American CareSource Holdings Announces Third Quarter 2006 Financial ResultsDALLAS, TX -- 11/09/2006 -- American CareSource Holdings, Inc. (AMEX: XSI) today announced financial results for the quarter and nine months ended September 30, 2006.
Net revenue increased 224% to $3.3 million in the third quarter of 2006 from $1.0 million in the third quarter of 2005.The contribution margin from these sales increased to $624 thousand in 2006 from a negative $7 thousand in 2005. Net loss for the quarter ended September 30, 2006 was $116 thousand, or $0.01 per share, compared to a loss of $640 thousand, or $0.05 per share, in the prior year.
For the nine months ended September 30, 2006 net revenue increased 155% to $8.6 million from $3.4 million in the first nine months of 2005. The contribution margin from these sales increased to $1.7 million in 2006 from a negative $12 thousand in 2005. Net loss for the nine months ended September 30, 2006 was $641 thousand, or $0.05 per share, compared to a loss of $1.8 million, or $0.15 per share, in the prior year. Cash used in operations decreased from $1.3 million for the nine months ended September 30, 2005 to $425 thousand in the first nine months of 2006.
"Our sales momentum continues to build and in September we achieved positive cash flow from operating activities for the first time in the company's history. As we turn on our new clients and expand our business with existing clients, we expect to generate positive income," stated Wayne A. Schellhammer, Chief Executive Officer and Chairman of the Board for American CareSource Holdings. "Our sales pipeline is expanding in targeted markets and we have streamlined our product line and enhanced our value added services to our provider network and clients."
About American CareSource Holdings, Inc.
American CareSource Holdings, Inc is a comprehensive ancillary care service provider offering a national network of more than 22,000 ancillary provider locations. American CareSource Holdings, Inc.'s ancillary network management provides a complete outsourced solution for a wide variety of healthcare payors and plan sponsors including self-insured employers, indemnity insurers, PPOs, HMOs, third party administrators and both the Federal and local governments. Through its product offerings, American CareSource Holdings, Inc. offers its clients substantial discounts on services rendered through its network of ancillary care providers in more than 30 service categories.
Any statements that are not historical facts contained in this release are forward-looking statements particularly those statements related to expectations of future earnings and/or profitability, as well as those related to potential annual billed revenue under the client implementation and the number of additional payors that may be added to the company's network. It is possible that the assumptions made by American CareSource Holdings, Inc. for purposes of such statements may not materialize in that actual results could differ materially from anticipated results. The client for which services are to be provided may terminate its agreement, providers may withdraw from the company's program or other factors may affect the ability of the Company to recognize any revenue in connection with their relationship. Actual results may differ from the expectations conveyed by such forward-looking statements, further risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, and intellectual property rights, and the outcome of competitive products, risks in product development, the results of financing effort, the ability to complete transactions, regulatory conditions and other risks identified in this release, as well as the filings of American CareSource Holdings, Inc. with the U. S. Securities and Exchange Commission.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of
September 30, December 31,
ASSETS 2006 2005
--------------- ---------------
CURRENT ASSETS
Cash $ 5,227,360 $ 23,399
Accounts Receivable 1,997,063 482,159
Other 137,675 30,151
--------------- ---------------
Total Current Assets 7,362,098 535,709
Net Property, Plant, and Equipment 230,176 175,608
Intangible Assets 1,761,215 1,921,401
Goodwill 4,361,299 4,361,299
--------------- ---------------
Total Assets $ 13,714,788 $ 6,994,017
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Due to Service Providers $ 1,446,580 $ 386,217
Accounts Payable and Accrued
Liabilities 651,556 352,383
Current Maturities of Long-Term Debt 367,710 20,231
--------------- ---------------
Total Current Liabilities 2,465,846 758,831
Long-Term Debt 119,329 3,845,929
--------------- ---------------
Total Liabilities 2,585,175 4,604,760
STOCKHOLDERS' EQUITY:
Common Stock-par value $0.01,
