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 STRONG THIRD QUARTER, NINE MONTH RESULTS
• | Revenues in Third Quarter Increase 11.9 Percent Over Prior Year | ||
• | Net Loss Narrows To Less Than One Cent Per Share |
West Palm Beach, Fla., November 9, 2005 –HearUSA, Inc. (AMEX: EAR) today reported net revenues in the third quarter of 2005 rose 11.9 percent to $19.6 million from net revenues of $17.5 million in the third quarter of last year. Revenues for the first nine months of 2005 were $57.7 million compared with $50.8 million during the comparable period a year ago, an increase of 13.6 percent. The nine month period of 2005 also included an extra week, which occurred in the first quarter of the year.
HearUSA posted a net loss applicable to common stockholders for the third quarter ended October 1, 2005 of $89,000, or less then one cent per share, compared with a net loss applicable to common stockholders of $233,000, or one cent per share, in the third quarter a year earlier. For the nine month period of 2005 the company recorded a net loss applicable to common stockholders of $376,000, or one cent per share. This compares with a net loss of $2.8 million, or nine cents per share, in the first nine months of 2004. For both nine month periods, centers divested in the second quarter of 2005 are treated as discontinued operations.
Additionally, third quarter results include $663,000 of non-cash debt discount amortization expense. This compares with debt discount amortization expense of $532,000 in the third quarter of 2004. For the first nine months of 2005, debt discount amortization expense was $1.8 million, compared with $1.6 million in the first nine months of 2004.
“We continued to experience strong revenue growth in the third quarter as our strategy to enhance revenues, both through enhanced sales at existing centers and through strategic acquisitions, is having an increased effect,” said Stephen J. Hansbrough, president and chief executive officer. “We are continuing to examine every aspect of our operations and we will not be satisfied until we are consistently and increasingly profitable,” Hansbrough added.
“The third quarter was marked by significant progress,” said founder and chairman Paul A. Brown, M.D. “Clearly the initiatives we have taken to control our costs combined with the acquisitions and other structural changes we made this year are gaining traction. We said in earlier announcements that we have taken all the steps to prepare HearUSA for profitable growth. We are now on the verge of realizing that growth. We believe that our infrastructure is sufficient to support revenue levels well beyond what they are at present without corresponding increases in our cost structure and, therefore, more profitable performance. We have put in place a team of talented executives and tasked them with identifying acquisition opportunities that will increase our revenue and profit base.
“These factors, combined with our established revenue base and reputation for excellent service should increasingly manifest themselves in continued growth in revenues and consistently profitable performance,” Dr. Brown concluded.
About HearUSA
HearUSA provides hearing care to patients through contracts with health insurance and managed care organizations and to retail “self-pay” patients. The company-owned clinics are located in California, Florida, New York, New Jersey, Massachusetts, Ohio, Michigan, Missouri 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 website www.hearusa.com.
HearUSA provides hearing care to patients through contracts with health insurance and managed care organizations and to retail “self-pay” patients. The company-owned clinics are located in California, Florida, New York, New Jersey, Massachusetts, Ohio, Michigan, Missouri 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 website www.hearusa.com.
HearUSA will hold a conference call on November 9, 2005 at 4:15 p.m. Eastern Time to allow securities analysts and shareholders the opportunity to hear management discuss the company’s Third Quarter Results. The call is being webcast by Vcall and can be accessed at HearUSA’s website atwww.hearusa.com <http://www.hearusa.com> or investors can access the webcast athttp://www.investorcalendar.com/IC/CEPage.asp?ID=97497. The conference can also be listened to by telephone by dialing (toll free) 877-407-9210 (international) 201-689-8049.
Tables Follow...
HearUSA, Inc.
