Full Press Release Details
NUTEX HEALTH reports THIRd quarter 2023 financial results
HOUSTON, TX (PRNewswire) - November 9, 2023 - Nutex Health Inc. ("Nutex Health" or the "Company") (NASDAQ: NUTX), a physician-led, technology-enabled integrated healthcare delivery system comprised of 22 state-of-the-art micro-hospitals in 8 states and primary care-centric, risk-bearing physician networks, today announced third quarter 2023 financial results for the three months and nine months ended September 30, 2023.
Financial Highlights for the Three Months and Nine Months Ended September 30, 2023:
Note: Adjusted EBITDA is a non-GAAP financial metric. A reconciliation of non-GAAP to GAAP measures is included below in this earnings release.
"Our balance sheet continues to remain strong with $26.8 million of cash on hand and significant capital available to handle the development of the five additional micro-hospitals we plan to open in 2024, in addition to forming new IPAs and growing our existing IPAs," stated Jon Bates, Chief Financial Officer of Nutex Health.
"We are executing on our goal of opening new hospitals and growing volumes and service lines at our existing hospitals. In addition, we are actively enrolling patients in our South Florida and Houston IPAs during the 2023 Medicare Annual Enrollment Period and executing on our integrated healthcare delivery model comprised of micro-hospitals surrounded by risk-bearing physician networks. We believe that this is a novel and innovative model that we can replicate across the country. On the NSA side, we are actively working with legislators and members of CCIIO, as well as the Biden-Harris Administration to correct the flawed implementation of the NSA," stated Tom Vo, M.D., MBA, Chairman and Chief Executive Officer of Nutex Health.
"In the first nine months of 2023, we have delivered three successive quarters with positive net cash from operating activities and positive adjusted EBITDA while opening four new micro-hospitals, one new urgent care center and launching three new IPAs. We intend to continue to execute on our growth strategy and are confident in our outlook for 2024. On the capital markets side, with cash on hand and proceeds from our private offering, we intend to pay off the remaining $5.6 million outstanding of our pre-paid advance from Yorkville Advisors prior to the end of the year, with the goal of mitigating the selling pressure on our stock. We expect our board to base its decision regarding the reverse stock split on our trading price and an extension of our existing grace period," stated Warren Hosseinion, M.D., President of Nutex Health.
For more details on the Company's Third Quarter 2023 financial results, please refer to our Quarterly Report on Form 10-Q filed with the U.S. Securities & Exchange Commission and accessible at www.sec.gov.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2023 | December 31, 2022 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 26,826,733 | $ | 34,255,264 | ||
| Accounts receivable | 53,209,834 | 57,777,386 | ||||
| Accounts receivable - related parties | 1,487,591 | 538,183 | ||||
| Inventories | 2,682,716 | 3,533,285 | ||||
| Prepaid expenses and other current assets | 5,645,296 | 1,869,806 | ||||
| Total current assets | 89,852,170 | 97,973,924 | ||||
| Property and equipment, net | 85,496,612 | 82,094,352 | ||||
| Operating right-of-use assets | 16,712,230 | 20,466,632 | ||||
| Finance right-of-use assets | 247,593,480 | 192,591,624 | ||||
| Intangible assets, net | 21,624,132 | 21,191,390 | ||||
| Goodwill, net | 17,935,036 | 17,010,637 | ||||
| Other assets | 419,882 | 423,426 | ||||
| Total assets | $ | 479,633,542 | $ | 431,751,985 | ||
| Liabilities and Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 17,599,047 | $ | 23,614,387 | ||
| Accounts payable - related parties | 6,144,188 | 3,915,661 | ||||
| Lines of credit | 3,371,676 | 2,623,479 | ||||
| Current portion of long-term debt | 19,644,656 | 12,546,097 | ||||
| Operating lease liabilities, current portion | 1,562,385 | 1,703,014 | ||||
| Finance lease liabilities, current portion | 4,171,489 | 4,219,518 | ||||
| Accrued expenses and other current liabilities | 14,773,273 | 6,240,813 | ||||
| Total current liabilities | 67,266,714 | 54,862,969 | ||||
| Long-term debt, net | 19,303,829 | 23,051,152 | ||||
| Operating lease liabilities, net | 15,874,261 | 19,438,497 | ||||
| Finance lease liabilities, net | 263,791,711 | 203,619,756 | ||||
| Deferred tax liabilities | 8,492,294 | 10,452,211 | ||||
| Total liabilities | 374,728,809 | 311,424,585 | ||||
| Commitments and contingencies | ||||||
| Equity: | ||||||
