Alegro reports fiscal 2009 second quarter financial results



    TORONTO, Aug. 26 /CNW/ - Alegro Health Corp. (TSX-V: AGO), a healthcare
services provider, today announced its financial results for the second
quarter ended June 30, 2009.
    "While the base business of the Rehabilitation and Disability Management
division grew dramatically, the acquisition of Active Health Management was
the obvious highlight in what was a truly transformational quarter for
Alegro," said Brenda Rasmussen, President and Chief Executive Officer of
Alegro Health Corp. "Beyond the significant organic growth in the second
quarter, the addition of Active Health Management helped increase revenues by
over eighty percent compared to the same period last year, and that only
includes one month of Active Health Management in our second quarter results
of operations. The Management and Board of Alegro are enthusiastic about the
rapid, and to date, seamless integration of Active Health Management and look
forward to continued organic and acquisition-based growth for the Company."

    
    Second Quarter 2009 Financial and Operating Highlights

      -  Completed the acquisition of Active Health Management on May 29,
         2009.
      -  Revenue increased by 83% or $3,191,000 in the current quarter over
         the quarter ended June 2008, driven largely by the acquisition of
         the Active Health Management business.
      -  EBITDA has increased to $860,000 compared with $470,000 for the
         comparable quarter in 2008.
      -  Earnings per share increased by 57% for the three months ended
         June 30, 2009 from $0.007 to $0.011 and by 75% for the six months
         ended June 30, 2009 from $0.012 to $0.021.
      -  Net income of $518,000 for the quarter was double that of the prior
         year.
      -  At June 30, 2009 the Company had cash on hand of $900,000 and an
         unused line of credit of $4,000,000.

    Financial Results

    Selected Financial Results (in thousands)

                       Three Months Ended June 30,  Six Months Ended June 30,
                          2009     2008    Change     2009     2008   Change
                       --------------------------- --------------------------
    Revenue              $7,027   $3,836      83%   $11,296   $7,565     49%
    Expenses
    Direct costs          4,704    1,933     143%     6,969    3,964     76%
    General and
     administrative
     expense              1,463    1,433       2%     2,880    2,760      4%
    Amortization             61       40      53%       108       91     19%
                       --------------------------- --------------------------
                          6,228    3,406      83%     9,957    6,815     46%
                       --------------------------- --------------------------

    Income before
     interest expense       799      430      86%     1,339      750     79%
    Interest expense         60        -                 60        -

                       --------------------------- --------------------------
    Income before
     income taxes          $739     $430      72%    $1,279     $750     71%
                       --------------------------- --------------------------

    EBITDA(1)              $860     $470      83%    $1,447     $841     72%

    (1) See comments re non-GAAP measure.
    

    Revenue for the quarter ended June 30, 2009 was $7,027,000 and includes
one month of operations for the newly acquired Active Health Management
business. The combined revenue in the second quarter for the rehabilitation
and disability management group of Work Able and Direct Health was $3,876,000
which was $387,000 higher than the comparable period in the prior year. This
growth was attributable to customer service strategies that promoted newer and
higher repeat business with existing clients. DMSU revenue for the second
quarter was flat compared to last year's second quarter. The Active Health
Management business generated revenue of $2,820,000 for the one month that it
was owned during the second quarter.
    Direct costs include third party consultant fees associated with the
assessment and physiotherapy businesses and salaries and wages of employees
working directly in each business segment. Direct costs increased by
$2,262,000 due to the acquisition of the Active Health Management business,
the remainder of the increase of $509,000 was due to higher fees paid to third
party consultants due to higher business volumes in the assessment business
and a general increase in fee schedules paid to medical professionals used in
the business. Direct costs expressed as a percentage of revenue, are
approximately 80% for the Active Health Management business versus 58% for the
other business units which reflects the higher labour component in the Active
Health Management business.
    During the second quarter ended June 30, 2009, general and administrative
expenses were in-line with the comparable quarter in the prior year;
amortization was higher during the period due to the amortization of assets
acquired in the Active Health Management acquisition and interest expense was
incurred relating to the loan that was arranged for the purchase of the Active
Health Management business and includes $11,000 of amortization of financing
costs.
    During the second quarter, Alegro completed a private placement with
Global Healthcare Investments and Solutions, Inc. for 20,500,000 shares and a
comparable number of warrants, exercisable within five years, at a price of
$0.33 per share, for cash consideration of $6,765,000. As part of the purchase
price for the acquisition of the Active Health Management business, the vendor
was issued 3,333,333 of the Company's common shares valued at $1,000,000.
    As at June 30, 2009, the Company had total shares outstanding of
60,415,095 compared to 36,581,762 at December 31, 2008 along with the
20,500,000 warrants referred to above.
    As at June 30, 2009, there were a total of 3,775,000 options outstanding
to purchase an equivalent number of common shares at an average exercise price
of $0.30, expiring at various dates until 2014.
    As at June 30, 2009, the Company had total cash on hand of $900,000, a
decrease of $2,666,000 during the quarter. This decrease is mainly
attributable to the acquisition of Active Health Management.
    For a complete review of financial statements, please visit
www.sedar.com.

