WELL Health Technologies Corp

TSX:WELL

Earnings Call Transcript 2021-Q1

[Operator]

Welcome to the WELL Health Technologies Corp. First Quarter Fiscal 2021 Financial Results Conference Call. My name is Sylvie and I will be your operator for today's call. [Operator Instructions] Please note that this call is being recorded.And I would like to turn the conference over to Pardeep Sangha, Vice President, Corporate Strategy and Investor Relations. Please go ahead, sir.

[Pardeep S. Sangha]

Thank you, operator, and welcome, everyone, to WELL Health's 2021 fiscal first quarter financial results conference call. Joining me on the call today are Hamed Shahbazi, Chairman and CEO; and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion from sedar.com.Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of these laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies.These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if it's required by law.Please note we use adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted shareholder EBITDA on this conference call, which are all non-GAAP measures. For more information on how we define these terms, please refer to the definition set out in today's press release and in our management discussion and analysis. The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS.And with that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO of WELL Health Technologies Corp.

[Hamed Shahbazi, Founder, Chairman & CEO]

Thank you, Pardeep, and good day, everyone. We hope that you're all keeping safe and healthy. We truly appreciate everyone for joining us today. On today's call, I'll first provide some general commentary on the quarter and give an update on each business unit, followed by our CFO, Eva Fong, who will provide a financial summary of our first quarter 2021 results. I will then come back and provide some commentary on our recently announced acquisition of CRH Medical. We will then conclude the call with a question-and-answer session.We begin the year with an exceptionally strong first quarter in which we delivered record quarterly revenue and adjusted gross profit. WELL achieved another quarter with record revenue for Q1 2021 with revenue increasing 150% on a year-over-year basis and gross profit increasing 155% on a year-over-year basis. With the company software and services revenue leading the way by increasing by 345%, again on a year-over-year basis.In addition, Q1 was the second quarter in a row where we reported positive adjusted EBITDA. You may remember that in the last quarter, we were -- consensus was essentially focused in and around breakeven and we had really over-performed at -- coming in at just under $1 million in EBITDA. Well, in fact, this quarter, we achieved record EBITDA of $1.1 million, over $1 million from our Canadian operations, but had elevated costs in our Circle Medical investment, which is our only investment in the U.S. until our CRH acquisition, which caused our overall EBITDA to fall to about CAD 0.5 million for the quarter.Our M&A program continues to successfully execute on wealth disciplined capital allocation strategy. Since the beginning of the year, we have completed or announced the following acquisitions: one, the 100% acquisition of CRH Medical Corporation, a company focused on providing products and services to gastroenterologists throughout the United States; two, 100% acquisition of Advocare, practice management and telehealth platform serving allied health practitioners in 5 countries; three, the 100% acquisition of Open Health Software Solutions, an OSCAR EMR service provider to medical clinics primarily in Ontario; four, the 100% acquisition of IntraHealth Systems, an enterprise class EMR provider operating in Canada, Australia and New Zealand; five, a seed investment in Twig Fertility Company, a new tech-enabled fertility clinic, which we'll be opening in Midtown Toronto later this year; six, the 100% acquisition of ExecHealth, a provider of primary care and executive health services in the Ottawa region; seven, the proposed 51% majority stake acquisition of Doctors Services Group, our first acquisition by our Doctor Care unit, which is our billing and back office business unit. And just yesterday, we announced CRH Medical completed its first acquisition as a WELL business unit with the 85% majority stake acquisition of New England Anesthesia Associates.I will now review our overall patient visit count in the quarter and I'll discuss the progress of our individual business units. I'm very pleased to report that our total multichannel patient visits in Q1 were 469,982. This includes all patient visits that were either delivered by a WELL practitioner or virtual care consultation carried out by a practitioner outside the walls of WELL by using a WELL-enabled platform.In-person visits at our clinics made up 30% of this total visits number and accounted for 142,944 visits. Telehealth patient visits made up to 70% of the total visits and accounted for 265,991 visits, including both telephone and virtual care visits. We don't know of any other provider in Canada that has anywhere close to the capacity of delivering both, physical in-person and telehealth patient visits for the same degree as WELL, given that we are now on a multimillion run rate for the year.To our knowledge, we are the market leader in multichannel patient visits in Canada today and we will look to build on that lead purposefully and ambitiously over the next year. And might I point out that that's really what makes WELL truly special, is the fact that we have both platform technologies and clinical care for hundreds of practitioners delivering clinical care in all aspects of primary and secondary care, often using a WELL platform.Now an update on our business units. On the last quarterly conference call, I made reference to how we aspire and model ourselves to be like Berkshire Hathaway. We regard ourselves, as I said, aspirationally as the Berkshire Hathaway of tech-enabled healthcare. Much like Berkshire Hathaway, our goal is to make investments in highly successful and resilient companies run by top-notch management teams that have a superior track record of delivering results. The main difference here is that Berkshire has a very wide mandate and ours is very much focused on the theme of tech-enabled healthcare. As we see this as a pivotal time where digitization and modernization are occurring in one of the largest sectors in the world.Furthermore, Berkshire Hathaway companies and leaders are invited to stay, be empowered and continue their journey while benefiting from being in the group. We have similarly structured the company into several business units, each with its own business unit leader. WELL is employing a decentralized operating strategy where most of the operating decisions are managed by the leaders of the different business units. This allows the company to grow in scale without added bureaucracy and leaner shared services.Notwithstanding this approach, capital allocation decisions are centralized and thoughtfully planned to ensure that the company is always making the most