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Nova Leap Health Corp
Symbol NLH
Shares Issued 86,309,252
Close 2023-08-10 C$ 0.21
Market Cap C$ 18,124,943
Recent Sedar Documents

Nova Leap Health loses $183,501 (U.S.) in Q2 2023

2023-08-10 18:12 ET - News Release

Mr. Chris Dobbin reports

NOVA LEAP HEALTH CORP. POSTS Q2 2023 RESULTS INCLUDING RECORD ADJUSTED EBITDA

Nova Leap Health Corp. has released its financial results for the quarter ended June 30, 2023. All amounts are in United States dollars unless otherwise specified.

Nova Leap Q2 2023 financial results

Financial results for the second quarter ended June 30, 2023, include the following:

  • Q2 2023 revenues of $6,677,360 increased by 4.4 per cent relative to Q1 2023 revenues of $6,396,076 and were lower than Q2 2022 revenues of $6,986,758 by 4.4 per cent.
  • Nova Leap is reporting the highest quarterly adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in company history.
  • Q2 2023 adjusted EBITDA of $386,084 was 4.5 times higher than Q1 2023 adjusted EBITDA of $86,025 and 11.4 times higher than Q2 2022 adjusted EBITDA of $33,950.
  • Q2 2023 adjusted EBITDA for the United States operating segment of $597,893 was the highest in the company's history, an increase of 90 per cent from Q1 2023 and 132 per cent from Q2 2022.
  • Gross profit margin as a percentage of revenues increased 160 basis points to 36.8 per cent in Q2 2023 from 35.2 per cent in Q1 2023.
  • Head office and operations management expense decreased by $269,953 in Q2 2023 as compared with Q2 2022 and $106,494 as compared with Q1 2023 due to the elimination of targeted support functions in head office late in Q2 2022 and the decisions undertaken by management since Q3 2022 to streamline U.S. operations.
  • The company generated income from operating activities in Q2 2023 of $116,662, an increase of $547,545 from Q2 2022 and $299,526 from Q1 2023.
  • The litigation previously initiated by Nova Leap in Q2 2022 was settled in Q2 2023, resulting in a total gain of $352,789. The settlement consisted of a cash payment of $95,000 received during the quarter, forgiveness of the remaining promissory notes plus accrued interest of $257,789 and the elimination of any future earnout payments.
  • In Q2 2023, a goodwill impairment of $350,567 was recorded in one of the company's U.S. agencies. The impairment is based on the loss of client service hours and the expected longer recovery time to return to previous revenue levels.
  • The company recorded a net loss of $183,501 in Q2 2023 as compared with a net loss $282,742 in Q1 2023 and a net loss of $24,746 in Q2 2022.
  • The company had available cash of $888,257 as of June 30, 2023, as well as full access to the unutilized revolving credit facility of $1,132,931 ($1.5-million (Canadian)).

President and chief executive officer's comments

"This was an excellent quarter for the company," said Chris Dobbin, president and chief executive officer of Nova Leap. "The changes we have implemented over the past year have led to an increase in quarterly revenue, an increase in quarterly gross margin, an increase in quarterly gross margin percentage and record quarterly adjusted EBITDA.

"Much of our operational focus has been dedicated to the U.S. operating segment which had been greatly impacted during the pandemic. I am pleased to report that we have made major headway and that the U.S. operating segment has produced record quarterly adjusted EBITDA in Q2. This achievement exceeds our previous prepandemic record and represents quarterly U.S. operating segment adjusted EBITDA that is more than the two previous quarters combined. We believe in continuous improvement and we are focused on building upon these record results.

"In addition to improved financial performance, our balance sheet and cash profile has strengthened. As referenced in my letter to shareholders on June 27, 2023, a significant portion of bank debt and promissory notes have been extinguished and we remain on track to have less than $300,000 of bank debt by the end of 2023.

"In summary, the operational focus and prudent fiscal management that I have highlighted in my commentary the past three quarters has led to record results for Q2 and positions Nova Leap well for future growth opportunities."

This news release should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2023, and 2022 including the notes to the financial statements and management's discussion and analysis dated Aug. 10, 2023, which have been filed on SEDAR.

About Nova Leap Health Corp.

Nova Leap is an acquisitive home health care service company operating in one of the fastest-growing industries in the United States and Canada. The company performs a vital role within the continuum of care with an individual- and family-centred focus, particularly those requiring dementia care. Nova Leap achieved the No. 42 ranking on the 2021 Report on Business ranking of Canada's top-growing companies, the No. 2 ranking on the 2020 ROB ranking of Canada's top-growing companies and the No. 10 ranking in the 2019 TSX Venture 50 in the clean technology and life science sector. The company is geographically diversified with operations in 10 different U.S. states within the New England, southeastern, south-central and Midwest regions, as well as in Nova Scotia, Canada.

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