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Press release from CNW Group

OPMEDIC GROUP INC. announces an increase of 256% in net earnings and declares a dividend

Thursday, April 07, 2011

OPMEDIC GROUP INC. announces an increase of 256% in net earnings and declares a dividend09:15 EDT Thursday, April 07, 2011/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./MONTREAL, April 7 /CNW Telbec/ - OPMEDIC GROUP Inc. ("OPMEDIC GROUP") (TSX: "OMG"), a healthcare-related company in fertility, laboratories and surgeries providing services and facilities to patients and surgeons, is pleased to announce financial results for the second quarter ended February 28, 2011.HIGHLIGHTS:Revenue up by 55%. Revenue for the second quarter totalled $4.928 million compared to $3.185 million for the same period a year earlier.Gross Profit up by 62%. Gross profit for the second quarter totalled $2.789 million compared to $1.719 million for the same period a year earlier.General and Administrative Expenses up by 5%. General and administrative expenses for the second quarter totalled $1.014 million compared to $0.964 million for the same period a year earlierNet Earnings up by 256%. Net earnings and net earnings per share for the second quarter were respectively $1.007 million and $0.06 compared to $0.283 million and $0.02 a year earlier.Declaration of a dividend of $0.025 on common sharesRevenuesRevenues for the quarter ended February 28, 2011 totalled $4.928 million, up 55% or $1.743 million from $3.185 million for the same period in 2010. The increase in fertility activities, largely as a result of the new no-cost program under the Québec Health Insurance Plan, generated additional revenue of $1.656 million over the same period in the previous year. Revenue from the surgical activities of the OPMEDIC division continued to increase with additional revenue of $0.122 million, while prenatal screening was down slightly by $0.130 million for the quarter.For the six-month period ended February 28, 2011, revenues rose by 51% or $3.521 million to $10.371 million from $6.850 million in 2010. Fertility activities were up $3.118 million while surgical activities generated additional revenues of $0.297 million. In addition, the $0.151 million drop in prenatal screening was offset by the $0.191 million increase from the cytogenic laboratory.Cost of ServicesThe cost of services for the quarter rose by $0.673 million to $2.139 million in 2011 from $1.466 million in the previous year. The increase in fertility activities necessarily incurred additional costs of $0.223 million in payroll, while supplies and professional fees were up by $0.193 million and $0.068 million, respectively. Rising surgical activities required extra payroll expenses of $0.027 million.For the six-month period ended February 28, 2011, the cost of services totalled $4.242 million, compared with $3.049 million for the previous period, for an increase of $1.193 million. The increase in fertility activities necessarily incurred additional payroll costs of $0.430 million, while supplies were up by $0.335 million, and professional fees, by $0.155 million. Extra payroll costs of $0.068 million were incurred for surgical activities.Gross ProfitGross profit stood at $2.789 million for the quarter ended February 28, 2011, up $1.070 million or 62% from $1.719 million a year earlier. The major increase in revenue had a direct impact on gross profit. For the fertility division, gross profit was up by $1.020 million, while the activities of the OPMEDIC division contributed $0.050 million to gross profit.Gross profit in relation to revenue for the quarter was 57% in 2011, compared with 54% in 2010. As a result of the significant increase in activities, the Company was able to realize economies of scale.For the six-month period ended February 28, 2011, gross profit was $6.129 million, up $2.328 million or 61% from $3.801 million in 2010. The upward trend in revenue was mainly responsible for this improvement. The fertility division's gross profit rose by $2.158 million, while the activities of the surgical and endoscopic division contributed $0.170 million.Gross profit in relation to revenue for the six-month period ended February 28, 2011 was 59%, versus 55% in 2010. Economies of scale were realized as a result of the increase in activities since the beginning of the fiscal year.General and Administrative ExpensesGeneral and administrative expenses totalled $1.014 million for the quarter ended February 28, 2011, up $0.050 million or 5% from $0.964 million in 2010. Professional fees were up by $0.072 million in order to successfully complete different projects, including consulting fees for the development and opening of the new Ontario fertility clinic and for the laboratory accreditation fees, as well as the cost of converting to international accounting standards. Administrative salaries for customer service staff also increased during the quarter to the tune of $0.059 million, which was offset by a drop of $0.038 million in advertising expenses and a decline of $0.038 million in the loss on the disposal of assets.For the six-month period ended February 28, 2011, general and administrative expenses were $2.121 million, up $0.213 million or 11% from $1.908 million in 2010. Professional fees were up by $0.225 million, mainly as a result of $0.095 million in consulting fees and legal expenses paid for the opening of the new Ontario clinic. External consultants' fees to prepare for the conversion to the new international accounting standards and laboratory accreditation accounted for the remainder.Net Earnings Net earnings and net earnings per share for the quarter ended February 28, 2011 were respectively $1.007 million and $0.06, up significantly by 256% from $0.283 million and $0.02 in 2010.For the six-month period ended February 28, 2011, net earnings and net earnings per share were respectively $2.374 million and $0.14, up significantly by 179% from $0.852 million and $0.05 in 2010.DECLARATION OF DIVIDEND ON COMMON SHARESThe Company announces that its Board of Directors has declared a cash dividend of $0.025 per share payable April 28, 2011 to shareholders of record at the close of business on April 21, 2011. Future dividends are subject to the discretion of the Board of Directors.The Company designates this dividend to be an "eligible dividend" pursuant to subsection 89(14) of the Income Tax Act (Canada) and its equivalent in any provinces of Canada.Detailed financial results can be accessed on the OPMEDIC GROUP web site at www.opmedicgroup.com.About OPMEDIC GROUPOPMEDIC GROUP is a company incorporated under the laws of the Province of Quebec which provides healthcare-related services including surgical and endoscopic facilities and services to patients and surgeons (with its OPMEDIC division), fertility treatments, medical imaging, laboratory services and diagnostic procedures (with its PROCREA Cliniques division) and sperm banking services (with its PROCREA Cryopreservation Centre subsidiary). OPMEDIC GROUP's Common Shares trade on the Toronto Stock Exchange under the symbol "OMG".This news release does not constitute an offer to sell or to solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful. This news release contains certain forward-looking statements that reflect the current views and/or expectations of OPMEDIC GROUP with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.The Content of this press release has not been approved by nor submitted to the TSX which assumes no liability therefore.For further information: Jean-Marc LACHANCE Vice President Finance and Chief Financial Officer (514) 345-8535, x 2260 jmlachance@opmedicgroup.com