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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nobilis Health Corporation | AMEX:HLTH | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.1225 | 0 | 01:00:00 |
|
British Columbia
(State or other jurisdiction of
incorporation or organization)
|
98-1188172
(I.R.S. Employer
Identification No.)
|
11700 Katy Freeway, Suite 300, Houston, Texas
(Address of principal executive offices)
|
77079
(Zip Code)
|
Large accelerated filer [ ]
|
Accelerated filer [ X ]
|
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
|
Emerging growth company [ X ]
|
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash
|
$
|
23,239
|
|
|
$
|
22,536
|
|
Trade accounts receivable, net of allowance of $3,629 and $2,598 at March 31, 2018 and December 31, 2017, respectively
|
133,362
|
|
|
144,522
|
|
||
Medical supplies
|
3,146
|
|
|
3,356
|
|
||
Prepaid expenses and other current assets
|
15,126
|
|
|
14,472
|
|
||
Total current assets
|
174,873
|
|
|
184,886
|
|
||
Property and equipment, net
|
49,035
|
|
|
51,559
|
|
||
Intangible assets, net
|
64,340
|
|
|
65,990
|
|
||
Goodwill
|
116,072
|
|
|
116,072
|
|
||
Deferred tax asset
|
10,933
|
|
|
9,951
|
|
||
Other long-term assets
|
2,580
|
|
|
2,580
|
|
||
Total Assets
|
$
|
417,833
|
|
|
$
|
431,038
|
|
Liabilities and Shareholders' Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Trade accounts payable
|
$
|
18,680
|
|
|
$
|
24,312
|
|
Accrued liabilities
|
33,724
|
|
|
35,393
|
|
||
Current portion of capital leases
|
3,040
|
|
|
3,249
|
|
||
Current portion of long-term debt
|
3,766
|
|
|
3,766
|
|
||
Current portion of convertible promissory notes
|
6,750
|
|
|
4,250
|
|
||
Other current liabilities
|
13,786
|
|
|
16,324
|
|
||
Total current liabilities
|
79,746
|
|
|
87,294
|
|
||
Lines of credit
|
24,000
|
|
|
18,000
|
|
||
Long-term capital leases, net of current portion
|
12,025
|
|
|
12,667
|
|
||
Long-term debt, net of current portion
|
89,021
|
|
|
90,619
|
|
||
Convertible promissory notes, net of current portion
|
1,750
|
|
|
4,250
|
|
||
Warrant and stock option derivative liabilities
|
445
|
|
|
384
|
|
||
Other long-term liabilities
|
2,927
|
|
|
3,036
|
|
||
Total liabilities
|
209,914
|
|
|
216,250
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
||
Contingently redeemable noncontrolling interest
|
16,947
|
|
|
17,161
|
|
||
Shareholders' Equity:
|
|
|
|
||||
Common shares, no par value, unlimited shares authorized, 78,183,802 shares issued and outstanding at March 31, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Additional paid in capital
|
226,624
|
|
|
225,790
|
|
||
Accumulated deficit
|
(79,101
|
)
|
|
(75,245
|
)
|
||
Total shareholders’ equity attributable to Nobilis Health Corp.
|
147,523
|
|
|
150,545
|
|
||
Noncontrolling interests
|
43,449
|
|
|
47,082
|
|
||
Total shareholders' equity
|
190,972
|
|
|
197,627
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
417,833
|
|
|
$
|
431,038
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Patient and net professional fees
|
$
|
63,513
|
|
|
$
|
64,901
|
|
Contracted marketing revenues
|
135
|
|
|
1,379
|
|
||
Factoring revenues
|
809
|
|
|
2,022
|
|
||
Total revenues
|
64,457
|
|
|
68,302
|
|
||
Operating expenses:
|
|
|
|
||||
Salaries and benefits
|
16,227
|
|
|
15,321
|
|
||
Drugs and supplies
|
9,915
|
|
|
12,744
|
|
||
General and administrative
|
28,323
|
|
|
33,688
|
|
||
Bad debt expense, net
|
1,031
|
|
|
—
|
|
||
Depreciation and amortization
|
4,631
|
|
|
2,338
|
|
||
Total operating expenses
|
60,127
|
|
|
64,091
|
|
||
Corporate expenses:
|
|
|
|
||||
Salaries and benefits
|
2,611
|
|
|
2,439
|
|
||
General and administrative
|
3,545
|
|
|
4,253
|
|
||
Legal expenses
|
830
|
|
|
571
|
|
||
Depreciation
|
94
|
|
|
83
|
|
||
Total corporate expenses
|
7,080
|
|
|
7,346
|
|
||
Loss from operations
|
(2,750
|
)
|
|
(3,135
|
)
|
||
Other expense (income):
|
|
|
|
||||
Change in fair value of warrant and stock
option derivative liabilities |
61
|
|
|
(375
|
)
|
||
Interest expense
|
2,885
|
|
|
1,255
|
|
||
Other income, net
|
(1,851
|
)
|
|
(258
|
)
|
||
Total other expense (income)
|
1,095
|
|
|
622
|
|
||
Loss before income taxes and noncontrolling interests
|
(3,845
|
)
|
|
(3,757
|
)
|
||
Income tax benefit, net
|
(704
|
)
|
|
(1,551
|
)
|
||
Net loss
|
(3,141
|
)
|
|
(2,206
|
)
|
||
Net income attributable to noncontrolling interests
|
711
|
|
|
192
|
|
||
Net loss attributable to Nobilis Health Corp.
