Calgary, Alberta--(Newsfile Corp. - March 13, 2024) - Comprehensive Healthcare Systems Inc. (TSXV: CHS) (the "Company" or "CHS"), an industry leader in healthcare benefits administration software and services, is pleased to announce its Company update for Q1, 2024.
Comprehensive Healthcare Systems is pleased to provide an update on the business ending February 29th, 2024.
Key Highlights:
- Completed major operational restructuring resulting in significant cost savings.
- Achieved realignment of cost structure to current revenue base.
- The Company expects to report positive EBIDTA on an adjusted go-forward basis in Q1 2024," not including legacy payments and extraordinary items against an average cash loss of over USD 300K per month as reported in quarter ending September 30, 2023. This does not include legacy payables under previous management, and extraordinary items.
- Implemented price rationalization across the client base to account for increased inflation resulting in enhanced revenue.
- Well positioned to explore additional revenue opportunities from current client base.
- Strong pipeline of new business development opportunities.
- Internalized technology team and reduced reliance on third party vendors resulting in better quality control and improved performance for clients.
- Strengthened management team in areas of operations and technology.
- Improved Customer Experience: Customers' support response improved 300% Year over year.
- The Company continues to diligence strategic opportunities that could enhance shareholders' value.
Operational Improvements:
Having completed our organizational restructuring in Q3/Q4, FY23, it has allowed us to complete the rollout of our new development and support strategy. The Company implemented a strategy to secure and internalize its fulfillment team and discontinued using third party vendors. This has resulted in a significant saving for CHS. The company and our clients are also seeing the positive effects from those efforts. Client support response has improved by almost 300% Year Over Year, and our new client engagement methodology has improved the level of client satisfaction, utilizing a better communication process and hitting committed delivery dates.
As we implement new clients this year, we will be utilizing a new methodology which leverages preferred content from some of our strongest clients in the market. This will allow us to accelerate delivery, reduce cost, and drive speed to value for our clients. These strategies are all geared towards our goal of an industry leading client experience.
Financial Metrics Improvements:
As these changes have had a positive effect for our clients, they have also done the same for our financial health. Better delivery has driven down our costs of sale, driving increased EBITDA profitability. We are pleased to report that the Company has made significant improvements in aligning its cost structure to the current revenue base. The Company expects to report positive EBIDTA on an adjusted go-forward basis in Q1 2024," not including legacy payments and extraordinary items against an average cash loss of over USD 300K per month as reported in quarter ending September 30, 2023. This does not include legacy payables under previous management, and extraordinary items. This puts CHS on a path to being in better financial health and in a better position to invest more in our technology, cyber security protocols, and product enhancements this year.
While the financial performance has improved, like other small growth companies, CHS continues to look at additional capital options. The Company is in active discussions with potential strategic investors to secure more robust working capital cushion and to implement organic and acquisition-based growth strategies. This will allow the company to expand its sales and marketing efforts, along with product and technology advancements.
Growth: - Organic/Inorganic
We continue to see a high demand for our solutions in the market. Our unique ability to deliver a fully integrated solution, supporting all aspects of the benefits management continuum, including but not limited to: Member engagement, eligibility, claims adjudication, Annuities, cobra, and reporting/analytics, allows us to stand alone in a market that's highly fragmented. An integrated solution allows clients to leverage one vendor for their technology requirements, bringing them more capabilities which can streamline their processes and reduce costs of managing multiple vendors. With over 1200 Taft Hartley Unions, and 130,000 Third Party Administrators (TPA's) throughout the US, the Company has a large addressable market to cater to.
CHS is one of only a few providers that provides a fully integrated healthcare benefits administration software platform to the Taft Hartley Unions who self-administer their HealthCare plans, which gives the Company a great opportunity to secure future contracts. The Company is pleased to report that it has a strong pipeline of business development opportunities, and it will vigorously pursue these prospects during the year 2024.
The opportunity to grow through acquisition is also an initiative for 2024. In a highly fragmented market, having the ability to leverage more capabilities, technology and tech enabled services allows us to provide more value for our clients, and drive larger revenue growth in the market. The TPA market has been a very active space for acquisition opportunities.
With our software's ability to automate up to 80% of the claims adjudication process, it's a natural fit for us to bring TPA's into our Novus360 technology platform. The market growth for the TPA's is driven by the rise in adoption of TPA's in the health insurance industry, rise for need for operational efficiency and transparency in the health insurance business and technological advancements in TPA services. In a report titled "Insurance Third Party Administrator Market" published in September 2023, Allied Market Research projects this global market to reach $795 Billion by 2032. (https://www.alliedmarketresearch.com/insurance-third-party-administrator-market-A12542)
We currently have identified at least two targets for acquisition and are currently evaluating our acquisition financing options to advance such transactions.
Moving Forward:
Over the next few quarters, the company will continue to work to refine our new processes as we continue to increase our ability to drive high levels of satisfaction to our new and existing clients.
As the new leadership team has taken over, we will also continue to focus on managing the past payables and debt that had been incurred by previous leadership, and work to drive that down over the next couple years.
"We are excited to have transformed Comprehensive Healthcare into a cash flow positive business on a go forward basis, with a very focused go to market strategy and message," cited CHS CEO, Chris Cosgrove, "with a fully integrated platform, along with a host of tech enabled solutions to compliment the technology, it provides us a unique competitive market advantage which will allow us to drive significant growth."
About Comprehensive Healthcare Systems Inc.
Comprehensive Healthcare Systems Inc. is a corporation incorporated under the laws of the Province of Alberta and is the parent company of Comprehensive Healthcare Systems Inc. (Delaware). The Company is a vertically integrated software as a services (SaaS) company focused on digitizing healthcare with Healthcare Benefits Administration solutions, providing reliable and high-volume transaction capable systems. The Company's state-of-the-art Novus 360 Healthcare Welfare and Benefits Administration (HWBA) SaaS platform is used by clients for all aspects of healthcare benefits administration (including self-funded employers, providers, and labor unions), providing healthcare administrative software and technology-enabled services.
FORWARD-LOOKING INFORMATION:
The press release contains "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "budget," "believe," "project," "estimate," "expect," "scheduled," "forecast," "strategy," "future," "likely," "may," "to be," "could," "would," "should," "will" and similar references to future periods or the negative or comparable terminology, as well as terms usually used in the future and conditional. An example of a forward-looking statement in this news release is the intended use of the proceeds of the Private Placement. These forward-looking statements are based on assumptions as of the date they are provided. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
Additionally, there are known and unknown risk factors that could cause the Company's actual results and financial conditions to differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important risk factors that could cause actual results and financial conditions to differ materially from those indicated in the forward-looking statements, include among others: general economic, market and business conditions in Canada and globally; market volatility; unforeseen delays in timelines for any of the transactions or events described in this press release; and the risk of regulatory changes that may impact the business of the Company. All forward-looking information is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking statement or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events, or developments, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Comprehensive Healthcare Systems Inc.
For further information:
COMPREHENSIVE HEALTHCARE SYSTEMS INC.
Chris Cosgrove, Chief Executive Officer
E-mail: chris.cosgrove@comphealthcare.com
Phone: 1-732-362-2010
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