Company Contact: | Investor Relations Contact: | |||
PHC, Inc. | Liolios Group, Inc. |
| ||
Bruce A. Shear, President & CEO | Scott Kitcher |
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Tel: 978-536-2777 | Tel: 949-574-3860 |
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PHC Reports Record Results for Second Quarter Fiscal 2008
Q2 Revenues Up 28%, Net Income Up 85% vs. Same Year-Ago Quarter
Peabody, Mass. – February 14, 2008 – PHC, Inc., d.b.a. Pioneer Behavioral Health (AMEX:PHC), a leading provider of inpatient and outpatient behavioral health services and pharmaceutical research, announced financial results for the second quarter ended December 31, 2007.
Q2 2008 Financial and Operational Highlights
• | Record second quarter revenues of $12.7 million, increased 28% vs. Q2 2007. |
• | Record second quarter net income of $0.5 million or $0.02 per share, increased 85% vs. Q2 2007. |
• | Second quarter patient care revenue increased 27% vs. Q2 2007. |
• | Patient days increased 6% vs. Q2 2007. |
• | Balance sheet continued to strengthen: Total liabilities reduced by $0.3 million from Q1 2008 Shareholders equity increased more than $1 million since 6/30/07. |
• | Construction of the Seven Hills Behavioral Institute near Las Vegas, Nevada continued as scheduled and remains on track to open in Q4 2008. Seven Hills is projected to contribute annualized revenue of approximately $12 million, along with higher margins than PHC’s other inpatient facilities. |
• | Expanded agreement for services with major railroad customer. |
Key Financial Indicators
(In thousands, except per-share amounts.)
Q2 2008 vs. Q2 2007 |
| Q2 2008 |
| Q2 2007 |
| Change |
| % Change |
Consolidated revenues | $ | 12,694 | $ | 9,952 | $ | 2,742 |
| 28% |
Patient care revenues | $ | 10,131 | $ | 7,947 | $ | 2,184 |
| 27% |
Net Income Before Taxes | $ | 787 | $ | 423 | $ | 364 |
| 86% |
Net Income | $ | 482 | $ | 261 | $ | 221 |
| 85% |
Earnings per share - Basic | $ | 0.02 | $ | 0.01 | $ | 0.01 |
| 100% |
Earnings per share - Diluted | $ | 0.02 | $ | 0.01 | $ | 0.01 |
| 100% |
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Second Quarter Financial Results
For the three months ended December 31, 2007, and compared to the same quarter a year ago, total net revenue from operations increased 28% to $12.7 million, as compared to $10.0 million for the three months ended December 31, 2006. This increase is primarily attributable to an increase in net revenue of the company’s patient care segment, which was up 27% to $10.1 million from $7.9 million in the same year-ago period. Revenue from the pharmaceutical studies segment increased 63% to $1.4 million as compared to $0.9 million for the same quarter last year. Contract support services revenue provided by the company’s Wellplace subsidiary remained relatively stable at $1.1 million.
Income from operations for the quarter totaled $0.8 million, an increase of 38% from the $0.6 million reported for the same period last year. Net income before taxes increased 86% to a record $0.8 million from $0.4 million for the same year-ago period.
Net income for the quarter was $0.5 million, or $0.02 per fully diluted share (based on 20.5 million fully diluted shares), an increase of 100% compared to net income of $0.3 million, or $0.01 per fully diluted share (based on 19.4 million shares) for the second quarter of last year.
“This was the best second quarter in company history,” said Pioneer’s President and CEO Bruce A. Shear, “It follows last quarter’s similar record. Historically, our second quarters have often been the seasonally weakest in each fiscal year, and we are especially proud that we nearly doubled our net income despite the pre-operational expenses of our new Seven Hills facility. Since the previous quarter, we also added nearly a million dollars in cash to the balance sheet, while reducing our long term liabilities substantially.”
Continued Shear, “This record performance was driven by another quarter of strong growth in our patient care segment. Like the first quarter’s doubling of net income over the prior year, the doubling this quarter demonstrates the return of our investment in our Las Vegas market expansion. We expect substantial growth in both revenue and income to continue, especially as our new Seven Hills facility comes online later this fiscal year and we realize the fruition of some of our wellness program initiatives. Add to this a strong balance sheet and it is plain to see that Pioneer enjoys a very strong foundation as we seek new opportunities for growth and expansion in the second half of fiscal 2008 and beyond.”