compelling and accretive investment decisions. It should be noted that WELL is increasingly seeking investments in situations where its business unit leaders assist with WELL's capital allocation goals. Recent case studies illustrating this objective include the acquisitions of IntraHealth, New England Anesthesia and the proposed acquisitions of Doctors Services Group. In each of these cases, the business unit leaders are very much involved in the M&A process or entirely carrying out the M&A's process themselves as in the case of CRH Medical.While WELLs business units span across different areas in tech-enabled healthcare, each of these business units and operations essentially support one theme and that is practitioner enablement and support, often with the latest and greatest technology.And now I'll speak to each of the business units, starting with our clinical business. WELL's public insured revenue increased by 13% compared to the same quarter last year as we are witnessing strong year-over-year organic growth assisted with the addition of our telehealth services by physicians in our wholly owned clinics. Our patient services revenue generated by our clinical business unit includes both in-clinic and telehealth-related revenue.WELL's own physicians have embraced the omnichannel, multichannel or bricks and clicks of experience, with many doctors conducting patient visits in the clinic and also online. We believe that COVID-19 has accelerated the adoption of telehealth and digital services. However, we continue to believe the future will be reflective of a hybrid delivery approach. Doctors and patients still need to meet and see patients at times for proper examination purposes. Given these trends, we believe WELL is very well positioned to benefit from the permanent trend of delivering service via a hybrid bricks and clicks approach.Next we have Allied Health. WELL's Allied Health business unit is focused on operating, investing and unlocking opportunities associated with allied health offerings such as physiotherapy, occupational therapy, chiropractic, dietary, mental health counseling and sleep-related services. Both SleepWorks and Easy Allied are mobile services that continue to outperform their original expectations and are experiencing the benefits from working very closely with our primary care clinics in D.C. to offer a more integrated approach to healthcare.WELL's noninsured patient services revenue or our Allied Health revenue increased 132% compared to Q1 of last year and 61% sequentially from last quarter in Q4, due to a full quarter of revenue contribution from Easy Allied acquisition and strong performance from our SleepWorks business. It should be noted that both Easy Allied and SleepWorks has very strong year-over-year growth, and that's organic growth.Next, we have WELL's Digital Health Apps business unit. WELL Digital Health Apps is our business unit solely focused on developing, investing in, and unlocking opportunities associated with digital health applications or apps. This business unit is primarily focused on establishing partnerships into our investments with leading digital health apps that allow WELL to unlock the value of its other assets, such as its EMR platforms.As we talked about before, this is the business unit to date that has housed most of our platform technologies, especially as it relates to digital patient engagement. By extension, it should be noted that we don't have a separate telehealth business unit, but telehealth is actually a part of the apps business unit. Telehealth is actually used and deployed across the entire organization. So it lives not just in this business unit, but integrated throughout. We have a number of telehealth platforms in Canada, including tiahealth.com, Virtual Clinic Plus, Advocare and IntraHealth.The combination of all these telehealth platforms positions WELL as one of the top providers of telehealth services in Canada. And of course, we also have Circle Medical, which I'll speak to in a bit, in the United States. Tia Health is our virtual health marketplace where medical practitioners are online at all hours of the day facilitating a virtual walk-in experience for the millions of patients across Canada who do not have a regular family doctor.The marketplace-like approach not only provides patients with comfort in selecting a healthcare practitioner, but it also encourages patients to often come back to the same practitioner, creating attachments and furthering a more longitudinal care model. Once again, in Q1, over 50% of the visitors to our Tia Health platform were repeat visitors. We view this as an excellent data point and very good news because it means our users love the experience and are coming back again and again, improving our lifetime value, and we are essentially turning unattached patients into attached patients.Turning our attention to telehealth in the United States and Circle Medical, who experienced -- who continues to experience healthy telehealth patient volume increases despite the return to more of an in-clinic model given the strong recovery in the United States. Circle Medical is also expanding its physical footprint and will be opening its third wholly-owned clinic in Austin, Texas in Q2 2021. Circle's partnership with Kind Health Group of San Diego, California is still in its early stages and is promising in terms of its growth as well.As part of this new pilot program, Circle Medical is allowing embedded primary care practices access to its technology platform to deliver a high-quality experience while streamlining their administrative overhead. This is without Circle having to buy the clinical business, merely partnering and leveraging Circle Medical's platform. Circle Medical is making great progress and is reflecting roughly 150% organic growth in visits on a year-over-year basis.It should also be noted that despite having a clinical business, more than 80% of the company's revenue come from pure virtual care services and is expected to continue to have its telehealth services outpace its brick-and-mortar revenue growth, which will also continue to organically grow. In addition to the strong growth in telehealth, the WELL Digital Apps business unit has experienced an incredible amount of interest and activity with the apps.health marketplace. Currently, we have now 31 digital health apps on the marketplace from 18 different publishers.In fact, we've had a couple of very key announcements in the quarter relating to apps. One was the fact that we adopted the FHIR standard, that's F-H-I-R, which, of course, stands for Fast Healthcare Interoperability Resources. We actually did a lot of development work around this and it was all driven internally and organically by our various different teams on a multidisciplinary, multi-business unit basis. This is strong evidence that WELL is an innovative company that does more than drive corporate development successes.We launched a new FHIR API or application programming interface. This is a big deal because it allows digital health app developers to build integrations much more easily to our EMR platforms and