PR Newswire
HOUSTON, Aug. 9, 2023
- NET REVENUE OF $58.9 MILLION
- COMPANY EXPECTS TO OPEN 1-2 MORE HOSPITALS IN 2023 AND ANOTHER 14 BY END OF 2025
HOUSTON, Aug. 9, 2023 /PRNewswire/ -- 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 second quarter 2023 financial results for the three months and six months ended June 30, 2023.
Financial Highlights for the Three Months and Six Months Ended June 30, 2023:
- Net revenue of $58.9 million and $115.3 million, respectively.
- Net loss attributable to Nutex Health of $3.5 million and $8.6 million, respectively.
- Adjusted EBITDA of $4.0 million and $6.4 million, respectively.
- Net cash from operating activities of $1.1 million as of June 30, 2023.
- As of June 30, 2023, the Company had total assets of $436.2 million, including cash and cash equivalents of $32.8 million.
Note: Adjusted EBITDA is a non-GAAP financial metric. A reconciliation of non-GAAP to GAAP measures is included below in this earnings release.
Year-to-Date 2023 Highlights:
- On February 6, 2023, Nutex Health opened its second micro-hospital in Arkansas. The facility is already performing above expectations.
- On May 3, 2023, Nutex Health opened its first urgent care center in Southern California to take better and more efficient care of its 25,000 patients enrolled in its independent practice association ("IPA") in Southern California.
- On June 20, 2023, Nutex Health opened its second new micro-hospital in 2023 in New Mexico. The facility is performing above expectations.
- On July 5, 2023, Nutex Health opened its third new micro-hospital in 2023 in Louisiana. The facility is performing above expectations.
- On August 7, 2023, Nutex Health opened its fourth new micro-hospital in 2023 in Texas.
- Nutex Health expects to open 1-2 more micro-hospitals in 2023 and another 14 by end of 2025.
- Nutex Health launched three new independent practice associations ("IPAs") in 2023. IPAs are physician networks comprised of primary care physicians ("PCPs") and specialists. The three new IPAs are strategically located around existing (Houston and Phoenix) and upcoming (South Florida) Nutex Health micro-hospitals and expect to start enrolling managed care patients later this year. As of today, South Florida Physicians IPA has signed contracts with 78 primary care physicians, Houston Physicians IPA has signed contracts with over 70 primary care physicians and our newest IPA, Phoenix Physicians IPA, has signed up 12 primary care physicians. The Company anticipates starting 2-3 new IPAs per year in the vicinity of its micro-hospitals.
- In 2023, Nutex Health has spent over $500,000 enhancing its cloud-based advanced population health analytics platform called Clinigence Health. Clinigence is a pioneer in clinical data integration, clinical quality reporting and population health analytics and is in use by multiple organizations and individual physicians throughout the U.S. Our platform currently has clinical and claims data on over 3 million patients. Nutex Health intends to gain more customers for its platform going forward.
- On July 31, 2023, Nutex Health announced that its advanced population health analytics platform had been selected by Varmed Management, a Puerto Rico-based medical management company, to enhance patient care.
- On March 17, 2023, the Centers for Medicare & Medicaid Services ("CMS") issued new guidelines related to the independent dispute resolution ("IDR") process of the No Surprises Act. Nutex Health believes that these new guidelines will result in higher reimbursements. Due to the lag in normal hospital billing, our data set is still small. However, we have early evidence that reimbursements have increased. We believe that most of the increase in reimbursements are not yet reflected in our Second Quarter financial results due to the timing of the new CMS guidelines.
- On August 3, 2023, the U.S. District Court for the Eastern District of Texas granted a summary judgement in favor of the Texas Medical Association vacating the HHS' December 2022 decision to increase, without notice, the administrative fee required to initiate IDR arbitration from $50 to $350, which made filing for IDR arbitration prohibitively expensive for many providers.
