Exhibit 99.1
FOR IMMEDIATE RELEASE
Company Contact: | Investor Relations |
Paul A. Brown, M.D, Founder & Chairman | Scott Liolios or Ron Both |
Stephen J. Hansbrough, President & CEO | Liolios Group, Inc. |
HearUSA, Inc | info@liolios.com |
(561) 478-8770 | (949) 574-3860 |
HEARUSA REPORTS RECORD THIRD QUARTER 2007 RESULTS
Net Revenues Reach Fourth Consecutive Record Quarter High
Net Revenues at $26.9 Million, up 22% vs. Year Ago Quarter
Net Income at Record $488,000 or $0.01 per share
Net Income from Operations at Record $2.5 million or 9.3% of Revenues
West Palm Beach, Fla. -- November 13, 2007 -- HearUSA, Inc. (AMEX: EAR), a leading provider of hearing care through a fully integrated and professionally accredited system of hearing care centers, reported financial results for the third quarter ended September 29, 2007.
Net revenues totaled a record $26.9 million, an increase of 8% from $24.9 million in the previous quarter and an increase of 22% from $22.0 million in the comparable quarter of the previous year. This fourth consecutive quarter of record net revenues was attributable to a combination of hearing centers acquired within the last 12 months and organic growth of 7% for the quarter.
Income from operations was a record $2.5 million or 9.3% of revenues, as compared to $810,000 or 3.0% of revenues in the previous quarter and $405,000 or 1.8% of net revenues a year ago. These substantially improved results come very close to the company’s stated long term objective for income from operations to be in the range of 10% to 12%. It should be noted that income from operations includes a one-time charge of $282,000 related to employee severance applicable to the third quarter.
The net income applicable to common stockholders for the third quarter was a record $488,000 or $0.01 per share, as compared to a net loss of $3.4 million or $0.09 per share in the previous quarter and net loss of $1.7 million or $0.05 per share in the comparable quarter of the previous year.
HearUSA acquired eight hearing care centers during the quarter, with combined estimated trailing twelve-month ("TTM") revenues of $2.8 million. This brings the total number of acquisitions for the first nine months of 2007 to 14, with combined estimated TTM revenues of $6.9 million. At the end of the quarter, the company had 12 letters of intent for the acquisition of an additional 17 centers with approximately $7.8 million TTM revenues.
“A combination of healthy organic growth and our continued aggressive acquisition program led to a record quarter for both revenues and income for HearUSA,” said Stephen J. Hansbrough, president and CEO. “We are especially pleased with the strong organic growth we enjoyed in the quarter as it reflects both the success of the Don Shula marketing campaign and our continued position as the provider of choice for hearing care to the nation’s top managed healthcare organizations.”
“It’s also important to note that this quarter, while a record in net income, still does not reflect the positive impact of our previously announced plan to reduce corporate expenses by more than $1 million by the end of the third quarter,” added Hansbrough. “This quarter’s performance keeps us on track to
meet or exceed our stated goals for 2007, which include both improved profitability and an increase in net revenues of 15-20% over last year”.
Conference Call
The company will hold a conference call later today to discuss its third quarter financial results. President and CEO Stephen J. Hansbrough and Executive Vice President and CFO Gino Chouinard will host the presentation, which will be followed by a question and answer period.
Date: Tuesday, November 13, 2007
Time: 4:30 pm Eastern (1:30 pm Pacific)
Toll Free Dial-In Number: 1-877-407-9210
International/Toll Dial-in Number: 1-201-689-8049
Conference ID Number: 261662
Internet Simulcast: http://www.vcall.com/IC/CEPage.asp?ID=123001
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call, please contact the Liolios Group at (949) 574-3860.
A replay of the call will be available later that evening and accessible until November 27, 2007.
Toll-free Replay Number: 1-877-660-6853
International/Toll Replay Number: 1-201-612-7415
Conference ID Number: 261662; Account Number: 286
Internet Replay: http://www.vcall.com/IC/CEPage.asp?ID=123001
About HearUSA
HearUSA, Inc. provides hearing care to patients primarily through more than 175 company-owned hearing care centers, which offer a complete range of quality hearing aids with an emphasis on the latest digital technology. HearUSA Centers are located in California, Florida, New York, New Jersey, Massachusetts, Ohio, Michigan, Missouri and the province of Ontario, Canada. The company also derives revenues from its HearUSA Hearing Care Network, comprised of over 1,600 affiliated audiologists in 49 states, as well as its website that enables online purchases of hearing related products, such as batteries, hearing aid accessories and assistive listening devices. For further information, click on "investor information" at the HearUSA website: www.hearusa.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995, including those concerning the company being on track to meet or exceed the stated goals for 2007 including improved profitability and an increase in net revenues of 15-20% over 2006. These 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 successful implementation of the company’s acquisition program; integration of the newly acquired centers and maintenance of revenue levels from those centers; the company’s ability to maintain cost controls and limit expenses; the successful implementation of the Siemens agreements; the ability of the company to maintain unit sales of Siemens hearing aids; market demand for the company’s goods and services; 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 Form 10-K for the fiscal year ended December 30, 2006.