makes it easier for clinicians to launch digital health app that interact with their EMR data. With the adoption of FHIR, WELL will ensure strong programmatic connectivity between its global family of EMR products and its apps.health ecosystem, extending app availability to its full EMR footprint globally.The idea here is that FHIR interoperability will allow third-party app developers to publish apps to WELL's apps.health ecosystem and immediately communicate with WELL's global fleet, which now includes IntraHealth, providing access to thousands of medical practitioners and clinicians in multiple countries.Adopting FHIR was also a critical path item for us to enable and be able to work with Apple, on the Apple Health Records project that we just announced last week. I'd like to spend some time now talking about this press release and the success that -- and achievements surrounding enabling Apple Health Records on iPhone, which is now rolling out for clinicians and patients across WELL's primary care clinics, EMR network, Tia Health Virtual Care Services and apps.health marketplace.Apple Health Records on iPhone allow patients to securely view and store their own available medical records from multiple providers right in the Apple Health app on their iPhone with their privacy and data protected at all times. This is an app that should be essentially factory installed on every iPhone. The Health Records feature creates a direct encrypted connection between a patient's iPhone and one or more healthcare organizations, allowing users to access a centralized view of their allergies, conditions, immunizations, lab results, medications, procedures and vitals, just to name a new -- a number of these items across multiple providers and to be notified when their data is updated.Any OSCAR Pro enabled clinic of which now, as you know, there are more than 2,200, can now opt-in to offer health records on iPhone. We are very proud of the fact that WELL's Tia Health will be the first telehealth service in Canada to support health records on iPhone and WELL's OSCAR Pro is the first electronic medical records provider to support health records on iPhone.We've recently rolled out a number of new apps such as Apple Health, but we've also rolled out other apps. We've rolled out an app for Advocare. Advocare is the industry-leading practice management and telehealth solution that is powering a lot of allied health experiences such as major clients such as Aurora Cannabis and Lifemark.We've also now added an app on the marketplace for Pillway. You'll remember that in Q4 last year we made an investment in Pillway, which is an industry-leading e-prescription platform. We now own more than 20% of the company and sit on the Board. Pillway is also fully integrated with our telehealth platform and now processing prescriptions every day for our telehealth customers.We've also launched WELL's own PMR or personal medical record system called YourCare, which is a major initiative, that essentially allows patients to interact with their data as it relates to our telehealth business. This is also fully Apple Health Records compatible.Now for the WELL EMR Group. Q1 was a monumental quarter for the WELL EMR Group as the acquisition of IntraHealth has transformed the business unit to a multiproduct offering across the globe. IntraHealth is an enterprise-class EMR provider with deep IP portfolio and a highly customizable platform that supports a myriad of healthcare settings including health authorities, hospitals, public health outpatient centers, community health, home care, ambulatory care and diverse healthcare professionals.IntraHealth supports approximately 15,000 clinicians, providing care for millions of patients in its combined databases across its global network of Canada, Australia and New Zealand. For example, IntraHealth powers large customers such as the government of Western Australia, Victoria State government again in Australia, New Zealand's Defense Force, the Auckland District Health Board as well as several other large health authorities as well within the Australia-Asia region.As discussed earlier, WELL also anticipates integrating IntraHealth to apps.health marketplace in the coming months, paving the way for third-party app developers to have their digital health applications available on both OSCAR Pro and IntraHealth platforms.And now for our cybersecurity business unit, Cycura. Our cybersecurity business had a very strong quarter with revenues exceeding 495% compared to Q4. You'll recall in the last quarterly conference call, we explained that Q4 revenue in the cybersecurity business unit was negatively impacted by shipment of networking and security products at the end of December, which got delayed into January. While this delayed shipment helped improve our Q1 results, our cybersecurity team still had a fantastic quarter, closing and delivering on a multitude of deals with large enterprise customers. As a result, our first quarter ends up -- revenue ended up being exceptionally strong.Keep in mind that even with this delay in shipment in Q4, we also met and exceeded consensus in Q4. Revenues for this business unit can often be lumpy as a result of the timing of shipments and project-related contracts. Notwithstanding, we remain very excited about the prospects for our security business as this is becoming a critical area of focus.Cycura and Source 44 is already supporting all of our business units across the organization, including clinics, Allied Health, EMR, Digital Apps, billing and soon we'll be providing cybersecurity solutions to CRH's customers.Next WELL's billing and back office business unit. DoctorCare, as a foundational acquisition for WELL, serves a new business unit focused on the North American medical billing and back office marketplace. DoctorCare already supports WELL's OSCAR Pro EMR and is featured on WELL's app.health marketplace, but it also supports all other major EMRs in the country. DoctorCare recently announced its first acquisition, which is the proposed 51% majority stake acquisition of Doctors Services Group.We view DoctorCare as another one of WELL's key consolidation points for additional billing-related acquisitions and growth initiatives. There are a number of small billing outfits across the country that support doctors with their billings. We've identified this as a compelling and highly accretive consolidation opportunity that will likely yield significant additional sticky recurring revenue and profitability.That concludes my update of the individual business units. As you can see, WELL has substantially diversified its business into several growth-oriented business units with heavy emphasis on driving collaboration and in-sourcing from the group of companies and capabilities, driving real network effects. Each business unit is experiencing organic growth and is a leverage point for additional related acquisitions.I'll go into additional details on the proposed CRH acquisition later in the call today. But first, I'd like to turn the call over to our CFO, Eva Fong, who will review the financials for the fourth quarter. Eva?