Consolidated Balance Sheets
Consolidated Balance Sheets
ASSETS | October 1, | December 25, | ||||||
2005 | 2004 | |||||||
(unaudited) | (audited) | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 3,152,769 | $ | 2,615,379 | ||||
Restricted cash and investment securities | 431,000 | 435,000 | ||||||
Accounts and notes receivable, less allowance for doubtful accounts of $381,528 and $373,583 | 6,620,397 | 5,876,699 | ||||||
Inventories | 904,785 | 801,234 | ||||||
Prepaid expenses and other | 1,409,031 | 557,435 | ||||||
Current assets held for sale | — | 77,458 | ||||||
Total current assets | 12,517,982 | 10,363,205 | ||||||
Property and equipment, net | 3,312,972 | 3,346,788 | ||||||
Goodwill | 36,282,984 | 33,210,380 | ||||||
Intangible assets, net | 11,492,728 | 11,094,169 | ||||||
Deposits and other | 617,389 | 551,148 | ||||||
Long-term assets held for sale | — | 736,125 | ||||||
$ | 64,224,055 | $ | 59,301,815 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 7,546,049 | $ | 6,644,600 | ||||
Accrued expenses | 2,129,025 | 2,303,601 | ||||||
Accrued salaries and other compensation | 2,189,945 | 1,982,559 | ||||||
Current maturities of long-term debt | 4,664,454 | 4,152,908 | ||||||
Dividends payable | 34,561 | 177,996 | ||||||
Current maturities of subordinated notes | 1,760,000 | — | ||||||
Current maturities of convertible subordinated notes | 1,875,000 | — | ||||||
Total current liabilities | 20,199,034 | 15,261,664 | ||||||
Long-term debt | 16,335,592 | 17,296,125 | ||||||
Subordinated notes, net of debt discount of $1,662,799 | 2,077,201 | — | ||||||
Warrant liability | 1,794,702 | — | ||||||
Convertible subordinated notes, net of debt discount of $3,919,759 and $5,443,879 | 1,705.241 | 2,056,121 | ||||||
Total long-term debt, subordinated notes, warrant liability and convertible subordinated notes | 21,912,736 | 19,352,246 | ||||||
Commitments and contingencies | — | — | ||||||
Mandatorily redeemable convertible preferred stock (Series E) | — | 4,709,921 | ||||||
Stockholders’ equity | ||||||||
Preferred stock (Aggregate liquidation preference $2,330,000; $1 par, 7,500,000 shares authorized) | ||||||||
Series H Junior Participating (none outstanding) | — | — | ||||||
Series J (233 shares outstanding) | 233 | 233 | ||||||
Total preferred stock | 233 | 233 | ||||||
Common stock: $.10 par; 75,000,000 shares authorized 31,742,510 and 30,060,690 shares issued | 3,174,251 | 3,006,069 | ||||||
Stock subscription | (412,500 | ) | (412,500 | ) | ||||
Additional paid-in capital | 121,908,793 | 120,197,937 | ||||||
Accumulated deficit | (102,344,377 | ) | (101,968,452 | ) | ||||
Accumulated other comprehensive income | 2,271,026 | 1,639,838 | ||||||
Treasury stock, at cost: 523,662 and 523,662 common shares | (2,485,141 | ) | (2,485,141 | ) | ||||
Total stockholders’ equity | 22,112,285 | 19,977,984 | ||||||
$ | 64,224,055 | $ | 59,301,815 | |||||
HearUSA, Inc.
