ARCPOINT TO HOST CONFERENCE CALL TO PROVIDE BUSINESS UPDATE AND DISCUSS 2023 Q3 FINANCIAL RESULTS
Greenville, South Carolina, Nov. 20, 2023 (GLOBE NEWSWIRE) — ARCpoint Inc. (TSXV: ARC) (the “Company” or “ARCpoint”) a leading US-based franchise system providing drug testing, alcohol screening, DNA and direct to consumer (“DTC”) clinical lab testing services, announces that it will host a conference call on Wednesday, November 22, 2023 at 9:30 am Eastern time to review the Company’s financial results for the third quarter ended September 30, 2023, and provide an operational update.
The dial-in number for the conference call is as follows:
Canada / USA Toll Free 1-800-319-4610
International Toll 1-604-638-5340
Callers should dial in 5 – 10 min prior to the scheduled start time and ask to join the ARCpoint call:
ARCpoint’s President and CEO, John Constantine commented “We continue to cut costs as we roll out our MyARCpointLabs platform and reduced our net, operating cash, EBITDA and Adjusted EBITDA losses for this quarter by 37%, 47%, 41% and 74% respectively, versus the previous quarter. These improvements do not include the new cuts we implemented and announced last month”.
On October 17, 2023, the Company reported that it had undertaken new measures to reduce costs by US$1million on an annualized basis. These cuts included annualized reductions in staffing and compensation of approximately US$800,000 and US$200,000 in sales, general and administration costs. As a function of these cuts, the Company incurred severance costs of US$67,000 in October 2023 with the full impact of financial benefits beginning in November 2023.
Mr. Constantine added, “Since launching MyARCpointLabs in July 2023, in addition to reducing costs, we have focused on building out our distribution network of affiliates and other relationships to drive more business through our franchisee locations and overall system.”
On July 10, 2023, ARCpoint announced that it had launched its new consumer e-commerce platform, MyArcpointLabs, (“MAPL”) which was developed to make it easier for the Company’s franchisees to attract and better serve individual health care consumers and for consumers to purchase the company’s products and services more easily, as well as expand the Company’s distribution network through affiliate locations. As the Company discussed in its August 10, August 17 and October 17, 2023, news releases, affiliate businesses are health-related businesses that are separate from ARCpoint, such as health or vitamin stores, fitness facilities, chiropractor offices, physician offices, clinical and genetic reference labs, and pharmacies. Given regulatory, licensing, technology, and other issues, many of these types of businesses have not been previously able to offer DTC healthcare testing services. Using the MyARCpointLabs platform, affiliates can offer some or all ARCpoint’s products and services to their customers to both enhance their own product and service offerings and, in some cases, generate additional revenue, while at the same time meeting applicable regulatory and other compliance obligations. As also discussed in the October 17, 2023, news release on the launch of ARCpoint Employer Access, any business can now become a new type of affiliate by offering ARCpoint wellness and preventative diagnostic testing services to their employees.
As at September 30, 2023, the Company had total cash on hand of approximately US$1.8 million, comprised of US$1.5 million in unrestricted cash and cash equivalents and US$246 thousand in Brand Fund restricted cash. Use of Brand Fund restricted cash is at the Company’s discretion and is used to increase sales and the brand presence of the Company’s entities and franchisees.
Summary of 2023 Q3 Financial Results
All results below are reported under International Financial Reporting Standards and in US dollars.
- Total revenue for the three months ended September 30, 2023, was $1.6 million compared to $1.7 million for the three months ended September 30, 2022, $1.5 million for the three months ended June 30, 2023, and $1.7 million for the three months ended March 31, 2023. During Q3 2022, high complexity PCR testing and low complexity rapid tests volumes were higher due to the COVID pandemic.
- Net loss for the three months ended September 30, 2023, was $1.5 million compared to a net loss of $1.9 million for the three months ended September 30, 2022, loss of $2.4 million for the three months ended June 30, 2023, and loss of $2.1 million for the three months ended March 31, 2023. The decrease in loss for Q3 2023 versus Q3 2022 was due to lower operating costs, including salaries and wages and legal costs for the period.
- Operating cash flow for the three months ended September 30, 2023, was negative $1.0 million compared to negative $1.3 million for the three months ended September 30, 2022, negative $1.9 million for the three months ended June 30, 2023, and negative $1.2 million for the three months ended March 31, 2023.
- EBITDA for the three months ended September 30, 2023, was negative $1.2 million compared to negative $1.6 million for the three months ended September 30, 2022, negative $2.0 million for the three months ended June 30, 2023, and negative $1.8 million for the three months ended March 31, 2023.
- Adjusted EBITDA for the three months ended September 30, 2023, was negative $458 thousand compared to negative $928 thousand for the three months ended September 30, 2022, negative $1.8 million for the three months ended June 30, 2023, and negative $1.1 million for the three months ended March 31, 2023. For the current period ended, the difference between EBITDA and Adjusted EBITDA is primarily due to an adjustment related to the timing difference between Brand fund revenues and expenditures and the gain on the retirement of the Corporate Labs of Indy office lease.
