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MONTREAL, April 13, 2012 /CNW Telbec/ - OPMEDIC Group Inc. ("OPMEDIC GROUP") (TSX: OMG), a healthcare-related corporation in fertility, laboratories and surgeries providing services and facilities to patients and surgeons, announces its financial results for the second quarter ended February 29, 2012.
- Revenue down by 10%. Revenue for the second quarter totalled $4.456 million compared to $4.928 million for the same period a year earlier.
- Gross profit down by 21%. Gross profit for the second quarter totalled $2.263 million compared to $2.861 million for the same period a year earlier.
- Net profit down. Net profit and earnings per share for the second quarter were respectively $0.378 million and $0.02 compared to $1.038 million and $0.06 a year earlier.
- Declaration of a dividend of $0.02 on common shares
Revenues for the quarter ended February 29, 2012 totalled $4.456 million, down $0.472 million or 10% from $4.928 million in the same period in 2011. Fertility revenues decreased by $0.246 million primarily as a result of the reduction in the government prescribed rates for IVF activity in Quebec as of the beginning of January 2012, this, despite a 25% increase in the volume of IVF procedures during the quarter versus the previous period. Effectively, the Régie de l'assurance maladie du Québec ("RAMQ") decided to lower the rates effective January 1, 2012 paid to physicians who provide assisted procreation services in private clinics. The rates related to in vitro fertilization ("IVF") activities carried out in private clinics in Quebec including a technical portion paid by the attending physician to the private clinic were reduced, effective January 1, 2012, by 34%. The rates for a standard IVF cycle that includes a technical portion were reduced from $6,975 to $4,600. The impact of this reduction did not affect the attending physician, who continues to receive the same fees from the RAMQ for professional services provided in a hospital or a private clinic, but has reduced the technical portion of the expenses that are payable to the private clinic−hence the Corporation−by the attending physician for all services provided by the private clinic. Prenatal screening was down $0.159 million mainly due to the increased services offered in the public system. Revenues from OPMEDIC surgical division operations were down by $0.054 million mainly as a result of fewer hours in rental of operating rooms.
For the six-month period ended February 29, 2012, revenues totalled $9.846 million, down $0.525 million or 5% from $10.371 million in 2011. Fertility revenues were up $0.147 million driven by a 21% increase in the volume of IVF procedures over the previous period. However, since the beginning of January, the lower rates payable by the RAMQ largely offset such increase. Prenatal screening was down $0.346 million, still affected by the increased offer in the public system, and OPMEDIC Division's surgical operations decreased by $0.153 million primarily because of fewer hours of rental of operating rooms and, to a lesser extent, by a drop in endoscopies. Lastly, cytogenic and cytology operations were down in equal portions by $0.132 million.
Cost of Services
The cost of services for the three-month period rose from $2.067 million in 2011 to $2.193 million in 2012, up $0.126 million or 6%. The increase in fertility operations entailed additional costs of $0.071 million in payroll, and $0.058 million in supplies that were offset by the $0.076 million reduction in professional fees. In addition, the new South Shore endoscopic clinic incurred costs of $0.074 million in payroll, rentals and medical supplies.
For the six-month period ended February 29, 2012, the cost of services totalled $4.351 million, up $0.254 million or 6% from $4.097 million in 2011. The increase in fertility operations required additional costs of $0.184 million in payroll, and of $0.110 million in supplies which were offset by the $0.161 million reduction in professional fees. The new South Shore endoscopic clinic incurred costs of $0.117 million in payroll, rentals and medical supplies.
Gross profit for the quarter ended February 29, 2012 stood at $2.263 million, down $0.598 million or 21% from $2.861 million in 2011. For the fertility segment, gross profit decreased by $0.480 million, while in the OPMEDIC division, it was down by $0.118 million as a result of lower revenues.
Gross profit in relation to revenues for the quarter was 51% in 2012, versus 58% in 2011.
Gross profit for the six-month period ended February 29, 2012 totalled $5.495 million, down $0.779 million or 12% from $6.274 million in 2011. For the fertility segment, gross profit decreased by $0.517 million, while in the OPMEDIC division, it was down by $0.262 million as a result of lower revenues.
Gross profit in relation to revenues for the six-month period ended February 29, 2012 was 56%, as opposed to 60% in 2011.
General and Administrative Expenses
General and administrative expenses for the quarter ended February 29, 2012 were $1.547 million, up $0.225 million or 17% over $1.322 million in 2011. Additional administrative support staff hired plus higher advertising and annual reports expenses accounted for the $0.107 million increase. Furthermore, payroll, rental and office expenses for the opening of the new endoscopic clinic on the South Shore totalled $0.045 million, and capital asset depreciation as a result of the previous year's acquisitions rose by $0.047 million.
For the six-month period ended February 29, 2012, general and administrative expenses were $2.933 million, up $0.227 million or 8% over $2.706 million in 2011. Administrative salaries, advertising and annual reports expenses increased by $0.138 million, while payroll, rental and office expenses for the new South Shore endoscopic clinic amounted to $0.071 million, and the depreciation expense was also up by $0.054 million. The $0.097 million decrease in professional fees offset increases emanating, for instance, from laboratory ISO and Standards Council of Canada accreditation in 2011, which was not required in 2012, and the lower fees for the conversion to the new accounting standards in 2011.
Net profit and net earnings per share for the quarter ended February 29, 2012 were respectively $0.378 million and $0.02, compared with $1.038 million and $0.06, respectively, for the previous year.
For the six-month period ended February 29, 2012, net profit and net earnings per share were respectively $1.625 million and $0.09, compared with $2.435 million and $0.14, respectively, for 2011.
DECLARATION OF DIVIDEND ON COMMON SHARES
The Corporation announces that its Board of Directors has declared a cash dividend of $0.02 per share payable April 30, 2012 to shareholders of record at the close of business on April 25, 2012. Future dividends are subject to the discretion of the Board of Directors.
The Corporation 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.
RESIGNATION OF A BOARD MEMBER
OPMEDIC GROUP reports the departure of Mr. Ken Newport as director effective on April 2, 2012. Mr. Newport resigned to devote time to other professional responsibilities. OPMEDIC GROUP's Board of Directors would like to thank Mr. Newport for his sustained contributions to the Corporation since joining the Board in 2005 and wish him well in his future endeavors.
Detailed financial results can be accessed on the OPMEDIC GROUP web site at www.opmedicgroup.com.
About OPMEDIC GROUP
OPMEDIC GROUP is a corporation 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 one of its joint ventures) 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