EBITDA, AND NET INCOME RESULTS FOR Q4 AND FULL YEAR 2023 AND RAISES REVENUE GUIDANCE

Well Health Technologies Corp. has released its audited consolidated financial results for the fiscal year and fourth quarter ended Dec. 31, 2023.

Hamed Shahbazi, chairman and chief executive officer of Well, commented: "We had an outstanding year in 2023 with record revenue, adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], net income and patient visits. I am proud to announce that with the inclusion of growth associated with our clinic absorption program where Well is attracting clinics to its network for nominal consideration, we achieved organic growth of 15 per cent and overall revenue growth of 36 per cent in 2023 driven by strong operating results across all our business units. Our record achievements can be attributed to the company's discipline and focus on tech-enabling health care providers and supporting them by simplifying, modernizing and digitizing their workflows and empowering them to deliver the best health care possible. In 2024 thus far, we have begun the year with an intense focus on enhanced profitability and capital efficiency and are very pleased to provide shareholders with new and enhanced guidance which features continued top-line growth approaching $1-billion in revenues and accelerating adjusted EBITDA growth into our guidance range of $125-[million to] $130-million. What is exciting about our 2024 game plan is that it features less capital allocation and M&A activity and more emphasis on organic growth given the company's growing attractiveness to care providers across Canada and the U.S."

Mr. Shahbazi further added: "In support of our operating plan for 2024, we have strategically implemented comprehensive cost-cutting measures, including a streamlined approach to staff restructuring, increased utilization of AI and technology for process improvement and optimization, consolidation of suppliers, and tighter integration of our business units. These initiatives have not only strengthened our operational efficiency but also resulted in-millions of dollars of annualized cost savings."

Eva Fong, Well's chief financial officer, commented: "I am proud to announce that we achieved positive EPS, or earnings per share, on an adjusted and unadjusted basis for the full year and fourth quarter of 2023. I am also very pleased that we were able to refinance our $300-million (U.S.) credit facility with JP Morgan and a syndicate of investors on attractive terms. We generated $42.4-million of adjusted free cash flow in 2023 and are in an excellent position to continue to fund our growth through our cash flows from operations and we expect to lower our overall debt levels, leverage ratio and interest costs in 2024."

Fiscal 2023 annual financial highlights:

• Total revenue for the year ended Dec. 31, 2023, was $776.1-million, compared with total revenue of $569.1-million for the prior year, an increase of 36 per cent driven by acquisitions and organic growth during the past year.
• Canadian patient services revenue was $230.4-million in 2023, an increase of 27 per cent as compared with Canadian patient services revenue of $182-million in 2022.
• U.S. patient services revenue was $476.9-million in 2023, an increase of 45 per cent as compared with U.S. patient services revenue of $329.6-million in 2022.
• Software-as-a-service and technology revenue was $68.8-million in 2023, an increase of 20 per cent as compared with SaaS and technology revenue of $57.5-million in 2022.
• Adjusted gross profit was $372.3-million in 2023, an increase of 23 per cent as compared with adjusted gross profit of $303.3-million in 2022.
• Adjusted gross margin percentage was 48 per cent in 2023, as compared with adjusted gross margin percentage of 53.3 per cent in 2022. The decrease in adjusted gross margin percentage is driven by the company's increase in patient services revenue, most notably from recruitment revenue after the acquisition of CarePlus which has lower margins compared with other patient services and virtual services revenue.
• Adjusted EBITDA was $113.4-million in 2023, an increase of 8 per cent as compared with adjusted EBITDA of $104.6-million in 2022.
• Adjusted EBITDA to Well shareholders was $88.4-million in 2023, an increase of 15 per cent as compared with adjusted EBITDA to Well shareholders of $76.6-million in 2022.
• Adjusted net income was $52.4-million, or 22 cents per share in 2023, a decrease of 2 per cent as compared with adjusted net income of $53.7-million, or 24 cents per share in 2022.
• Adjusted free cash flow was $42.4-million for 2023, a decrease of 13 per cent, as compared with adjusted free cash flow of $48.9-million for 2022. The decrease was mainly due to higher tax and interest payments offsetting the increase in shareholder's EBITDA.
• Net income was $16.6-million or nil per share in 2023, a decrease of 11 per cent as compared with net income of $18.7-million or nil per share in 2022.