Teleconference Information
PHC will host a conference call today at 4:30 p.m., Eastern Time. A question and answer session will follow management’s presentation.
To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the PHC conference call and provide the conference ID.
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Domestic callers: 1-800-762-9058
International callers: 1-480-248-5085
Conference ID#: 3835589
A web simulcast of the call can be accessed via PHC’s website at www.phc-inc.com. The call will be available for replay starting at 7:30 p.m. Eastern Time until March 14, 2008:
Toll-Free Replay number: 1-800-406-7325
International Replay number: 1-303-590-3030
Replay PIN #: 3835589
If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 949-574-3860.
About PHC, Inc.
Pioneer Behavioral Health operates companies that provide inpatient and outpatient behavioral health care services, clinical research and Internet- and telephonic-based referral services. The companies contract with national insurance companies, government payors, and major transportation and gaming companies, among others, to provide such services. For more information, please visit www.phc-inc.com.
Statement under the Private Securities Litigation Reform Act of 1995
This press release may include "forward-looking statements" that are subject to risks and uncertainties. Forward-looking statements include information about possible or assumed future results of the operations or the performance of the Company and its future plans and objectives. Various future events or factors may cause the actual results to vary materially from those expressed in any forward-looking statements made in this press release. For a discussion of these factors and risks, see the company's annual report on Form 10-K for the most recently ended fiscal year.
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| December 31, |
| June 30, |
ASSETS |
| 2007 |
| 2007 |
Current assets: |
| (unaudited) | ||
Cash and cash equivalents | $ | 3,707,113 | $ | 3,395,173 |
Accounts receivable, net of allowance for doubtful accounts of $2,872,746 at December 31, 2007 and $3,764,583 at June 30, 2007 |
|
6,145,555 |
|
6,524,387 |
Pharmaceutical receivables |
| 1,667,911 |
| 1,942,268 |
Prepaid expenses |
| 486,023 |
| 688,600 |
Other receivables and advances |
| 888,088 |
| 868,628 |
Deferred income tax asset |
| 1,344,920 |
| 2,015,000 |
Total current assets |
| 14,239,610 |
| 15,434,056 |
Accounts receivable, non-current |
| 35,000 |
| 35,000 |
Other receivables |
| 79,868 |
| 91,697 |
Property and equipment, net |
| 2,559,369 |
| 2,121,191 |
Deferred financing costs, net of amortization of $208,148 and $150,124 at December 31, 2007 and June 30, 2007 |
|
542,346 |
|
613,865 |
Customer relationships, net of amortization of $440,000 at December 31, 2007 and $380,000 at June 30, 2007, respectively |
|
1,960,000 |
|
2,020,000 |
Goodwill |
| 3,508,576 |
| 3,508,576 |
Other assets |
| 3,722,545 |
| 3,465,356 |
Total assets | $ | 26,647,314 | $ | 27,289,741 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable | $ | 1,385,328 | $ | 1,261,841 |
Current maturities of long-term debt |
| 1,117,123 |
| 1,134,300 |
Revolving credit note |
| 653,826 |
| 1,518,742 |
Deferred revenue |
| 66,048 |
| 433,301 |
Current portion of obligations under capital leases |
| 184,463 |
| 205,858 |
Accrued payroll, payroll taxes and benefits |
| 1,646,583 |
| 1,631,693 |
Accrued expenses and other liabilities |
| 1,380,078 |
| 1,702,772 |
Total current liabilities |
| 6,433,449 |
| 7,888,507 |