- On August 4, 2023, the HHS and CMS again temporarily suspended the federal IDR process, including the ability to initiate new disputes, until the HHS and CMS can provide new instructions in response to the summary judgement. We do not expect that this IDR suspension will materially impact the reimbursement amounts we receive due to the generally low percentage of arbitrations we initiate. We do however anticipate that this additional favorable court ruling will further enhance the fairness of the reimbursement process under the NSA.
- On June 22, 2023 the Company paid back $3.75 million to an affiliate of Yorkville Advisors Global. The Company has approximately $7.7 million outstanding and is evaluating whether to pay off the remaining portion and terminating its pre-paid advance agreement with Yorkville.
- The Company has a committed investment agreement for up to $100 million with Lincoln Park Capital, none of which has been used.
- In 2023, as part of our Board of Director's portfolio rationalization initiative, Nutex Health closed down two hospital outpatient departments and one micro-hospital which were unprofitable. All three facilities were in Texas.
"Our balance sheet continues to remain strong with $32.8 million of cash on hand and significant capital available to handle the development of the 1-2 additional micro-hospitals we plan to open this year in addition to growing our existing IPAs. We remain cash flow positive and proud of our sequential quarter-over-quarter increase in adjusted EBITDA from $2.4 million in Q1 to $4.0 million in Q2," stated Jon Bates, Chief Financial Officer of Nutex Health.
"Our goal for the remainder of this year is to increase patient volumes as well as to create new service lines. We have recently launched a behavioral health program due to the massive need for mental health and substance use services. We are also excited to start enrolling patients in our new IPAs later this year, which we believe will bring even more volume to our facilities. In addition, we are getting a lot more adept with navigating through the NSA and the IDR process which will allow us to maximize collections from insurers," stated Tom Vo, M.D., MBA, Chairman and Chief Executive Officer of Nutex Health.
"We have delivered yet another quarter with positive net cash from operating activities and positive adjusted EBITDA. We intend to continue to execute on our growth strategy. Our improving results in the first six months of 2023 make us confident in our outlook for the remainder of the year," stated Warren Hosseinion, M.D., President of Nutex Health.
For more details on the Company's Second 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.
NUTEX HEALTH INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(UNAUDITED) | ||||||
June 30, 2023 | December 31, 2022 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 32,754,330 | $ | 34,255,264 | ||
Accounts receivable | 50,676,301 | 57,777,386 | ||||
Accounts receivable - related parties | 1,335,241 | 538,183 | ||||
Inventories | 2,450,776 | 3,533,285 | ||||
Prepaid expenses and other current assets | 4,858,546 | 1,869,806 | ||||
Total current assets | 92,075,194 | 97,973,924 | ||||
Property and equipment, net | 83,062,145 | 82,094,352 | ||||
Operating right-of-use assets | 17,111,817 | 20,466,632 | ||||
Finance right-of-use assets | 206,072,425 | 192,591,624 | ||||
Intangible assets, net | 20,418,551 | 21,191,390 | ||||
Goodwill, net | 17,010,637 | 17,010,637 | ||||
Other assets | 483,679 | 423,426 | ||||
Total assets | $ | 436,234,448 | $ | 431,751,985 | ||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 16,424,368 | $ | 23,614,387 | ||
Accounts payable - related parties | 3,919,114 | 3,915,661 | ||||
Lines of credit | 2,980,684 | 2,623,479 | ||||