Fourth quarter 2023 financial highlights:

• Well achieved record quarterly revenue of $231.2-million in Q4 2023, an increase of 48 per cent as compared with revenue of $156.5-million generated in Q4 2022. The increase in revenue was mainly driven by acquisitions, seasonally strong patient visits in the company's primary care and Well Health USA businesses, and healthy organic growth of the company's virtual services businesses.
• Canada patient services revenue was $67.6-million in Q4 2023, an increase of 31 per cent as compared with Canada patient services revenue of $51.5-million in Q4 2022.
• U.S. patient services revenue was $143.5-million in Q4 2023, an increase of 55 per cent as compared with U.S. patient services revenue of $92.3-million in Q4 2022.
• SaaS and technology revenue was $20.2-million in Q4 2023, an increase of 60 per cent as compared with SaaS and technology revenue of $12.6-million in Q4 2022.
• Adjusted gross profit was $101-million in Q4 2023, an increase of 26 per cent as compared with adjusted gross profit of $80.2-million in Q4 2022.
• Adjusted gross margin percentage was 43.7 per cent during Q4 2023 compared with adjusted gross margin percentage of 51.3 per cent in Q4 2022.
• Adjusted EBITDA was $30.8-million in Q4 2023, an increase of 13 per cent as compared with adjusted EBITDA of $27.2-million in Q4 2022.
• Adjusted EBITDA to Well shareholders was $22.6-million in Q4 2023, an increase of 7 per cent as compared with adjusted EBITDA to Well shareholders of $21.1-million in Q4 2022.
• Adjusted net income was $11.2-million, or five cents per share in Q4 2023, as compared with adjusted net income of $12.5-million, or five cents per share in Q4 2022.
• Adjusted free cash flow was $12.7-million in Q4 2023, an increase of 23 per cent, as compared with adjusted free cash flow of $10.3-million in Q4 2022.
• Net income was $33.8-million, or 12 cents per share in Q4 2023, an increase of 53 per cent as compared with net income of $22.1-million, or nine cents per share in Q4 2022.

Fourth quarter and annual 2023 patient visit metrics

For the full year, Well achieved a total of over 4.2 million patient visits and 6.1 million care interactions in 2023. Patient visits grew 22 per cent in 2023 compared with the prior year, and total care interactions grew 29 per cent over the same period. This growth was driven through a combination of acquisitions and organic growth.

Well achieved a total of over 1.2 million patient visits in Q4 2023, representing a year-over-year increase of 30 per cent compared with Q4 2022, and a 27-per-cent increase compared with Q3 2023. In addition, Well conducted over 547,000 technology interactions in Q4 2023 and completed 98,000 billed provider hours. Combining Well's patient visits, technology interactions and billed provider hours, Well achieved a total of over 1,769,000 care interactions in Q4 2023.

Fourth quarter 2023 business highlights

On Oct. 1, 2023, the company completed its transaction with Healwell AI in which the company acquired the Ontario clinics from Healwell, obtained representation on Healwell's board of directors, invested $4-million as part of a $10-million convertible debenture offering, and acquired a call option to purchase up to 30.8 million Class A subordinate voting shares and 30.8 million Class B multiple voting shares in Healwell over time, subject to the achievement of certain performance metrics.

On Oct. 1, 2023, the company acquired a 100-per-cent interest in Proack Security Inc. Proack is a leading provider of offensive security assessments, offering services like penetration testing, red teaming and social engineering to pro-actively identify and mitigate cybersecurity threats. Acquired by Cycura, Well Health's cybersecurity business unit, Proack enhances Cycura's capabilities in safeguarding sensitive data and maintaining robust security across health care and corporate networks.

On Oct. 18, 2023, the company announced the launch of Well AI Decision Support. Well AI Decision Support is a solution that utilizes artificial intelligence to aid health care providers in early disease diagnosis and preventive health, particularly in identifying over 110 complex or rare diseases. Developed by Healwell, this technology has been validated in both Canadian and U.S. health care systems. It aims to bridge the gap in health care diagnostics and patient care, ensuring more accurate and timely diagnoses, and is available through Well's digital marketplace for EMR (electronic medical record) tools and applications.

