VANCOUVER, Nov. 26 /PRNewswire-FirstCall/ -- CRH Medical Corporation (CRM:TSX-V) announced today unaudited results for the three and nine months ended September 30, 2008, and unveiled a new strategy designed to mitigate the need to obtain financing from the equity markets, the primary source of funding for the Company to date. Highlights of the quarter include (all figures are in US dollars):
- Total revenue for the three months ended September 30, 2008 increased 123% to $1,947,642 compared to $879,698 for the same period in 2007. - Total revenue for the nine months ended September 30, 2008 increased 138% to $4,958,879 compared to $2,081,746 for the same period in 2007. - For the nine months ended September 30, 2008 Center operations revenue and Product sales increased 138% and 136% respectively compared to the same period in 2007. - Patient visits for the nine months ended September 30, 2008, increased 115% to 18,911 compared to 8,780 patient visits for the same period in 2007. - The Company recorded a net loss of $993,211 ($0.02 per share) and $3,049,922 ($0.07 per share) for the three and nine months ended September 30, 2008 compared to a net loss of $777,584 ($0.02 per share) and $2,728,408 ($0.06 per share) for the same periods in 2007.
CRH Medical announced a new strategic initiative to suspend the rapid expansion of opening new Centers for Colorectal Health, minimizing current expenses, and continuing to grow quarter over quarter revenues at existing Centers. The Company believes effectively implementing the new strategy will enable us to achieve positive operating cash flows with currently available working capital.
Commenting on the third quarter 2008 results and plans going forward, Edward Wright, Chief Executive Officer, stated, "By the end of the third quarter of 2008, we had successfully opened nine new Centers. Our Center operations model continues to perform well and we believe that we have the infrastructure in place and the market demand to significantly expand the number of CRH Centers well beyond the 17 that we currently operate. However, continuing on our current pace of expansion will require additional capital. It is clear that the market for issuing new equity is weak and because timing of recovery is uncertain, we have initiated a strategy that we believe will enable us to achieve positive cash flows by focusing on increasing the utilization of our existing Centers. Although we will keep a close tab on the markets, by effectively using the capacity at our existing Centers, we expect to eliminate or, in the worst case, at least defer the necessity of additional equity financings. Our new plan is to continue to invest in our existing Centers but to defer opening new Centers until our revenues or the terms of available capital support that action. In the meantime, we have secured a revolving line of credit to manage our working capital requirements as we strive to maximize the revenue potential of our Centers. Simply put, our short term focus will shift toward profitability, as opposed to growing the top line as rapidly as possible."
Mr. Wright further stated, "Our partnership program, where we provide training and support to physicians, continues to grow. Since April 2008 the Company has trained 96 physicians. Although this segment of our business also has the potential for rapid growth, we expect to carefully manage expenses in this area as well, so that additional investments are expected to come from our operating cash flows."
As a part of its new strategy, the Company has secured a $750,000 revolving line of credit collateralized by the Company's accounts receivable. As of September 30, 2008 the Company had $0.942 million in cash and cash equivalents and working capital of $2.304 million.
Summary of interim results (expressed in United States dollars): Consolidated Balance Sheets ------------------------------------------------------------------------- September 30, December 31, 2008 2007 ------------------------------------------------------------------------- (Unaudited) Current assets: Cash and cash equivalents $ 942,375 $ 3,531,818 Accounts receivable 1,734,692 975,290 Inventory 57,977 30,716 Prepaid expenses and deposits 121,662 262,084 ----------------------------------------------------------------------- 2,856,706 4,799,908 Property and equipment 808,020 879,394 Intellectual property 677,962 734,293 ------------------------------------------------------------------------- $ 4,342,688 $ 6,413,595 Current liabilities: Accounts payable and accrued liabilities $ 511,097 $ 323,791 Deferred leasehold inducements 41,426 41,426 ----------------------------------------------------------------------- 552,523 365,217 Deferred leasehold inducements 71,492 98,729 Shareholders' equity: Share capital (note 6) 15,022,822 14,933,072 Contributed surplus (note 6) 3,134,820 2,405,624 Accumulated other comprehensive loss (66,772) (66,772) Deficit (14,372,197) (11,322,275) ------------------------------------------------------------------------- 3,718,673 5,949,649 ------------------------------------------------------------------------- $ 4,342,688 $ 6,413,595 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Operations, Comprehensive Loss and Deficit ------------------------------------------------------------------------- Three months ended Nine months ended ------------------------ ------------------------ September 30, September 30, September 30, September 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Revenue: Center operations $ 1,789,970 $ 825,018 $ 4,587,610 $ 1,924,635 Product sales 167,672 54,680 371,365 157,111 ----------------------------------------------------------------------- 1,957,642 879,698 4,958,975 2,081,746 Expenses: Center operations and development 2,118,727 1,155,065 5,554,948 3,396,643 Medical products 217,412 30,085 432,344 172,924 Corporate and other 508,286 558,960 1,762,021 1,576,242 Depreciation and amortization 88,433 77,927 264,026 215,258 ----------------------------------------------------------------------- 2,932,858 1,822,757 8,013,388 5,361,067 Operating loss (975,216) (943,059) (3,054,363) (3,279,321) Other items: Interest income 15,373 47,389 49,610 130,963 Foreign exchange gain (loss) (34,887) 118,086 (48,799) 419,950 Other income 1,519 - 3,630 - ----------------------------------------------------------------------- (17,995) 165,475 4,441 550,913 Net loss and comprehensive loss (993,211) (777,584) (3,049,922) (2,278,408) Deficit, beginning of period (13,378,986) (9,753,904) (11,322,275) (7,803,080) ------------------------------------------------------------------------- Deficit, end of period $(14,372,197) $(10,531,488) $(14,372,197) $(10,531,488) Basic and diluted loss per share $ (0.02) $ (0.02) $ (0.07) $ (0.06) Weighted average shares outstanding 44,919,251 43,829,351 44,840,640 43,312,907 About CRH Medical Corporation:
CRH Medical Corporation specializes in the treatment of hemorrhoids utilizing its proven treatment protocol and patented proprietary technology. CRH's single use, disposable, hemorrhoid technology is safe and highly effective in treating hemorrhoid grades I - IV. CRH Medical employs two commercialization strategies: First, it operates Centers for Colorectal Health facilities in the United States specializing in the treatment of hemorrhoids and fissures, and colon cancer screening. In addition CRH distributes its hemorrhoid banding technology, treatment protocols, operational and marketing expertise as a complete, "turn key" package directly to its partner physicians. The Company's goal is to establish the CRH hemorrhoid technology as the standard for hemorrhoid treatment.
The information in this news release contains so-called "forward-looking" statements. These include statements regarding CRH Medical expectations, beliefs, intentions or strategies for the future, which may be indicated by words or phrases such as "anticipate", "expect", "intend", "plan", "will", "we believe", "CRH Medical believes", "management believes" and similar language. All forward-looking statements are based on CRH Medical current expectations and are subject to risks and uncertainties and to assumptions made.
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or accuracy of this release.
