Opens 10 New Sites, Expects Strong Growth in 2007 CHADDS FORD, Pa.,
Nov. 2 /PRNewswire-FirstCall/ -- I-trax, Inc. (AMEX:DMX), a leading
provider of integrated health and productivity management, today
reported financial results for the third quarter ended September
30, 2006. Third Quarter Results During the quarter ended September
30, 2006, I-trax commenced operations at 10 new sites, bringing
total sites under management to 211. For the third quarter, I-trax
reported net income of $0.2 million on $30.5 million of net
revenue. Net loss applicable to common stockholders was $(0.1)
million, or $0.00 per diluted share. Results for the third quarter
of fiscal 2006 include $0.4 million of stock option expense as a
result of the Company's adoption in 2006 of Statement of Financial
Accounting Standards No. 123 Revised, "Share- Based Payment" ("SFAS
123R") and $0.2 million of expense associated with the Company's
compliance efforts under Section 404 of the Sarbanes-Oxley Act of
2002. Commenting on the third quarter, Frank A. Martin, chairman,
stated, "We continue to build a robust sales pipeline, including a
number of large, multi- site proposals. We developed or submitted
most of these proposals during the third quarter. We expect net
revenue growth in 2007 to be in the mid teens or higher depending
on the outcome and timing of these multi-site opportunities.
"During the third quarter we commenced operations in one such
multi-site opportunity, adding 10 sites for a single client. We
continue to strengthen the size and capabilities of our sales force
and our senior management team continues to be intensively involved
in our selling efforts. We are also test marketing a strategic
relationship with a major health plan around the successful results
of our disease management research project. These results have been
accepted for publication in a peer review magazine for January
2007. "Overall, our third quarter results are in line with our
expectations and prior guidance for the quarter at both the revenue
and EBITDA levels. The third quarter once again demonstrates that
we have a stable platform of core business on which to build. We
continue to monitor our operating and general and administrative
expenses carefully. During the third quarter, our general and
administrative expenses increased due primarily to Sarbanes-Oxley
compliance efforts and the disposal of outdated technology assets.
Our gross margin improved during the quarter." Revenue Net revenue
for the quarter was $30.5 million, an increase of $1.7 million over
the year-ago quarter. Due to the timing of site openings, we will
begin to realize the revenue effect of our 10 new sites in the
fourth quarter of 2006. For the nine months ended September 30,
2006, net revenue was $91.1 million as compared to $84.5 million
for the year-ago period. Pass-through pharmaceutical purchases for
the third quarter were $37.9 million, bringing the year-to-date
pass-through pharmaceutical purchases to $113.1 million. In
comparison to the comparable periods of 2005, net revenue growth
for the third quarter and nine months ended September 30, 2006 was
5.8% and 7.7%, respectively. Excluding net revenue in the prior
year periods related to contracts and business that the Company
restructured or exited, the three and nine month growth rates were
9.1% and 11%, respectively. Expenses For the quarter, operating
expenses were $22.6 million, or 74.2% of net revenue. For the nine
months ended September 30, 2006, operating expenses were $68.8
million, or 75.6% percent of net revenue, compared to 76.6% for the
comparable year-ago period. Accordingly, gross margin increased to
24.4% for the year-to-date period compared to 23.4% for the
year-ago nine months. General and administrative expenses were $6.4
million for the third quarter, or 21.1% of net revenue. Excluding
the effect of non-cash stock compensation expense of approximately
$0.4 million, general and administrative expenses as a percent of
net revenue were 19.8% compared to 19.1% for the prior year period.
Contributing factors to the increase over the year-ago quarter and
over the first and second quarters of 2006 were $0.2 million of
Sarbanes-Oxley Act compliance costs in the third quarter of 2006
and a loss of approximately $0.4 million on the disposal of
outdated technology assets. Operating profit for the three and nine
months ended September 30, 2006 was $0.6 million and $1.3 million,
respectively, including the effect of non- cash stock option
expense. Net Income and EBITDA Net income for the quarter and nine
month period was $0.2 million and $0.4 million, respectively.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") were $1.4 million for the third quarter (including
non-cash stock compensation charges of $0.4 million). For the nine
months ended September 30, 2006, EBITDA was $3.9 million (including
non-cash stock compensation charges of $1.0 million) compared to
$2.4 million for the year- ago period excluding restructuring
charges. Net income and EBITDA amounts including stock-based
compensation for 2006 are as follows: Nine months (in 000's) Three
months ended ended March 31, June 30, September September 2006 2006
30, 2006 30, 2006 Net income/(loss) $(29) $ 241 $ 204 $ 415
Interest 114 115 113 342 Taxes 90 90 234 414 Depreciation and
amortization 915 885 885 2,685 EBITDA $1,090 $1,331 $1,436 $3,856
Cash Flow and Balance Sheet Cash and cash equivalents increased
during the quarter by $3.5 million. Cash provided from operations
was $2.5 million. The Company used cash for investment activities
of $1.2 million; cash provided by financing activities was $2.2
million (primarily draws on the Company's credit facility).
