NEW YORK, Oct. 19, 2023 (GLOBE NEWSWIRE) -- Salona Global Medical Device Corporation (the “Company”) (TSXV:SGMD) today announced its intention to change its name to “Evome Medical Technologies Inc.” subject to governmental and regulatory approvals. The proposed name change reflects the direction the new management team is taking toward higher margin recovery science products and services to advance organic growth and boost gross margins and reduce the focus on lower margin contract manufacturing.
Management also affirmed it expects to report, based on preliminary results, positive Adjusted EBITDA (defined below) and net income for its third quarter ending September 30, 2023.
With the new name comes a more focused, higher margin business plan. The plan is straight forward and solves the biggest needs in the recovery science market: Next generation solutions for physical therapy and chiropractic clinic customers using (1) connectivity, (2) portability, and (3) artificial intelligence (AI) to increase the amount of patients a physical therapist can treat in a given hour - improving profitability, patient care and therapist morale.
The solutions include both products, such as Biodex and Mio-Guard currently in the Company’s portfolio, as well as a new focus on services, all designed to improve the business performance for physical therapy clinics, chiropractic businesses, and athletic departments globally.
As part of the new business plan, the Company:
| (1) | plans to eliminate its lower gross margin (15%-20%) contract manufacturing services fully in the quarters to come and has started notifying customers to find other contract manufacturing suppliers to ensure smooth transition of their business; and |
| (2) | has promoted the Corporate Senior Controller of one of its operating subsidiaries, Natalia Vakhitova, to Chief Financial Officer. Ms. Vakhitova has over a decade of experience in accounting and finance with cross border publicly listed companies. |
The new management team plans to debut the new line of next generation products and services in the coming weeks culminating with a new investor website and presentation for investor meetings targeted to launch November 16, 2023 in the U.S. and Canada following its earnings report.
“Our new team made quick work on our turn-around plan and based on preliminary results we anticipate generating a profit for the quarter ending September 30, 2023 and expect continued cross company efficiency improvements during the fourth quarter of the year,” said CEO Mike Seckler. “Now that we have stabilized the company and finished the integration of the acquisitions made to date, we are urgently focused on revenue and profit growth for 2024. We have quite a line-up of products and services we will be rolling out to our physical therapy and chiropractic clinic customers in 2024 that I believe will drive revenue and profit growth. After studying this market for some time, we have come to realize the next step in increasing efficiency and profitability of our customers is delivering products and services that are connected, portable and, where possible, can use artificial intelligence to increase the ratio of patients to physical therapists and chiropracters. I am looking forward to the coming weeks as we reveal these exciting and novel products to our customer base and our investors.”
Full financial results from the third quarter ending September 30, 2023 will be filed with regulators on or before November 14, 2023.
For more information please contact:
Mike Seckler
Chief Executive Officer
Tel: 1 (800) 760-6826
Email: Info@Salonaglobal.com
Non-GAAP Measures
This press release refers to "Adjusted EBITDA" which is a non-GAAP and non-IFRS financial measure that does not have a standardized meaning prescribed by GAAP or IFRS. The Company’s presentation of this financial measure may not be comparable to similarly titled measures used by other companies. This non-GAAP financial measure assists the Company’s management in comparing its operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete acquisition plans that are fundamentally different from the ongoing operating plans of the Company. The Company’s management also believes that presenting this measure allows investors to view the Company’s performance using the same measures that the Company uses in evaluating its financial and business performance and trends.
“Adjusted EBITDA” is defined as net loss excluding interest expense, provision for income taxes, depreciation of property and equipment, amortization of right-of-use asset, amortization of intangible asset, foreign exchange (loss) gain, other income, provision for impairment, change in fair value of contingent consideration, transaction costs, and stock-based compensation.
Preliminary Financial Metrics
This press release contains certain pre-released third quarter financial metrics. The third quarter financial metrics contained in this press release are preliminary and represent the most current information available to the Company's management, as financial closing procedures for the third quarter ended September 30, 2023 are not yet complete. The Company's actual consolidated audited financial statements for such period may result in material changes to the financial metrics summarized in this press release (including by any one financial metric, or all of the financial metrics, being below or above the figures indicated) as a result of the completion of normal quarter and year end accounting procedures and adjustments, and also what one might expect to be in the final consolidated financial statements based on the financial metrics summarized in this press release. Although the Company believes the expectations reflected in this press release are based upon reasonable assumptions, the Company can give no assurance that actual results will not differ materially from these expectations.
Additional Information
Unless otherwise specified, all dollar amounts in this press release are expressed in Canadian dollars.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Certain statements contained in this press release constitute "forward-looking information" within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. These statements can be identified by the use of forward-looking terminology such as “expects” “believes”, “estimates”, "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", and "anticipate", and similar expressions as they relate to the Company, including: the proposed name change; the Company’s new direction and its expectations of the results of its new direction; the Company expecting to generate positive Adjusted EBITDA and net income for its third quarter ending September 30, 2023; the plan to debut a new line of next generation products and services in the coming weeks culminating with a new investor website and presentation for investor meetings targeted to launch November 16, 2023 in the U.S. and Canada; and the Company believing that the line-up of products and services it intends to roll out to customers in 2024 will drive revenue and profit growth.
All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions, including: the Company receiving the necessary approvals to change its name; the Company generating profits based on cost cutting activities during Q3 2023, and adjusted pricing already agreed to with certain contract manufacturing customers being reflected in the financial statements for the third quarter ending September 30, 2023. The Company cautions that the forward-looking statements contained herein are qualified by important factors that could cause actual results to differ materially from those reflected by such statements. Such factors include but are not limited to the general business and economic conditions in the regions in which the Company operates; the ability of the Company to execute on key priorities, including the successful completion of acquisitions, business retention, and strategic plans and to attract, develop and retain key executives; difficulty integrating newly acquired businesses; ongoing or new disruptions in the supply chain, the extent and scope of such supply chain disruptions, and the timing or extent of the resolution or improvement of such disruptions; the ability to implement business strategies and pursue business opportunities; disruptions in or attacks (including cyber-attacks) on the Company’s information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behavior to which the Company is exposed; the failure of third parties to comply with their obligations to the Company or its affiliates; the impact of new and changes to, or application of, current laws and regulations; granting of permits and licenses in a highly regulated business; the overall difficult litigation environment, including in the United States; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the availability of funds and resources to pursue operations; critical accounting estimates and changes to accounting standards, policies, and methods used by the Company; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; as well as those risk factors discussed or referred to in the Company’s disclosure documents filed with United States Securities and Exchange Commission and available at www.sec.gov, and with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.ca. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