|
$
|
(3,852
|
)
|
|
$
|
(2,398
|
)
|
Net loss per basic common share
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
Net loss per fully diluted common share
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
Weighted average shares outstanding (basic)
|
78,183,802
|
|
|
77,805,014
|
|
||
Weighted average shares outstanding (fully diluted)
|
78,183,802
|
|
|
77,805,014
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(3,141
|
)
|
|
$
|
(2,206
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,725
|
|
|
2,421
|
|
||
Provision for bad debts
|
1,031
|
|
|
—
|
|
||
Share-based compensation
|
835
|
|
|
1,264
|
|
||
Change in fair value of warrant and stock option derivative liabilities
|
61
|
|
|
(375
|
)
|
||
Deferred income taxes
|
(982
|
)
|
|
(1,831
|
)
|
||
Loss on sale of property and equipment
|
61
|
|
|
—
|
|
||
Loss from equity method investment
|
—
|
|
|
61
|
|
||
Amortization of deferred financing fees
|
340
|
|
|
109
|
|
||
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed:
|
|
|
|
||||
Trade accounts receivable
|
10,129
|
|
|
22,966
|
|
||
Medical supplies
|
210
|
|
|
802
|
|
||
Prepaid expenses and other current assets
|
(656
|
)
|
|
(2,514
|
)
|
||
Trade accounts payable and accrued liabilities
|
(7,301
|
)
|
|
(5,170
|
)
|
||
Other current liabilities
|
(2,537
|
)
|
|
1,194
|
|
||
Other long-term liabilities
|
(110
|
)
|
|
(189
|
)
|
||
Net cash provided by operating activities
|
2,665
|
|
|
16,532
|
|
||
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchase of property and equipment
|
(641
|
)
|
|
(3,506
|
)
|
||
Proceeds on sale of property and equipment
|
22
|
|
|
—
|
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(7,883
|
)
|
||
Net cash used for investing activities
|
(619
|
)
|
|
(11,389
|
)
|
||
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Distributions to noncontrolling interests
|
(4,554
|
)
|
|
(1,200
|
)
|
||
Payments on capital lease obligations
|
(851
|
)
|
|
773
|
|
||
Proceeds from line of credit
|
6,000
|
|
|
3,000
|
|
||
Payments on debt
|
(1,938
|
)
|
|
(656
|
)
|
||
Deferred financing fees
|
—
|
|
|
(466
|
)
|
||
Net cash (used for) provided by financing activities
|
(1,343
|
)
|
|
1,451
|
|
||
|
|
|
|
|
|
||
NET INCREASE IN CASH
|
703
|
|
|
6,594
|
|
||
CASH — Beginning of period
|
22,536
|
|
|
24,572
|
|
||
CASH — End of period
|
$
|
23,239
|
|
|
$
|
31,166
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for interest
|
$
|
2,949
|
|
|
$
|
707
|
|
Cash paid for taxes
|
$
