Exhibit 99
PHC, INC. ANNOUNCES FISCAL 2004 FINANCIAL RESULTS
FOR IMMEDIATE RELEASE
Company Contact: Investor Relations Contact:
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PHC, Inc. Hayden Communications, Inc.
Bruce A. Shear Matthew Hayden
978-536-2777 843-272-4653
>> RECORD FOURTH QUARTER EARNINGS OF $532,454 OR $0.03 PER SHARE
>> FOURTH QUARTER REVENUES INCREASED 20% TO $7.6 MILLION
>> FISCAL 2004 REVENUES INCREASED 12% TO $26.6 MILLION
>> 2004 NON-PATIENT OPERATIONS REVENUE INCREASED 63%
>> SHAREHOLDERS' EQUITY INCREASED 177% TO $5.4 MILLION ON JUNE 30th
Peabody, MA, September 2, 2004 -- PHC, Inc., d.b.a. Pioneer Behavioral Health
(OTC Bulletin Board: PIHC), a leading provider of inpatient and outpatient
behavioral health services, today announced its fourth quarter and year end
financial results for fiscal 2004, which ended June 30, 2004.
Revenues for the fourth quarter increased 20 percent to $7.6 million from the
$6.3 million reported in the fiscal fourth quarter of 2003, due to increases in
revenue from all three of the Company's operating segments. Net income from
ongoing operations for the quarter increased 183.8 percent to $533,083, a record
for the 4th quarter compared to the year ago period. Net income applicable to
common shareholders for the three months was $532,454, or $0.03 per diluted
share, up from $179,786, or $0.01 per diluted share for the fourth quarter of
fiscal 2003. This was the Company's 14th consecutive quarter of operating
profitability, with the exception of the previously reported litigation
settlement and related legal costs.
Revenues for the fiscal year ended June 30, 2004 increased 12 percent to $26.6
million from the $23.8 million reported in fiscal 2003. Non-patient operations
revenue, which includes pharmaceutical studies and contract support services,
increased 63.3 percent to $4.2 million versus $2.6 million last year. Revenue
from the Company's Wellplace division nearly doubled to $3.0 million in 2004
from $1.6 million in 2003, an increase of 80.9 percent, and revenue for the
Company's Research Division, operating under the Pivotal Research name,
increased 32.4 percent to $1.2 million from $940,772 last year. This increase
included two months revenue of $699,341 from Pivotal, which was recently
acquired.
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The Company's results were impacted by $1.03 million in one-time expenses
related to the Company's settlement of a malpractice lawsuit against a
subsidiary. After the full effect of these one-time expenses, the net loss
applicable to common shareholders was $257,003 compared to net income of
$977,742 for 2003. The Company reported a fully diluted loss per share for 2004
of $(0.02) versus earnings per share of $0.07 on fewer shares outstanding last
year. The number of diluted shares outstanding increased to 17,337,923 for the
quarter June 30, 2004 from 14,774,203 for the quarter June 30, 2003. Exclusive
of the one-time expenses, the Company's earnings would have been $772,997.
Bruce A. Shear, Chairman and Chief Executive Officer, commented, "Strong
increases in each of our three operating segments, Wellplace, Pivotal Research
and Behavioral Health Service, produced strong revenue growth and lead to record
profitability levels for the fourth quarter, validating our business strategy
and providing momentum and optimism for fiscal 2005. We achieved our stated goal
of double-digit revenue growth for fiscal 2004, with a 12 percent increase which
we expect will accelerate in 2005. We continue to strengthen our balance sheet,
by reducing debt and increasing cash and shareholders' equity, and we expect
these positive trends to continue in 2005."
Other operational highlights include:
o The acquisition of Pivotal has been completed and integrated with the
Company's pharmaceutical research operations consolidated under the Pivotal
name and management. In the two months following the closing of the
acquisition, Pivotal contributed more than $699,000 in revenue. The Company
currently has more than eighty (80) active studies.
o As part of the acquisition, the Company completed a private placement of
its Common Stock in two stages. In March, the Company issued 684,999 shares
of Class A Common Stock for $753,500 and warrants to purchase 171,248
additional shares of Class A Common Stock. As a result of second stage of
this offering, in April 2004, the Company issued 1,918,196 shares of Class
A Common Stock for $2,110,016 and warrants to purchase 479,549 additional
shares of Class A Common Stock.
o The expansion at the Detroit Medical Center is scheduled for mid-September,
with the opening of the first 30-bed unit. Further anticipated expansion
will result in a total of 114 acute and long-term psychiatric beds at this
leased facility.
