Northstar Healthcare Reports 2013 Second Quarter Results
HOUSTON, TX, Aug. 13, 2013 /CNW/ - Northstar Healthcare Inc. (TSX:NHC) today announced its financial results for the three and six months ended June 30, 2013. All dollar amounts are in United States currency unless otherwise stated; percentage calculations are based on the numbers in the financial statements and may not correspond to rounded figures presented in this release.
Detailed information relating to the three and six months ended June 30, 2013 is available in Management's Discussion and Analysis (MD&A) and Interim Consolidated Financial Statements, which are available on the company's web site at: www.northstar-healthcare.com and at www.sedar.com. This information is not intended to provide a comprehensive comparison of financial results.
"The second quarter of 2013 was a transitional quarter for the Company. Over the last ten years there has been a continued shift from excess demand for operating rooms to a relative oversupply," said Dr. Donald Kramer, Chief Executive Officer of Northstar. "As a result, those companies which have developed the ability to source patients directly through direct to consumer campaigns have shown performance which far exceeds the surgical industry norms. I have chosen to spend Northstar's resources on developing those marketing competencies as well as surgeon recruitment programs rather than building additional physical plant and capacity."
"Our first direct to consumer marketing initiative focused on podiatry in Houston and we are seeing strong performance early in that campaign," said Dr. Kenneth Efird, Chief Business Development Officer of Northstar. "The Company spent $356K in direct marketing costs during the second quarter and also hired additional personnel to oversee the campaigns. Due to the length of the marketing cycle, the results of the marketing spend had no material impact on revenues during the second quarter, but will be impactful during the second half of the year. The results from the podiatry marketing campaign are meeting Northstar's projections. The next marketing initiative will focus on spine surgery and is anticipated to launch in the latter part of the third quarter."
"In addition, we have recruited thirty-six new physicians to the Northstar surgical centers so far in 2013," said Dr. Efird. "Sixteen of these physicians have started actively scheduling and performing cases at the Northstar surgical centers and we expect the remaining twenty to complete the credentialing process and start scheduling and performing cases in the near future."
"The marketing campaigns and physician recruitment should profoundly impact our surgical volumes in subsequent quarters," said Dr. Kramer. "As our surgical volume increases, we will either acquire or contract for the use of additional operating rooms. Ultimately, Northstar will be in a position to develop a strong strategic relationship with an organization that needs Northstar's skill sets to fill their portfolio of operating rooms. That is Northstar's vision."
Second Quarter Results
Net patient service revenues for the three months ended June 30, 2013 totaled $5.9 million, an increase of $0.7 million or 14.4%, compared to $5.1 million for the same period in 2012. The increase in net patient service revenues was primarily due to a 26.7% increase in case volume. The increase in case volume was mainly due to Northstar resyndicating the center in Dallas and adding a large pain and spine physician group in the 2nd half of 2012.
The Company recorded net loss of $0.6 million compared to net income of $0.5 million in the prior corresponding period. This change is primarily related to increased marketing spend in salaries and advertising as the Company is focusing more of its efforts on direct to consumer marketing. This resulted in net loss per weighted average share of $0.02.
For the three months ended June 30, 2013 the Company had cash flows provided by operations of $1.4 million, representing a $0.3 million decrease compared to the prior corresponding period. The decrease was caused by a decline in net income as a result of increased spending on current marketing campaigns.
For the three months ended June 30, 2013, the Company used $1.1 million in cash flows for financing activities compared to $0.8 million used in the prior corresponding period. Due to positive cash flow positions, the Company was able to make significant distributions to non-controlling interests.
Six Months Results
Net patient service revenues for the six months ended June 30, 2013 totaled $10 million, an increase of $1.5 million or 19.5%, compared to $8.4 million for the same period in 2012. The increase in net patient service revenues was primarily due to a 14.3% increase in case volume. The increase in case volume was mainly due to Northstar resyndicating the center in Dallas and adding a large pain and spine physician group in the 2nd half of 2012.
The Company recorded net loss of $1.3 million compared to a net loss of $0.1 million in the prior corresponding period. This change is primarily related to increased marketing spend in salaries and advertising as the Company is focusing more of its efforts on direct to consumer marketing. This resulted in net loss per weighted average share of $0.03.
The Company had cash flows provided by operations of $1.5 million, representing a $0.4 million decrease compared to the prior corresponding period, despite higher case volume. The decrease was caused by a decline in net income as a result of increased spending on current marketing campaigns.
For the six months ended June 30, 2013, the Company used $2.0 million in cash flows for financing activities compared to $1.1 million used in the prior corresponding period. Due to positive cash flow positions, the Company was able to make significant distributions to non-controlling interests.
At June 30, 2013, Northstar had consolidated working capital of $5.8 million, including cash of $3.5 million. This compares with $7.1 million and $4.2 million, respectively, at year-end 2012.
Resignation of Daniel Steinberg
Daniel Steinberg has announced that with his change of employment he can no longer act as a director of a public company and has submitted his resignation effective as of August 15, 2013. Northstar thanks him for his three years of service on its board of directors.
About Northstar Healthcare Inc.
Northstar partners with physicians in the ownership and management of ambulatory facilities and healthcare services. Northstar owns and manages interests in three ambulatory surgery centers, two in Houston and the third in Dallas.
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
SOURCE Northstar Healthcare Inc.
More by this Source
Northstar Announces Results of Annual Shareholder Meeting
Jun 12, 2013, 18:29 ET
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.