DEFINITION AND RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
The Company reports certain non-IFRS measures that are used to evaluate the performance of its businesses and the performance of their respective segments. Securities regulators require such measures to be clearly defined and reconciled with their most comparable IFRS measures.
As non-IFRS measures generally do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. Rather, these are provided as additional information to complement those IFRS measures by providing further understanding of the results of the operations of the Company from management’s perspective. Accordingly, these measures should not be considered in isolation, nor as a substitute for analysis of the Company’s financial information reported under IFRS. Non-IFRS measures used to analyze the performance of the Company’s businesses include “EBITDA” and “Adjusted EBITDA”.
The Company believes that these non-IFRS financial measures provide meaningful supplemental information regarding the Company’s performances and may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. These financial measures are intended to provide investors with supplemental measures of the Company’s operating performances and thus highlight trends in the Company’s core businesses that may not otherwise be apparent when solely relying on the IFRS measures. These non-IFRS measures are calculated as follows:
“EBITDA” is comprised as income (loss) less interest, income tax and depreciation and amortization. Management believes that EBITDA is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See “Unaudited Interim Condensed Consolidated EBITDA and Adjusted EBITDA Reconciliation” appended to this press release for a quantitative reconciliation of EBITDA to the most directly comparable financial measure.
“Adjusted EBITDA” is comprised as income (loss) less interest, income tax, depreciation, amortization, share-based compensation, Brand Fund revenue and expense timing difference, change in fair value of warrant liability, foreign exchange gain (loss) and other income / expenses not attributable to the operations of the Company. Management believes that EBITDA is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See “Unaudited Interim Condensed Consolidated EBITDA and Adjusted EBITDA Reconciliation” appended to this press release for a quantitative reconciliation of Adjusted EBITDA to the most directly comparable financial measure.
A reconciliation of how the Company calculates EBITDA and Adjusted EBITDA is provide in the table appended to this press release.
For more information, please see the interim Financial Statements (the “Financial Statements”) and the interim Management Discussion & Analysis of the Company (MD&A”) for the three-month period ended September 30, 2023, under the Company’s profile at www.sedar.com.
About ARCpoint Inc.
ARCpoint is a leading US-based franchise system that leverages technology along with brick-and-mortar locations to give businesses and individual consumers access to convenient, cost-effective healthcare information and solutions with transparent, up-front pricing, so that they can be proactive and preventative with their health and well-being. ARCpoint is based in Greenville, South Carolina, USA. ARCpoint Franchise Group LLC, formed under the laws of the state of South Carolina in February 2005, is the franchisor of ARCpoint Labs and supports over 130 independently owned locations. ARCpoint sells franchises to individuals throughout the United States and provides support in the form of marketing, technology and training to new franchisees. ARCpoint Corporate Labs LLC develops corporate-owned labs committed to providing accurate, cost-effective solutions for customers, businesses and physicians. AFG Services LLC serves as the innovation center of the ARCpoint group of companies as it builds a proprietary technology platform and a physician network to equip all ARCpoint labs with best-in-class tools and solutions to better serve their customers. The platform also digitalizes and streamlines administrative functions such as materials purchasing, compliance, billing and physician services for ARCpoint franchise labs and other clients.
For more information, please contact:
Jason Tong, Chief Financial Officer
Phone : (604) 889-7827
E-mail : [email protected]
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION :
Forward-Looking Information – this news release contains “forward-looking information” within the meaning of applicable Canadian securities laws which are based on ARCpoint’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy.
The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Froward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the ability of the Company to implement its business strategies, the COVID-19 pandemic; competition and other risks.
Any forward-looking information speaks only as of the date on which it is made, and except as required by law, the Company does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. When considering the forward-looking information contained herein, readers should keep in mind the risk factors and other cautionary statements in the Company’s disclosure documents filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this Press release.
Unaudited Interim Condensed Consolidated EBITDA and Adjusted EBITDA Reconciliation
(Expressed in United States Dollars)
- Finance expense comprised of interest on bank loans, notes payable and lease liabilities (see Financial Statements).
- Unit-based compensation expense comprised of non-cash compensation (see Financial Statements).
- Other income comprised of government assistance benefit received pertaining to the COVID-19 pandemic.
- One-time legal and professional fees refer to expenses and other transactional costs incurred for financings and restructuring completed in 2022 and one-time legal fees in 2023.
- The Group operates a Brand Fund established to collect and administer funds contributed for use in advertising and promotional programs designed to increase sales and enhance the reputation of the Group and its franchisees. The Group reports contributions and expenditures on a gross basis on the Group’s statement of profit and loss. Brand Fund contributions are recognized as revenue when invoiced, as the Group has full discretion on how and when the Brand Fund revenues are spent. Brand Fund revenue received may not equal advertising expenditures for the period due to timing of promotions and this difference is recognized to earnings. This adjustment is made to normalize for the timing difference of the collection Brand Fund revenues and Brand Fund expenditures.
Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. UKNewshour.com takes no editorial responsibility for the same.