Canada NewsWire
MONTREAL, March 21, 2023
Strong finish to the year highlighted by landmark customer wins and more than $10 million in new ARR
MONTREAL, March 21, 2023 /CNW/ - Dialogue Health Technologies Inc. (TSX: CARE) ("Dialogue" or the "Company"), Canada's premier health and wellness virtual healthcare platform, announced today its financial and operational results for the three months and year ended December 31, 2022. Financial references are in Canadian dollars unless otherwise indicated. Please visit Dialogue's investor relations website to view management's commentary and related presentation on fourth quarter results.
"2022 was another strong year, as new and existing customers continue to see great value in providing our virtual care platform to their employees and members. We enhanced our offering with the addition of a Wellness program, extending our treatment capabilities to include prevention. We completed the sale of our OHS business in Germany to focus efforts on our Integrated Health PlatformTM within markets where we see the highest growth potential. And we strengthened our largest partnerships, as both Sun Life and Canada Life expanded their group health benefits by adding more of our services," said Cherif Habib, Chief Executive Officer of Dialogue. "Dialogue added $23 million in net new ARR in the past year, exceeding $100 million overall, an important milestone that demonstrates our team's unrelenting focus on driving innovation and upholding a high level of service quality. We also made solid progress with large enterprise customers, those with 10,000 employees or more, signing four such agreements in the fourth quarter alone. As we move forward in 2023, we will continue to invest in our platform to help users of Dialogue lead healthier and fuller lives."
Navaid Mansuri, Chief Financial Officer, added: "Dialogue delivered a strong performance in 2022. We saw organic ARR growth and revenue growth in our digital business of 44% and 52% respectively. We added more than 820,000 net new members, many of which signed up for two or more services, and saw our virtual Mental Health and EAP segments scale meaningfully. We are on track to reach positive adjusted EBITDA by the end of 2023, having improved gross margins significantly in 2022 and stabilized our operating expenses in the last three quarters. We ended the year with more than $62 million in cash on our balance sheet and should require between $5 million and $10 million to reach our breakeven target. With no bank debt and cash flow generation on the horizon, Dialogue is in a strong position to execute on M&A. That said, we will remain patient until valuations become more reasonable and maintain our discipline and focus on generating long-term value for all our stakeholders."
Q4 2022 Financial Highlights
(All capitalized terms not defined herein, shall have the meaning and usefulness ascribed to them in the Management's Discussion and Analysis ("MD&A") for the three months and year ended December 31, 2022. Comparison periods in each case are the three months and year ended December 31, 2021, unless otherwise stated.)
Results that were presented in our business update published on January 25, 2023, included our divested Occupational Health and Safety ("OHS") segment in Germany in order to properly compare them to our quarterly guidance issued on November 14, 2023. Results presented below reflect continuing operations only and are not directly comparable to those presented in our business update.
Q4 2022 Key Business Developments and Subsequent Events
_________________________ |
1 Adjusted EBITDA is a Non-IFRS financial measure. Refer to the reconciliation contained in the Non-IFRS Financial Measures section, beginning on page 4 of this earnings release. |
Financial Outlook
Dialogue is providing an outlook based on current market conditions and expectations. For the first quarter of 2023, we expect:
Upcoming Events
Notice of Conference Call
Starting this quarter, we are making changes to our format for the conference call with analysts and investors. Management's prepared remarks on the Company's quarterly performance and accompanying slides have been published concurrently with this press release and are available here. This will allow more time to interact with analysts and to answer questions. Cherif Habib, CEO, and Navaid Mansuri, CFO, will host the live video webinar on Wednesday, March 22, 2023, at 8:30 a.m. ET. All interested parties can join the event at the following link, which is also available in the Events and Presentations section of Dialogue's website. Please connect at least 15 minutes prior to the event to ensure adequate time for any software download of Zoom that may be required to attend the event. Listeners that prefer to dial in by phone may do so by accessing the same web link and the dial in details will be provided by email upon registration.
