Nobilis looking for more large in-network acquisitions in 2018: 5 key quotes from CEO Harry Fleming

Laura Dyrda - Print  |

Nobilis Health reported $299.7 million for 2017 revenue, a 4.9 percent increase over 2016. However, natural disasters and tax reform set the company back in the fourth quarter.


Total case volume for 2017 decreased 5.9 percent and the company reported net income was $3.8 million; it would have been $10 million without tax reform. Here are five key quotes from CEO Harry Fleming during the company's annual earnings call, as reported in Seeking Alpha:

1. On lost revenue: "We continue to feel the impact of Hurricane Harvey in our largest market, Houston, where we experienced $5 million to $8 million of lost revenue in this month of October; this coming on the heels of a $10 million to $12 million revenue loss in September when Houston was flooded. The quarter was also impacted by the company's decision to move away from the low-margin lab services business that produced $9.5 million of revenue in the fourth quarter of 2016."

2. Tax reform impact: "Net income was impacted by a $6.2 million write-down of our deferred tax asset in conjunction with the recent lowering of the federal tax rate. While the new federal corporate tax structure will benefit the company going forward, the lowering of the tax rate required us to write down our deferred tax asset to comply with the new tax plan."

3. 2017 key company goals met: "[Our] three goals were one, to streamline Nobilis' cost structures; two, to develop new sources of revenue; and three, to grow our in-network portfolio through acquisitions, operational efficiencies, service line expansions and improved internal reporting capabilities. We were successful in all three of these areas during the year."

4. Elite Surgical acquisition: "Nobilis has been looking for its first large-scale in-network acquisition. We found that in Elite. The Elite acquisition represents a major step for the company; it will provide significant annual in-network revenue to the Nobilis system. Even though this was our largest acquisition to date, I believe we will see other large in-network acquisitions in the future."

5. IT platform to drive case volume: "Through the Concertis Concierge 360 platform, we are seeing dramatic increase in referral-based business in 2018. We will pursue primary care physician engagement through a variety of avenues, but the most promising tool we have is the application of an internally developed IT platform designed to interface directly with referring and treating physicians."

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