Exhibit 99.1
Company Contact: | Investor Relations |
Stephen J. Hansbrough | Scott Liolios or Ron Both |
Chairman & CEO | Liolios Group, Inc. |
HearUSA, Inc. | info@liolios.com |
561-478-8770 | 949-574-3860 |
HearUSA Reports Third Quarter 2009 Results
Net Revenues of $21.8 Million Generates Net Income of $713,000 or $0.02 Per Diluted Share
West Palm Beach, Fla. – November 10, 2009 --HearUSA, Inc. (AMEX: EAR), the recognized leader in hearing care for the nation's top managed care organizations through 178 company-owned hearing care centers and a network of 1,900 affiliated providers, reported financial results for the third quarter ended September 26, 2009.
Third Quarter 2009 Financial Results
Net revenues from continuing operations decreased 4% to $21.8 million from $22.7 million in the previous quarter and decreased 11% from $24.5 million in the same year-ago period. Revenues from continuing operations exclude revenues from the company’s Canadian unit, which was sold on April 27, 2009. The year-over-year decrease was due to a 14% decline in organic revenue, partially offset by a 2% increase attributable to centers acquired over the last 12 months and approximately $290,000 in contracted transition services provided to the acquirer of the Canadian unit.
Net income attributable to common stockholders was $713,000 or $0.02 per diluted share in the third quarter of 2009, as compared to net income of $1.1 million or $0.03 per diluted share in the previous quarter and a net loss of $75,000 or $(0.00) per diluted share in the same period a year ago. Net income attributable to common shareholders included income from discontinued operations of $427,000 or $0.01 per diluted share in the third quarter of 2009, $336,000 or $0.01 per diluted share in the second quarter of 2009 and $720,000 or $0.02 per diluted share in the third quarter of 2008.
Income from continuing operations totaled $502,000 in the third quarter of 2009, compared to $963,000 in the previous quarter and a loss of $278,000 in the same year-ago period. Income from continuing operations excludes the operating results of the company’s Canadian operations for all periods and includes AARP program related costs of $189,000 in the third quarter of 2009, $142,000 in the second quarter of 2009, and $428,000 in the third quarter of 2008.
Management Commentary
“Our ability to exercise strong cost controls along with effective resource management allowed us to achieve another profitable quarter in this challenging economic climate,” said Stephen J. Hansbrough, HearUSA's chairman and CEO. “We have made the tough calls and avoided the unprofitable strategies that benefit sales at the expense of profits. We believe this approach has enabled us to establish a cost structure that can maximize the potential of a rising top line in 2010.”
Gino Chouinard, HearUSA’s president and COO, added, “In 2009, our main focus has been to realign our expense structure and return the company to profitability. Thanks to our margin improvement initiatives and $8 million in annual expense reductions, we have now achieved two consecutive quarters of positive net income. In 2010, we will focus on generating revenue growth by maximizing new and existing third party relationships, implementing new marketing strategies, expanding internal training and motivational programs, and making accretive acquisitions.”
Conference Call
HearUSA will hold a conference call later today to discuss its third quarter 2009 financial results. The company’s senior management will host the presentation, which will be followed by a question and answer period.
Date: Tuesday, November 10, 2009
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Domestic callers: 1-800-894-5910
International callers:1-785-424-1052
Conference ID#: 7HEARUSA
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 November 24, 2009:
Toll-free replay number: 1-800-388-9074
International replay number:1-402-220-1117
(No passcode required)
About HearUSA, Inc.
HearUSA is the recognized leader in hearing care for the nation's top managed care organizations through its network of more than 2000 hearing care providers, including 178 company-owned locations. HearUSA is the nation's only hearing care network accredited by URAC, an independent, nonprofit health care accrediting organization dedicated to promoting health care quality through accreditation, certification and commendation. HearUSA is also the administrator of the AARP Hearing Care program, designed to help millions of Americans aged 50+ who have untreated hearing loss.For more information about HearUSA visit www.hearusa.com, or go towww.hearingshop.com for a wide selection of hearing related products available for purchase online.