Investments were mainly for software and enhancements of systems to
improve operational efficiency. On September 30, 2006, I-trax had
cash of $8.9 million and debt of $10.4 million, compared with $5.4
million and $8.6 million, respectively, at December 31, 2005. The
Company's current ratio, excluding dividends payable on preferred
stock, improved to 1.26 at September 30, 2006 from 1.00 at December
31, 2005. 2007 Guidance and Outlook The Company expects 2006 net
revenue of approximately $123 million, which is in line with prior
guidance for the year. The Company currently expects 2007 net
revenue in a range of $138 million to $143 million. Approximately
$12 million of this growth in net revenue is contracted or in final
stages of negotiation. The balance is expected to result from
contracts that management expects will be committed during the
current quarter or during 2007. Depending on the outcome and timing
of multi-site opportunities currently under discussion, multi-site
contracts could add substantially to the 2007 revenue expectations
set out above. The Company expects EBITDA for the fourth quarter of
2006 in the range of $1.0 to $1.5 million and EBITDA for the year
of $5.0 to $5.3 million. Excluding non-cash stock compensation
expense, 2006 EBITDA is expected to be $6.3 to $6.6 million,
compared to $4.3 million for 2005. The Company will continue its
practice of updating revenue and earnings guidance on a quarterly
basis. Conference Call I-trax will host a conference call at 4:30
p.m. EST today. During the call, Frank A. Martin, chairman, R.
Dixon Thayer, chief executive officer, Dr. Raymond J. Fabius,
president and chief medical officer, and David R. Bock, chief
financial officer, will discuss the Company's financial and
operating results. The telephone number for the conference call is
(866) 321-0042; the participant pin number is 536353#. Investors
may also listen to the conference call on I-trax's web site,
http://www.i-trax.com/, by selecting the conference link on the
Investor Information page. Investors may access an encore recording
of the conference call for one week by calling (866) 321-0085; the
pin number is 190960#. The encore recording will be available
approximately two hours after the conference call concludes.
Investors may also access a recording of this call on I-trax's web
site available 90 days after the call. Non-GAAP Financial Measures
The Company makes use of EBITDA (earnings before interest, taxes,
depreciation and amortization), which is not a recognized term
under generally accepted accounting principles, or "GAAP," and
should not be considered as an alternative to net income/(loss) or
net cash provided by operating activities, which are GAAP measures.
The Company believes EBITDA is a useful performance indicator for
measuring the growth of the Company's core operations. The Company
reconciles EBITDA to net income/(loss) at the end of this release.
Because the Company initiated a significant restructuring in the
second quarter of 2005 and had associated accounting reversals
during the third quarter of 2005, the Company has also included a
reconciliation of certain financial indicators excluding
restructuring-related activities to assist readers in comparing the
third quarter results from 2006. In this press release, the Company
also makes use of certain financial measures that exclude the
non-cash stock compensation expense resulting from the Company's
adoption of SFAS 123R, effective January 1, 2006, so that such
measures may be compared with the information presented on the face
of the Company's prior statements of operations. About I-trax
I-trax is a leading provider of integrated workplace health and
productivity management solutions. Serving nearly 100 clients at
over 200 locations nationwide, I-trax offers on-site health centers
through its CHD Meridian Healthcare, LLC subsidiary, which delivers
primary care, acute care corporate health, occupational health and
pharmacy care management services as well as integrated disease
management, wellness and disability management programs. I-trax
provides a comprehensive solution utilizing telephonic and e-health
tools to enhance the trusted relationship established by our
clinicians at the worksite. CHD Meridian is focused on making the
workplace safe, helping companies achieve employer of choice
status, reducing costs while improving the quality of care received
and the productivity of the workforce. Managing employer-sponsored
health centers for over 40 years, some of CHD Meridian Healthcare's
clients include: BMW, Blue Ridge Paper, Coors Brewing Company,
Coushatta Casino Resort, DENSO Manufacturing Michigan, Deutsche
Bank, Eastman Chemical, Fieldale Farms, Horizon Blue Cross Blue
Shield of New Jersey, Lowe's, Toyota and UnumProvident. For more
information, visit http://www.chdmeridian.com/. Safe Harbor
Statement: This press release contains forward-looking statements
that are based upon current expectations and assumptions, which
involve a number of risks and uncertainties. Investors are
cautioned that these statements may be affected by certain
important factors, and consequently, actual operations and results
may differ, possibly materially from those expressed in such
statements. The important factors include, but are not limited to:
demand for the Company's products and services and the Company's
ability to execute new service contracts; uncertainty of future
profitability; general economic conditions; the risk associated
with a significant concentration of revenue with a limited number
of customers; and the Company's ability to renew and maintain
contracts with existing customers under existing terms. I-trax
undertakes no obligation to update or revise any forward-looking
statement. These and other risks pertaining to I-trax are described
in greater detail in I-trax's filings with the Securities and
Exchange Commission. Attached: Balance sheet, quarterly income
statements and reconciliations of non-GAAP financial measures.
