American CareSource Holdings, Inc. (NASDAQ: ANCI) today announced
financial and operational results for the three months ended March
31, 2009. Recent highlights include:
-- Reported quarterly net income of $279 thousand, or $0.02 per diluted
share.
-- Achieved $16.1 million in revenue for the first quarter, a 40% increase
in revenues compared to the same prior year period.
-- Quarterly gross margins were approximately 14.3% compared to
approximately 14.8% in the three months ended March 31, 2008 reflecting
client and provider mix changes.
-- Generated EBITDA, as adjusted, of approximately $683 thousand for the
quarter.
-- EBITDA, as adjusted, (a non-GAAP measure) is defined as income
(loss) from operations adjusted for depreciation and amortization,
non-cash warrant and option compensation expense, executive
severance and other non-cash charges. EBITDA, as adjusted, should
be considered in addition to, but not in lieu of, income (loss)
from operations reported under generally accepted accounting
principles (GAAP).
-- The Company finished the quarter with approximately $10.3 million in
cash and cash equivalents on hand and generated approximately $54
thousand in cash from operating activities in the first quarter of
2009.
-- Added approximately 600 new providers representing approximately 1,400
new sites during the first quarter.
-- Aggregate claims volume processed increased to approximately 90
thousand for the first quarter of 2009, up 51% over the first quarter
of 2008.
-- Signed new client agreements with HealthSCOPE Benefits, Inc. and the
subsidiaries of HealthMarkets, Inc., allowing the Company to diversify
its client mix and work with direct payors.
-- Signed new client agreement with Principal Financial Group to provide a
full range of ancillary care services for its newly launched
proprietary healthcare network, Principal Edge Network.
-- Signed new client agreement with InterGroup Services Corporation,
extending reach into the Mid-Atlantic PPO market.
"Our financial results for the first quarter of 2009 are a
reflection of our continued efforts to diversify our client mix,"
stated David S. Boone, Chief Executive Officer of American
CareSource. "Our revenues were down compared to the fourth quarter
of 2008 due to the seasonal resetting of co-pays and deductibles
with typical health insurance plans as well as a broad based
reduction in healthcare spending due to the current economic
conditions. However, we made important strides during the recent
quarter in signing new payor clients and broadening our customer
base. As a result, we anticipate a return to sequential quarterly
improvements in revenues for the remainder of the year.
"Our goal, as previously stated, is to increase claims volume,
both by continuing to focus on offering a broad, value-added suite
of services to our clients, as well as by expanding our client base
with a greater number of direct payors such as Third Party
Administrators and other insurers. As such, we invested in
additional sales and marketing resources, expanded our provider
development organization and developed the infrastructure during
the quarter to support our anticipated growth throughout the year.
With these initiatives in place, we remain confident in our 2009
revenue guidance of $85-$95 million."
Revenues for the first quarter of 2009 were $16.1 million
compared to $11.5 million in the first quarter of 2008. The 40%
increase in revenues is due to the progression of the Company's
client relationships, which allowed the Company access to a greater
number of payors and to benefit from the external growth and
expansion of its clients. In addition, revenues were positively
impacted by growth of the Company's network of ancillary service
providers.
The Company reported net income of $279 thousand, or $0.02 per
diluted share, for the three months ended March 31, 2009, compared
to net income of approximately $521 thousand, or $0.03 per diluted
share, in the same period last year. The number of employees
supporting the business increased to 63 at March 31, 2009 as
compared to 39 at March 31, 2008 as American CareSource has
invested in capabilities necessary to expand its national service
provider network, develop its sales and marketing organization and
to develop technology to facilitate efficient scaling of the
business. Consequently, net income for the quarter was impacted by
those investments designed to manage and realize the Company's 2009
growth projections.
Cash provided by operations was $54 thousand for the quarter
ended March 31, 2009 versus cash provided by operations of
approximately $1.6 million during the same period in 2008. The
Company has generated positive operating cash flow for seven
consecutive quarters and continues to operate debt free. At March
31, 2009, the Company had approximately $10.3 million in cash and
cash equivalents compared to approximately $10.6 million at
December 31, 2008.
Conference Call
As previously announced, American CareSource will hold a
conference call today, to discuss financial results of the first
quarter ended March 31, 2009 as follows:
Date: Thursday, May 7, 2009
Time: 10:00 a.m. (CT)/11:00 a.m. (ET)
Dial-in numbers: 888-442-4145 (U.S. & Canada) or 719-955-1569
Live webcast: www.anci-care.com, under "Events"
The teleconference replay will be available three hours after
completion through Thursday, May 14, 2009 at 888-203-1112 (U.S.
& Canada) or 719-457-0820. The replay pass code is 4586869. The
archived webcast will be available for one year on the Company's
investor website, www.anci-care.com, under "Events."
About Ancillary Healthcare Services
American CareSource provides ancillary healthcare services
through its network that offers cost effective alternatives to
physician and hospital-based services. This market is estimated at
$574 billion, and has grown to 30% of total national health
expenditures. These providers offer services in over 30 categories,
including laboratories, dialysis centers, free-standing diagnostic
imaging centers, non-hospital surgery centers, as well as durable
medical equipment such as orthotics and prosthetics, and
others.
About American CareSource Holdings, Inc.
American CareSource Holdings, the first national, publicly
traded ancillary care network services company, offers a
comprehensive national network of approximately 3,000 ancillary
service providers at over 26,000 sites through its subsidiary,
Ancillary Care Services. The Company's ancillary network and
management provides a complete outsourced solution for a wide
variety of healthcare payors and plan sponsors including
self-insured employers, indemnity insurers, PPOs, HMOs, third party
administrators and both federal and local governments. For
additional information, please visit www.anci-care.com.