Current portion of long-term debt | 16,412,345 | 12,546,097 | ||||
Operating lease liabilities, current portion | 1,551,655 | 1,703,014 | ||||
Finance lease liabilities, current portion | 4,105,654 | 4,219,518 | ||||
Accrued expenses and other current liabilities | 12,049,471 | 6,240,813 | ||||
Total current liabilities | 57,443,291 | 54,862,969 | ||||
Long-term debt, net | 25,106,830 | 23,051,152 | ||||
Operating lease liabilities, net | 16,256,976 | 19,438,497 | ||||
Finance lease liabilities, net | 220,473,072 | 203,619,756 | ||||
Deferred tax liabilities | 8,728,100 | 10,452,211 | ||||
Total liabilities | 328,008,269 | 311,424,585 | ||||
Commitments and contingencies | ||||||
Equity: | ||||||
Common stock, $0.001 par value; 950,000,000 shares authorized; 660,742,624 | 660,742 | 650,224 | ||||
Additional paid-in capital | 463,869,968 | 458,498,402 | ||||
Accumulated deficit | (371,912,251) | (363,285,925) | ||||
Nutex Health Inc. equity | 92,618,459 | 95,862,701 | ||||
Noncontrolling interests | 15,607,720 | 24,464,699 | ||||
Total equity | 108,226,179 | 120,327,400 | ||||
Total liabilities and equity | $ | 436,234,448 | $ | 431,751,985 | ||
NUTEX HEALTH INC. | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(UNAUDITED) | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenue: | ||||||||||||
Hospital division | $ | 51,611,803 | $ | 51,604,679 | $ | 100,899,967 | $ | 130,731,921 | ||||
Population health management division | 7,312,651 | 6,443,254 | 14,353,904 | 6,443,254 | ||||||||
Total revenue | 58,924,454 | 58,047,933 | 115,253,871 | 137,175,175 | ||||||||
Operating costs and expenses: | ||||||||||||
Payroll and benefits | 24,860,702 | 24,356,184 | 50,697,375 | 49,966,401 | ||||||||
Contract services | 9,747,873 | 13,060,447 | 18,937,204 | 17,979,079 | ||||||||
Medical supplies | 3,264,202 | 2,581,552 | 7,288,084 | 6,841,031 | ||||||||
Depreciation and amortization | 4,169,160 | 3,132,485 | 8,162,907 | 5,529,346 | ||||||||
Other | 7,235,594 | 8,279,344 | 15,673,655 | 14,405,901 | ||||||||
Total operating costs and expenses | 49,277,531 | 51,410,012 | 100,759,225 | 94,721,758 | ||||||||
Gross profit | 9,646,923 | 6,637,921 | 14,494,646 | 42,453,417 | ||||||||
Corporate and other costs: | ||||||||||||
Facilities closing costs | - | - | 217,266 | - | ||||||||
Acquisition costs | - | 3,885,666 | - | 3,885,666 | ||||||||
Stock-based compensation expense | 249,645 | 54,166 | 2,149,645 | 54,166 | ||||||||
General and administrative expenses | 9,759,816 | 4,076,566 | 16,935,360 | 10,653,089 | ||||||||
Total corporate and other costs | 10,009,461 | 8,016,398 | 19,302,271 | 14,592,921 | ||||||||
Operating income (loss) | (362,538) | (1,378,477) | (4,807,625) | 27,860,496 | ||||||||
Interest expense, net | 4,843,048 | 4,369,609 | 7,983,137 | 6,225,583 | ||||||||
Other expense (income) | (123,528) | (1,403,222) | 123,927 | 977,323 | ||||||||
Income (loss) before taxes | (5,082,058) | (4,344,864) | (12,914,689) | 20,657,590 | ||||||||
Income tax expense (benefit) | (815,612) | 19,653,286 | (1,726,271) | 19,829,609 | ||||||||
Net income (loss) | (4,266,446) | (23,998,150) | (11,188,418) | 827,981 | ||||||||
Less: net loss attributable to noncontrolling interests | (787,399) | (4,713,304) | (2,562,092) | (1,417,475) | ||||||||
Net income (loss) attributable to Nutex Health Inc. | $ | (3,479,047) | $ | (19,284,846) | $ | (8,626,326) | $ | 2,245,456 | ||||
Earnings (loss) per common share | ||||||||||||
Basic | $ | (0.01) | $ | (0.03) | $ | (0.01) | $ | 0.00 | ||||
Diluted | $ | (0.01) | $ | (0.03) | $ | (0.01) | $ | 0.00 | ||||
NUTEX HEALTH INC. | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(UNAUDITED) | ||||||
Six Months Ended June 30, | ||||||
2023 | 2022 | |||||
Cash flows from operating activities: | ||||||
Net income (loss) | $ | (11,188,418) | ||||