| Common stock, $0.001 par value; 950,000,000 shares authorized; 670,711,741 and 650,223,840 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 670,712 | 650,224 | ||||
| Additional paid-in capital | 466,711,720 | 458,498,402 | ||||
| Accumulated deficit | (377,454,642) | (363,285,925) | ||||
| Nutex Health Inc. equity | 89,927,790 | 95,862,701 | ||||
| Noncontrolling interests | 14,976,943 | 24,464,699 | ||||
| Total equity | 104,904,733 | 120,327,400 | ||||
| Total liabilities and equity | $ | 479,633,542 | $ | 431,751,985 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenue: | ||||||||||||
| Hospital division | $ | 54,585,263 | $ | 21,244,305 | $ | 155,485,230 | $ | 151,976,226 | ||||
| Population health management division | 8,137,709 | 7,150,753 | 22,491,613 | 13,594,007 | ||||||||
| Total revenue | 62,722,972 | 28,395,058 | 177,976,843 | 165,570,233 | ||||||||
| Operating costs and expenses: | ||||||||||||
| Payroll and benefits | 28,873,144 | 29,048,207 | 79,570,519 | 79,014,608 | ||||||||
| Contract services | 9,035,650 | 8,557,373 | 27,972,854 | 26,536,452 | ||||||||
| Medical supplies | 3,460,130 | 2,486,083 | 10,748,214 | 9,327,114 | ||||||||
| Depreciation and amortization | 4,745,941 | 4,330,167 | 12,908,848 | 9,859,513 | ||||||||
| Other | 9,541,894 | 7,686,132 | 25,215,549 | 22,092,033 | ||||||||
| Total operating costs and expenses | 55,656,759 | 52,107,962 | 156,415,984 | 146,829,720 | ||||||||
| Gross profit (loss) | 7,066,213 | (23,712,904) | 21,560,859 | 18,740,513 | ||||||||
| Corporate and other costs: | ||||||||||||
| Facilities closing costs | - | - | 217,266 | - | ||||||||
| Acquisition costs | 43,464 | - | 43,464 | 3,885,666 | ||||||||
| Stock-based compensation expense | 49,167 | 81,249 | 2,198,812 | 135,415 | ||||||||
| Impairment of goodwill | - | 398,135,038 | - | 398,135,038 | ||||||||
| General and administrative expenses | 7,794,808 | 6,751,548 | 24,730,168 | 17,404,637 | ||||||||
| Total corporate and other costs | 7,887,439 | 404,967,835 | 27,189,710 | 419,560,756 | ||||||||
| Operating loss | (821,226) | (428,680,739) | (5,628,851) | (400,820,243) | ||||||||
| Interest expense, net | 4,098,179 | 3,402,606 | 12,081,316 | 9,628,189 | ||||||||
| Other expense (income) | (53,206) | (630,450) | 70,721 | 346,873 | ||||||||
| Loss before taxes | (4,866,199) | (431,452,895) | (17,780,888) | (410,795,305) | ||||||||
| Income tax expense (benefit) | (342,259) | (8,543,880) | (2,068,530) | 11,285,729 | ||||||||
| Net loss | (4,523,940) | (422,909,015) | (15,712,358) | (422,081,034) | ||||||||
| Less: net income (loss) attributable to noncontrolling interests | 1,018,451 | (10,722,749) | (1,543,641) | (12,052,765) | ||||||||
| Net loss attributable to Nutex Health Inc. | $ | (5,542,391) | $ | (412,186,266) | $ | (14,168,717) | $ | (410,028,269) | ||||
| Loss per common share: | ||||||||||||
| Basic | $ | (0.01) | $ | (0.62) | $ | (0.02) | $ | (0.65) | ||||
| Diluted | $ | (0.01) | $ | (0.62) | $ | (0.02) | $ | (0.65) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended September 30, | ||||||
| 2023 | 2022 | |||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (15,712,358) | $ | (422,081,034) | ||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||
| Depreciation and amortization | 12,908,848 | 9,859,513 | ||||
| Impairment of goodwill | - | 398,135,038 | ||||
| Stock-based compensation expense | 2,198,812 | 135,415 | ||||
| Deferred tax expense (benefit) | (2,068,530) | 3,375,106 | ||||
| Debt accretion expense | 1,251,867 | 1,719,572 | ||||
| Loss on lease termination | 58,210 | - | ||||
| Non-cash lease expense | 89,338 | 18,775 | ||||
| Changes in operating assets and liabilities, net of the effects of acquisitions: | ||||||
| Accounts receivable | 4,444,706 | 52,921,095 | ||||
| Accounts receivable - related party | (949,408) | 1,846,887 | ||||
| Inventories | 850,569 | (399,198) | ||||
| Prepaid expenses and other current assets | (3,771,946) | (5,658,746) | ||||
| Accounts payable | (6,015,250) | 4,147,170 | ||||
| Accounts payable - related party | 2,228,527 | (630,490) | ||||
| Accrued expenses and other current liabilities | 7,519,285 | 2,712,011 | ||||
| Net cash from operating activities | 3,032,670 | 46,101,114 | ||||
| Cash flows from investing activities: | ||||||
| Acquisitions of property and equipment | (10,322,487) | (22,512,464) | ||||
| Payments for acquisitions of businesses, net of cash acquired | (743,837) | - | ||||
| Acquired cash in reverse acquisition with Clinigence | - | 12,716,228 | ||||
| Cash related to deconsolidation of Real Estate Entities | (1,039,157) | (2,421,212) | ||||
| Net cash from investing activities | (12,105,481) | (12,217,448) | ||||
| Cash flows from financing activities: | ||||||
| Proceeds from lines of credit | 2,340,911 | 2,592,714 | ||||