[Eva Fong, Chief Financial Officer]

Thank you, Hamed. I'm pleased to report that we had a very strong Q1 results for the 3 months ended March 31, 2021, and they are as follows. WELL achieved record quarterly revenue of $25.6 million during Q1 2021 compared to revenue of $10.2 million generated during Q1 2020, an increase of 150%, driven by acquisitions during the past year and the addition of telehealth-related revenue.WELL achieved software and services revenues of $7.6 million in Q1 2021, representing 345% year-over-year growth as compared to $1.7 million in Q1 of last year. During Q1 of 2021, WELL achieved record adjusted gross profit of $10 million, representing 155% year-over-year growth as compared to adjusted gross profit of $3.9 million in the prior year Q1 2020.WELL achieved adjusted gross margin percentage of 39.3% during Q1 2021 compared to adjusted gross margin percentage of 38.5% in Q1 2020. Net loss was $7.1 million or $0.04 per share for the 3 months ended March 31, 2021, compared to a net loss of $2 million or $0.02 per share for the 3 months ended March 31, 2020.Adjusted EBITDA profit was $0.5 million for Q1 2021 compared to adjusted EBITDA loss of $0.2 million for Q1 2020. Adjusted EBITDA was positively impacted by WELL's Canadian operations, which achieved adjusted EBITDA of $1.1 million. As Hamed mentioned earlier, this is the second quarter in a row that we have reported positive adjusted EBITDA.WELL ended Q1 with a very strong balance sheet. The company had cash and cash equivalents of $83.3 million as at March 31, 2021, compared to $86.9 million as at December 31, 2020. Subsequent to the end of the quarter, WELL completed its acquisition of CLH and announced a USD 300 million revolving credit facility with JPMorgan and a syndicate of lenders. CLH has since completed an acquisition that was announced yesterday, which is fully funded by this credit facility. WELL's current cash balance is over $65 million and the company has access to additional facilities under the JPMorgan credit facility to fund future expansion.As of the end of the first quarter on March 31, 2021, the company had 174,531,714 fully diluted securities issued and outstanding. More recently, as of yesterday, May 10, 2021, the company had 207,096,661 fully diluted securities issued and outstanding, including the recent 30.9 million shares of subscription receipt, which have all been converted to WELL shares at the close of the CLH acquisition.That is my financial update and I turn the call back over to Hamed.

[Hamed Shahbazi, Founder, Chairman & CEO]