|
4
|
|
|
$
|
—
|
|
Management Companies Combined
|
|
November 15, 2017
|
||
|
|
|
||
Assets acquired:
|
|
|
||
Cash
|
|
$
|
150
|
|
Trade accounts receivable
|
|
6,490
|
|
|
Prepaid expenses and other current assets
|
|
145
|
|
|
Property and equipment
|
|
11,225
|
|
|
Other long-term assets
|
|
1,057
|
|
|
Intangible assets
|
|
47,905
|
|
|
Goodwill
|
|
46,069
|
|
|
Total assets acquired
|
|
$
|
113,041
|
|
|
|
|
||
Liabilities assumed:
|
|
|
||
Trade accounts payable
|
|
$
|
499
|
|
Accrued liabilities
|
|
674
|
|
|
Total liabilities assumed
|
|
$
|
1,173
|
|
|
|
|
||
Consideration:
|
|
|
||
Cash
|
|
$
|
53,620
|
|
Noncontrolling interests
|
|
47,124
|
|
|
Future obligation - payment for additional equity interests
|
|
4,389
|
|
|
Convertible promissory note
|
|
3,500
|
|
|
Escrow
|
|
2,500
|
|
|
Stock issued
|
|
500
|
|
|
Stock options issued
|
|
235
|
|
|
Total consideration
|
|
$
|
111,868
|
|
|
Recognized as of Acquisition Date
|
|
Measurement Period Adjustments
(1)
|
|
March 8, 2017
|
||||||
|
|
|
|
|
|
||||||
Assets acquired:
|
|
|
|
|
|
||||||
Cash
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
438
|
|
Trade accounts receivable
|
747
|
|
|
(150
|
)
|
|
597
|
|
|||
Prepaid expenses and other current assets
|
42
|
|
|
—
|
|
|
42
|
|
|||
Medical Supplies
|
295
|
|
|
—
|
|
|
295
|
|
|||
Property and equipment
|
2,359
|
|
|
611
|
|
|
2,970
|
|
|||
Intangible assets
|
—
|
|
|
1,900
|
|
|
1,900
|
|
|||
Goodwill
|
10,828
|
|
|
(2,499
|
)
|
|
8,329
|
|
|||
Total assets acquired
|
$
|
14,709
|
|
|
$
|
(138
|
)
|
|
$
|
14,571
|
|
|
|
|
|
|
|
||||||
Liabilities assumed:
|
|
|
|
|
|
||||||
Trade accounts payable
|
$
|
612
|
|
|
$
|
(203
|
)
|
|
$
|
409
|
|
Refunds payable
|
347
|
|
|
(347
|
)
|
|
—
|
|
|||
Accrued liabilities
|
524
|
|
|
(83
|
)
|
|
441
|
|
|||
Current portion of capital lease
|
69
|
|
|
—
|
|
|
69
|
|
|||
Long-term portion of capital leases
|
39
|
|
|
—
|
|
|
39
|
|
|||
Total liabilities assumed
|
$
|
1,591
|
|
|
$
|
(633
|
)
|
|
$
|
958
|
|
|
|
|
|
|
|
||||||
Consideration:
|
|
|
|
|
|
||||||
Cash
|
$
|
8,321
|
|
|
$
|
—
|
|
|
$
|
8,321
|
|
Convertible promissory note
|
5,000
|
|
|
—
|
|
|
5,000
|
|
|||
Working capital adjustment
|
(203
|
)
|
|
495
|
|
|
292
|
|
|||
Total consideration
|
$
|
13,118
|
|
|
$
|
495
|
|
|
$
|
13,613
|
|
|
|
|
|
|
|
|
|
2017
|
||
|
|
|
|
|
|
|
|
|
||
Revenue
|
|
|
|
|
|
|
|
$
|
81,264
|
|
Income from operations
|
|
|
|
|
|
|
|
$
|
2,604
|
|
Net income (loss) attributable to Nobilis Health Corp.
