Exhibit 99.1
Company Contact: | The Investor Relations Company: | |
| Paul A. Brown, M.D., Chairman | Brien Gately | |
| (561) 478-8770, Ext. 123 | (847) 296-4200 |
HearUSA REPORTS 4thQUARTER and 2004 RESULTS
WEST PALM BEACH, FL, February 28, 2005— HearUSA, Inc. (AMEX: EAR)today announced revenues for the fiscal year ended December 25, 2004 of $72.3 million compared to $70.5 million for fiscal 2003. The loss of $3.5 million or 11 cents per share compared with a loss of $1.7 million or 6 cents for fiscal 2003. The loss for 2004 included a non-cash interest charge for debt discount amortization of $2.1 million associated with a financing completed in December 2003 compared to $517,000 for the same item in fiscal 2003.
Revenues in the fourth quarter of 2004 increased to $18.8 million from revenues of $16.9 million for the comparable period in the prior year. The net loss for the fourth quarter of fiscal 2004 of $669,000 or 2 cents per share compared to a loss of $2 million or 7 cents per share for the comparable period in the prior year. The fourth quarter for 2004 included a non-cash interest charge for debt discount amortization of $532,000 for the December 2003 financing compared to $517,000 for the same item in the comparable period of the prior year.
The company believes that revenues for 2005 should exceed $80 million and that 2005 should be the company’s first profitable year. A significant portion of the increase over 2004 revenues is expected to come from new or expanded healthcare provider contracts signed at the end of 2004. Consistent with the company’s recently announced policy of keeping the investment community up-to-date with the company’s steady progress, revenues for the month of February will be announced on March 8, 2005.
About HearUSA
HearUSA provides hearing care to patients whose health insurance and managed care organizations have contracted with the company for such care and to retail “self-pay” patients. The 154 company owned centers are located in California, Florida, New York, New Jersey, Massachusetts, Ohio, Michigan, Wisconsin, Minnesota, Missouri and Washington and the province of Ontario Canada. In addition, the company has a network of approximately 1,400 affiliated audiologists in 49 states. For further information, click on “investor information” at HearUSA’s websitewww.hearusa.com.
This press release contains forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995, including those concerning the Company’s expectation that
revenues for 2005 should exceed $80 million and that 2005 should be the company’s first profitable year; and that a significant portion of the increase over 2004 revenues is expected to come from new and expanded healthcare provider contracts signed at the end of 2004. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as market demand for the Company’s goods and services; successful implementation of the Company’s cost reduction program; changes in the pricing environment; general economic conditions in those geographic regions where the Company’s centers are located; the impact of competitive products; and other risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission, including the Company’s quarterly report on Form 10-Q for the 2004 third quarter.
HearUSA will hold a webcast today at 9:00 A.M. Eastern Time to allow securities analysts and shareholders the opportunity to hear management discuss the company’s Fourth Quarter 2004 and Year End Financial results. The call is being webcast by Vcall and can be accessed at HearUSA’s website atwww.hearusa.com or investors can access the webcast at<http://www.vcall.com/CEPage.asp?ID=90633>. The conference can also be listened to by telephone by dialing (toll free) 877-407-9210 (international) 201-689-8049.