Thank you, Eva. I'll now provide some commentary on our recent acquisition of CRH Medical that was completed a couple of weeks ago. I think I just mistakenly mentioned that it was a proposed acquisition. It was proposed for so long it kind of got in my head. We're very happy to have CRH complete. In fact, during Q1, we mentioned -- during our Q1 conference call, I think we mentioned that this acquisition puts us on track for annualized revenue run rate approaching $300 million. That is -- continues to be the case and we're very pleased about that.CRH accelerates our revenue growth and significantly boost our free cash flow, which will obviously be used to make additional cash flow-generating acquisitions. This is when we're cooking with fire. Our acquisition of CRH Medical was partially funded by an upsized subscription receipt equity offering of $302.5 million at $9.80 Canadian per share, without any warrants or sweeteners. This was done at a premium to market price. The equity offering was led by Hong Kong businessman, an investor, Mr. Li Ka-shing and his partner who invested $100 million and were joined by several other large multibillion dollar institutions.Please note that WELL's management team inboard also invested alongside our institutional investors. That includes every Board Member and almost every member of our management team, including myself, who acquired $530,000 worth of the subscription receipts at $9.80.CRH Medical is a cornerstone transaction for WELL for the following reasons. One, again, it boosts our free cash flow, which would be used to make additional cash flow generating acquisitions. In fact, we -- in our press release today, we noted that the asset is on track to hit plan. This is the plan that we extensively diligenced during our due diligence period, which was extensive, and we hired a high-powered team of external advisers and paid hundreds of thousands of dollars to do a very deep review. And the plan that we settled on, they are on track for. And that plan calls for revenue exceeding USD 150 million and free cash flow of -- generating free cash flow of over USD 40 million, and that's pretty exciting for us.And with this acquisition, WELL gains deep access to U.S. healthcare with a rapidly growing asset. WELL aims to unlock the value of this channel of over 3,000 GI doctors with new revenue and business opportunities. And the strategic fit here is pretty substantial because what we're talking about is CRH does not own clinics. It has a trusted adviser relationship with a substantial number of practitioners. And that's what WELL has done extensively in the past, which is tech-enabled and digitize practitioners.And so these 3,000-plus GI doctors are in all 48 of the lower United States. And CRH currently provides 2 services to this GI marketplace. And that includes anesthesia services and hemorrhoid banding services and training. And it's a product portfolio that we'd like to expand from 2 to 5 products. And so we plan to lead with cybersecurity and follow with offerings such as digital patient engagement and we are deeply reviewing the opportunity to add chronic disease care management.I'm also pleased to report that CRH Medical just completed its first acquisition, which we announced yesterday. The plan is to continue to make acquisitions using that credit line that Eva just spoke to. And again, that $40 million in free cash flow and $150 million in revenues includes a plan that's, again, inclusive of M&A that's planned for the year. And we think that it's very possible that that plan could be exceeded.With the CRH Medical acquisition, WELL's financial and operating profile, it's clear that WELL becomes not only a leader in the healthcare market in Canada here, but also a strong emerging player in the United States. This past year has been a tremendous year for WELL and we're looking forward to continued success as we expand in the U.S. and build on the successes of CRH Medical and their team.In closing, I want to review WELL's goals for 2021. One, is to drive organic growth across all our business units and, again, using the opportunity to cross-fertilize and leverage new opportunities through the network effects brought about by our growing network. Two, continue to follow a very disciplined acquisition and capital allocation strategy. Three, increase EBITDA throughout the year. Four, increase operating cash flows through acquisitions, optimizing costs and digitizing clinical assets. And 5, increasing our market share of digital health and the virtual care-related products and programs. Our outlook remains very positive across all our business units.We continue to have approximately 9 executed LOIs signed and pending for execution. The value of these LOIs when combined with our existing deals propels us to WELL over $400 million in revenue and over $100 million in EBITDA. Given the strong scale WELL continues to seriously evaluate the prospects and feasibility of a U.S. IPO in the next few months. WELL's already conferring with tier 1 bankers and with some of the most recognized global firms in the world, and they're very excited about WELL's progress and interest in a senior listing in the U.S. We've also retained counsel with our partners at Fenwick & West who we work with on other U.S. acquisitions.And that is my financial update. Let's talk about Q&A now.

[Operator]

[Operator Instructions] And your first question will be from Doug Taylor at Canaccord.

[Douglas Taylor, Director]

You got into it right at the end there. I just want to clarify, the LOIs amounting to $400 million in revenue and $100 million in EBITDA. Previously, you talked about achieving a 50-50 somewhat split between clinical services and digital. Is that still the objective exiting this year to achieve that kind of mix of revenue?

[Hamed Shahbazi, Founder, Chairman & CEO]

Thanks, Doug, for the question. We have talked about kind of the snapshot of where digital and clinical sits, but we've really been intentional about not providing guidance on where that weighting would be. And this is really important for us to remain perfectly opportunistic to make the best capital allocation decisions. We think that that weighting will shift over time and we think that that's only natural given that once in a while, we'll find great digital deals and once in a while we find great clinical deals.But to your point, we are conscious of always maintaining a strong weighting in digital. And so we do have a good mix between all the different business units. So we have strong recurring revenues and platform-driven revenues from a digital perspective that are related with EMR, with billing and back office, and of course, clinical opportunities as well.

[Operator]

Next will be Christian Sgro at Eight Capital.

[Christian Sgro, Research Analyst]

I'll just ask 2 today, both on CRH. Now the first is on WELL's ability to digitize CRH's offering in the U.S. You mentioned that cybersecurity might be the best first in or natural weighted to get into some of the clinics in the U.S., but could you talk a little bit about the go-to-market strategy and other success you're seeing selling products in?

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. No. So thanks, Christian. We do think cybersecurity is a really good model because remember that we don't own clinics, CRH does not own clinics. It provides anesthesia services to 73 ambulatory surgical centers and the banding services to many more practitioners. And so those practitioners already have a lot of their own workflows. And so one of the things that's really exciting about where we sit in healthcare overall is that any practitioner that you touch, any practitioner that's out there, it doesn't matter which field, is going to be experiencing a greater level of digitization. It's just something that's absolutely unavoidable.And practitioners are part of the responsible parties and of course, clinic administrators to keep data safe. So this is something that is unquestionable in terms of trend. What's also great is that it doesn't necessarily require any kind of integration with workflow to protect data. So we're talking about things such as edge defenses of clinics, ensuring that you have commercial grade, hardware and software and protections for that data.And so that's one of the big reasons why we think cybersecurity is a great way to kind of move into that channel because you don't need to change the workflows, you don't need to go through change -- very difficult change management processes that often become difficult with healthcare practitioners. And so our -- we're putting this -- I mean, obviously, we just completed the acquisition. We are very close to pulling together the portfolio of cybersecurity products. And our view is like any company, CRH has some very strong advocates and clinics and practitioners that really love their products and services. So the idea is to go to them first and establish our first wins and really celebrate those wins and demonstrate how they've been transformational helping those businesses.The other thing to think about here is there's an education element. A lot of practitioners are quickly realizing that there are more and more malware breaches and issues going on within the health care sector. Some practitioners are not aware of this, some practitioners are, but we are looking to really educate the market. And again, our close relationship and trusted adviser relationship with these practitioners will help us get there. Hope that's helpful for you.We're also looking at potentially adding new heads to allow us to -- as we sort of nail down the value proposition to be able to scale it more effectively. So we have no issue adding more resources and sales horsepower as that becomes a reality.

