Exhibit 99.1
PHC, INC. ANNOUNCES RECORD REVENUE AND EARNINGS FOR ITS THIRD QUARTER OF
FISCAL 2005
Revenues of $8.8 million and Earnings of $880,000
FOR IMMEDIATE RELEASE
Company Contact: Investor Relations Contact:
_________________ __________________________
PHC, Inc. Hayden Communications, Inc.
Bruce A. Shear Matthew Hayden
978-536-2777 843-272-4653
>> RECORD THIRD QUARTER REVENUE OF $8.8 MILLION VS. $6.5 MILLION IN PRIOR YEAR
>> RECORD THIRD QUARTER EARNINGS OF $880,000 OR $0.05 PER SHARE VS. LOSS OF
$845,000 OR $(0.06) PER SHARE IN THE PRIOR YEAR
>> NINE-MONTH REVENUES INCREASE 30% VS. YEAR AGO PERIOD; NINE-MONTH BASIC
EARNINGS (LOSS) PER SHARE OF $0.12 VS. $(0.06) LAST YEAR
>> SHAREHOLDERS' EQUITY INCREASED 46.2% TO $7.8 MILLION FROM JUNE 30, 2004.
>> YTD PHARMACEUTICAL STUDIES REVENUE UP MORE THAN 570%
Peabody, Mass., May 11, 2005 -- PHC, Inc., d.b.a. Pioneer Behavioral Health (OTC
Bulletin Board: PIHC), a leading provider of inpatient and outpatient behavioral
health services and pharmaceutical research, today announced record financial
results for its fiscal 2005 third quarter and nine-month period ended March 31,
2005. The record results were due to increases in revenue from all three
operating segments, as well as significant increases in patient days and
improved collections.
Key Financial Indicators
(all numbers in thousands, except per-share amounts)
Q3 2005 Q3 2004 Increase % Change
(decrease)
Consolidated revenue $8,764 $6,472 $2,292 35.4%
Patient care revenue $6,735 $5,584 $1,151 20.6%
Pharmaceutical studies $1,103 $155 $948 611.6%
Contract support services $926 $733 $193 26.3%
Income (loss) from
operations $983 $(673) $1,656 NA
Net Income (loss) $880 $(845)* $1,725 NA
EPS - Basic $0.05 $(0.06) $0.11 NA
EPS - Diluted $0.05 $(0.06) $0.11 NA
Other Third Quarter Operational Highlights:
o 17th consecutive profitable quarter, excluding previously reported
litigation settlement and related legal costs previously reported and
related to the quarter ending March 31, 2004.
o 22.4% increase in patient days
o Detroit Behavioral Institute (DBI) facility currently at 100 percent
capacity of Phase I.
o Company's provision for doubtful accounts decreased 4.2% from the same
quarter last year due to improved collections and a related decrease in the
age of the Company's receivables.
o Pivotal Research Centers (Pivotal) is currently engaged in 24 enrolling
studies and providing services in a total of 58 studies.
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"For the last two years, we worked diligently to diversify our company with
multiple revenue streams that leverage our core competencies, and the success of
this initiative has enabled us to deliver exceptional growth and record
profitability during all periods of this fiscal year," commented Bruce A. Shear,
Pioneer's President and Chief Executive Officer. "We have also prudently managed
operating expenses and improved collections, which have both improved our
profitability. The acquisition of Pivotal has continued to pay dividends,
resulting in an increase of more than 570% in revenue from pharmaceutical
studies. The 30 adjudicated juvenile beds at DBI are now generating positive
cash flow and contributed to a 22.4% increase in patient days for the quarter,
leading to a significant increase in patient care revenue. These factors have
remained consistent throughout fiscal 2005, and we are focused on continuing
these positive trends into fiscal 2006 and beyond."
Total revenues for the third quarter increased 35.4% to a record $8.8 million
from the $6.5 million reported in the third quarter of fiscal 2004, due to
substantial increases in revenue from all three operating segments. Net patient
care revenue increased 20.6% to $6.7 million for the quarter from $5.6 million
last year due to a 22.4% increase in patient days. Revenue from pharmaceutical
studies increased 611.6% to $1.1 million from $155,000 for the third quarter of
last year, due to the acquisition of Pivotal Research Centers, LLC on April 30,
2004. Contract support services revenue provided by the Company's Wellplace
division increased 26.3% to $926,000 for the third quarter from $733,000 for the
third quarter one year ago due to the October 2004 increase in the Michigan call
center contract with Detroit-Wayne County (Michigan) Community Mental Health
Agency, which increased the monthly revenue on this contract due to a service
expansion.
Total operating expenses increased 8.9% to $7.8 million for the third quarter
from $7.1 million reported in the same quarter last year. Income from operations
for the quarter was $983,000 for the third quarter, compared to a loss from
operations of $673,000. The third quarter of fiscal 2004 included $947,500 in
one-time expenses related to the acquisition of Pivotal and the disposition of a
lawsuit the Company inherited from a previous acquisition. Net income applicable
to common shareholders for the three months was a record $880,000, or $0.05 per
basic and fully diluted share, compared to a net loss, inclusive of
non-recurring expenses, of $845,000, or $(0.06) per basic and fully diluted
share for the third quarter last year. Net income increased sequentially 115.4%
compared to the $409,000 reported in the Company's second quarter of fiscal
2005.
