Exhibit 99.1
Company Contact: | Investor Relations |
Stephen J. Hansbrough | Scott Liolios or Ron Both |
Chairman, President & CEO | Liolios Group, Inc. |
HearUSA, Inc | info@liolios.com |
(561) 478-8770 | (949) 574-3860 |
HEARUSA REPORTS RECORD FIRST QUARTER 2008 RESULTS
Sixth Consecutive Record Revenues Quarter, Up 21.6% to $28.7 Million
West Palm Beach, Fla. -- May 13, 2008 -- HearUSA, Inc. (AMEX: EAR), the recognized leader in hearing care for the nation’s top managed care providers through more than 190 company-owned hearing care centers and a network of over 1,900 affiliated providers, reported financial results for the first quarter ended March 29, 2008.
Highlights
• | Sixth consecutive quarter of record net revenues totaling $28.7 million, up 21.6% vs. Q1 2007 |
• | Acquired six centers with aggregate annual estimated revenues of $1.5 million. |
Financial Results for First Quarter 2008
In the first quarter 2008, net revenues totaled a record $28.7 million, an increase of 21.6% from the $23.6 million reported in the first quarter of 2007. Approximately 12.2% of the increase is attributable to hearing care center acquisitions made during the last 12 months, with 9.4% due to organic growth. First quarter 2008 net revenues represented an increase of 4.2% from $27.6 million in the previous quarter. This was the company’s sixth consecutive quarter of record net revenues.
Income from operations was $1.1 million or 3.9% of net revenues, which includes a onetime charge related to the retirement of Dr. Paul A. Brown as chairman of the board totaling $811,000, or 2.8% of net revenues. This compares to income from operations of $1.6 million, or 7.0% of net revenues, in the first quarter of 2007. Operating income for the quarter was also affected by other additional expenses consisting of additional professional fees associated with year end tax consulting and the Sarbanes Oxley compliance review, additional regional management costs and operating losses incurred by the new North Carolina region.
Net loss applicable to common stockholders totaled $685,000 or ($0.02) per basic and diluted share, which includes the onetime charge associated with Dr. Brown’s retirement of $811,000 ($0.02 per basic and diluted share). This compares to a net loss of $595,000 or ($0.02) per basic and diluted share incurred in the first quarter of 2007.
Interest expense decreased $439,000 from $1.7 million in the first quarter of 2007 to $1.2 million in the first quarter of 2008 primarily as a result of the conversion of the 2003 convertible subordinated notes to common stock during the second quarter of 2007.
Q1 2008 Operational Highlights
HearUSA completed three transactions involving six centers with estimated annualized trailing twelve month revenues of $1.5 million during the first quarter of 2008. Subsequent to the end of the quarter, the
company completed two more transactions for two centers with aggregate estimated annualized trailing twelve month revenues of $1.0 million.
“In this first quarter of 2008 we again raised the bar in terms of revenues,” said Stephen J. Hansbrough, president and CEO. “Despite an increasingly aggressive price-focused market, we were able to once again post strong organic growth. Concurrently, our acquisition program remains on track with more than $2.5 million in estimated annualized trailing twelve month revenues already added and another $8.2 million in LOIs currently pending. Given these positive factors as well as ongoing strong organic growth so far in Q2, we continue to expect fiscal 2008 revenues to increase at least 16% and exceed $120 million, with net earnings per basic share estimated between $0.08 and $0.11.”
Conference Call
The company will hold a conference call later today at 4:30 p.m. ET to discuss its first quarter 2008 financial results. Chairman, President, 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.
To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the HearUSA conference call and provide the conference ID:
Domestic callers: 1-800-895-1085
International callers: 1-785-424-1055
Conference ID#: 7HEARUSA
Internet Simulcast: http://viavid.net/dce.aspx?sid=00005054
If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 1-949-574-3860.
A replay of the call will be available later that evening and will be accessible until May 27, 2008. The replay call-in number is 1-800-839-1162 for domestic callers and 1-402-220-0398 for international.
About HearUSA
HearUSA, Inc. provides hearing care to patients primarily through more than 190 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, North Carolina, and the province of Ontario, Canada. The company also derives revenues from its HearUSA Hearing Care Network, comprised of 1,900 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 the statements that the company expects 2008 net revenue to increase at least 16% and exceed $120 million; and that the company expects 2008 net earnings per basic share in the range of $0.08 to $0.11. 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 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 29, 2007 and quarter ended March 31, 2008.
HearUSA, Inc.
