Medisys Health Group Income Fund Announces Q2 2007 Results



    MONTREAL, Aug. 14 /CNW/ - Medisys Health Group Income Fund (TSX: MHG.UN)
(the "Fund"), one of Canada's leading national providers of healthcare
services to corporations, individuals and insurance companies, today announced
its financial results for the quarter ended June 30, 2007.

    
    Q2 2007 Highlights

      -  Q2 2007 revenue was $24.3 million, compared to $21.1 million in
         Q2 2006, an increase of 15%;
      -  Corporate Health Services reported an 18% increase in revenue and
         51% increase in EBITDA relative to Q2 2006;
      -  Medical Imaging increased revenues by 19% and 37% increase in EBITDA
         relative to Q2 2006; and
      -  Total segment operating income increased by 35% relative to Q2 2006.
    

    "Rising Q2 revenue and segment operating income demonstrates the
continued momentum and growth in our core operating segments, Corporate Health
Services and Medical Imaging," said Dr. Sheldon Elman, Chairman and CEO of
Medisys Health Group. "We continue to focus on driving profitability in these
segments, and reducing overall corporate general and administrative expenses."

    Financial Results

    For the three months ended June 30, 2007, consolidated revenues increased
to $24.3 million as compared to $21.1 million for the three months ended
June 30, 2006, an increase of 15% or $3.2 million. The increase in our total
revenues is primarily attributable to the impact of the most recent
acquisitions and to organic growth in both the Medical Imaging and Corporate
Health Services segments.
    Medisys' Q2 2007 EBITDA(1) totalled $2.5 million, an increase of 99% or
$1.3 million relative to the same period in 2006.
    For the three months ended June 30, 2007, Corporate Health Services
generated $14.1 million in revenue and $2.5 million in operating income, an
18% increase in revenue and a 51% increase in operating income relative to Q2
2006. Subsequent to the end of the first quarter, the Fund was advised that,
pursuant to the most recent tender-process just completed, it will not be
retained as the provider of disability management services for Canada Post,
effective June 30, 2007. While revenue from this customer amounted to less
than 10% of the total consolidated revenues of the Fund for the year ending
December 31, 2006, the operating income contribution represented approximately
5% of the operating income of the Corporate Health Services segment for the
same period.
    Medical Imaging generated revenues of $7.1 million and operating income
of $1.8 million for the three months ended June 30, 2007, a 19% increase in
revenue and a 37% increase in operating income relative to Q2 2006.
    Insurance Medical Services generated $3.2 million in revenue and
$0.4 million in operating income in Q2 2007, a 1% decrease in revenue and a
24% decrease in operating income relative to Q2 2006.

    
    ---------------------------------------
    (1) EBITDA is not a recognized measure under GAAP. Management believes
        that in addition to net income, EBITDA is a useful supplemental
        measure as it provides investors with an indication of the Fund's
        performance. Investors should be cautioned, however, that EBITDA
        should not be construed as an alternative to net income. The Fund's
        method of calculating EBITDA may differ from that of other
        companies' or income trusts' and, accordingly, EBITDA may not be
        comparable to measures used by other companies or income trusts. For
        a detailed reconciliation of EBITDA to the GAAP measure "Net Income",
        please refer to our Q2 2007 Report, filed by the Fund with the
        Canadian securities regulatory authorities and available at
        www.sedar.com.
    

    Conference Call Notice

    Medisys will host a conference call to discuss its Q2 financial results
on Tuesday, August 14th, 2007, at 11:30 am (EST). The dial-in number for the
conference call is 416-644-3422 or 1-866-249-2157 (reference No. 21242319).
The call will be audiocast live and archived for 90 days at www.medisys.ca.

    About Medisys Health Group

    Medisys Health Group is a leading Canadian provider of healthcare and
medical imaging services to corporations and individuals and health-related
underwriting support services to insurance companies. Through its national
network of facilities, including offices in Montreal, Ottawa, Toronto, Calgary
and Vancouver, Medisys' Corporate Health Services division delivers
preventive, diagnostic and consultative healthcare services to approximately
4,000 corporations, including 320 companies of the Financial Post 500.
Medisys' Medical Imaging operations service patient populations in both
Ontario and Quebec. Medisys' Insurance Medical Services division supports the
national underwriting activities of more than 60 Canadian and U.S. life and
health insurance companies. Medisys Health Group Income Fund is an
unincorporated, open-ended, limited purpose trust established to invest in
Medisys Health Group and its subsidiaries.

