NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
HALIFAX, Nova Scotia, March 06, 2025 (GLOBE NEWSWIRE) --
Dear Nova Leap Health Corp. (“Nova Leap” or the “Company”) Shareholders:
All amounts are in United States dollars unless otherwise specified.
This annual letter to shareholders allows me some time to reflect on the past year as well as to provide some insight as to what the future may hold. At the time of this writing, we provide services across a large geographical area covering both rural and urban centers. I hold an enormous sense of gratitude towards our staff that provide compassionate home care on a daily basis and to the families that allow us into their homes as part of their life’s journey. Nova Leap’s story has always been, and remains, about family. Since our inception, we have had the privilege of serving thousands of families across two countries and of attracting a team committed to one of life’s most fulfilling duties – helping others. While Nova Leap has grown to be one of the larger home care companies operating in the United States and Canada, our mission, our values and our approach remains the same today as it did when we started – one family at a time.
“Say what you mean, and mean what you say”
A significant contributor and investor in Nova Leap used to utter that phrase quite frequently and it had me thinking about the lack of trust that exists within the microcap investor space. In the earlier days of Nova Leap, I would travel extensively across the U.S. and Canada trying to raise capital for our growth plans and to let investors know that we existed. One of the comments that I would hear frequently from investors on my second or third trip to see them was that I had done what I said I would do. I was surprised by the comment. It was very much a compliment because, in their own shared experiences, that was not normally the case. I was beginning to understand the uphill battle we faced as a start-up public company coming from an area not well known to investors.
A month ago, I was contacted by a family office that was doing due diligence on Nova Leap. For those that know me, I’m blunt and get to the point. I’m happy to share what I believe in and have little interest in trying to give someone what they want to hear. As much as investors are trying to figure out whether Nova Leap may be a fit for their portfolio, I’m trying to figure out whether the person on the other end of the line is someone we want as an investor. After a lengthy conversation with the normal Q&A, the investor on the other end of the call said “those were all the right answers but I’ve heard that before”. It struck me that, even after eight years of expansion, there is a lack of trust and skepticism that remains towards companies involved in the microcap space.
To that end, this letter serves as a historical record of a point in time. Potential future investors a decade from now will be able to review my annual letters to get a sense of my thinking of the time and to research the resulting outcomes. It is my hope that, over time, we will distinguish ourselves both as a company and as a leadership team that can be viewed positively within the broader capital markets.
Nova Leap continues to be in excellent financial condition and is actively seeking M&A and expansion opportunities.
From my perspective, the financial highlights from 2024 are as follows:
We entered the year in a very strong financial position as an operating free cash flow positive company with no long-term bank debt;
We exited the year in a very strong financial position as a profitable, operating free cash flow positive company with very manageable acquisition related long-term bank debt;
We achieved record annual consolidated Adjusted EBITDA of $1.562 million, the second consecutive year of record results, and a 5.75% increase over 2023 results. At the current exchange rate, 2024 Adjusted EBITDA was approximately CAD$2.2 million.
As a result of Nova Leap’s consistently strong financial performance, we entered into an amended credit facility that will provide up to an additional $7 million to support continued growth;
With the amended credit facility, strong balance sheet and operational cash flow, we re-engaged our acquisition program by announcing acquisitions to enter Florida along with further expansion across Massachusetts and Nova Scotia;
Nova Leap’s accounts receivable collection rate of 99.4% remained exceptional and consistent with the prior years range of 99.7% - 99.9% between 2020 and 2023; and
Insider ownership grew as it has annually from 36.2% in 2021 to 41.64% at the end of 2024.
In summary, 2024 was a year in which the leadership team at Nova Leap demonstrated its ability to re-engage its acquisition program while continuing to ensure the Company remains in excellent financial condition.
Allocation of capital plans utilizing Free Cash Flow
Management has three primary objectives pertaining to allocating capital for 2025 as follows:
Investing in current home care operations - Our objective is to increase revenues and hours of service at existing home care locations through the following initiatives:
Staggered hiring of additional office staff to complement existing office and regional growth plans;
Replicating the success of local office revenue service lines across the broader organization; and
Opening of new office locations to build upon the success of existing offices with one new office slated to be open in the Midwest towards the end of Q2;
Acquisitions – Nova Leap recently closed two acquisitions. Management will continue to evaluate additional opportunities to acquire established home care operations.
Debt repayment – Management intends to repay acquisition-related debt on schedule as it has in the past.