HearUSA, Inc.
Consolidated Balance Sheets
(unaudited)
| September 29, | December 30, |
ASSETS | 2007 | 2006 |
| (Dollars in thousands) | |
Current assets |
|
|
Cash and cash equivalents | $ 3,526 | $ 2,326 |
Accounts and notes receivable, less allowance for |
|
|
doubtful accounts of $505,497 and $434,098 | 8,851 | 7,591 |
Inventories | 2,209 | 2,371 |
Prepaid expenses and other | 986 | 1,400 |
Deferred tax asset | 78 | 67 |
Total current assets | 15,650 | 13,755 |
Property and equipment, net | 4,176 | 3,878 |
Goodwill | 57,465 | 50,970 |
Intangible assets, net | 15,766 | 13,592 |
Deposits and other | 705 | 876 |
Restricted cash and cash equivalents | 209 | 205 |
Total Assets | $ 93,971 | $ 3,276 |
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Current liabilities |
|
|
Accounts payable | $ 11,016 | $ 10,463 |
Accrued expenses | 2,929 | 2,509 |
Accrued compensation | 3,069 | 2,826 |
Current maturities of long-term debt | 6,471 | 8,391 |
Current maturities of convertible subordinated notes, net of debt discount of $1,263,003 in 2006 | - | 2,487 |
Current maturities of subordinated notes, net of debt discount of $134,169 and $452,228 | 1,845 | 1,308 |
Dividends payable | 34 | 34 |
Minority interest in net income of consolidated joint venture, currently payable | 820 | 633 |
Total current liabilities | 26,184 | 28,651 |
Long-term debt | 37,252 | 28,599 |
Deferred income taxes | 5,948 | 5,234 |
Convertible subordinated notes, net of debt discount of $217,923 in 2006 | - | 2,282 |
Subordinated notes, net of debt discount of $60,123 in 2006 | - | 1,480 |
Warrant liability | - | 110 |
Total long-term liabilities | 43,200 | 37,705 |
Commitments and contingencies | - | - |
|
|
|
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) | - | - |
Total preferred stock | - | - |
|
|
|
Common stock: $.10 par; 75,000,000 shares authorized 37,870,451 and 32,029,750 shares issued | 3,787 | 3,203 |
Stock subscription | (412) | (412) |
Additional paid-in capital | 132,499 | 123,972 |
Accumulated deficit | (112,977) | (109,521) |
Accumulated other comprehensive income | 4,175 | 2,163 |
Treasury stock, at cost: 523,662 common shares | (2,485) | (2,485) |
Total Stockholders’ Equity | 24,587 | 16,920 |
Total Liabilities and Stockholders’ Equity | $ 93,971 | $ 83,276 |
HearUSA, Inc.
Consolidated Statements of Operations
Three Months Ended September 29, 2007 and September 30, 2006
(unaudited)
| September 29, | September 30, |
| 2007 | 2006 |
| (Dollars in thousands, except per share amounts) | |
|
|
|
Net revenues |
|
|
Hearing aids and other products | $ 25,050 | $ 20,519 |
Services | 1,812 | 1,523 |
Total net revenues | 26,862 | 22,042 |
|
|
|
Operating costs and expenses |
|
|
Hearing aids and other products | 6,807 | 6,491 |
Services | 499 | 511 |
Total cost of products sold and services | 7,306 | 7,002 |
Center operating expenses | 12,585 | 10,598 |
General and administrative expenses | 3,890 | 3,540 |
Depreciation and amortization | 572 | 497 |
Total operating costs and expenses | 24,353 | 21,637 |
Income from operations | 2,509 | 405 |
Non-operating income (expenses): |
|
|
Gain from insurance proceeds | - | 146 |
Interest income | 21 | 19 |
Interest expense | (1,330) | (1,638) |
Income (loss) before income tax expense and minority interest in income of consolidated joint venture | 1,200 | (1,068) |
Income tax expense | (284) | (257) |
Minority interest in income of consolidated joint venture | (394) | (322) |
Net income (loss) | 522 | (1,647) |
Dividends on preferred stock | (34) | (34) |
Net income (loss) applicable to common stockholders | $ 488 | $ (1,681) |
|
|
|
Net income (loss) applicable to common stockholders per common share – basic | $ 0.01 | $ (0.05) |
Net income (loss) applicable to common stockholders per common share –diluted | $ 0.01 | $ (0.05) |
|
|
|
Weighted average number of shares of common stock outstanding – basic | 37,950 | 32,260 |
Weighted average number of shares of common stock outstanding – diluted | 46,415 | 32,260 |
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