|
|
|
|
|
|
|
|
$
|
(1,158
|
)
|
Net income (loss) per basic common share
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Payors
|
|
|
|
|
|
2018
|
|
2017
|
||
|
|
|
|
|
|
|
|
|
||
Private insurance and other private pay
|
|
|
|
|
|
97.9
|
%
|
|
96.2
|
%
|
Workers compensation
|
|
|
|
|
|
1.0
|
%
|
|
3.4
|
%
|
Medicare
|
|
|
|
|
|
1.1
|
%
|
|
0.4
|
%
|
Total
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Payors
|
|
|
|
|
|
2018
|
|
2017
|
||
|
|
|
|
|
|
|
|
|
||
Private insurance and other private pay
|
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Workers compensation
|
|
|
|
|
|
0.0
|
%
|
|
0.0
|
%
|
Medicare
|
|
|
|
|
|
0.0
|
%
|
|
0.0
|
%
|
Total
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Payors
|
|
|
|
|
|
2018
|
|
2017
|
||
|
|
|
|
|
|
|
|
|
||
Private insurance and other private pay
|
|
|
|
|
|
97.9
|
%
|
|
97.5
|
%
|
Workers compensation
|
|
|
|
|
|
1.0
|
%
|
|
2.3
|
%
|
Medicare
|
|
|
|
|
|
1.1
|
%
|
|
0.2
|
%
|
Total
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended March 31,
|
||||||||||||
|
Revenues
(in thousands) |
|
Number of Cases
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
|
||||||
Hospitals
|
$
|
45,670
|
|
|
$
|
41,848
|
|
|
2,715
|
|
|
2,593
|
|
ASCs
|
12,044
|
|
|
8,115
|
|
|
2,401
|
|
|
1,676
|
|
||
Clinics
|
3,088
|
|
|
3,106
|
|
|
—
|
|
|
—
|
|
||
Ancillary services
|
2,912
|
|
|
11,737
|
|
|
—
|
|
|
—
|
|
||
Total
|
$
|
63,714
|
|
|
$
|
64,806
|
|
|
5,116
|
|
|
4,269
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Trade accounts receivable
|
$
|
131,235
|
|
|
$
|
140,580
|
|
Allowance for doubtful accounts
|
(3,629
|
)
|
|
(2,598
|
)
|
||
Receivables purchased
|
5,756
|
|
|
6,540
|
|
||
Trade accounts receivable, net
|
$
|
133,362
|
|
|
$
|
144,522
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Accrued liabilities:
|
|
|
|
||||
Accrued salaries and related benefits
|
$
|
5,575
|
|
|
$
|
4,588
|
|
Contract services
|
4,256
|
|
|
3,836
|
|
||
Lab expense
|
5,552
|
|
|
6,366
|
|
||
Deferred lease liability
|
3,326
|
|
|
3,269
|
|
||
Other
|
15,015
|
|
|
17,334
|
|
||
Total accrued liabilities
|
$
|
33,724
|
|
|
$
|
35,393
|
|
Other current liabilities:
|
|
|
|
||||
Estimated amounts due to third party payors
|
$
|
5,081
|
|
|
$
|
5,081
|
|
Additional equity interest purchase obligation in conjunction with Elite acquisition
|
4,389
|
|
|
4,389
|
|
||
Other
|
4,316
|
|
|
6,854
|
|
||
Total other current liabilities
|
$
|
13,786
|
|
|
$
|
16,324
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
|
||||
Lines of credit
|
|
$
|
24,000
|
|
|
$
|
18,000
|
|
Term loan
|
|
98,550
|
|
|
100,488
|
|
||
Convertible promissory notes
|
|
8,500
|
|
|
8,500
|
|
||
Gross debt
|
|
131,050
|
|
|
126,988
|
|
||
Less: unamortized debt issuance costs
|
|
(5,763
|
)
|
|
(6,103
|
)
|
||
Debt, net of unamortized debt issuance costs
|
|
125,287
|
|
|
120,885
|
|
||
Less: current debt, net of unamortized debt issuance costs
|
|
(10,516
|
)
|
|
(8,016
|
)
|
||
Long-term debt, net
|
|
$
|
114,771
|
|
|
$
|
112,869
|
|
|
March 31, 2018
|
||
|
|
||
2018
|
$
|
11,875
|
|
2019
|
6,875
|
|
|
2020
|
5,125
|
|
|
2021
|
67,800
|
|
|
2022
|
39,375
|
|
|
Total
|
$
|
131,050
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted Prices in
Active Markets for Identical Assets and Liabilities (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
|
||||||||
December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Warrant and stock option derivative liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
384
|
|
|
$
|
384
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
384
|
|
|
$
|
384
|
|
March 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Warrant and stock option derivative liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
445
|
|
|
$
|
445
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
445
|
|
|
$
|
445
|
|
|
Shares Underlying
Options
|
|
Weighted-
Average Exercise
Price
|
|
Weighted-Average
Remaining Life
(years)
|
||||
|
|
|
|
|
|
||||
Outstanding at January 1, 2017
|
7,544,025
|
|
|
$
|
2.61
|
|
|