- Tables follow -
Consolidated Balance Sheets
| December 25, | December 27, | |||||||
| 2004 | 2003 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
| Cash and cash equivalents | $ | 2,615,379 | $ | 6,714,881 | ||||
| Restricted Cash and investment securities | 435,000 | 435,000 | ||||||
| Accounts and notes receivable, less allowance for doubtful accounts of $373,583 and $490,881 | 5,876,699 | 6,539,149 | ||||||
| Inventories | 877,206 | 979,092 | ||||||
| Prepaid expenses and other | 558,921 | 1,115,393 | ||||||
Total current assets | 10,363,205 | 15,783,515 | ||||||
Property and equipment, net | 3,493,862 | 4,969,265 | ||||||
Goodwill | 33,652,380 | 33,222,779 | ||||||
Intangible assets, net | 11,242,444 | 11,577,097 | ||||||
Deposits and other | 549,924 | 630,694 | ||||||
| $ | 59,301,815 | $ | 66,183,350 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
| Accounts payable | $ | 6,644,600 | $ | 6,750,234 | ||||
| Accrued expenses | 2,303,601 | 2,492,094 | ||||||
| Accrued salaries and other compensation | 1,982,559 | 1,706,252 | ||||||
| Current maturities of long-term debt | 4,152,908 | 6,436,271 | ||||||
| Dividends payable | 177,996 | 728,699 | ||||||
Total current liabilities | 15,261,664 | 18,113,550 | ||||||
Long-term debt | 17,296,125 | 20,579,977 | ||||||
Convertible subordinated notes, net of debt discount of $5,443,879 and $7,423,596 | 2,056,121 | 76,404 | ||||||
Total long-term debt and convertible subordinated notes | 19,352,246 | 20,656,381 | ||||||
Commitments and contingencies | — | — | ||||||
Mandatorily redeemable convertible preferred stock | 4,709,921 | 4,600,107 | ||||||
Stockholders’ equity | ||||||||
| Preferred stock (aggregate liquidation preference $2,330,000 and $2,330,000, $1 par, 5,000,000 shares authorized) | ||||||||
| Series H Junior Participating (none outstanding) | — | — | ||||||
| Series J (233 shares outstanding) | 233 | 233 | ||||||
| Total preferred stock | 233 | 233 | ||||||
| Common stock: $0.10 par; 50,000,000 shares authorized, 30,060,690 and 29,528,432 shares issued | 3,006,069 | 2,952,845 | ||||||
| Stock subscription | (412,500 | ) | (412,500 | ) | ||||
| Additional paid-in capital | 120,197,937 | 120,226,050 | ||||||
| Accumulated deficit | (101,968,452 | ) | (98,501,791 | ) | ||||
| Accumulated other comprehensive income | 1,639,838 | 1,033,616 | ||||||
| Treasury stock, at cost: 523,662 common shares | (2,485,141 | ) | (2,485,141 | ) | ||||
Total stockholders’ equity | 19,977,984 | 22,813,312 | ||||||
| $ | 59,301,815 | $ | 66,183,350 | |||||
HearUSA, Inc.
Consolidated Statements of Operations
| Year Ended | ||||||||||||
| December 25, | December 27, | December 28, | ||||||||||
| 2004 | 2003 | 2002 | ||||||||||
Net revenues | $ | 72,300,623 | $ | 70,545,154 | $ | 57,230,128 | ||||||
Operating costs and expenses | ||||||||||||
| Cost of products sold | 20,464,789 | 20,097,594 | 16,428,569 | |||||||||
| Center operating expenses | 37,518,850 | 35,059,925 | 31,577,182 | |||||||||
| General and administrative expenses | 10,218,284 | 10,470,717 | 11,185,160 | |||||||||
| Depreciation and amortization | 2,311,016 | 3,017,280 | 2,522,389 | |||||||||
| Total operating costs and expenses | 70,512,939 | 68,645,516 | 61,713,300 | |||||||||
Income (loss) from operations | 1,787,684 | 1,899,638 | (4,483,172 | ) | ||||||||
Non-operating income (expense): | ||||||||||||
| Interest income | 17,543 | 20,836 | 114,152 | |||||||||
| Interest expense (including approximately $2,127,000 and $517,000, in 2004 and 2003, of non-cash debt discount amortization) | (4,563,729 | ) | (2,828,327 | ) | (1,722,990 | ) | ||||||
Loss before equity in loss of affiliated company | (2,758,502 | ) | (907,853 | ) | (6,092,010 | ) | ||||||
| Equity in loss of affiliated company | — | — | (630,801 | ) | ||||||||
Loss from continuing operations | (2,758,502 | ) | (907,853 | ) | (6,722,811 | ) | ||||||
Discontinued operations | ||||||||||||
| Loss from discontinued operations (including loss on disposal of $105,296 in 2003) | — | (201,536 | ) | (157,658 | ) | |||||||
Net loss | (2,758,502 | ) | (1,109,389 | ) | (6,880,469 | ) | ||||||
Dividends on preferred stock | (708,159 | ) | (626,956 | ) | (696,541 | ) | ||||||
Loss applicable to common stockholders | $ | (3,466,661 | ) | $ | (1,736,345 | ) | $ | (7,577,010 | ) | |||
Loss from continuing operations, including dividends on preferred stock, per common share — basic and diluted | $ | (0.11 | ) | $ | (0.05 | ) | $ | (0.33 | ) | |||
Net loss applicable to common stockholders per common share — basic and diluted | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.34 | ) | |||
Weighted average number of shares of common stock outstanding | 30,426,829 | 30,424,262 | 22,524,393 | |||||||||