For the first nine months of fiscal 2005, revenues were $24.8 million, a 30.0%
increase compared to the $19.1 million reported for the first nine months of
last year. Net patient care revenue increased 15.8% to $18.9 million from $16.3
million for the nine months ended March 31, 2004, due to a 13.3% increase in
patient days for the period. Revenue from pharmaceutical studies increased
576.8% to $3.4 million for the nine months from $500,000 for the same period
last year. Contract support services revenue provided by Wellplace increased
12.0% to $2.5 million for the nine months from $2.2 million for the same period
last year.
Total operating expenses were $22.2 million for the nine months ended March 31,
2005, a 14.2% increase compared to the $19.5 million reported for the same
period last year. Income from operations for the nine-months was $2.5 million
for the nine months ended March 31, 2005 compared to a loss from operations of
$789,000, inclusive of the legal and acquisition expenses, for the same period
last year. Net income applicable to common shareholders for the nine months was
a record $2.1 million, or $0.12 per basic and $0.11 per fully diluted share,
compared to a net loss of $789,000, or $(0.06) per basic and fully diluted share
for the same period last year.
The Company's balance sheet continued to strengthen with a current ratio of
1.38:1 on March 31, 2005. Shareholders' equity increased 46.2% to $7.8 million
on March 31, 2005 from $5.4 million on June 30, 2004.
Mr. Shear continued, "Our third quarter was indicative of the operational
success we've had throughout this fiscal year, and demonstrates the operational
leverage our business model affords us as we expand our revenue base. Expansion
efforts continue at the Detroit Medical Center, and the next 20 beds at DBI are
scheduled to open during July 2005. We also continue to grow our pharmaceutical
research efforts in Michigan and Utah. Our Wellplace division's expanded
contract with Wayne County, Michigan, led to increased revenues, and we believe
we can grow this division further throughout 2005. We are focused on exploiting
our competitive position and broadening our revenue base to further improve our
financial results and enhance shareholder value."
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Teleconference Information
Mr. Shear will host a conference call to discuss the fiscal 2005 third quarter
results on Wednesday, May 11, 2005, at 9 a.m. Eastern Time. Interested parties
within the United States can access the call by dialing 800-299-7635, and
international callers may dial 617-786-2901. Please use passcode 23076603. A
replay of the call also will be available until May 18, 2005 at 888-286-8010 for
callers within the United States, and 617-801-6888 for international callers.
Please use passcode 47504642 for the replay. This call is being webcast by CCBN,
and can be accessed at PHC, Inc.'s web site at www.phc-inc.com.
About Pioneer Behavioral Health
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 or www.haydenir.com.
- tables follow -
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-KSB for the most
recently ended fiscal year.
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
March 31, March 31,
2005 2004 2005 2004
__________________________________________________
Total revenues $8,763,682 $6,472,188 $24,790,398 $19,064,183
Total operating expenses 7,780,810 7,145,284 22,242,796 19,479,911
__________ __________ ___________ ___________
Income (loss) from operations 982,872 (673,096) 2,547,602 (415,728)
__________ __________ ___________ ___________
Income (loss) before provision for 880,456 (845,265) 2,163,357 (778,336)
taxes*
Provision for income taxes -- -- 98,469 11,121
__________ __________ ___________ ___________
Net income (loss) applicable to
common Shareholders $ 880,456 $ (845,265) $2,064,888 $ (789,457)
========== =========== ========== ============
Basic net income (loss) per
common Share $ 0.05 $ (0.06) $ 0.12 $ (0.06)
========== =========== ========== ============
Basic weighted average number
of shares outstanding 17,648,412 14,402,988 17,474,155 14,149,261
========== =========== ========== ============
Fully diluted net income (loss)
per common share $ 0.05 $ (0.06) $ 0.11 $ (0.06)
========== =========== ========== ============
Fully diluted weighted average
number of shares outstanding 18,690,012 14,402,988 18,234,480 14,149,261
========== =========== ========== ============
BALANCE SHEET HIGHLIGHTS
As of As of
March 31, 2005 June 30, 2004
______________ _____________
Cash $ 552,874 $ 594,823
Total current assets 10,163,064 7,631,516
Net property and equipment 1,488,525 1,353,975
___________ _________
Total assets $17,292,497 $13,311,569
=========== ===========
Total current liabilities $ 7,372,275 $ 7,390,661
Total long term debt 2,059,963 529,378
___________ _________
Total liabilities 9,447,183 7,944,532
Shareholders' equity 7,845,314 5,367,037
___________ _________
Total liabilities and equity $17,292,497 $13,311,569
============ ============
* March 31, 2004 includes $947,500 in one-time, non-recurring expenses