On Nov. 9, 2023, the company announced the launch of the Well Longevity+ program, a progressive extension of its preventive health division and designed to redefine the future of personal and corporate wellness. Well Longevity+ enhances preventive health with advanced precision diagnostics and AI technologies for the early detection of serious health conditions to dramatically improve early diagnosis of major chronic diseases, paving the way for earlier treatment interventions.

On Nov. 21, 2023, the company announced the launch of Well AI Inbox Admin, a powerful AI-powered system that creates efficient custom workflows to help optimize clinical operations and manage incoming documents such as faxes which are still prevalent in Canada's health care ecosystem. Well AI Inbox Admin seamlessly integrates with EMR systems such as Well's OSCARPro EMR, enabling quick patient information retrieval and the ability to quickly triage and prioritize urgent matters, while its referral management features save time and enhance patient care pathways.

Events subsequent to Dec. 31, 2023

On Jan. 26, 2024, the company refinanced its $300-million (U.S.) syndicated credit facility with JPMorgan Chase Bank, N.A. and a syndicate of banking partners with an extension of the term to Jan. 26, 2027. This facility includes a $175-million (U.S.) credit facility and an additional $125-million (U.S.) accordion feature for future growth.

On Feb. 1, 2024, the company completed the sale of Intrahealth, an enterprise-class EMR provider within the company's SaaS and technology services operating segment, to Healwell for total consideration of approximately $24.2-million, consisting of cash, shares in Healwell and deferred payments.

On Feb. 7, 2024, the company created a dedicated public sector focused group to support large-scale health systems and care delivery networks that underpin the public sector. The objective of this group is to combine and deliver product offerings that are specifically suited for public sector's unique scale and requirements.

Outlook

Well is expecting its strong performance to continue into 2024 with a greater focus on optimizing its operations for organic growth and profitability. Well's objective is to focus on more capital-efficient growth opportunities while effectively managing its costs and delivering strong and sustained cash flow to shareholders. Management is pleased to provide the following update to its guidance, which only includes announced acquisitions:

• Annual revenue for 2024 is expected to be in the range of $950-million to $970-million, representing up to 25 per cent annual revenue growth.
• Annual adjusted EBITDA for 2024 is expected to be in the range of $125-million to 130-million, representing up to 15-per-cent increase from 2023 levels.

Well expects to continue to grow both of its U.S. and Canadian patient services business both organically and inorganically but with greater emphasis on capital efficiency such that it can use cash flows from its business to reduce debt and limit share dilution. In Canada, Well expects to increase its market leadership as the country's first pan-Canadian clinical network with a highly integrated network of tech-enabled outpatient health care clinics across the country.

Well has implemented a cost optimization program to enhance operational efficiency and profitability. This program includes staff and leadership restructuring and several other business transformation and optimization initiatives.

As a company with deep tech experience and capabilities, Well has also made investments in AI technologies a key priority within the company and expects to continue to develop compelling new products and enhancements to roll out to Well's provider and clinic network.

Conference call

Well will hold a conference call to discuss its 2023 fourth quarter and annual financial results on Thursday, March 21, 2024, at 12:30 p.m. ET (9:30 a.m. PT). Please use the following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local), 1-888-664-6383 (toll-free) or 1-416-764-8650 (international), with conference ID: 2519 7474.

The conference call will also be simultaneously webcast and can be accessed on Well's website.

About Well Health Technologies Corp.

Well's mission is to tech-enable health care providers. It does this by developing the best technologies, services and support available, which ensures health care providers are empowered to positively impact patient outcomes. Well's comprehensive health care and digital platform includes extensive front- and back-office management software applications that help physicians run and secure their practices. Well's solutions enable more than 34,000 health care providers between the United States and Canada and power the largest owned and operated health care ecosystem in Canada with more than 165 clinics supporting primary care, specialized care, and diagnostic services. In the United States Well's solutions are focused on specialized markets such as the gastrointestinal market, women's health, primary care and mental health. Well is publicly traded on the Toronto Stock Exchange under the symbol WELL and on the OTC Exchange under the symbol WHTCF.

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