Consolidated Statements of Operations
Nine Months Ended October 1, 2005 and September 25, 2004
Consolidated Statements of Operations
Nine Months Ended October 1, 2005 and September 25, 2004
October 1, | September 25, | |||||||
2005 | 2004 | |||||||
(unaudited) | (unaudited) | |||||||
Net revenues | ||||||||
Hearing aids and other products | $ | 53,706,549 | $ | 46,617,220 | ||||
Services | 3,995,852 | 4,157,405 | ||||||
Total net revenues | 57,702,401 | 50,774,625 | ||||||
Operating costs and expenses | ||||||||
Hearing aids and other products | 15,692,130 | 12,835,926 | ||||||
Services | 1,342,226 | 1,305,112 | ||||||
Total cost of products sold and services | 17,034,356 | 14,141,038 | ||||||
Center operating expenses | 26,929,214 | 26,005,198 | ||||||
General and administrative expenses | 8,848,091 | 7,534,233 | ||||||
Depreciation and amortization | 1,446,203 | 1,578,190 | ||||||
Total operating costs and expenses | 54,257,864 | 49,258,818 | ||||||
Income from operations | 3,444,537 | 1,515,966 | ||||||
Non-operating income (expense): | ||||||||
Gain from insurance proceeds | 430,122 | — | ||||||
Interest income | 52,180 | 11,045 | ||||||
Interest expense (including approximately $1,759,000 and $1,595,000 of non-cash debt discount amortization) | (3,595,147 | ) | (3,467,304 | ) | ||||
Income (loss) from continuing operations | 331,692 | (1,940,293 | ) | |||||
Discontinued operations: | ||||||||
Gain on disposition of assets | 365,158 | — | ||||||
Loss from discontinued operations | (406,662 | ) | (326,169 | ) | ||||
Net loss from discontinued operations | (41,504 | ) | (326,169 | ) | ||||
Net income (loss) | 290,188 | (2,266,462 | ) | |||||
Dividends on preferred stock | (666,113 | ) | (530,828 | ) | ||||
Net loss applicable to common stockholders | $ | (375,925 | ) | $ | (2,797,290 | ) | ||
Net loss from continuing operations, including dividends on preferred stock, per common share — basic and diluted | $ | (0.01 | ) | $ | (0.08 | ) | ||
Net loss applicable to common stockholders per common share — basic and diluted | $ | (0.01 | ) | $ | (0.09 | ) | ||
Weighted average number of shares of common stock outstanding — basic and diluted | 31,452,690 | 30,425,804 | ||||||
HearUSA, Inc.
Consolidated Statements of Operations
Three Months Ended October 1, 2005 and September 25, 2004
Consolidated Statements of Operations
Three Months Ended October 1, 2005 and September 25, 2004
October 1, | September 25, | |||||||
2005 | 2004 | |||||||
(unaudited) | (unaudited) | |||||||
Net revenues | ||||||||
Hearing aids and other products | $ | 18,362,752 | $ | 15,911,778 | ||||
Services | 1,252,803 | 1,623,617 | ||||||
Total net revenues | 19,615,555 | 17,535,395 | ||||||
Operating costs and expenses | ||||||||
Hearing aids and other products | 5,624,739 | 4,345,713 | ||||||
Services | 507,152 | 420,804 | ||||||
Total cost of products sold and services | 6,131,891 | 4,766,517 | ||||||
Center operating expenses | 8,868,510 | 8,460,660 | ||||||
General and administrative expenses | 2,882,357 | 2,585,408 | ||||||
Depreciation and amortization | 471,116 | 504,396 | ||||||
Total operating costs and expenses | 18,353,874 | 16,316,981 | ||||||
Income from operations | 1,261,681 | 1,218,414 | ||||||
Non-operating income (expense): | ||||||||
Gain from insurance proceeds | 300,527 | — | ||||||
Interest income | 22,582 | 3,601 | ||||||
Interest expense (including approximately $663,000 and $532,000 of non-cash debt discount amortization) | (1,234,171 | ) | (1,138,273 | ) | ||||
Income from continuing operations | 350,619 | 83,742 | ||||||
Discontinued operations: | ||||||||
Net loss from discontinued operations | (140,155 | ) | (139,824 | ) | ||||
Net income (loss) | 210,464 | (56,082 | ) | |||||
Dividends on preferred stock | (299,035 | ) | (177,331 | ) | ||||
Net loss applicable to common stockholders | $ | (88,571 | ) | $ | (233,413 | ) | ||
Net income (loss) from continuing operations, including dividends on preferred stock, per common share — basic | $ | 0.00 | $ | (0.00 | ) | |||
Net income (loss) from continuing operations, including dividends on preferred stock, per common share — diluted | $ | 0.00 | $ | (0.00 | ) | |||
Net loss applicable to common stockholders per common share — basic | $ | (0.00 | ) | $ | (0.01 | ) | ||
Net loss applicable to common stockholders per common share — diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
Weighted average number of shares of common stock outstanding — basic | 32,033,447 | 30,429,902 | ||||||
Weighted average number of shares of common stock outstanding — diluted | 39,155,406 | 30,429,902 | ||||||
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