News Column

Northstar Healthcare Reports Record Revenues and $600K in EBITDA During 2014 Second Quarter

August 14, 2014

HOUSTON, TX -- (Marketwired) -- 08/14/14 -- Northstar Healthcare Inc. (TSX: NHC) today announced its financial results for the three and six months ended June 30, 2014. All dollar amounts are in United States currency unless otherwise stated; percentage calculations are based on the numbers in the financial statements and may not correspond to rounded figures presented in this release.

Detailed information relating to the three and six months ended June 30, 2014 is available in Management's Discussion and Analysis (MD&A) and Interim Consolidated Financial Statements, which are available on the company's web site at: www.northstar-healthcare.com and at www.sedar.com. This information is not intended to provide a comprehensive comparison of financial results.

"The Company experienced a record quarter with over $15 million in revenue," said Dr. Donald Kramer, Northstar's Chief Executive Officer. "Our investment in marketing efforts has borne fruit in the Houston and Dallas markets. As we work to make our programs more effective and efficient, the revenue derived from these programs should increase as the year goes on. The Phoenix center started performing cases at the end of the second quarter and should prove to be accretive during the latter half of the year."

"We increased revenue by over $9 million compared to the second quarter of 2013," said Andy Chen, Northstar's Chief Financial Officer. "With the expected seasonal increase in revenue during the second half of the year, the Company is on track to meet our revenue guidance for the annual period."

Second Quarter Results

Net patient service revenue for the three months ended June 30, 2014 totaled $15.1 million, an increase of $9.3 million or 157.8%, compared to $5.9 million from the prior corresponding period. Total cases for the three months ended June 30, 2014 were 1,646, representing an increase of 349 cases or 26.9% from the 1,297 cases in the prior corresponding period. Revenue per case increased as a product of the procedure mix moving towards surgeries with higher reimbursements. The increase in net patient service revenue resulted in Northstar having EBITDA of $0.6 million, for the three months ended June 30, 2014 compared with $(0.4) million from the prior corresponding period. The increase in net patient service revenue was offset by an increase in operating general and administrative expenses as Northstar invested in its revenue growth and diversification. Northstar had net income of $0.01 per weighted average share, compared with net loss of $(0.02) per weighted average share in the corresponding 2013 period.

Cash flows used for operating activities in the three months ended June 30, 2014 were $0.1 million, which represented a $1.4 million decrease compared to the prior corresponding period, which provided $1.4 million in cash flows from operating activities.

Six Months Results

Net patient service revenue for the six months ended June 30, 2014 totaled $27.2 million, an increase of $17.3 million or 172.8%, compared to $10.0 million from the prior corresponding period. Total cases for the six months ended June 30, 2014 were 3,145, representing an increase of 804 cases or 34.3% from the 2,341 cases in the prior corresponding period. Revenue per case increased as a product of the procedure mix moving towards surgeries with higher reimbursements. The increase in net patient service revenue resulted in Northstar having EBITDA of $0.2 million, for the six months ended June 30, 2014 compared with $(0.9) million from the prior corresponding period. The increase in net patient service revenue was offset by an increase in operating general and administrative expenses as Northstar invested in its revenue growth and diversification. Northstar had a net loss of $(0.01) per weighted average share, compared with a net loss of $(0.03) per weighted average share in the corresponding 2013 period.

Cash flows provided by operating activities in the six months ended June 30, 2014 were $2.3 million, which represented a $0.8 million increase compared to the prior corresponding period, which provided $1.5 million in cash flows from operating activities.

At June 30, 2014, Northstar had consolidated net working capital of $9.1 million, including cash of $4.2 million. This compares with $8.7 million and $5.6 million, respectively, at year-end 2013.

About Northstar Healthcare Inc.

Northstar partners with physicians in the ownership and management of ambulatory facilities and healthcare services. Northstar owns and manages interests in four ambulatory surgery centers, two in Houston, one in Dallas, and the fourth in Scottsdale, Arizona. Northstar also owns and manages interests in two imaging centers and one urgent care clinic in Houston.

EBITDA is defined as earnings before interest, income taxes and depreciation and amortization. EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA is an analytical indicator used by management and the health care industry to evaluate company performance, allocate resources and measure leverage and debt service capacity. EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, EBITDA as presented may not be comparable to other similarly titled measures of other companies. Net income attributable to Northstar Healthcare Inc. common shareholders is the financial measure calculated and presented in accordance with generally accepted accounting principles that is most comparable to EBITDA as defined.

Forward-looking statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) and financial outlooks relating to the business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions and may discuss future expectations, contain projections of future results of operations or of financial condition, or state other forward-looking information. These statements are based on the Company's expectations, estimates, forecasts and projections and while the Company considers these to be reasonable based on information currently available, they may prove to be incorrect. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. Other than as required by law, the Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

Source: Northstar Healthcare Inc.


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