Mr. Shear concluded, "The attention on the importance of mental health is
increasing, as both Presidential candidates have discussed plans for increasing
funding and providing legislation to enhance American's ability to receive
high-quality mental health care. Pioneer remains well-positioned to benefit from
this trend going forward, and we look forward to meeting this increasing demand
to assist those in need."
The Company's balance sheet continues to strengthen with a current ratio of
1.03:1 on June 30, 2004. Included in short-term liabilities is approximately
$1.5 million mortgage debt held by GE Healthcare Financial Services, Inc. which
matures in November 2004. The company is negotiating a renewal or replacement of
this debt and is confident that it will be successful. The Company's auditors
have indicated preliminarily that they may qualify their opinion if the debt is
not replaced or a binding commitment is not secured prior to September 28, 2004.
If this debt was classified as long term the current ratio would have been
1.29:1.
Shareholders' equity increased 177 percent to $5.4 million on June 30, 2004,
from $1.9 million on June 30, 2003. Cash and equivalents also increased
substantially to $594,823 on June 30, 2004, from $494,991 on June 30, 2003, an
increase of 20 percent. Interest expense during fiscal 2004 decreased to
$531,564 from the $542,269 paid during fiscal 2003.
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About Pioneer Behavioral Health Pioneer
Behavioral Health's core business provides inpatient and outpatient behavioral
healthcare services. The company contracts with national insurance companies,
major transportation and gaming companies to provide behavioral health services.
Pioneer's Pivotal Research division provides clinical research for leading
pharmaceutical manufacturers. Pioneer also owns and operates Wellplace.com, a
leading Internet-based provider of behavioral health services to consumers and
professionals. For more information, please visit our web site at
www.phc-inc.com or www.haydenir.com.
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 (or during this conference
call). These factors and risks are discussed in the company's annual report on
Form 10-KSB for the years ended June 30, 2002 and 2003, copies of which were
filed with the Securities and Exchange Commission, and in our quarterly reports
on Form 10-QSB filed with the Securities and Exchange Commission since October
2003.
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PHC, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
FOR THE FOR THE
THREE MONTHS TWELVE MONTHS
ENDED ENDED
______________________________________________________
06/30/04 06/30/03 06/30/04 06/30/03
___________ __________ __________ ___________
Total Revenue $7,584,662 $6,313,932 $26,648,845 $23,833,323
Net Income (Loss)from Ongoing
Operations Before Dividends 533,083 192,066 (225,110) 1,002,516
Net Loss Attributable to
Closed Operations (629) (12,280) (31,893) (24,774)
Net Income (Loss) 532,454 179,786 (257,003) 977,742
Basic Earnings (Loss)Per Share 0.03 0.01 (0.02) 0.07
Diluted Earnings (Loss)Per Share 0.03 0.01 (0.02) 0.07
Basic Shares Outstanding 16,551,383 14,066,254 14,731,395 13,944,047
Diluted Shares Outstanding 17,337,923 14,774,203 14,731,935 14,564,078
BALANCE SHEET HIGHLIGHTS
As of June 30
2004 2003 2002
___________ __________ __________
Cash $ 594,823 $ 494,991 $ 281,848
Total Current Assets 7,631,516 6,145,489 6,014,356
Net Property and Equipment 1,353,975 1,295,113 1,306,108
Total Assets $13,311,569 $9,411,723 $9,373,838
___________ __________ __________
Total Current Liabilities $ 7,390,661 $5,409,312 $5,722,920
Total Long Term Debt 553,871 2,030,285 1,819,026
Total Liabilities $ 7,944,532 $7,476,466 $7,580,160
___________ __________ __________
Shareholders' Equity $ 5,367,037 $1,935,257 $1,793,678
Total Liabilities and Equity $13,311,569 $9,411,723 $9,373,838
___________ __________ __________
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