    Non-GAAP Measure

    The Company defines EBITDA as earnings before interest, taxes,
depreciation and amortization. EBITDA is not a recognized measure under
Canadian GAAP. Management believes that in addition to net earnings, EBITDA is
a useful supplemental measure, as it provides investors with an indication of
the Company's performance. EBITDA is used by the Company to analyze
performance and compare profitability between periods. Investors should be
cautioned, however, that EBITDA should not be construed as an alternative to
net earnings determined in accordance with GAAP. The Company's method of
calculating EBITDA may differ from other companies and accordingly, EBITDA may
not be comparable to measures used by other companies.

    About Alegro Health Corp.

    Alegro Health Corp. is a leading healthcare services provider capturing
high value opportunities by providing additional access to select quality
healthcare services. Through its divisions - Rehabilitation and Disability
Management and Surgical/Hospital Services - Alegro is delivering additional
resources to the Canadian public healthcare services and addressing the
growing demand for private and enhanced out-of-pocket healthcare services.
With superior knowledge of the healthcare industry, extensive and trusted
relationships with payers, physicians, and government agencies, Alegro is
pursuing a vertically integrated approach and an aggressive acquisition
strategy to achieve its growth objectives. Alegro is listed on the TSX Venture
Exchange under the symbol AGO. For further information, please visit
www.alegrohealth.com.

    This press release contains statements that may constitute
"forward-looking statements" within the meaning of applicable Canadian
securities legislation. These forward-looking statements include, among
others, statements regarding business strategy, plans and other expectations,
beliefs, goals, objectives, information and statements about possible future
events. Specific forward-looking statements contained in this press release
include statements regarding Alegro's proposed acquisition of Active Health
Management, the completion of the acquisition and the outcome of the
acquisition, as well as statements regarding transaction values, accretion,
and ownership levels resulting from the completion of the proposed
acquisition. Readers are cautioned not to place undue reliance on such
forward-looking statements. Forward-looking statements are based on current
expectations, estimates and assumptions that involve a number of risks, which
could cause actual results to vary and in some instances to differ materially
from those anticipated by Alegro and Active Health Management and described in
the forward-looking statements contained in this press release. Among the
various factors that could cause results to vary materially from those
indicated in the forward-looking statements include failure to realize
anticipated synergies and the result of the review of the proposed acquisition
by regulatory authorities. No assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or occur or, if
any of them do so, what benefits Alegro will derive there from.

    
    This release was prepared by management of the Company who takes full
    responsibility for its contents. The TSX Venture Exchange has not
    reviewed and does not accept responsibility for the adequacy or accuracy
    of this news release.
    

    %SEDAR: 00016656E




For further information:

For further information: Peter Walkey, Chief Financial Officer, Alegro
Health, (416) 927-8400 ext. 309, pwalkey@alegrohealth.com; Michael Moore,
Investor Relations, Equicom Group, (416) 815-0700 ext. 241,
mmoore@equicomgroup.com


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