Non-IFRS ("International Financial Reporting Standards") Financial Measures
This press release makes reference to certain non-IFRS measures, such as "EBIT" (which stands for net profit or loss before net profit or loss from discontinued operations, net financing (income) expenses and income taxes), "EBITDA" (which stands for net profit or loss before net loss from discontinued operations, net financing (income) expenses, income taxes, depreciation of property and equipment, amortization of intangible assets and amortization of right-of-use assets) and "Adjusted EBITDA" (which stands for net profit or loss before net loss from discontinued operations, net financing (income) expenses, income taxes, depreciation of property and equipment, amortization of intangible assets, amortization of right-of-use assets, disposal costs, acquisition costs, restructuring costs, change in fair value of conversion feature, share-based payments expense, change in fair value of contingent consideration, asset write-off and impairment and foreign exchange gain or loss). This earnings release also makes reference to Annual Recurring and Reocurring Revenue ("ARR"), Net Retention Rate ("NRR"), Member-Service Units ("MSUs"), Attach Rate and Members, which are key performance indicators. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other companies. These measures and key performance indicators are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information as reported under IFRS. We also believe that other users, such as securities analysts, investors and other interested parties, frequently use non-IFRS measures, particularly in the evaluation of issuers.
Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. Where applicable, we provide a clear quantitative reconciliation from the non-IFRS financial measures to the most directly comparable measure calculated in accordance with IFRS.
The following table reconciles net loss to Adjusted EBITDA loss for the three months and year ended December 31, 2022 and 2021:
DIALOGUE HEALTH TECHNOLOGIES INC.
ADJUSTED EBITDA
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2022 and 2021
(in thousands of CAD) | Three months ended December 31, | Year ended December 31, | ||||||
2022 | 2021 | 2022 | 2021 | |||||
$ | $ | $ | $ | |||||
Net loss | (4,506) | (7,142) | (25,953) | (251,351) | ||||
Net (gain) loss from discontinued operations | (1,088) | 258 | 1,444 | 3,402 | ||||
Net financing income | (522) | (178) | (994) | (363) | ||||
Current income tax expense | 64 | 36 | 148 | 70 | ||||
Deferred income tax expense (recovery) | 173 | (114) | (615) | (393) | ||||
EBIT | (5,879) | (7,140) | (25,970) | (248,635) | ||||
Depreciation of property and equipment | 115 | 161 | 536 | 431 | ||||
Amortization of intangible assets | 563 | 344 | 2,045 | 1,364 | ||||
Amortization of right-of-use assets | 192 | 107 | 644 | 423 | ||||
EBITDA | (5,009) | (6,528) | (22,745) | (246,417) | ||||
Share-based payments expense | 858 | 677 | 3,470 | 2,061 | ||||
Acquisition costs | 72 | 150 | 1,064 | 380 | ||||
Change in fair value of conversion feature | — | — | — | 225,417 | ||||
Change in fair value of contingent consideration | 74 | 193 | 340 | 193 | ||||
Restructuring costs | 490 | 37 | 542 | 37 | ||||
Disposal costs | 604 | — | 604 | — | ||||
Assets write-off and impairment | 1,179 | — | 1,179 | — | ||||
Foreign exchange loss (gain) | (371) | — | 3 | 87 | ||||
Adjusted EBITDA | (2,103) | (5,471) | (15,543) | (18,242) |
About Dialogue
Incorporated in 2016, Dialogue is Canada's premier virtual healthcare and wellness platform, providing affordable, on-demand access to quality care. Through our team of health professionals, we serve employers and organizations who have an interest in the health and well-being of their employees, members and their families. Our Integrated Health Platform™ is a one-stop healthcare hub that centralizes all of our programs in a single, user-friendly application, providing access to services 24 hours per day, 365 days per year from the convenience of a smartphone, computer or tablet. Dialogue is the first virtual care provider to receive the Accreditation Canada Primer award, a third-party validation of safety and high-level quality of care.
Forward-Looking Information
This release includes "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities laws. Forward-looking information may relate to our financial outlook (including revenues and Adjusted EBITDA), and anticipated events or results and may include information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives.
In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward-looking terminology such as "plans" "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance.
Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Dialogue as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the risk factors identified under "Risk Factors" in the Company's latest annual information form, and in other periodic filings that the Company has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under the Company's SEDAR profile at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Dialogue. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. Dialogue undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.
Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not currently known to us or that we currently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, you should not place undue reliance on forward-looking information. The forward-looking information represents our expectations as of the date of this earnings release (or as the date it is otherwise stated to be made) and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable Canadian securities laws. All of the forward-looking information contained in this earnings release is expressly qualified by the foregoing cautionary statements.
DIALOGUE HEALTH TECHNOLOGIES INC.
CONSOLIDATED STATEMENT OF NET LOSS AND OTHER COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(in thousands of CAD except share and per share data) | Three months ended December 31, | Year ended December 31, | |||||
2022 | 2021 | 2022 | 2021 | ||||
$ | $ | $ | $ | ||||
Continuing operations | |||||||
Revenue | 23,471 | 17,850 | 87,132 | 64,534 | |||
Cost of services | 10,205 | 10,257 | 43,788 | 38,067 | |||
Gross profit | 13,266 | 7,593 | 43,344 | 26,467 | |||
Operating expenses | |||||||
General and administrative | 12,400 | 7,966 | 42,593 | 27,900 | |||
Sales and marketing | 3,485 | 2,850 | 12,727 | 10,437 | |||
Product and development | 2,402 | 3,240 | 10,524 | 9,287 | |||
Share-based payments expense | 858 | 677 | 3,470 | 2,061 | |||
19,145 | 14,733 | 69,314 | 49,685 | ||||
Operating loss from continuing operations | (5,879) | (7,140) | (25,970) | (23,218) | |||
Other expenses | |||||||
Change in fair value of conversion feature | — | — | — | 225,417 | |||
Net financing income | (522) | (178) | (994) | (363) | |||
(522) | (178) | (994) | 225,054 | ||||
Net loss before income taxes from continuing operations | (5,357) | (6,962) | (24,976) | (248,272) | |||
Current income tax expense | 64 | 36 | 148 | 70 | |||
Deferred income tax expense (recovery) | 173 | (114) | (615) | (393) | |||
Net loss from continuing operations | (5,594) | (6,884) | (24,509) | (247,949) | |||
Net loss from discontinued operations | 1,088 | (258) | (1,444) | (3,402) | |||
Net loss | (4,506) | (7,142) | (25,953) | (251,351) | |||
Other comprehensive loss from continuing operations | |||||||
Items that may be reclassified subsequently to net loss from continuing operations | |||||||
Foreign currency translation gain (loss) | 486 | 14 | 157 | (45) | |||
Comprehensive loss from continuing operations | (5,108) | (6,870) | (24,352) | (247,994) | |||
Other comprehensive loss from discontinued operations | |||||||
Foreign currency translation gain (loss) | (737) | 204 | (140) | 797 | |||
Comprehensive (loss) income from discontinued operations | 351 | (54) | (1,584) | (2,605) | |||
Total comprehensive loss | (4,757) | (6,924) | (25,936) | (250,599) | |||
Loss from continuing operations per share - basic and diluted | (0.08) | (0.10) | (0.37) | (4.42) | |||
Loss from discontinued operations per share - basic and diluted | 0.02 | — | (0.02) | (0.06) | |||
Loss per share - basic and diluted | (0.06) | (0.10) | (0.39) | (4.48) |
DIALOGUE HEALTH TECHNOLOGIES INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2022 AND DECEMBER 31, 2021
(in thousands of CAD) | December 31, | December 31, | |||
2022 | 2021 | ||||
$ | $ | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | 62,697 | 104,296 | |||
Trade and other receivables | 17,190 | 13,659 | |||