Long-term debt, net of current maturities |
| 418,345 |
| 831,387 |
Obligations under capital leases |
| 288,664 |
| 226,706 |
Deferred tax liability |
| 93,000 |
| 93,000 |
Total liabilities |
| 7,233,458 |
| 9,039,600 |
Stockholders’ equity: |
|
|
|
|
Preferred Stock, 1,000,000 shares authorized, none issued or outstanding |
| -- |
| -- |
Class A common stock, $.01 par value, 30,000,000 shares authorized, 19,752,728 and 19,622,076 shares issued at December 31, 2007 and June 30, 2007, respectively |
|
197,527 |
|
196,221 |
Class B common stock, $.01 par value, 2,000,000 shares authorized, 775,760 issued and outstanding at December 31, 2007 and June 30, 2007, respectively, each convertible into one share of Class A common stock |
|
7,758 |
|
7,758 |
Additional paid-in capital |
| 27,124,340 |
| 26,812,808 |
Treasury stock, 362,698 shares and 199,098 shares of Class A common stock at December 31, 2007 and June 30, 2007, respectively, at cost |
|
(622,666) |
|
(191,700) |
Accumulated deficit |
| (7,293,103) |
| (8,574,946) |
Total stockholders’ equity |
| 19,413,856 |
| 18,250,141 |
Total liabilities and stockholders’ equity | $ | 26,647,314 | $ | 27,289,741 |
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| Three Months Ended |
| Six Months Ended | ||||
|
| December 31, |
| December 31, | ||||
Revenues: |
| 2007 |
| 2006 |
| 2007 |
| 2006 |
Patient care, net | $ | 10,131,201 | $ | 7,946,670 | $ | 20,274,636 | $ | 15,823,102 |
Pharmaceutical studies |
| 1,421,853 |
| 873,920 |
| 2,842,818 |
| 1,925,303 |
Contract support services |
| 1,141,376 |
| 1,131,770 |
| 2,281,142 |
| 2,266,161 |
Total revenues |
| 12,694,430 |
| 9,952,360 |
| 25,398,596 |
| 20,014,566 |
Operating expenses: |
|
|
|
|
|
|
|
|
Patient care expenses |
| 5,472,592 |
| 4,431,765 |
| 10,768,666 |
| 8,486,731 |
Patient care expenses, pharmaceutical |
|
816,814 |
|
421,549 |
|
1,426,606 |
|
908,486 |
Cost of contract support services |
|
823,571 |
|
687,174 |
|
1,626,219 |
|
1,525,729 |
Provision for doubtful accounts |
| 342,342 |
| 347,458 |
| 764,568 |
| 799,983 |
Administrative expenses |
| 3,799,897 |
| 2,929,865 |
| 7,409,833 |
| 5,926,006 |
Administrative expenses, pharmaceutical |
|
605,757 |
|
529,555 |
|
1,177,613 |
|
1,208,663 |
Total operating expenses |
| 11,860,973 |
| 9,347,366 |
| 23,173,505 |
| 18,855,598 |
|
|
|
|
|
|
|
|
|
Income from operations |
| 833,457 |
| 604,994 |
| 2,225,091 |
| 1,158,968 |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
| 52,504 |
| 33,808 |
| 85,039 |
| 66,657 |
Other income |
| 18,472 |
| (3,135) |
| 32,571 |
| (4,078) |
Interest expense |
| (117,319) |
| (212,441) |
| (248,700) |
| (332,271) |
|
|
|
|
|
|
|
|
|
Total other expenses, net |
| (46,343) |
| (181,768) |
| (131,090) |
| (269,692) |
|
|
|
|
|
|
|
|
|
Income before provision for taxes |
| 787,114 |
| 423,226 |
| 2,094,001 |
| 889,276 |
Provision for income taxes |
| 305,282 |
| 162,138 |
| 812,158 |
| 344,905 |
|
|
|
|
|
|
|
|
|
Net income applicable to common shareholders |
$ |
481,832 |
$ |
261,088 |
$ |
1,281,843 |
$ |
544,371 |
|
|
|
|
|
|
|
|
|
Basic net income per common share | $ | 0.02 | $ | 0.01 | $ | 0.06 | $ | 0.03 |
|
|
|
|
|
|
|
|
|
Basic weighted average number of shares outstanding |
|
20,143,636 |
|
18,758,151 |
|
20,140,208 |
|
18,636,146 |
|
|
|
|
|
|
|
|
|
Diluted net income per common share | $ | 0.02 | $ | 0.01 | $ | 0.06 | $ | 0.03 |
|
|
|
|
|
|
|
|
|
Diluted weighted average number of shares outstanding |
|
20,485,294 |
|
19,409,232 |
|
20,494,963 |
|
19,280,727 |
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