CML HealthCare Income Fund Provides Update on Recent Canadian Medical Imaging Clinic Acquisition Activity



    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    Toronto Stock Exchange Symbol: CLC.UN
    

    MISSISSAUGA, ON, Aug. 6 /CNW/ - CML HealthCare Income Fund (the "Fund" or
"CML HealthCare"), (TSX: CLC.UN) today reported that it has purchased, or
entered into definitive agreements to acquire, six separate medical imaging
operations, comprising 14 clinics located in the provinces of British
Columbia, Alberta and Ontario. These medical imaging operations include:
Associated Diagnostic Radiologists ("ADR"), General Medical Imaging Services
("GMIS") and Laurel Radiology Inc. ("Laurel Radiology"), all located in the
Greater Vancouver Area, British Columbia; Calgary Women's Imaging Centre
("CWIC"), located in Calgary, Alberta; and, Niagara Falls and Pelham X-Ray and
Ultrasound Services ("Niagara Falls"), and Applemed X-Ray and Ultrasound
Services ("Applemed") located in Niagara Falls and St. Catharines, Ontario.
The acquisitions are expected to be immediately accretive to the Fund's
distributable cash(xx) on a per unit basis. The Fund closed the acquisitions
of: ADR on January 31, 2008; Niagara Falls on February 29, 2008; Laurel
Radiology on April 22, 2008; and Applemed on July 10, 2008. The Fund entered
into definitive agreements to acquire GMIS and CWIC on August 5, 2008. The
anticipated annualized revenue contribution from these transactions, as well
as the aggregate cash consideration paid, are included in the following
summary:

    
    Number of Clinics:    14 in the Greater Vancouver Area, Calgary, Niagara
                          Falls and St. Catharines

    Modalities:           X-ray, Ultrasound, Bone Densitometry, Mammography,
                          Fluoroscopy

    Revenues:             $20.0 million
    (annualized estimate)

    Consideration:        $27.5 million
    (cash approx.)
    

    "We are pleased to further strengthen our market presence and referring
physician networks in key strategic markets in central and western Canada. The
purchases of ADR, GMIS and Laurel Radiology will establish CML HealthCare as
the largest community-based provider of diagnostic imaging in the Greater
Vancouver Area, and further improve our ability to provide excellent patient
care as the market leader in British Columbia. Our Niagara Falls acquisitions
complement our existing imaging and laboratory operations in the Niagara
Falls/St. Catharines region of Ontario," said Paul Bristow, President and CEO
of CML HealthCare. "Our pending acquisition of CWIC in Calgary, Canada's first
and only imaging and interventional clinic dedicated exclusively to women,
will provide us with a unique opportunity to advance the development of a
women's diagnostic imaging platform in Canada, while also strengthening our
presence in the Alberta market. We welcome the staff from the 14 clinics to
the CML HealthCare team, and look forward to continuing to deliver quality
patient care in each of their respective communities."
    ADR has been in operation for 23 years in the Surrey and Greater
Vancouver Area, with three multi-modality clinics. GMIS operates four
multi-modality clinics and one single-modality clinic in the Greater Vancouver
Area. GMIS has been delivering quality patient care for more than 15 years and
is one of Vancouver's largest medical imaging practices. Laurel Radiology's
two multi-modality clinics provide general medical imaging services as well as
specialized fertility imaging services. Laurel has been servicing patients in
Vancouver for more than 20 years. CWIC is Canada's first full-service
women's-only diagnostic imaging facility. This Calgary-based multi-modality
clinic has been in operation for six years. Niagara Falls' two-clinic
multi-modality operation and Applemed's multi-modality clinic have been
serving the Niagara Falls and St. Catharines communities for a combined 30
years.
    In CML HealthCare's 2008 first quarter results news release and
Management Discussion & Analysis ("MD&A") (dated May 6, 2008), the Fund
reported that as of March 31, 2008 it had outstanding deposits and acquisition
costs of $0.6 million primarily related to two potential acquisitions,
comprising seven diagnostic imaging clinics in Canada. The GMIS and Laurel
Radiology acquisitions disclosed in this news release collectively account for
the aforementioned deposits. In a news release dated July 26, 2007, the Fund
reported that it had entered into a binding agreement on July 3, 2007 to
acquire Toronto-based North York Diagnostic Imaging and Quality Medical
Imaging. This acquisition was subsequently closed on August 15, 2007.

