Press release from CNW Group
OPMEDIC GROUP INC. announces an increase of 202% in net earnings and declares a dividend
Friday, July 08, 2011
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./
MONTREAL, July 8, 2011 /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 third quarter ended May 31, 2011.
- Revenue up by 58%. Revenue for the third quarter totalled $6.164 million compared to $3.899 million for the same period a year earlier.
- Gross Profit up by 79%. Gross profit for the third quarter totalled $3.960 million compared to $2.209 million for the same period a year earlier.
- General and Administrative Expenses up by 8%. General and administrative expenses for the third quarter totalled $1.077 million compared to $1 million for the same period a year earlier
- Net Earnings up by 202%. Net earnings and net earnings per share for the third quarter were respectively $1.815 million and $0.11 compared to $0.600 million and $0.04 a year earlier.
- Declaration of a dividend of $0.025 on common shares
Revenues for the quarter ended May 31, 2011 totalled $6.164 million, up 58% or $2.265 million from $3.899 million for the same period in 2010. The increase in fertility activities, largely as a result of the new no-cost program under the Quebec Health Insurance Plan, generated additional revenues of $2.329 million over the same period in the previous year. Surgical and endoscopic activities continued to grow with additional revenues of $0.139 million, while prenatal screening was down by $0.133 million for the quarter due to fiercer competition in both the public and private sectors.
For the nine-month period ended May 31, 2011, revenues rose by 54% or $5.786 million to $16.535 million from $10.749 million in 2010. Fertility activities were up $5.447 million, and surgical and endoscopic activities generated additional revenues of $0.436 million, while prenatal screening was down by $0.283 million.
Cost of Services
The cost of services for the quarter increased by $0.513 million or 30% to $2.203 million in 2011 from $1.690 million in the previous year. The larger volume of fertility activities necessarily incurred additional costs of $0.260 million and $0.215 million in payroll and supplies, respectively. Rising surgical activities required extra payroll expenses and supplies of $0.064 million.
For the nine-month period ended May 31, 2011, the cost of services totalled $6.446 million, compared with $4.738 million for the previous period, for an increase of $1.708 million or 36%. The increase in fertility activities necessarily resulted in additional payroll costs of $0.691 million, while supplies were up by $0.551 million, and professional fees, by $0.163 million. The higher volume of surgical activities required extra payroll costs and supplies of $0.165 million.
Gross profit stood at $3.960 million for the quarter ended May 31, 2011, up $1.751 million or 79% from $2.209 million a year earlier. The major increase in revenues had a direct impact on gross profit. For the fertility division, gross profit was up by $1.689 million, while the activities of the surgical and endoscopic division contributed $0.062 million to gross profit.
Gross profit in relation to revenues for the quarter was 64% in 2011, compared with 57% in 2010. As a result of the significant increase in activities, the Company was able to realize economies of scale.
For the nine-month period ended May 31, 2011, gross profit was $10.090 million, up $4.080 million or 68% from $6.010 million in 2010. The upward trend in revenues was mainly responsible for this improvement. The fertility division's gross profit rose by $3.847 million, while the activities of the surgical and endoscopic division contributed $0.233 million.
Gross profit in relation to revenues for the nine-month period ended May 31, 2011 rose by 500 basis points to 61%, versus 56% 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 Expenses
General and administrative expenses totalled $1.077 million for the quarter ended May 31, 2011, up $0.077 million or 8% from $1 million in 2010. Professional fees were up by $0.038 million due to consulting fees for the development and opening of the new Ontario fertility clinic and the cost of converting to international accounting standards. Administrative salaries for customer service staff also increased during the quarter to the tune of $0.028 million, which was offset by a $0.029 million drop in advertising expenses.
For the nine-month period ended May 31, 2011, general and administrative expenses amounted to $3.199 million, up $0.291 million or 10% from $2.908 million in 2010. Professional fees were up by $0.263 million, mainly as a result of $0.110 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. Furthermore, a $0.124 million increase in salaries for the customer service staff offset the $0.103 million decline in advertising expenses.
Net earnings and net earnings per share for the quarter ended May 31, 2011 were respectively $1.815 million and $0.11, up sharply by 202% from $0.600 million and $0.04 in 2010.
For the nine-month period ended May 31, 2011, net earnings and net earnings per share were respectively $4.189 million and $0.24, up by 188% from $1.452 million and $0.09 a year earlier.
DECLARATION OF DIVIDEND ON COMMON SHARES
The Company announces that its Board of Directors has declared a cash dividend of $0.025 per share payable July 28, 2011 to shareholders of record at the close of business on July 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 GROUP
OPMEDIC 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:
Vice President Finance and Chief Financial Officer
(514) 345-8535, x 2260