I-TRAX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (Unaudited) (in thousands, except share data) Three
months ended Nine months ended September 30 September 30 2006 2005
2006 2005 Net revenue $30,495 $28,824 $91,061 $84,528 Costs and
expenses: Operating expenses 22,622 21,736 68,849 64,742 Impairment
of long-lived assets - - - 12,470 Provision for loss contracts -
(1,453) - 663 Restructuring expenses - (56) - 783 General and
administrative expenses 6,437 5,519 18,356 17,363 Depreciation and
amortization 826 772 2,513 2,740 Total costs and expenses 29,885
26,518 89,718 98,761 Operating profit/(loss) 610 2,306 1,343
(14,233) Interest 113 95 342 400 Amortization of financing costs 59
57 172 182 Other - - - - Income/(loss) before provision for income
taxes 438 2,154 829 (14,815) Provision for income taxes 234 (253)
414 6 Net income/(loss) 204 2,407 415 (14,821) Less preferred stock
dividend (282) (518) (902) (1,561) Net income/(loss) applicable to
common stockholders (78) 1,889 (487) (16,382) Weighted average
shares Basic 36,462,797 30,716,890 35,875,461 29,138,509 Diluted
36,462,797 41,244,259 35,875,461 29,138,509 Earnings/(loss) per
common share Basic $(0.00) $0.06 $(0.01) $(0.56) Diluted $(0.00)
$0.05 $(0.01) $(0.56) Reconciliation of net income/(loss) to EBITDA
Net income/(loss) $204 $2,407 $415 $(14,821) Add: Depreciation and
amortization 885 829 2,685 2,922 Add: (Benefit from)/provision for
income taxes 234 (253) 414 6 Add: Interest 113 95 342 400 EBITDA
$1,436 $3,078 $3,856 $(11,493) Impairment of long-lived assets - -
- 12,470 Provision for loss contracts - (1,453) - 663 Restructuring
expenses - (56) - 783 EBITDA, excluding restructuring-related
activities $1,436 $1,569 $3,856 $2,423 Reconciliation of net
income/(loss) to adjusted net income/(loss), excluding
restructuring-related activities Net income/(loss) $204 $2,407 $415
$(14,821) Impairment of long-lived assets - - - 12,470 Provision
for loss contracts - (1,453) - 663 Restructuring expenses - (56) -
783 Net income/(loss), excluding restructuring-related activities
$204 $898 $415 $(905) Reconciliation of operating profit/(loss) to
adjusted operating profit/(loss), excluding restructuring-related
activities Operating profit/(loss) $610 $2,306 $1,343 $(14,233)
Impairment of long-lived assets - - - 12,470 Provision for loss
contracts - (1,453) - 663 Restructuring expenses - (56) - 783
Operating profit/(loss), excluding restructuring-related activities
$610 $797 $1,343 $(317) I-TRAX, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share
data) September 30, 2006 December 31, 2005 Assets Current assets
Cash and cash equivalents $8,909 $5,386 Accounts receivable, net
16,956 15,490 Other current assets 2,126 1,899 Total current assets
27,991 22,775 Property, plant and equipment, net 3,595 4,042
Intangible assets, net 70,652 72,125 Other assets 41 41 Total
assets $102,279 $98,983 Liabilities and stockholders' equity
Current liabilities Accounts payable $7,584 $8,069 Other accruals
and liabilities 17,547 17,773 Total current liabilities 25,131
25,842 Other long term liabilities 12,876 10,978 Total liabilities
38,007 36,820 Stockholders' equity Preferred stock $0.001 par
value, 2,000,000 shares authorized, 559,160 and 853,039 issued and
outstanding, respectively 1 1 Common stock, $0.001 par value,
100,000,000 shares authorized, 36,502,979 and 32,818,955 shares
issued and outstanding, respectively 36 32 Paid in capital 136,554
134,864 Retained earnings (72,319) (72,734) Total stockholders'
equity 64,272 62,163 Total liabilities and stockholders' equity
$102,279 $98,983 Company Contact: Public Relations Contact: Janice
MacKenzie Audrey Whaley I-trax, Inc. Howard, Merrell & Partners
(610) 459-2405 x109 (919) 844-2764 Investor Relations Contact:
Michael Steinberg American Capital Ventures (305) 918-7000
DATASOURCE: I-trax, Inc. CONTACT: Company Contact: Janice
MacKenzie, I-trax, +1-610-459-2405 x109, ; Public Relations
Contact: Audrey Whaley, Howard, Merrell & Partners for I-trax,
Inc., +1-919-844-2764, ; Investor Relations Contact: Michael
Steinberg, American Capital Ventures for I-trax, +1-305-918-7000,
Web site: http://www.i-trax.com/ http://www.chdmeridian.com/
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