Consolidated Statements of Operations
(unaudited)
|
|
| March 29, |
|
| March 31, |
|
|
| (Dollars in thousands, except per |
| ||||
Net revenues |
|
|
|
|
|
|
|
Hearing aids and other products |
| $ | 26,680 |
| $ | 21,972 |
|
Services |
|
| 2,008 |
|
| 1,614 |
|
Total net revenues |
|
| 28,688 |
|
| 23,586 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
|
Hearing aids and other products |
|
| 7,588 |
|
| 5,738 |
|
Services |
|
| 545 |
|
| 476 |
|
Total cost of products sold and services |
|
| 8,133 |
|
| 6,214 |
|
Center operating expenses |
|
| 14,023 |
|
| 11,609 |
|
General and administrative expenses |
|
| 4,759 |
|
| 3,632 |
|
Depreciation and amortization |
|
| 662 |
|
| 489 |
|
Total operating costs and expenses |
|
| 27,577 |
|
| 21,944 |
|
Income from operations |
|
| 1,111 |
|
| 1,642 |
|
Non-operating income (expenses): |
|
|
|
|
|
|
|
Interest income |
|
| 16 |
|
| 47 |
|
Interest expense |
|
| (1,241 | ) |
| (1,680 | ) |
Loss from continuing operations before income tax expense, loss from discontinued operations and minority interest in income of consolidated Joint Venture |
|
| (114 | ) |
| 9 |
|
Income tax expense |
|
| (200 | ) |
| (147 | ) |
Minority interest in income of consolidated joint venture |
|
| (336 | ) |
| (424 | ) |
Net income (loss) |
|
| (650 | ) |
| (562 | ) |
Dividends on preferred stock |
|
| (35 | ) |
| (33 | ) |
Net income (loss) applicable to common stockholders |
| $ | (685 | ) | $ | (595 | ) |
|
|
|
|
|
|
|
|
Net income (loss) applicable to common stockholders per common share – basic and diluted |
| $ | (0.02 | ) | $ | (0.02 | ) |
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock outstanding – basic and diluted |
|
| 38,588 |
|
| 32,272 |
|
HearUSA, Inc.
Consolidated Balance Sheets
(unaudited)
ASSETS |
| March 29 |
|
| December 29, |
| |
|
|
| (Dollars in thousands) |
| |||
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 3,597 |
| $ | 3,369 |
|
Accounts and notes receivable, less allowance for |
|
|
|
|
|
|
|
doubtful accounts of $525,000 and $498,000 |
|
| 9,491 |
|
| 8,825 |
|
Inventories |
|
| 2,536 |
|
| 2,441 |
|
Prepaid expenses and other |
|
| 1,468 |
|
| 1,283 |
|
Deferred tax asset |
|
| 62 |
|
| 62 |
|
Total current assets |
|
| 17,154 |
|
| 15,980 |
|
Property and equipment, net |
|
| 4,251 |
|
| 4,356 |
|
Goodwill |
|
| 63,912 |
|
| 63,134 |
|
Intangible assets, net |
|
| 15,952 |
|
| 16,165 |
|
Deposits and other |
|
| 701 |
|
| 691 |
|
Restricted cash and cash equivalents |
|
| 216 |
|
| 216 |
|
Total Assets |
| $ | 102,186 |
| $ | 100,542 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
| $ | 13,375 |
| $ | 12,467 |
|
Accrued expenses |
|
| 3,220 |
|
| 2,523 |
|
Accrued salaries and other compensation |
|
| 3,968 |
|
| 3,521 |
|
Current maturities of long-term debt |
|
| 11,611 |
|
| 10,746 |
|
Current maturities of subordinated notes, net of |
|
| 1,088 |
|
| 1,480 |
|
Dividends payable |
|
| 34 |
|
| 34 |
|
Minority interest in net income of consolidated joint venture, currently payable |
|
| 966 |
|
| 1,221 |
|
Total current liabilities |
|
| 34,262 |
|
| 31,922 |
|
Long-term debt |
|
| 36,008 |
|
| 36,499 |
|
Deferred income taxes |
|
| 6,662 |
|
| 6,462 |
|
Total long-term liabilities |
|
| 42,670 |
|
| 42,961 |
|
Commitments and contingencies |
|
| — |
|
| — |
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
Preferred stock (aggregate liquidation preference $2,330,000, $1 par, |
|
|
|
|
|
|
|
Series H Junior Participating (none outstanding) |
|
| — |
|
| — |
|
Series J (233 shares outstanding) |
|
| — |
|
| — |
|
Total preferred stock |
|
| — |
|
| — |
|
|
|
|
|
|
|
|
|
Common stock: $.10 par; 75,000,000 shares authorized |
|
| 3,857 |
|
| 3,833 |
|
Stock subscription |
|
| (412 | ) |
| (412 | ) |
Additional paid-in capital |
|
| 133,598 |
|
| 133,261 |
|
Accumulated deficit |
|
| (113,761 | ) |
| (113,076 | ) |
Accumulated other comprehensive income |
|
| 4,457 |
|
| 4,468 |
|
Treasury stock, at cost: 523,662 common shares |
|
| (2,485 | ) |
| (2,485 | ) |
Total Stockholders’ Equity |
|
| 25,254 |
|
| 25,589 |
|
Total Liabilities and Stockholders’ Equity |
| $ | 102,186 |
| $ | 100,542 |
|