- Following an initial slowdown due to the COVID-19 pandemic in March 2020, CB2 has continued to see growth in patient visits and registrations, while ongoing improvements to its business model and operating structure have led to reduced costs for delivery of services;
- The Company is weathering the COVID-19 pandemic well and operational performance has materially improved in Q2 2020; The Company has now reported its first full quarter of positive cash flow from Operations.
- The Company continues its expansion to traditional healthcare services including urgent and primary care, insurable services focused on Medicaid and Medicare eligible patients; representing the largest proportion of healthcare spending in the US; and
- With CAD $1.3 million in cash at the end of June 2020, the Company is well positioned and focused now on growth through a 3-pronged approach including same services, new services (direct primary care) and accretive acquisitions.
Prad Sekar, Chief Executive Officer of CB2 stated “Despite the significant uncertainties facing our business caused by the pandemic, we are delighted to report the first EBITDA positive quarter in the company’s history. Our operations continue to demonstrate resilience to the economic headwinds as demonstrated by the healthy revenue growth. In addition, we now have a strong balance sheet, a cash generating business and strong support from our anchor investors, which allows us to be more aggressive in pursuing some highly attractive and accretive acquisitions.”
Summary of Q2 2020 Key Milestones and Consolidated Results
- Total revenue for Q2 2020 was $3.7 million, up from $3.2 million from Q2 2019;
- Gross profit was $2.6 million in Q2 2020 compared to $2.1 million from Q2 2019; an increase of 22.8% driven by process improvements and the deployment of technology to improve the delivery cost of services;
- Adjusted EBITDA was $0.37 million in Q2 2020 versus an adjusted EBITDA loss of $0.79 million from Q2 2019 due to continued improvements to the operating model and top line growth;
- In April 2020, the Company launched Skylight Health Group (“SHG”) as part of its clinical operations in the US to focus on integrated healthcare and providing low cost insurable services to patients;
- As of June 30, 2020, the Company has approximately CAD $1.3 million in cash;
- In April, May and June 2020, the Company saw consecutive months of profitability driven by improved operating margins from efforts in 2019 and Q1 2020, as well as growth in top line revenues;
- In June 2020, the Company amended its promissory note held by Merida Capital Partners, extending it to December 2022, reducing its interest rate of from 12% to 8%, payable in shares or cash and the company’s option and a forced conversion at a premium to the current market price; and
- In July 2020, the Company launched the first in a series of monthly medical reports derived from real-world clinical treatments on a variety of healthcare conditions and modalities across the United States, Canada, and United Kingdom.
Q2 2020 Financial Highlights
|Three months ended June 30||Six months ended June 30|
|Cost of sales||1,088,015||1,129,270||2,118,346||1,784,958|
|Total operating expenses||2,525,671||3,857,031||5,572,491||7,051,120|
|Income (loss) from operations||86,787||(1,729,280)||(1,058,338)||(2,729,246)|
Highlights from Q2 2020:
Mr. Sekar continued, “What we have built in 2019 and the first quarter of 2020, allows us to accelerate our growth moving forward. We believe the expansion into traditional healthcare verticals is both accretive and prudent given the future role this company can play in the real-world evidence space. It also provides a huge opportunity to further grow and capitalize on one of the largest and underserviced segments of healthcare spending in the US. Our focus in 2020 and 2021 will be on growth from same services, growth from new services (SHG), and growth through accretive acquisitions.”
The Company will hold its quarterly investor conference call on September 1, 2020 at 9:00 am ET.
Conference call details:
DATE: September 1, 2020
TIME: 9:00 am ET
US/Canada Toll Free Dial In: 1-800-319-4610
Toronto Local Dial In: 1-416-915-3239
International Toll: 1-604-638-5340
CALL NAME: CB2 Insights Earnings Call