| Proceeds from notes payable | 16,952,905 | 10,126,130 | ||||
| Proceeds from convertible debt | 891,000 | - | ||||
| Repayments of lines of credit | (1,592,714) | (72,055) | ||||
| Repayments of notes payable | (10,557,758) | (4,720,737) | ||||
| Repayments of finance leases | (2,704,082) | (923,321) | ||||
| Common stock issued for exercise of warrants | - | 4,119,141 | ||||
| Common stock issued for exercise of options | - | 644,974 | ||||
| Members' contributions | 649,550 | 4,825,377 | ||||
| Members' distributions | (4,335,532) | (49,973,374) | ||||
| Net cash from financing activities | 1,644,280 | (33,381,151) | ||||
| Net change in cash and cash equivalents | (7,428,531) | 502,515 | ||||
| Cash and cash equivalents - beginning of the period | 34,255,264 | 36,118,284 | ||||
| Cash and cash equivalents - end of the period | $ | 26,826,733 | $ | 36,620,799 |
Non-GAAP Financial Measures
Adjusted EBITDA. Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.
We define Adjusted EBITDA as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for stock-based compensation, certain defined items of expense, any acquisition-related costs and impairments. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA: | ||||||||||||
| Net loss attributable to Nutex Health Inc. | $ | (5,542,391) | $ | (412,186,266) | $ | (14,168,717) | $ | (410,028,269) | ||||
| Depreciation and amortization | 4,745,941 | 4,330,167 | 12,908,848 | 9,859,513 | ||||||||
| Interest expense, net | 4,098,179 | 3,402,606 | 12,081,316 | 9,628,189 | ||||||||
| Income tax expense (benefit) | (342,259) | (8,543,880) | (2,068,530) | 11,285,729 | ||||||||
| Allocation to noncontrolling interests | (1,772,908) | (922,762) | (3,500,873) | (4,445,224) | ||||||||
| EBITDA | 1,186,562 | (413,920,135) | 5,252,044 | (383,700,062) | ||||||||
| Facilities closing costs | - | - | 217,266 | - | ||||||||
| Impairment of goodwill | - | 398,135,038 | - | 398,135,038 | ||||||||
| Acquisition costs | 43,464 | - | 43,464 | 3,885,666 | ||||||||
| Stock-based compensation expense | 49,167 | 81,249 | 2,198,812 | 135,415 | ||||||||
| Adjusted EBITDA | $ | 1,279,193 | $ | (15,703,848) | $ | 7,711,586 | $ | 18,456,057 |
About Nutex Health Inc.
Headquartered in Houston, Texas and founded in 2011, Nutex Health Inc. (NASDAQ: NUTX) is a healthcare management and operations company with two divisions: a Hospital Division and a Population Health Management Division.
The Hospital Division owns, develops and operates innovative health care models, including micro-hospitals, specialty hospitals, and hospital outpatient departments (HOPDs). This division owns and operates 22 facilities in 8 states.
The Population Health Management division owns and operates provider networks such as Independent Physician Associations (IPAs). Through our Management Services Organization (MSO), we provide management, administrative and other support services to our affiliated hospitals and physician groups. Our cloud-based proprietary technology platform aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers, allowing us to deliver greater quality care more efficiently.
Forward-Looking Statements
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. When used in this press release, the words or phrases "will", "will likely result," "expected to," "expects to," "will continue," "anticipated," "estimate," "projected," "intend," "goal," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, many of which are beyond the control of the Company. Such uncertainties and risks include, but are not limited to, our ability to successfully execute our growth strategy, changes in laws or regulations, including final rules implemented under the No Surprises Act and related regulatory guidance, economic conditions, dependence on management, dilution to stockholders, lack of capital, the effects of rapid growth upon the Company and the ability of management to effectively respond to the growth and demand for products and services of the Company, newly developing technologies, the Company's ability to compete, conflicts of interest in related party transactions, regulatory matters, protection of technology, lack of industry standards, the effects of competition and the ability of the Company to obtain future financing. An extensive list of factors that can affect future results are discussed in the Current Report on Form 10-Q for the period ended September 30, 2023 under the heading "Risk Factors" in Part I, Item IA thereof, and other documents filed from time to time with the Securities and Exchange Commission. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release.
FOR ADDITIONAL INFORMATION:
Jennifer Smith Rodriguez - Investor Relations & Media Contact