    This media release may contain certain forward-looking statements that
reflect the current views and/or expectations of Medisys Health Group Income
Fund, Medisys Holding LP, Medisys Health Group Inc., and Medisys Health Group
LP with respect to their respective performance, business, and future events.
Such statements are subject to a number of risks, uncertainties, and
assumptions as outlined in the Fund's management's discussion and analysis for
the period ended June 30, 2007, and other filings with the Canadian securities
regulatory authorities. Actual results and events may vary.



    
    UNAUDITED CONSOLIDATED BALANCE SHEETS
    (IN THOUSANDS OF DOLLARS)

                                                               As at
                                                     ------------------------
                                                        June 30, December 31,
                                                           2007         2006
                                                     (Unaudited)    (Audited)
    -------------------------------------------------------------------------
    ASSETS

    Current

    Accounts receivable                               $  12,763    $  11,048
    Supplies inventory                                      230          247
    Prepaid expenses                                        337          467
    Income taxes recoverable                                271          206
    Future income taxes                                     248          485
    -------------------------------------------------------------------------
                                                         13,849       12,453

    Premises and Equipment                               17,947       17,667
    Other Assets                                          2,026        2,569
    Future Income Taxes                                     685          701
    Licenses                                             17,799       17,799
    Goodwill                                             14,060       14,060
    -------------------------------------------------------------------------
    Total Assets                                      $  66,366    $  65,249
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Current

    Accounts payable and accrued liabilities          $   8,871    $   7,288
    Distributions payable                                   302          602
    Current maturity of balances of purchase price        1,163        2,173
    Deferred revenue                                        364            -
    -------------------------------------------------------------------------
                                                         10,700       10,063

    Bank Indebtedness and Term Debt                      13,704       10,782
    Obligations Under Capital Leases                      2,627        3,317
    Balance of Purchase Price                             1,184        1,694
    Deferred Lease Inducements                            1,116          722
    Future Income Taxes                                   4,964        4,203
    -------------------------------------------------------------------------
                                                         34,295       30,781

    Exchangeable Units Interest                           8,779        9,200

    UNITHOLDERS' EQUITY

    Unitholders' Equity                                  23,292       25,268
    -------------------------------------------------------------------------

    Total Liabilities & Unitholders' Equity           $  66,366    $  65,249
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
    FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
    (IN THOUSANDS OF DOLLARS, EXCEPT PER UNIT AMOUNTS)


                                         Three Months Ended  Six Months Ended
                                               June 30,          June 30,
                                         ------------------ -----------------
                                            2007     2006     2007     2006
    -------------------------------------------------------------------------
    Revenues                              $24,333  $21,106  $47,203  $41,497

    Direct Costs, Selling and
     Administrative Expenses               21,815   19,838   42,863 $ 38,160
    ------------------------------------------------------- -----------------

    Operating income from Continuing
     Operations before the undernoted
     items                                  2,518    1,268    4,340    3,337

    Amortization of premises and equipment    882      692    1,809    1,446
    Amortization of other assets              150      298      299      402
    Amortization of fair value adjustment      38       57       76      110
    Amortization of financing fees             69        -      138        -
    Security-based compensation expense       694      915    1,157    1,886
    Interest on capital lease obligations      53       82      111      159
    Interest on bank indebtedness
     and term debt                            224      148      405      363
    Other interest                             54       58      123      128
    ------------------------------------------------------- -----------------
    Income (Loss) from Continuing
     Operations before Income Taxes           354     (982)     222   (1,157)

    Income taxes                            1,080     (212)   1,060     (252)
    ------------------------------------------------------- -----------------
    Loss from Continuing Operations          (726)    (770)    (838)    (905)

    Exchangeable units interest                80     (230)      46     (272)
    Dilution gain                               -      (24)       -   (1,030)
    ------------------------------------------------------- -----------------
    Net Income (Loss) from Continuing
     Operations                              (806)    (516)    (884)     397

    Net Income from discontinued
     operations, net of income taxes and
     exchangeable unit interest (note 2)        -      128        -      178
    ------------------------------------------------------- -----------------
    Net Income (Loss)                     $  (806) $  (388) $  (884) $   575
    ------------------------------------------------------- -----------------
    ------------------------------------------------------- -----------------

    Basic Earnings per Unit (note 7)
      Net income (loss) from continuing
       operations                         $ (0.15) $ (0.10) $ (0.16) $  0.08
      Net income (loss)                   $ (0.15) $ (0.07) $ (0.16) $  0.12
    ------------------------------------------------------- -----------------