9.0
|
|
Granted
|
175,000
|
|
|
$
|
2.30
|
|
|
9.8
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Forfeited
|
(520,000
|
)
|
|
$
|
3.34
|
|
|
—
|
|
Outstanding at March 31, 2017
|
7,199,025
|
|
|
$
|
2.55
|
|
|
8.8
|
|
Exercisable at
|
|
|
|
|
|
||||
Exercisable at March 31, 2017
|
3,097,358
|
|
|
$
|
2.36
|
|
|
8.4
|
|
Exercisable at
|
|
|
|
|
|
||||
Outstanding at January 1, 2018
|
8,864,025
|
|
|
$
|
2.17
|
|
|
8.5
|
|
Granted
|
370,000
|
|
|
$
|
1.40
|
|
|
9.9
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Forfeited
|
(5,000
|
)
|
|
$
|
1.99
|
|
|
—
|
|
Outstanding at March 31, 2018
|
9,229,025
|
|
|
$
|
2.14
|
|
|
8.3
|
|
Outstanding at
|
|
|
|
|
|
||||
Exercisable at March 31, 2018
|
5,787,421
|
|
|
$
|
2.23
|
|
|
8.0
|
|
|
Three Months Ended March 31,
|
||
|
2018
|
|
2017
|
|
|
|
|
Expected price volatility
|
81% - 91%
|
|
87%
|
Risk free interest rate
|
2.45% - 2.65%
|
|
2.03% - 2.08%
|
Expected annual dividend yield
|
0%
|
|
0%
|
Expected option term (years)
|
5 - 6
|
|
6
|
Expected forfeiture rate
|
7.4% - 12.9%
|
|
4.6%
|
Grant date fair value per share
|
$0.95 - $1.00
|
|
$1.52 - $1.81
|
Grant date exercise price per share
|
$1.38 - $1.45
|
|
$2.16 - 2.32
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of year
|
$
|
384
|
|
|
$
|
899
|
|
Vested during the period
|
—
|
|
|
63
|
|
||
Change in fair value recorded in earnings
|
61
|
|
|
(371
|
)
|
||
Balance as of March 31, 2018 and 2017
|
$
|
445
|
|
|
$
|
591
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Basic:
|
|
|
|
||||
Net loss attributable to Nobilis Health Corp.
|
$
|
(3,852
|
)
|
|
$
|
(2,398
|
)
|
Weighted average common shares outstanding
|
78,183,802
|
|
|
77,805,014
|
|
||
Net loss per common share
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
|
NHC - ASC Dallas
|
|
First Nobilis
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Balance at January 1, 2017
|
$
|
397
|
|
|
$
|
13,907
|
|
|
$
|
14,304
|
|
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to noncontrolling interests
|
149
|
|
|
2,708
|
|
|
2,857
|
|
|||
Total contingently redeemable noncontrolling interests at December 31, 2017
|
$
|
546
|
|
|
$
|
16,615
|
|
|
$
|
17,161
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2018
|
$
|
546
|
|
|
$
|
16,615
|
|
|
$
|
17,161
|
|
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to noncontrolling interests
|
(1
|
)
|
|
(213
|
)
|
|
(214
|
)
|
|||
Total contingently redeemable noncontrolling interests at March 31, 2018
|
$
|
545
|
|
|
$
|
16,402
|
|
|
$
|
16,947
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Total cash and short term investments
|
$
|
1,532
|
|
|
$
|
1,709
|
|
Total accounts receivable
|
24,142
|
|
|
25,385
|
|
||
Intercompany
(1)
|
9,105
|
|
|
9,021
|
|
||
Total other current assets
|
1,846
|
|
|
1,918
|
|
||
Total property and equipment
|
14,706
|
|
|
15,457
|
|
||
Total other assets
|
190
|
|
|
190
|
|
||
Total assets
|
$
|
51,521
|
|
|
$
|
53,680
|
|
|
|
|
|
||||
Total accounts payable
|
$
|
3,543
|
|
|
$
|
3,617
|
|
Total other liabilities
|
1,447
|
|
|
1,662
|
|
||
Intercompany
(1)
|
43,425
|
|
|
41,201
|
|
||
Total accrued liabilities
|
12,468
|
|
|
14,057
|
|
||
Long term - capital lease
|
11,072
|
|
|
11,407
|
|
||
Noncontrolling interest
|
(10,139
|
)
|
|
(9,924
|
)
|
||
Total liabilities
|
$
|
61,816
|
|
|
$
|
62,020
|
|
•
|
Canada is excluded from the worldwide annual effective tax rate calculation because Canada has historical ordinary losses but does not expect to recognize them and has recorded a full valuation allowance, which decreases the first quarter effective tax rate by approximately
1.2%
for the three months ended March 31, 2018.
|
•
|
All of the Partnership’s earnings are included in the Company’s net income; however, the Company is not required to record income tax expense or benefit with respect to the portion of the Partnership’s earnings allocated to its noncontrolling limited partners, which increases the first quarter effective tax rate by approximately
4.6%
for the three months ended March 31, 2018.