Prepaid expenses | 2,443 | 1,811 | |||
82,330 | 119,766 | ||||
Investment | 1,004 | — | |||
Property and equipment | 936 | 1,137 | |||
Right-of-use assets | 784 | 1,568 | |||
Intangible assets | 6,237 | 5,819 | |||
Goodwill | 24,586 | 6,963 | |||
Deferred income tax asset | 3,511 | — | |||
119,388 | 135,253 | ||||
Liabilities | |||||
Current liabilities | |||||
Trade payable and accrued liabilities | 16,724 | 9,534 | |||
Unearned revenue | 912 | 68 | |||
Current portion of contingent consideration payable | 1,425 | 718 | |||
Current portion of long-term debt | 400 | 400 | |||
Current portion of lease liabilities | 404 | 541 | |||
19,865 | 11,261 | ||||
Non-current portion of lease liabilities | 343 | 911 | |||
Non-current portion of long-term debt | 707 | 1,074 | |||
Non-current portion of contingent consideration payable | 664 | 1,300 | |||
Deferred income tax liability | 458 | 766 | |||
22,037 | 15,312 | ||||
Commitments and contingencies | |||||
Shareholders' equity | |||||
Share capital | 459,962 | 458,962 | |||
Equity reserve | 6,112 | 3,514 | |||
Cumulative translation adjustment | 112 | 347 | |||
Deficit | (368,835) | (342,882) | |||
97,351 | 119,941 | ||||
119,388 | 135,253 | ||||
DIALOGUE HEALTH TECHNOLOGIES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(in thousands of CAD) | 2022 | 2021 | |
$ | $ | ||
Operating activities | |||
Net loss | (25,953) | (251,351) | |
Items not affecting cash | |||
Increase (decrease) of contingent consideration | 340 | (165) | |
Unrealized Foreign Exchange gain | (3) | — | |
Deferred income tax recovery | (615) | (393) | |
Change in conversion feature on preferred shares | — | 225,417 | |
Depreciation of property and equipment | 572 | 519 | |
Amortization of right-of-use assets | 807 | 600 | |
Gain on lease modification | (21) | — | |
Net financing income | (966) | (363) | |
Amortization of intangible assets | 2,173 | 1,502 | |
Loss on intangible assets write-off and impairment | 1,179 | — | |
Share-based payments | 3,470 | 2,061 | |
Gain on disposal of discontinued operations | (360) | — | |
Foreign exchange gain realized on disposal of discontinued operations | (246) | — | |
(19,623) | (22,173) | ||
Net changes in non-cash operating working capital items | |||
Trade and other receivables | (3,677) | (2,301) | |
Prepaid expenses | (326) | (1,065) | |
Trade and other payables | 6,929 | 2,045 | |
Unearned revenue | 80 | (409) | |
Interest paid | (185) | (128) | |
Interest income | 1,233 | 753 | |
(15,569) | (23,278) | ||
Investing activities | |||
Purchase of property and equipment | (454) | (651) | |
Purchase of intangible assets | — | (87) | |
Sale of asset held for sale | — | 910 | |
Acquisition of Botfront | — | (292) | |
Acquisition of e-hub Health Pty Ltd. net of cash acquired | — | (3,138) | |
Investment | (1,004) | — | |
Payment of Optima contingent consideration | — | (1,500) | |
Payment of Botfront contingent consideration | — | (199) | |
Payment of e-Hub Health Pty Ltd. contingent consideration | (849) | — | |
Acquisition of Tictrac Ltd. net of cash acquired | (24,253) | — | |
Proceeds from sale of discontinued operations | 1,900 | — | |
(24,660) | (4,957) | ||
Financing activities | |||
Issuance of shares | — | 100,008 | |
Share issue costs | — | (9,371) | |
Performance share units settled in cash | (172) | — | |
Options exercised | 290 | 604 | |
Repayment of liability related to asset held for sale | — | (430) | |
Repayment of long-term debt | (400) | (400) | |
Repayment of lease liabilities | (873) | (699) | |
(1,155) | 89,712 | ||
Effect of foreign currency translation | (215) | 752 | |
Net (decrease) increase in cash and cash equivalents | (41,599) | 62,229 | |
Cash and cash equivalents, beginning of the year | 104,296 | 42,067 | |
Cash and cash equivalents, end of the year | 62,697 | 104,296 |
SOURCE Dialogue Health Technologies Inc.
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