    Diluted Earnings per Unit (note 7)
      Net income (loss) from continuing
       operations                         $ (0.15) $ (0.10) $ (0.16) $ (0.12)
      Net income (loss)                   $ (0.15) $ (0.08) $ (0.16) $ (0.09)
    ------------------------------------------------------- -----------------
    ------------------------------------------------------- -----------------



    UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
    (IN THOUSANDS OF DOLLARS)

                                         Three Months Ended  Six Months Ended
                                               June 30,          June 30,
                                         ------------------ -----------------
                                            2007     2006     2007     2006
    -------------------------------------------------------------------------
    Funds Provided (Used) -
    Operating Activities
      Net Income (net loss)               $  (806) $  (388) $  (884) $   575
      Results from discontinued operations      -      128        -      178
    ------------------------------------------------------- -----------------
      Results from continuing operations     (806)    (516)    (884)     397

      Amortization of premises
       and equipment                          882      692    1,809    1,446
      Amortization of other assets            150      298      299      402
      Amortization of deferred lease
       inducements                            (30)     (18)     (55)     (37)
      Amortization of fair value adjustment    38       57       76      110
      Amortization of financing fees           69        -      138        -
      Future income taxes                   1,080     (379)   1,014     (527)
      Deferred revenue                          -     (639)       -     (101)
      Security-based compensation expense     694      915    1,157    1,886
      Exchangeable units interest              80     (230)      46     (272)
      Dilution gain                             -      (24)       -   (1,030)
    ------------------------------------------------------- -----------------
                                            2,157      156    3,600    2,274
    Changes in non-cash operating
     elements of working capital            2,036     (128)     316   (1,036)
    ------------------------------------------------------- -----------------

    Net cash provided by (used in)
     continuing operations                  4,193       28    3,916    1,238
    Net cash provided by (used in)
     discontinued operations                    -      (80)       -    1,376
    ------------------------------------------------------- -----------------
    Net cash provided by (used in)
     operating activities                   4,193      (52)   3,916    2,614
    ------------------------------------------------------- -----------------

    Financing Activities
      Bank indebtedness and term debt        (775)   6,319    3,078   (4,102)
      Distributions to unitholders           (846)  (1,248)  (2,112)  (2,301)
      Distributions and advances to
       exchangeable unitholders              (363)    (551)    (906)  (1,074)
      Repayment of obligations under
       capital leases                        (336)    (388)    (690)    (763)
      Issue of exchangeable units               -      121        -    2,324
      Issue of units (net of issuance costs)    -                 -    9,786
    ------------------------------------------------------- -----------------
    Net cash provided by (used in)
     continuing operations                 (2,320)   4,253     (630)   3,870
    Net cash provided by (used in)
     discontinued operations                    -      123        -      871
    ------------------------------------------------------- -----------------
    Net cash provided by (used in)
     financing activities                  (2,320)   4,376     (630)   4,741
    ------------------------------------------------------- -----------------

    Investing Activities
      Payment of balance of purchase price   (818)  (1,146)  (1,596)  (1,609)
      Acquisitions                              -     (750)       -   (2,241)
      Additions to premises and equipment  (1,504)  (2,359)  (2,089)  (3,418)
      Additions to deferred lease
       inducements                            449        -      449        -
      Additions to other assets                 -      (43)     (50)     (58)
    ------------------------------------------------------- -----------------
    Net cash provided by (used in)
     continuing operations                 (1,873)  (4,298)  (3,286)  (7,326)
    Net cash provided by (used in)
     discontinued operations                    -      (26)       -      (29)
    ------------------------------------------------------- -----------------
    Net cash provided by (used in)
     investing activities                  (1,873)  (4,324)  (3,286)  (7,355)
    ------------------------------------------------------- -----------------
    Increase (decrease) in Cash           $     -  $     -  $     -  $     -

    Cash
      Beginning of Period                       -        -        -        -
    ------------------------------------------------------- -----------------
      End of Period                       $     -  $     -  $     -  $     -
    ------------------------------------------------------- -----------------
    

    %SEDAR: 00022283EF




For further information:

For further information: Stuart M. Elman, President & Chief Financial
Officer, Medisys Health Group, Phone: (514) 499-2778, Email:
stuart.elman@medisys.ca

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MEDISYS HEALTH GROUP INCOME FUND

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