|
|
Three Months Ended March 31, 2018
|
|||||||||||
|
Medical
|
Marketing
|
Corporate
|
Total
|
||||||||
|
|
|
|
|
||||||||
Revenues
|
$
|
63,714
|
|
$
|
743
|
|
$
|
—
|
|
$
|
64,457
|
|
Operating expenses
|
57,502
|
|
2,625
|
|
—
|
|
60,127
|
|
||||
Corporate costs
|
—
|
|
—
|
|
7,080
|
|
7,080
|
|
||||
Income (loss) from operations
|
6,212
|
|
(1,882
|
)
|
(7,080
|
)
|
(2,750
|
)
|
||||
Change in fair value of warrant and option liabilities
|
—
|
|
—
|
|
61
|
|
61
|
|
||||
Interest expense
|
262
|
|
—
|
|
2,623
|
|
2,885
|
|
||||
Other (income) expense
|
(1,891
|
)
|
—
|
|
40
|
|
(1,851
|
)
|
||||
Income (loss) before income taxes
|
$
|
7,841
|
|
$
|
(1,882
|
)
|
$
|
(9,804
|
)
|
$
|
(3,845
|
)
|
|
|
|
|
|
||||||||
Other data:
|
|
|
|
|
||||||||
Depreciation and amortization expense
|
$
|
4,270
|
|
$
|
361
|
|
$
|
94
|
|
$
|
4,725
|
|
Income tax expense (benefit)
|
$
|
254
|
|
$
|
40
|
|
$
|
32
|
|
$
|
326
|
|
Intangible assets, net
|
$
|
53,643
|
|
$
|
10,697
|
|
$
|
—
|
|
$
|
64,340
|
|
Goodwill
|
$
|
97,059
|
|
$
|
19,013
|
|
$
|
—
|
|
$
|
116,072
|
|
Capital expenditures
|
$
|
423
|
|
$
|
11
|
|
$
|
207
|
|
$
|
641
|
|
Total assets
|
$
|
340,894
|
|
$
|
46,261
|
|
$
|
30,678
|
|
$
|
417,833
|
|
Total liabilities
|
$
|
68,427
|
|
$
|
8,399
|
|
$
|
133,088
|
|
$
|
209,914
|
|
|
Three Months Ended March 31, 2017
|
|||||||||||
|
Medical
|
Marketing
|
Corporate
|
Total
|
||||||||
|
|
|
|
|
||||||||
Revenues
|
$
|
64,806
|
|
$
|
3,496
|
|
$
|
—
|
|
$
|
68,302
|
|
Operating expenses
|
60,458
|
|
3,633
|
|
—
|
|
64,091
|
|
||||
Corporate costs
|
—
|
|
—
|
|
7,346
|
|
7,346
|
|
||||
Income (loss) from operations
|
4,348
|
|
(137
|
)
|
(7,346
|
)
|
(3,135
|
)
|
||||
Change in fair value of warrant and option liabilities
|
—
|
|
—
|
|
(375
|
)
|
(375
|
)
|
||||
Interest expense
|
260
|
|
—
|
|
995
|
|
1,255
|
|
||||
Other (income) expense
|
(330
|
)
|
(8
|
)
|
80
|
|
(258
|
)
|
||||
Income (loss) before income taxes
|
$
|
4,418
|
|
$
|
(129
|
)
|
$
|
(8,046
|
)
|
$
|
(3,757
|
)
|
|
|
|
|
|
||||||||
Other data:
|
|
|
|
|
||||||||
Depreciation and amortization expense
|
$
|
1,957
|
|
$
|
381
|
|
$
|
83
|
|
$
|
2,421
|
|
Income tax expense
|
$
|
313
|
|
$
|
28
|
|
$
|
(1,892
|
)
|
$
|
(1,551
|
)
|
Intangible assets, net
|
$
|
6,813
|
|
$
|
12,447
|
|
$
|
—
|
|
$
|
19,260
|
|
Goodwill
|
$
|
53,836
|
|
$
|
19,011
|
|
$
|
—
|
|
$
|
72,847
|
|
Capital expenditures
|
$
|
2,616
|
|
$
|
1,125
|
|
$
|
68
|
|
$
|
3,809
|
|
Total assets
|
$
|
216,814
|
|
$
|
45,553
|
|
$
|
45,793
|
|
$
|
308,160
|
|
Total liabilities
|
$
|
64,786
|
|
$
|
7,798
|
|
$
|
81,298
|
|
$
|
153,882
|
|
Stock consideration given in conjunction with acquisition
|
$
|
2,250
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,250
|
|
Convertible promissory note
|
$
|
7,250
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,250
|
|
•
|
In July 2014, the Company entered into a marketing services agreement with a physician equity owner and an entity owned by that physician equity owner’s brother. The Company incurred expenses of
nil
and
$0.2 million
to the entity during the
three
months ended
March 31, 2018
and
2017
, respectively.