HearUSA, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 26, 2009 and September 27, 2008
(unaudited)
| September 26, | September 27, | ||||
| 2009 | 2008 | ||||
| (Dollars in thousands, except per share amounts) | |||||
|
|
| ||||
Net revenues |
|
| ||||
Hearing aids and other products | $ | 19,616 | $ | 22,716 | ||
Services | 2,212 | 1,813 | ||||
Total net revenues | 21,828 | 24,529 | ||||
|
|
| ||||
Operating costs and expenses |
|
| ||||
Hearing aids and other products | 4,543 | 5,963 | ||||
Services | 441 | 571 | ||||
Total cost of products sold and services excluding depreciation and amortization | 4,984 | 6,534 | ||||
|
|
| ||||
Center operating expenses | 10,811 | 12,781 | ||||
General and administrative expenses | 3,694 | 3,217 | ||||
Depreciation and amortization | 593 | 520 | ||||
Total operating costs and expenses | 20,082 | 23,052 | ||||
Income from operations | 1,746 | 1,477 | ||||
Non-operating income (expenses) |
|
| ||||
Gain on foreign exchange | 99 | - | ||||
Interest income | 4 | 7 | ||||
Interest expense | (1,137 | ) | (1,548 | ) | ||
Income (loss) from continuing operations before income tax expense and discontinued operations | 712 | (64 | ) | |||
Income tax expense | (210 | ) | (214 | ) | ||
Income (loss) from continuing operations | 502 | (278 | ) | |||
Discontinued operations |
|
| ||||
Income (loss) from discontinued operations, net of income tax expense | (15 | ) | 720 | |||
Gain on sale of discontinued operations | 529 | - | ||||
Income tax expense on gain on sale of discontinued operations | (87 | ) | - | |||
Income from discontinued operations | 427 | 720 | ||||
Net income | 929 | 442 | ||||
|
|
| ||||
Net income attributable to noncontrolling interest | (182 | ) | (482 | ) | ||
Net income (loss) attributable to controlling interest | 747 | (40 | ) | |||
Dividends on preferred stock | (34 | ) | (35 | ) | ||
Net income (loss) attributable to common stockholders | $ | 713 | $ | (75 | ) | |
|
|
| ||||
Income (loss) from continuing operations attributable to common stockholders per common share – basic | $ | 0.01 | $ | (0.02 | ) | |
Income (loss) from continuing operations attributable to common stockholders per common share- diluted | $ | 0.01 | $ | (0.02 | ) | |
|
|
| ||||
Net income (loss) attributable to common stockholders per common share – basic | $ | 0.02 | $ | (0.00 | ) | |
Net income (loss) attributable to common stockholders per common share - diluted | $ | 0.02 | $ | (0.00 | ) | |
Weighted average number of shares of common stock outstanding – basic | 44,838 | 38,408 | ||||
Weighted average number of shares of common stock outstanding –diluted | 45,810 | 38,408 | ||||
HearUSA, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(unaudited)
| September 26, | December 27, | ||||
ASSETS | 2009 | 2008 | ||||
| (Dollars in thousands, except for par values) | |||||
Current assets |
|
| ||||
Cash and cash equivalents | $ | 8,436 | $ | 3,553 | ||
Short-term marketable securities | 6,406 | - | ||||
Accounts and notes receivable, less allowance for |
|
| ||||
doubtful accounts of $644 and $506 | 5,628 | 7,371 | ||||
Inventories | 1,882 | 1,682 | ||||
Prepaid expenses and other | 797 | 502 | ||||
Total current assets | 23,149 | 13,108 | ||||
Property and equipment, net | 4,150 | 4,876 | ||||
Goodwill | 51,309 | 65,953 | ||||
Intangible assets, net | 12,997 | 15,630 | ||||
Deposits and other | 770 | 810 | ||||
Restricted cash and cash equivalents | 3,225 | 224 | ||||
Total Assets | $ | 95,600 | $ | 100,601 | ||
| ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities |
|
| ||||
Accounts payable | $ | 9,885 | $ | 5,011 | ||
Accrued expenses | 3,217 | 3,208 | ||||
Accrued salaries and other compensation | 3,103 | 3,713 | ||||
Current maturities of long-term debt | 6,372 | 6,915 | ||||
Income taxes payable | 1,870 | - | ||||
Dividends payable | 35 | 34 | ||||
Total current liabilities | 24,482 | 18,881 | ||||
Long-term debt | 37,308 | 49,099 | ||||
Deferred income taxes | 7,085 | 7,284 | ||||
Total long-term liabilities | 44,393 | 56,383 | ||||
Commitments and contingencies | - | - | ||||
|
|
| ||||
Stockholders’ equity |
|
| ||||
Preferred stock (aggregate liquidation preference $2,330, $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 44,880,045 and 44,828,384 shares issued | 4,488 | 4,483 | ||||
Additional paid-in capital | 137,577 | 136,924 | ||||
Accumulated deficit | (114,810 | ) | (116,360 | ) | ||
Accumulated other comprehensive income | - | 1,249 | ||||
Treasury stock, at cost: 523,662 common shares | (2,485 | ) | (2,485 | ) | ||
Noncontrolling interest | 1,955 | 1,526 | ||||
Total Stockholders’ equity | 26,725 | 25,337 | ||||
Total Liabilities and Stockholders’ Equity | $ | 95,600 | $ | 100,601 | ||