    ((xx)) Distributable Cash of the Fund is not a Canadian generally
accepted accounting principle ("GAAP") measure, and though it is generally
used by Canadian open-ended trusts as an indicator of financial performance,
it should not be seen as a measure of liquidity or a substitute for comparable
metrics prepared in accordance with GAAP. One characteristic of certain
non-GAAP measures such as Distributable Cash is the inclusion of management's
adjustments for entity-specific issues not contemplated in a standard
measurement, such as Standardized Distributable Cash that focuses on
comparability across entities and consistency over time. Therefore, the Fund's
Distributable Cash may differ from similar calculations as reported by other
similar entities and, accordingly, may not be comparable to Distributable Cash
as reported by such entities. The Fund's objective for disclosing the
Distributable Cash calculation is to outline the net cash flow generated by
the Fund that was available for distribution during the period and anticipated
to be sustainable into the next period. The Fund uses Distributable Cash to
evaluate, on a consistent basis, sustainable cash generated from its
operations, and to evaluate cash available for distributions.

    About CML HealthCare Income Fund

    CML HealthCare Income Fund is an unincorporated open-ended trust that
owns CML HealthCare Inc., one of Canada's largest healthcare services
businesses. Based in Mississauga, Ontario, CML HealthCare Inc. is a leading
provider of laboratory testing services in Ontario and the largest private
provider of medical imaging services in Canada. The Fund also owns American
Radiology Services, Inc., a leading provider of fully-integrated diagnostic
medical imaging services based in Baltimore, Maryland. CML HealthCare Income
Fund is publicly traded on the Toronto Stock Exchange under the symbol
"CLC.UN" and has approximately 89.8 million units outstanding. To reach CML
HealthCare Income Fund via the worldwide web log on to www.cmlhealthcare.com.

    Caution concerning forward-looking statements

    Statements made in this news release, other than those concerning
historical financial information, may be forward-looking and therefore subject
to various risks and uncertainties. Some forward-looking statements may be
identified by words like "may", "will", "anticipate", "estimate", "expect",
"intend", or "continue" or the negative thereof or similar variations. Readers
are cautioned not to place undue reliance on such statements, as actual
results may differ materially from those expressed or implied in such
statements. Factors that could cause results to vary include, but are not
limited to: dependence on government-based revenues; pending and proposed
legislative or regulatory developments including the impact of changes in
laws, regulations and the enforcement thereof; intensifying competition from
established competitors and new entrants in the businesses in which we
operate; technological change; interest rate fluctuations and general economic
conditions; insurance coverage of sufficient scope to satisfy any liability
claims; fluctuations in operating results; dependence on our ability to
renegotiate the MOH contract on favourable terms; dependence on our operating
subsidiary to pay its interest obligations; fluctuations in cash distributions
and capital investment; management of credit, market, liquidity and funding
and operational risks; judicial judgments and legal proceedings; our ability
to complete strategic acquisitions and to integrate our acquisitions
successfully; changes in accounting policies and methods we use to report our
financial condition, including uncertainties associated with critical
accounting assumptions and estimates; operational and infrastructure risks
including possible equipment failure and performance of information technology
systems; fluctuations in total patient referrals; loss of services of key
senior management personnel; other factors that may affect future growth and
results including, timely development and introduction of new products and
services; changes in our estimates relating to reserves and allowances; future
sales of units; changes in tax laws; technological changes and obsolescence,
natural disasters, the possible impact on our businesses from public health
emergencies, international conflicts and other developments including those
relating to terrorism; the effect of anyone or more of such events and risks
on our stability ratings and any changes thereto; and our success in
anticipating and managing the foregoing risks. Additional factors related to
the recent acquisition of American Radiology Services, Inc.("ARS") include,
but are not limited to, the Fund's ability to successfully integrate the
operations of ARS, additional liabilities or costs attributable to the
acquisition of ARS, unknown liabilities of ARS, the ability to retain senior
management of ARS, the ability to complete accretive acquisitions in the U.S.,
the continuation and nature of the relationship with The Johns Hopkins
University and The Johns Hopkins Health System Corporation (collectively
"Johns Hopkins") and changes in U.S. federal and state healthcare laws and
regulations, including with respect to Medicare and Medicaid reimbursements
levels.
    We caution that the foregoing list of factors is not exhaustive and that
when reviewing our forward-looking statements, investors and others should
refer to the "Risk Factors" section of the Fund's Annual Information Form, the
"Risks and Uncertainties" and other sections of our Management's Discussion
and Analysis of Operating Results and Financial Position and our other
periodic filings with Canadian securities regulatory authorities. All
forward-looking statements presented herein should be considered in
conjunction with such filings. Except as required by Canadian securities law,
the Fund does not undertake to update any forward-looking statements, whether
written or oral, that may be made from time to time by us or on our behalf;
such statements speak only as of the date made.

    %SEDAR: 00020333E




For further information:

For further information: Bruce Wigle, Investor Relations, The Equicom
Group Inc., (416) 815-0700 ext 228, (416) 815-0080 fax, Email:
bwigle@equicomgroup.com; Tom Weber, Chief Financial Officer, CML HealthCare
Income Fund, (905) 565-0043, (905) 565-1776 fax, Internet:
www.cmlhealthcare.com

Organization Profile

CML HEALTHCARE INC. (FORMERLY CML HEALTHCARE INCOME FUND)

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