|
•
|
In September 2014, the minority interest holder of a fully consolidated entity, who is also a partial owner of two other hospitals, entered into an ongoing business relationship with the Company. At
March 31, 2018
, the Company has a net amount due from these related parties of
$6.2 million
. In addition, the Company leases certain medical equipment and facility space from these related parties. Equipment lease costs of
$0.5 million
were incurred during both the
three
months ended
March 31, 2018
and
2017
, respectively. Facility lease costs of
$0.5 million
were incurred during both the
three
months ended
March 31, 2018
and
2017
, respectively.
|
•
|
In October 2014, the Company entered into a management agreement with an entity controlled by a physician equity owner. In June 2015, the Company expanded the relationship with this physician equity owner and an entity owned by the physician equity owner's wife to include consulting, marketing, medical supplies, medical directorship and on-call agreements (collectively "service agreements"). The Company incurred expenses of
$0.3 million
and
$1.5 million
in fees owed pursuant to the management agreement to the entity during the
three
months ended
March 31, 2018
and
2017
, respectively. The Company has incurred expenses of
$0.5 million
and
nil
in fees owed pursuant to the service agreements to the entity during the
three
months ended
March 31, 2018
and
2017
, respectively.
|
•
|
In April 2017, the minority interest holder of a fully consolidated entity, who is also a member of the Company's board of directors, entered into an ongoing business relationship with the Company. The Company incurred expenses of
$0.2 million
during the
three
months ended
March 31, 2018
. At
March 31, 2018
, the Company has a net amount due to this related party of
$0.1 million
.
|
•
|
our ability to successfully maintain effective internal controls over financial reporting;
|
•
|
our ability to implement our business strategy, manage the growth in our business, and integrate acquired businesses;
|
•
|
the risk of litigation and investigations, and liability claims for damages and other expenses not covered by insurance;
|
•
|
the risk that payments from third-party payers, including government healthcare programs, may decrease or not increase as costs increase;
|
•
|
adverse developments affecting the medical practices of our physician limited partners;
|
•
|
our ability to maintain favorable relations with our physician limited partners;
|
•
|
our ability to grow revenues by increasing case and procedure volume while maintaining profitability;
|
•
|
failure to timely or accurately bill for services;
|
•
|
our ability to compete for physician partners, patients and strategic relationships;
|
•
|
the risk of changes in patient volume and patient mix;
|
•
|
the risk that laws and regulations that regulate payments for medical services made by government healthcare programs could cause our revenues to decrease;
|
•
|
the risk that contracts are canceled or not renewed or that we are not able to enter into additional contracts under terms that are acceptable to us; and
|
•
|
the risk of potential decreases in our reimbursement rates.
|
•
|
North American Spine: promotion of minimally invasive spine procedures (pain management, musculoskeletal and spine);
|
•
|
Migraine Treatment Centers of America: promotion of procedures related to chronic migraine pain (interventional headache procedure);
|
•
|
NueStep: promotion of surgical procedures designed to treat pain in the foot, ankle and leg (podiatry);
|
•
|
Evolve: The Experts in Weight Loss Surgery: promotion of surgical weight loss procedures (bariatrics);
|
•
|
Minimally Invasive Reproductive Surgery Institute (“MIRI”): promotion of women’s health related procedures;
|
•
|
Onward Orthopedics: promotion of general orthopedics, sports medicine related to orthopedics (orthopedics and pain management interventions);
|
•
|
Clarity Vein and Vascular: promotion of cosmetic and medical vein and vascular treatments; and
|
•
|
Arizona Vein and Vascular Center: promotion of cosmetic and medical vein and vascular treatments.
|
•
|
Hamilton Vein Center: promotion of cosmetic and medical vein and vascular treatments.