40,000,000 shares authorized
and 14,478,495 and 12,371,309 shares
issued and outstanding as of
September 30, 2006 and December 31,
2005 respectively 144,785 123,713
Preferred Stock-par value $0.01,
10,000,000 shares authorized and none
outstanding 0 0
Additional Paid in Capital 16,955,766 7,734,800
Deferred Debt Issuance Cost (92,600) (231,500)
Accumulated (Deficit) (5,878,338) (5,237,756)
--------------- ---------------
Total Stockholders' Equity 11,129,613 2,389,257
Total Liabilities and Equity $ 13,714,788 $ 6,994,017
=============== ===============
AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
September 30,
2006 2005
----------- -----------
REVENUES
Net Ancillary Health $ 3,283,570 $ 991,365
Patient Claims Processing 29,870 31,103
----------- -----------
Net Revenue 3,313,440 1,022,468
Total Cost of Revenues 2,689,471 1,029,680
----------- -----------
Contribution Margin 623,969 (7,192)
----------- -----------
Selling, General, and Administrative
Expense 688,458 459,603
Depreciation and Amortization 77,271 85,256
----------- -----------
Total Operating Expense 765,729 544,859
----------- -----------
Operating (Loss) (141,760) (552,051)
----------- -----------
Other (Income) Expense (22,617)
Debt Issuance Cost 46,300 43,348
Net Interest and Finance Cost (49,067) 44,153
----------- -----------
Total Other Expense (25,384) 87,501
Net (Loss) Before Income Tax (116,376) (639,552)
Income Tax Expense 0 0
----------- -----------
Net (Loss) $ (116,376) $ (639,552)
=========== ===========
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.01) $ (0.05)
WEIGHTED AVERAGE COMMON SHARES 14,472,867 12,371,309
AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Ended
September 30,
2006 2005
------------ ------------
REVENUES
Net Ancillary Health $ 8,512,425 $ 3,205,241
Patient Claims Processing 95,337 165,228
------------ ------------
Net Revenue 8,607,762 3,370,469
Total Cost of Revenues 6,904,779 3,382,212
------------ ------------
Contribution Margin 1,702,983 (11,743)
------------ ------------
Selling, General, and Administrative
Expense 2,023,949 1,397,493
Depreciation and Amortization 235,618 245,682
------------ ------------
Total Operating Expense 2,259,567 1,643,175
------------ ------------
Operating (Loss) (556,584) (1,654,918)
------------ ------------
Other (Income) Expense 14,769 (7,378)
Debt Issuance Cost 138,900 102,927
Net Interest and Finance Cost (69,671) 86,333
------------ ------------
Total Other Expense 83,998 181,882
Net (Loss) Before Income Tax (640,582) (1,836,800)
Income Tax Expense 0 0
------------ ------------
Net (Loss) $ (640,582) $ (1,836,800)
============ ============
NET LOSS PER SHARE - BASIC AND DILUTED $ (0.05) $ (0.15)
WEIGHTED AVERAGE COMMON SHARES 14,066,192 12,371,309
AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Nine Months
Ended Ended
Sept. 30, Sept. 30,
2006 2005
------------ ------------
OPERATING ACTIVITIES:
Net loss $ (640,582) $ (1,836,800)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock option compensation expense 137,615 -
Depreciation and amortization 235,618 245,682
Compensation expense related to warrants 138,900 102,928
(Gain) on Disposal of Assets (33,359) (7,378)
Changes in operating assets and liabilities:
(Increase) decrease in accounts
receivable (1,514,904) 83,736
(Increase) in other current assets (107,524) (26,671)
Increase in accounts payable and
accrued liabilities 299,173 110,243
Increase (decrease) in amounts payable
to service providers 1,060,363 (3,952)
------------ ------------
Net cash used in operating
activities (424,700) (1,332,212)
------------ ------------
INVESTING ACTIVITIES:
Purchase of Property and equipment (161,866) (188,021)
Proceeds from the Sale of Equipment 65,225 31,656
------------ ------------
Net cash used in investing activities (96,641) (156,365)
------------ ------------
FINANCING ACTIVITIES:
Borrowings from line of credit 200,000 2,780,000
Net proceeds from debt 135,000 93,328
Payment on line of credit or long term debt (3,714,121) (48,614)
Net proceeds from the exercising of stock
options 34,575 -
Net proceeds from the sale of capital stock 9,069,848 -
Net (payments) to parent company - (1,314,025)
------------ ------------
Net cash provided by financing
activities $ 5,725,302 $ 1,510,689
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 5,203,961 $ 22,112
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 23,399 16,749
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,227,360 $ 38,861
============ ============
Supplemental disclosures cash flow information
Cash paid for interest expense $ 48,591 $ 84,929
Contact:
Wayne A. Schellhammer
Chairman & Chief Executive Officer
American CareSource Holdings, Inc.
Tel. 972-308-6830