ANCI-F
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995:
Any statements that are not historical facts contained in this
release, including with respect to future engagements by clients,
revenue growth, earnings, and guidance are forward-looking
statements. It is possible that the assumptions made by American
CareSource Holdings, Inc. for purposes of such statements may prove
to be inaccurate or may not materialize. Actual results may differ
materially from those projected or implied in any forward-looking
statements. Such statements may involve further risks and
uncertainties, including but not limited to those relating to
demand for our services, pricing, market acceptance, our ability to
integrate with our clients, our ability to attract and maintain
providers, our ability to manage growth, the effect of economic,
political and regulatory conditions, the effect of competition,
risks in product development, the ability to complete transactions,
and other risks identified in this release, and the Securities and
Exchange Commission filings of American CareSource Holdings,
Inc.
AMERICAN CARESOURCE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
March 31,
--------------------------
2009 2008
------------ ------------
Net Revenues $ 16,055,649 $ 11,505,675
Cost of revenues:
Provider payments 11,935,835 8,390,610
Administrative fees 815,526 701,676
Fixed costs 1,004,573 708,835
------------ ------------
Total cost of revenues 13,755,934 9,801,121
------------ ------------
Contribution margin 2,299,715 1,704,554
Selling, general and administrative expenses 1,900,678 1,112,854
Depreciation and amortization 112,797 92,067
------------ ------------
Total operating expenses 2,013,475 1,204,921
------------ ------------
Operating income 286,240 499,633
Interest income 40,962 40,668
Interest expense (312) (1,838)
Other expense (24,482) -
------------ ------------
Total other income, net 16,168 38,830
------------ ------------
Income before income taxes 302,408 538,463
Income tax provision 23,349 17,045
------------ ------------
Net Income $ 279,059 $ 521,418
============ ============
Earnings per common share:
Basic $ 0.02 $ 0.04
============ ============
Diluted $ 0.02 $ 0.03
============ ============
Basic weighted average common shares
outstanding 15,418,433 14,880,266
============ ============
Diluted weighted average common shares
outstanding 18,287,409 17,255,201
============ ============
Reconciliation of non-GAAP financial measures
to reported GAAP financial measures
Reconciliation of EBITDA and EBITDA, as
adjusted:
Three months ended
March 31,
--------------------------
2009 2008
------------ ------------
Operating income $ 286,240 $ 499,633
Depreciation and amortization 112,797 92,067
------------ ------------
EBITDA 399,037 591,700
Non-cash stock-based compensation expense 259,748 170,753
Other non-cash charges 24,482 -
Executive severance - 21,844
------------ ------------
EBITDA, as adjusted $ 683,267 $ 784,297
============ ============
AMERICAN CARESOURCE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2009 2008
------------ ------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 10,346,294 $ 10,577,829
Accounts receivable, net 6,173,110 5,788,457
Prepaid expenses and other current assets 545,730 495,814
------------ ------------
Total current assets 17,065,134 16,862,100
Property and equipment, net 1,119,527 915,224
Other assets:
Other non-current assets 1,027,258 1,127,114
Intangible assets, net 1,248,640 1,280,656
Goodwill 4,361,299 4,361,299
------------ ------------
Total assets $ 24,821,858 $ 24,546,393
============ ============
LIABILITIES and SHAREHOLDERS' EQUITY
Current Liabilities:
Due to service providers $ 5,796,503 $ 5,964,392
Accounts payable and accrued liabilities 2,942,368 3,100,839
Current maturities of long-term debt 11,287 11,023
------------ ------------
Total current liabilities 8,750,158 9,076,254
Other liabilities 374,301 3,053
Shareholders' equity 15,697,399 15,467,086
------------ ------------
Total liabilities and shareholders' equity $ 24,821,858 $ 24,546,393
============ ============
AMERICAN CARESOURCE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three months ended
March 31,
--------------------------
2009 2008
------------ ------------
Cash flows from operating activities:
Net income $ 279,059 $ 521,418
Adjustments to reconcile net income to net
cash provided by operations:
Stock-based compensation expense 259,748 157,525
Depreciation and amortization 112,797 92,067
Derivative loss 24,482 -
Amortization of long-term client
agreement 62,500 -
Client administration fee expense
related to warrants 28,011 13,228
Changes in operating assets and
liabilities:
Accounts receivable (384,653) 402,624
Prepaid expenses and other assets (40,570) 41,761
Accounts payable and accrued
liabilities (119,179) (31,073)
Due to service providers (167,889) 365,611
------------ ------------
Net cash provided by operating
activities 54,306 1,563,161
------------ ------------
Cash flows from investing activities:
Investment in software development costs (113,842) (28,084)
Additions to property and equipment (171,242) (66,642)
------------ ------------
Net cash used in investing
activities (285,084) (94,726)
------------ ------------
Cash flows from financing activities:
Payments on long-term debt (2,662) (13,564)
Proceeds from exercise of stock options 1,905 129,725
------------ ------------
Net cash provided by (used in)
financing activities (757) 116,161
------------ ------------
Net increase (decrease) in cash and cash
equivalents (231,535) 1,584,596
Cash and cash equivalents at beginning of
period 10,577,829 4,272,498
------------ ------------
Cash and cash equivalents at end of period $ 10,346,294 $ 5,857,094
============ ============
Contact: Steven J. Armond Chief Financial Officer American
CareSource Holdings, Inc. Tel: 972-308-6847
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