[Christian Sgro, Research Analyst]

Awesome. That's all helpful context. I'll just ask one more on CRH and more what you were seeing leading into the closing of the transaction. You had mentioned that the business was outperforming your plan year-to-date and into 2021. But if there's any other color that you want to provide, maybe if that's on the Oregon side or in the core business, anything else you'd like to talk about on CRH to help us understand where the strength is?

[Hamed Shahbazi, Founder, Chairman & CEO]

Sure. Yes, we are sort of absolutely in line on our plan. Our plan was something that we diligenced extensively, again, ourselves and including third-party consultants. And they're just effectively right on plan. And the plan was way ahead of anything that analysts had expected. As you may remember, Q4, while the company was still a listed company, they were also way ahead of our -- their Q4 consensus. So we're just extremely pleased at how things are going.Obviously, we didn't own the company in Q1, so we didn't announce their earnings. But suffice it to say that their growth was fantastic. They had better than at least 32% or close to 33% year-over-year growth in their Q1. Now some of that was COVID affected in the previous year, but you'll remember COVID was really just started to eat away at performance right in the last few days of March.So definitely still very much a strong demonstrable kind of data point. Keep in mind also that Q4, there was 21% year-over-year growth. So again, CRH has demonstrated that they are a growth business. And we not only expect that growth to occur inorganically, as you've seen, they're very good at that, but organically as well. And so that's a thing to note is that there has been organic growth in caseloads occurring from the different acquisitions. And in the past, some of the concerns of the company were that its case rates were declining. But again, our diligence showed that that had now stabilized and could even curl back up. So that was why, in our view, this was really a fantastic time to get involved in the story. Hopefully, that's helpful color.

[Operator]

Next question will be from David Kwan at TD Securities.

[David Kwan, Analyst]

I was wondering just on the public insured revenue, that was down a bit quarter-over-quarter. I don't know if that's related to kind of not having a typical flu season due to cold weather or what not or whether it was maybe related to the maybe shifting in appointments for uninsured clinic revenue, which obviously had a nice bump quarter-over-quarter. But I was curious to get your thoughts on that.

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. David, I think it was very minorly down, like maybe 1% or 2%. So we didn't think that there was much to that. I think a lot of that just depends on which doctors are taking time off or not. So I think that's probably what we said. We saw obviously some very strong -- I mean, the clinical divisions being really, really strong for us. It's been seeing great organic growth on the top line, but also really strong profitability enhancement.So it's now one of our most profitable divisions, which was sort of the whole point of WELL at the beginning, if you may remember, is the idea that we could buy clinics that sort of had mediocre to average profitability and significantly enhance that profitability. And so we're now into the double digits in EBITDA margin with our clinical population. And again, I think on a quarter-over-quarter basis, it was really no real notable element in terms of any shifting of visits. I think it was purely related with just circumstantial matters in terms of practitioners.

[David Kwan, Analyst]

And just one follow-up question. Just on the gross margin side then I guess, that was down quarter-over-quarter. I assume at least part of that was due to the equipment sale that was delayed from Q4 and maybe a heavier quarter for equipment sales in the cybersecurity business. Is there anything else going on there?

[Hamed Shahbazi, Founder, Chairman & CEO]

No, I think you nailed it. That's it.

[David Kwan, Analyst]

So you expect the gross margin other things being equal to bounce back if we get back to a normal revenue mix?

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. I do expect it. I do think our -- sort of where it seems that we're going to be trending is roughly in the 40% or just above the 40% range. I think that's probably going to -- and I think that's going to be very healthy for us. And that's -- when we look at businesses and companies, we try to buy products and services that are not -- that don't have kind of -- any kind of erosion. And CRH obviously has strong gross margins. So I think on a consolidated basis, we should be in really good shape there as well to maintain that 40% rate.

[Operator]

And next question will be from Kris Thompson at PI Financial.

[Kristopher Darcy Thompson, Technology Analyst]

Hamed, just got a follow-up on the line of questioning in the clinical business. I think British Columbia went to a more strict lockdown again at the end of March. Is that having a negative impact on your first incentive visit so far in the quarter? And what kind of color can you give us on that for modeling purposes?

[Hamed Shahbazi, Founder, Chairman & CEO]

We really haven't seen a big impact and I think it's testament to just how well managed those clinics are and how I think strong our hybrid approach is and the ability for practitioners to now be quite comfortable and artful in the way that they support patients between channels, providing often a very strong omnichannel experience and a multichannel experience. Of course, the difference between omni and multi is omni has a single customer view across those channels whereas multi, you may have different practitioners and so forth. And yes, so no, I think we feel really good about that.

[Kristopher Darcy Thompson, Technology Analyst]

Okay. Great. And just on the cash. In the prepared remarks, you mentioned you added $65 million today. Can you just remind us how much debt is drawn under the $175 million revolver? And also when you want to draw down the $125 million accordion, do you need to have any preconditions, any covenants before that? Or are you just able to draw that whenever you want that at your free will.