|
•
|
the surgical center fee for the use of infrastructure, surgical equipment, nursing staff, non-surgical professional services, supplies and other support services, which is earned by the Nobilis Facilities;
|
•
|
the professional fee, which is separately earned, billed and collected by the physician performing the procedure, separate and apart from the fees charged by the Nobilis Facilities; and
|
•
|
the anesthesiology fee, which is separately earned, billed and collected by the anesthesia provider, separate and apart from the fees charged by the Nobilis Facilities and the physicians.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Patient and net professional fees
|
$
|
63,513
|
|
|
$
|
64,901
|
|
Contracted marketing revenues
|
135
|
|
|
1,379
|
|
||
Factoring revenues
|
809
|
|
|
2,022
|
|
||
Total revenues
|
64,457
|
|
|
68,302
|
|
||
Operating expenses:
|
|
|
|
||||
Salaries and benefits
|
16,227
|
|
|
15,321
|
|
||
Drugs and supplies
|
9,915
|
|
|
12,744
|
|
||
General and administrative
|
28,323
|
|
|
33,688
|
|
||
Bad debt expense, net
|
1,031
|
|
|
—
|
|
||
Depreciation and amortization
|
4,631
|
|
|
2,338
|
|
||
Total operating expenses
|
60,127
|
|
|
64,091
|
|
||
Corporate expenses:
|
|
|
|
||||
Salaries and benefits
|
2,611
|
|
|
2,439
|
|
||
General and administrative
|
3,545
|
|
|
4,253
|
|
||
Legal expenses
|
830
|
|
|
571
|
|
||
Depreciation
|
94
|
|
|
83
|
|
||
Total corporate expenses
|
7,080
|
|
|
7,346
|
|
||
Loss from operations
|
(2,750
|
)
|
|
(3,135
|
)
|
||
Other expense (income):
|
|
|
|
||||
Change in fair value of warrant and stock
option derivative liabilities |
61
|
|
|
(375
|
)
|
||
Interest expense
|
2,885
|
|
|
1,255
|
|
||
Other income, net
|
(1,851
|
)
|
|
(258
|
)
|
||
Total other expense (income)
|
1,095
|
|
|
622
|
|
||
Loss before income taxes and noncontrolling interests
|
(3,845
|
)
|
|
(3,757
|
)
|
||
Income tax benefit, net
|
(704
|
)
|
|
(1,551
|
)
|
||
Net loss
|
$
|
(3,141
|
)
|
|
$
|
(2,206
|
)
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
Revenues
(in thousands) |
|
Number of Cases
|
|
Revenues
per Case (2) |
||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Hospitals
|
$
|
45,670
|
|
|
$
|
41,848
|
|
|
2,715
|
|
|
2,593
|
|
|
$
|
16,821
|
|
|
$
|
16,139
|
|
ASCs
|
12,044
|
|
|
8,115
|
|
|
2,401
|
|
|
1,676
|
|
|
$
|
5,016
|
|
|
$
|
4,842
|
|
||
Clinics
|
3,088
|
|
|
3,106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ancillary services
|
2,912
|
|
|
11,737
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
63,714
|
|
|
$
|
64,806
|
|
|
5,116
|
|
|
4,269
|
|
|
$
|
12,454
|
|
|
$
|
15,181
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
Revenues
(in thousands) |
|
Number of Cases (1)
|
|
Revenues
per Case (2) |
||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketing
|
$
|
742
|
|
|
$
|
3,496
|
|
|
159
|
|
|
162
|
|
|
$
|
4,667
|
|
|
$
|
21,580
|
|
Total
|
$
|
742
|
|
|
$
|
3,496
|
|
|
159
|
|
|
162
|
|
|
$
|
4,667
|
|
|
$
|
21,580
|
|
•
|
We are implementing enhanced internal controls and improving the communication and coordination among our third-party billing and collection agencies, finance department and our record-keeping procedures and we have expanded cross-functional involvement and input into monthly reviews of outstanding and aged accounts receivable due to the Company.
|
•
|
We are in the process of assessing the allowance for doubtful accounts process and methodology including documenting additional procedures; which includes those designed to add depth to our review procedures.
|
•
|
Implementing specific review procedures, including the added involvement of third-party specialists in the review of significant, complex and non-recurring transactions designed to enhance our financial reporting and month end close processes; and
|
•
|
Strengthening our financial reporting process with improved documentation standards, technical oversight and training related to third-party valuations and acquisition accounting.
|
Exhibit
|
Description
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1*
|
|
|
|
32.2*
|
|
|
|
101.INS*
|
XBRL Instance Document
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
May 8, 2018
|
||
|
||
By:
|
/s/ David Young
|
|
|
David Young
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Duly Authorized Officer)
|
1 Year Nobilis Health Chart |
1 Month Nobilis Health Chart |
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