Liberty Health Becomes Operationally Cash Flow Positive In Third Quarter
Liberty Health Sciences (CSE: LHS) filed its third quarter financial results last night, although the firm has yet to issue a related press release. The lack of a release is puzzling, given strong results demonstrated by the firm on a quarter over quarter basis.
Third quarter revenues came in at $16.1 million, an increase of 51% on a quarter over quarter basis. Despite the significant revenue increase, cost of goods sold increased only marginally, giving Liberty Health a gross profit of $9.7 million for the quarter before biological adjustments, as compared to $5.0 million in the previous quarter, an increase of 94%.
Total operating expenses came in at $7.4 million, of which the largest cost was selling costs at $1.7 million, followed by professional fees at $1.2 million. The firm managed a net income before tax of $21.2 million for the quarter overall, thanks in part to a large fair value adjustment from biological assets.
The strong quarter also resulted in Liberty Health seeing a net positive operating cash flow for the nine month period of $4.5 million, as compared to -$4.1 million last quarter. Investing activities during the period provided a net figure of $13.1 million, while financing activity cash flows were -$2.8 million. A net increase in the firms cash position as a result has been seen over the period, with Liberty Health currently having a cash balance of $28.5 million, an increase from $23.8 million in the prior quarter.
Moving to the balance sheet, total current assets increased from $52.1 million to that of $75.8 million, which was largely a result of an inventory increase. Inventory during the quarter jumped from $22.4 million to $38.0 million. Current liabilities also jumped during the quarter however, from $6.3 million to $21.6 million. The significant increase is largely a result of a convertible note becoming current, which has a value of $13.0 million, along with an embedded derivative valued at $0.4 million. Payables meanwhile increased from $5.4 million to $7.4 million during the quarter.
Liberty Health Sciences last traded at $0.72 on the CSE.
Information for this briefing was found via Sedar and Liberty Health Sciences. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
