American CareSource Holdings, Inc. (AMEX: XSI) today announced
record financial and operational results for the second quarter and
six months ended June 30, 2008. Highlights include:
-- Reported quarterly net income of $621 thousand, or $0.04 per diluted
share, resulting in four consecutive quarters of profit growth.
-- Achieved $13.0 million in revenue for the second quarter, a record
225% increase in revenues compared to the same prior year period,
representing five quarters of sequential revenue growth.
-- Attained gross margins of approximately 15% compared to 13% in the
three months ended June 30, 2007, reflecting continued leverage of
the Company's fixed cost infrastructure.
-- Generated EBITDA, as adjusted, of approximately $879 thousand for
the quarter.
-- EBITDA, as adjusted, (a non-GAAP measure) is defined as income
(loss) from operations less depreciation and amortization,
non-cash warrant and option compensation expense and executive
severance. 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 $6.1 million in
cash and cash equivalents on hand and generated approximately $500
thousand in cash from operating activities in the second quarter and
approximately $2.1 million during the first half of 2008.
-- Claims volume increased to approximately 40 thousand for the second
quarter of 2008, up 172% over the second quarter of 2007.
-- Signed new client agreements with Viant Holdings, Inc., one of the
nation's largest PPO networks, and Emerald Health Network, Ohio's
premiere PPO network provider.
-- Signed two new client agreements with Indiana-based union
organizations allowing the Company to penetrate an important union
market in the Midwest.
-- Selected to join the Russell Microcap� Index.
Commenting on today's announcement, David S. Boone, Chief
Executive Officer of American CareSource, stated, "Our second
quarter results demonstrate a continuation of the strong momentum
we are building in the market place. With these results, we have
generated four consecutive quarters of greater than 100%
year-over-year revenue growth and delivered four consecutive
quarters of increasing profitability. We finished the quarter with
over $6 million in cash and we continue to generate strong cash
flow. Our investments in technology and people are beginning to pay
dividends. Most importantly, our recent client wins are yet another
confirmation of the value we are adding to our clients and
providers as we work to lower the cost of ancillary healthcare.
"We are achieving the goals we have set for the organization
including delivering improved gross margins. The Company is
demonstrating its ability to scale effectively by absorbing the
increasing claim volume without a corresponding increase in cost.
Demand for our comprehensive and expanding national network of
ancillary healthcare services has continued, unabated and our
reputation for being able to offer clients an ever-increasing range
of services with positive economics should fuel this upward
momentum going forward. As a result, we are raising our initial
2008 guidance of $50 million in annual revenues to a range of $50 -
$55 million for the year.
"Reflecting our growth, during the second quarter, we were
pleased to announce new client agreements with Viant Holdings, one
of the largest PPO networks in the United States, as well as
Emerald Health Networks, Ohio's premier PPO network provider.
Additionally, we gained a foothold into the all-important Midwest
union market with the signing of two new client agreements with
Iron Workers Local 295 Trust Fund and Operative Plasterers and
Cement Masons Local 692. We are honored to be working with these
two, key union organizations and, in addition to our more
traditional clientele, hope to sign similar agreements with other
unions as time goes on."
Revenues for the second quarter of 2008 rose 225% to $13.0
million compared to $4.0 million in the second quarter of 2007. The
Company's second quarter revenues also represent a 13% improvement
over the first quarter of 2008 reported revenues of $11.5 million.
For the six months ended June 30, 2008, the Company reported
revenues of $24.5 million, a 291% increase compared to revenues of
$6.3 million in the same period of 2007.
The Company reported net income of $621 thousand, or $0.04 per
share, for the three months ended June 30, 2008, compared to a net
loss of $716 thousand, or ($0.05) per share, in the same period
last year. For the six months ended June 30, 2008, the Company
reported net income of $1.1 million, or $0.07 per diluted share,
compared to a net loss of $1.3 million, or ($0.09) per share, for
the same period in 2007.
Cash provided by operations was $2.1 million for the six months
ended June 30, 2008 versus cash used in operations of ($1.1)
million during the same period in 2008. Factors affecting the
improvement in operating cash flows include earnings growth,
accelerated client collections and overall effectiveness in working
capital management. At June 30, 2008, the Company had approximately
$6.1 million in cash and cash equivalents compared to $4.3 million
at December 31, 2007.
Conference Call
As previously announced, American CareSource will hold a
conference call to discuss financial results of the second quarter
ended June 30, 2008 as follows:
Date: Thursday, August 14, 2008
Time: 10:00 a.m. (CT)/11:00 a.m. (ET)
Dial-in numbers: 877-397-0286 (U.S. & Canada) or 719-325-4874
Live webcast: www.anci-care.com, under "New & Events"
The teleconference replay will be available two hours after
completion through Thursday, August 21, 2008 at 888-203-1112 (U.S.
& Canada) or 719-457-0820. The replay pass code is 3692642. The
archived webcast will be available for one year on the Company's
investor website, www.anci-care.com, under "News and 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 2,500 ancillary
service providers at over 25,000 sites. 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.
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
conditions, and the affect of competitive services, 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.