[Hamed Shahbazi, Founder, Chairman & CEO]

I'll just ask Eva because I think she's got those numbers. I'm really close to her there to answer that question.

[Eva Fong, Chief Financial Officer]

Yes. So yes, with the acquisition announced yesterday by CRH, the total drawn as of now is about $145 million. So we still have about almost $30 million left on the main credit facility in addition to the accordion.

[Hamed Shahbazi, Founder, Chairman & CEO]

And yes, Kris, the accordion involves, I think, conversation and an ability to kind of unlock that. I don't think it's a very extensive process to unlock that. So we do have that accessible to us.

[Operator]

Next question will be from Scott Fletcher at CIBC.

[Scott Fletcher, Research Analyst]

Sort of following up on that, the question of the CRH facility. Does the expanded facility imply an acceleration in M&A at CRH? Is that something we should expect? Or is it sort of just there in case?

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. Listen, we've said before and we'll say it again, we really think that that's possible. For now, at minimum, we want to carry out CRH's normal load of M&A, which has been demonstrated to add about $10 million in shareholder EBITDA per year. So very, very strong in terms of the ability that they've had and just the remarkable consistency in which they've purchased. So I think that's something that we look forward to this year. And depending on what opportunities we see, it could be enhanced. But yes, I think at minimum, we'd like to maintain their current pace.

[Scott Fletcher, Research Analyst]

Okay. And if it was to accelerate, is the infrastructure in place there? Or would there be need to be maybe some more heads on the corp. dev side?

[Hamed Shahbazi, Founder, Chairman & CEO]

It's a good question. I do think it's possible to see an acceleration without adding corp. dev resources to my knowledge. But I also think that if you want to materially catalyze that and grow that, you would probably need to add heads. And the team has been expanded recently just in the past few months. So they've demonstrated the ability to acquire and train and get people up to speed and really be able to activate them. So it's a very -- it's one of the things that really impressed us about the company, frankly, is just how extensible and professional the corp. dev process is. Of course, we're capital allocator. So we knew what to look for. We were very focused on what that process was and had multiple calls and due diligence touch points there.And again, we think we didn't just buy a lot of cash flow, we bought a cash flow machine that gives us exposure to thousands of practitioners. That's why we're so darn comfortable about this acquisition and how we're absolutely willing to go to the mat with anyone about it. And you'll see our performance over the next year.

[Operator]

Next question will be from Rob Goff at Echelon.

[Robert Goff, MD & Head of Research]

The question would be about Circle Medical. Could you talk through your pilot and how you might see an expansion along those lines? Is it by clinic by clinic or is it by 10s or 15s? How do you see that unfolding?

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. It's a really good question, Rob. I think that this is sort of a new initiative. And the company, as you know, has a very Silicon Valley DNA associated with it. And so it came out of Y Combinator. It's kind of refers to itself as a full stack primary care business. So they've built incredible amounts of software like they basically built almost an entire EMR in addition to a telehealth business.And so I think that just their strength in technology will favor telehealth expansion. This pilot, I think, again, with the Silicon Valley roots, is very much -- let's see how it goes, let's see what the strengths or weaknesses are. I find Silicon Valley companies take that, nail it, then scale it approach. So let's see if this becomes a really strong growth avenue for the business. I mean the business has demonstrated that it can grow substantially without driving additional clinical footprint. But I think the founders and the operators really believe it's important to continue to seed markets because it allows them to provide a different value proposition than the other virtual care providers.And this is something that we do up here as well. Like what really sets WELL apart is that we have both the physical clinical and the telehealth, and it's so hard to match us and strengthen that in that way. I'll also add that we've had conversations with Circle Medical about leveraging WELL's balance sheet to help with that. Because, of course, WELL is interested in growing its clinical business south of the border. And so expect to see collaboration on that level, so either cash deployed through Circle Medical and enabling and acquiring clinics or through WELL partnering with Circle. So we've just a lot of options in how we grow that business.

[Robert Goff, MD & Head of Research]

And as a follow-up, with your reference to nail it and scale it, would you say that the hammer is in your hand? Or what sort of time line might we look for?

[Hamed Shahbazi, Founder, Chairman & CEO]

That's a good question. I think it's really going to be nothing that happens over days, weeks. I think it's more a month to sort of see and I only say that because the growth has been so strong on the virtual side. The company recently dramatically beefed up its digital marketing expertise. And that's been really, really helpful. They've -- it's really impressive what they did. I mean think about the big Q4 contribution we got from them and they weren't even in part of Q4. And of course, a lot of that was COVID-driven. But then they have not seen really a decline. They've maintained that volume even having COVID completely drop off because of the U.S. progress. And so why is that? How are they able to do that? I mean, I think that's one of the sort of hidden gem stories that people are not aware about with Circle Medical.Circle Medical benefited greatly from COVID, but has pivoted and able -- and has been able to maintain its strong volumes by leveraging other conditions and going after those. So we understand that management has plans to grow this year extensively and they're very focused on a growth path that involves their -- really activating their strength of digital marketing and the product superiority that they have given their NPS scores. I think the clinical side of things is more sort of gravy, if you will, like, hey, let's see if we can grow without necessarily having to buy clinics and have these clinics take on our technology infrastructure.