(Tables to Follow)
AMERICAN CARESOURCE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Net Revenues $ 13,012,528 $ 4,008,288 $ 24,518,203 $ 6,274,857
Cost of revenues 11,110,593 3,478,292 20,911,715 5,579,935
------------ ------------ ------------ ------------
Contribution
margin 1,901,935 529,996 3,606,488 694,922
Selling, general
and administrative
expenses 1,194,504 1,209,740 2,307,358 1,911,272
Depreciation and
amortization 96,606 83,642 188,672 161,715
------------ ------------ ------------ ------------
Total operating
expenses 1,291,110 1,293,382 2,496,030 2,072,987
------------ ------------ ------------ ------------
Operating income
(loss) 610,825 (763,386) 1,110,458 (1,378,065)
------------ ------------ ------------ ------------
Interest income (31,240) (49,758) (71,908) (103,632)
Interest expense 1,606 2,488 3,444 6,449
Debt issuance costs - - - 46,300
------------ ------------ ------------ ------------
Total interest
(income) expense,
net (29,634) (47,270) (68,464) (50,883)
Income (loss)
before income
taxes 640,459 (716,116) 1,178,922 (1,327,182)
Income tax
provision 19,019 - 36,064 -
------------ ------------ ------------ ------------
Net Income (Loss) $ 621,440 $ (716,116) $ 1,142,858 $ (1,327,182)
============ ============ ============ ============
Earnings (loss)
per common share:
Basic $ 0.04 $ (0.05) $ 0.08 $ (0.09)
============ ============ ============ ============
Diluted $ 0.04 $ (0.05) $ 0.07 $ (0.09)
============ ============ ============ ============
Basic weighted
average common
shares outstanding 15,069,007 14,492,863 14,973,213 14,489,806
============ ============ ============ ============
Diluted weighted
average common
shares outstanding 17,435,365 14,492,863 17,343,860 14,489,806
============ ============ ============ ============
Reconciliation of non-GAAP financial measures to reported GAAP financial
measures:
Reconciliation of EBITDA and EBITDA, as adjusted
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Operating income
(loss) $ 610,825 $ (763,386) $ 1,110,458 $ (1,378,065)
Depreciation and
amortization 96,606 83,642 188,672 161,715
------------ ------------ ------------ ------------
EBITDA 707,431 (679,744) 1,299,130 (1,216,350)
Executive severance - 338,010 21,844 338,010
Non-cash
stock-based
compensation
expense 171,848 165,308 342,601 214,844
------------ ------------ ------------ ------------
EBITDA, as
adjusted $ 879,279 $ (176,426) $ 1,663,575 $ (663,496)
============ ============ ============ ============
AMERICAN CARESOURCE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
June 30,
2008 December 31,
(unaudited) 2007
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 6,077,395 $ 4,272,498
Accounts receivable, net 4,421,223 3,651,203
Prepaid expenses and other current assets 566,952 409,445
------------ ------------
Total current assets 11,065,570 8,333,146
Property and equipment, net 640,115 332,450
Other assets:
Certificate of Deposit, restricted 145,000 145,000
Other non-current assets 456,470 492,977
Intangible assets, net 1,387,447 1,494,238
Goodwill 4,361,299 4,361,299
------------ ------------
Total assets $ 18,055,901 $ 15,159,110
============ ============
LIABILITIES and STOCKHOLDERS' EQUITY
Current Liabilities:
Due to service providers $ 4,225,359 $ 3,344,278
Accounts payable and accrued liabilities 1,605,439 1,320,036
Current maturities of long-term debt 57,718 55,697
------------ ------------
Total current liabilities 5,888,516 4,720,011
Long-term debt 20,967 50,348
Stockholders' equity 12,146,418 10,388,751
------------ ------------
Total liabilities and stockholders' equity $ 18,055,901 $ 15,159,110
============ ============
AMERICAN CARESOURCE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six months ended
June 30,
--------------------------
2008 2007
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 1,142,858 $ (1,327,182)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operations:
Stock-based compensation expense 316,147 206,032
Depreciation and amortization 188,672 161,715
Amortization of debt issuance costs - 46,300
Client management fee expense related
to warrants 26,455 8,812
Changes in operating assets and
liabilities:
Accounts receivable (770,020) (325,268)
Prepaid expenses and other assets 13,876 (366,038)
Accounts payable and accrued
liabilities 285,403 370,967
Due to service providers 881,081 112,983
------------ ------------
Net cash provided by (used in)
operating activities 2,084,472 (1,111,679)
------------ ------------
Cash flows from investing activities:
Investment in software development costs (284,085) -
Additions to property and equipment (105,461) (69,606)
------------ ------------
Net cash used in investing
activities (389,546) (69,606)
------------ ------------
Cash flows from financing activities:
Payments on long-term debt (27,360) (322,572)
Proceeds from exercise of stock options 137,331 2,391
------------ ------------
Net cash provided by (used in)
financing activities 109,971 (320,181)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 1,804,897 (1,501,466)
Cash and cash equivalents at beginning of
period 4,272,498 5,025,380
------------ ------------
Cash and cash equivalents at end of period $ 6,077,395 $ 3,523,914
============ ============
Contact: Steven J. Armond Chief Financial Officer American
CareSource Holdings, Inc. Tel: 972-308-6847
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