[Operator]

The next question will be from David Newman at Desjardins.

[David Francis Newman, Analyst]

Just want to ask a question on mental health. Obviously, as we get further and further into COVID and that's become -- been almost a crisis here and stigma has been somewhat removed, I think, on -- coming through the pandemic, it's an area that obviously you haven't focused on as much. But is there -- do you have plans to put either through LOIs or other areas where you want to kind of step up your game on the mental health side?

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. Thanks for bringing that up, David, I fully agree with you. I've been talking to some folks who are in public health and what they're telling me is that it's a public health tsunami concern. There is a lot going on in that area. We are supporting mental health practitioners primarily through our telehealth businesses. Actually, all of them, Advocare has mental health practices that are supported through their practice management capabilities and telehealth capabilities. Insig has mental health practitioners on their platform. And of course, Circle as well. It's one of the areas where they've been really making a lot of progress in terms of different mental health-related elements.And so we are in this area. We don't talk about it much, but we are definitely mobilizing against it. Your comment about the LOI is -- rings true. We do have intent to beef up our area -- the area here and we are very excited about it. So we -- keep in mind too that it's something that we see extensively in our clinical business. So we are, today, a substantial provider of mental health services, but we feel that this is an area that we can really grow and we -- and it's an area where we have tremendous tools. So yes, yes, it's -- stay tuned.

[David Francis Newman, Analyst]

Excellent. And then my second question would be just ahead of the U.S. listing, is there things that you want to cover off or strategically, operationally or financially report the milestones you're looking at before considering that U.S. listing? Is there something you need to see before you go down that path?

[Hamed Shahbazi, Founder, Chairman & CEO]

Yes. I mean, listen, I think we now have the quantum to do it, but I think that there are a couple of these LOIs that we think are really important to get across that if we can get to that $400 million-plus quantum and $100 million-plus EBITDA, I mean there will be very few assets in tech-enabled health care with that -- with those -- with that kind of profitability structure. So that's really, really exciting because it's one thing to be in the U.S. It's another thing to be in the U.S. as a distinct and unique asset that's driving profitability better than most other assets.The other thing that I'll mention is something that I know you pay a lot of attention to is we're really paying attention to our weighting. This is a question that came up earlier as well. We think that it's really important that heading into that IPO, we also continue to demonstrate solid weighting towards digital. So it's something that's on our minds and definitely driving some of our deal-making in the next little while.

[Operator]

We have time for one more question from Justin Keywood at Stifel.

[Justin Keywood, Director of Equity Research]

Appreciate it. I just had a follow-up question on organic growth and cross-sell opportunities. I know there's a few rates mentioned for the different business units. But one, if you're able to provide the overall organic growth rate for Q1? And also if you're able to characterize to that growth, if it was the result of cross-selling products amongst the units? Or if it was the result of independent business units just doing that much better?

[Hamed Shahbazi, Founder, Chairman & CEO]

We're really pleased at our organic growth. We didn't provide a blended organic growth figure, but I can tell you that if we're talking year-over-year type growth, I mean, if you just look at our clinical division, we didn't acquire much in the clinical division. So a lot of that growth came organically.We continue to see pretty much strong growth throughout. I think it's tough to characterize this specifically as -- again, a specific number right now because we don't disclose that. But I will tell you that most of the assets that we have are probably -- we're seeing better than double digit. Like Allied Health is seeing very strong double-digit growth, obviously the year-over-year growth in the telehealth assets -- of course, we didn't own a lot of them on a year-over-year basis, but to characterize the trajectory of those businesses, they're seeing very strong organic growth. But it is an area where we're looking to provide more disclosure, but at this point in time, we just haven't published that number.

[Operator]

Thank you. And at this time, I would like to turn the call back to Mr. Shahbazi.

[Hamed Shahbazi, Founder, Chairman & CEO]

Well, thanks very much. In closing, I just want to thank you all for joining us. And of course, thank our shareholders and investors for their continued support. The capital markets have been very supportive of our vision and enabled us with the funding we need to pursue our goals. This means a lot to us. We take that very seriously. We work very hard and we diligence assets extensively.Your heart might be warmed to know that we reject a lot of deals that don't meet our stringent requirements, particularly in areas of cybersecurity. And so the rigor continues. And might I say as the company has grown, our inbound has exploded. There are many people -- WELL is seen as a blue chip company, as an aspirational buyer of assets in this space. And as a result of that, we have dramatically tightened up our diligence. And so -- and this, in my view, is a critical point where a lot of companies go wrong. And my mentors have made me focus on this extensively. And it's for that reason that I feel that we will continue to really excel as a business because we are looking after your money.I'd also like to thank WELL's senior management team and all our employees and contractors for their tremendous effort, especially during this pandemic, which continues to wear on all of us. And of course, thank our team of doctors and frontline workers to keep our clinics open and provide just the unbelievable patient care that we've been able to provide. So thank you and look forward to seeing you next quarter. Of course, next quarter, we will have more than 2 months contribution from CRH Medical. We are expecting absolutely blowout numbers. And our other businesses continue -- giving you the touch point right now that our businesses are looking good and we are feeling really excited about the balance of this year. And we hope you're getting vaccinated, and you're staying healthy and thanking you for your support.

[Operator]

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.