CHADDS FORD, PA , the leading provider of integrated health and
productivity management, today reported financial results for the
fourth quarter and year ended December 31, 2007.
Highlights
For the quarter ended December 31, 2007, I-trax reported record
net revenue of $40.0 million and net income of $0.3 million. Net
income applicable to common stockholders was $0.2 million, or $0.00
per diluted share. As of December 31, 2007, I-trax was providing
services at 243 sites, a net increase of nine sites during the
fourth quarter and 31 for the year.
Earnings before interest, taxes, depreciation, and amortization
("EBITDA") for the quarter ended December 31, 2007 were $1.7
million compared to adjusted EBITDA of $1.1 million in the prior
year period. EBITDA for the quarter ended December 31, 2006 was
adjusted $1.3 million for proceeds from discontinued
operations.
On December 14, 2007, I-trax completed its acquisition of
ProFitness Health Solutions, LLC, a provider of employer-sponsored
wellness, fitness and occupational health services in 22 states for
over 50 clients. The Company was advised on this acquisition by its
mergers and acquisitions advisors, Bryant Park Capital, LLC. The
purchase price for the acquisition was $8.3 million, subject to
certain adjustments. To fund the acquisition, I-trax entered into a
Ninth Amendment to its Credit Agreement with Bank of America, N.A.,
which increased the facility to $25.0 million. Operating results of
ProFitness will be combined with the results of I-trax commencing
January 1, 2008. Consequently, the accompanying statements of
operations for the quarter and year ended December 31, 2007 do not
include any results of operations from ProFitness.
Commenting on these results, Frank A. Martin, chairman, said,
"We are extremely pleased with our fourth quarter and full year
results from 2007. Not only did we achieve organic growth in
revenues of approximately 15% year-over-year, we realized
anticipated leverage on our investments -- as adjusted EBITDA grew
at almost twice our revenue growth rate -- 28%. We believe with our
acquisition of ProFitness we are poised to continue and accelerate
our growth in 2008. With the addition of ProFitness's expertise in
workplace wellness and fitness services, we offer a unique and
robust slate of services to help our customers meet their
employees' healthcare needs. The fourth quarter of 2007 is our
fifth consecutive quarter of increasing revenue growth rate. Our
fourth quarter net revenue of $40.0 million represents a new record
and our full year revenue of $143.2 million is in line with
guidance given last year. Sales opportunities continue to grow in
number as well as dollar value, and we are excited about the
cross-sell possibilities created by the acquisition of ProFitness.
With our service offerings leveraged by the distinctive trusted
on-site clinician relationship, we believe we will continue to help
our clients provide exceptional workplace-based healthcare.
"Our fourth quarter operating profit of $0.6 million grew by
almost 66% compared to the operating profit for the fourth quarter
of the prior year. Our gross margin for the fourth quarter was
24.5% and for the full year was 24.3%.
"We continued our strategy of investing in the business of the
future during the fourth quarter by spending $1.0 million of
general and administrative expenses for research and development
and sales and marketing. Including this investment, we held general
and administrative expenses flat with the year-ago quarter,
demonstrating scalability as we continue to grow the business."
Net Revenue
Net revenue for the quarter was $40.0 million, an increase of
$6.4 million over the year-ago quarter. This increase represents a
top line growth over the year-ago quarter of 19.2%. Pass-through
pharmaceutical purchases for the fourth quarter were $39.4 million.
Net revenue growth was primarily attributable to the addition of 31
net new facilities subsequent to the fourth quarter of 2006. Same
site revenue also increased during the quarter ended December 31,
2007 as compared to last year's fourth quarter.
Expenses
For the fourth quarter of 2007, operating expenses were $30.2
million, or 75.5% of net revenue, compared to $24.4 million, or
72.8% of net revenue, for the fourth quarter of 2006. Fourth
quarter results in 2006 were aided by approximately $0.7 million of
insurance reimbursements which reduced operating costs. Excluding
these expense reductions, margins remained strong and consistent
with 2006 results.
General and administrative expenses were reduced to 20.2% of net
revenue for the fourth quarter of 2007 from 24.0% of net revenue
for the prior year quarter. General and administrative expenses for
the fourth quarter of 2007 were $8.1 million compared to year-ago
quarter expenses of $8.0 million. Non-cash stock compensation
expense was approximately $0.5 million for the fourth quarter of
2007 compared to $0.3 million for the year-ago period. General and
administrative expenses excluding non-cash stock compensation,
research and development, and sales and marketing were 16.6% of net
revenue compared to 19.7% of net revenue in the same period last
year. I-trax considers non-cash stock compensation, research and
development, and sales and marketing activities as discretionary
investments in the future of our business and monitors these items
closely. Such investments were $1.4 million for the quarters ended
December 31, 2007 and 2006.
Net Income and EBITDA
Net income for the fourth quarter of 2007 was $0.3 million
compared to $1.4 million for the year-ago period, which included
$1.3 million from discontinued operations. Net income and EBITDA
amounts including non-cash stock compensation for the fourth
quarter of 2007 and 2006 are as follows ($ in thousands):
December December
31, 2007 31, 2006
---------- ----------
Net income $ 324 $ 1,350
Interest 141 132
Taxes 91 97
Depreciation and amortization 1,167 804
---------- ----------
EBITDA $ 1,723 $ 2,383
========== ==========
Excluding income from discontinued operations of $1.3 million,
EBITDA in the fourth quarter increased $0.6 million over 2006
results.
Balance Sheet and Cash Flow
The December 31, 2007 balance sheet includes the effects of the
acquisition of ProFitness. The aggregate purchase price of $8.3
million was preliminarily allocated as follows (in thousands):
Estimated
Amount Useful Life
------------- -----------
Fair value of tangible assets acquired
(includes cash of $574) $ 2,493 N/A
Liabilities assumed (1,700) N/A
Goodwill 4,543 N/A
Customer list 2,990 20 years
Other intangibles 10 1 year
-------------
$ 8,336
=============
Cash and cash equivalents increased during 2007 by $3.5 million.
Cash provided by operating activities and financing activities was
$1.4 million and $10.5 million, respectively, through December 31,
2007. Financing activities were primarily related to $10.1 million
of additional borrowings under our senior credit facility, which
provided the cash funding for the acquisition of ProFitness as well
as $2.4 million of capital expenditures related mainly to software,
technology licenses, and enhancements of systems to improve
operational efficiency.
At December 31, 2007, I-trax had cash of $10.1 million and bank
debt of $19.1 million, of which $3.9 million is classified as a
current liability with the remainder classified as a long-term
liability. At December 31, 2006, I-trax had cash of $6.6 million
and bank debt of $9.1 million. The Company's current ratio has
strengthened to 1.31 at the end of 2007 from 1.12 at December 31,
2006.
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 Bradley S. Wear, chief financial officer, will
discuss the Company's financial and operating results. The
telephone number for the conference call is (888) 637-2414.
Investors may also listen to the conference call on the I-trax
website, 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 (888) 880-7231; the pin number is 022108# /
20080208174794#. The encore recording will be available
approximately two hours after the conference call concludes.
Investors may also access a recording of this call on the Company's
website, www.i-trax.com, where a replay of the webcast will be
available for 90 days after the call.
Non-GAAP Financial Measures
The Company makes use of EBITDA which is not a recognized term
under generally accepted accounting principles, or "GAAP," and
should not be considered as an alternative to net income or net
cash used in 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 below. The Company also makes use
of adjusted EBITDA which excludes results of discontinued
operations.
About I-trax
I-trax is a leading provider of integrated workplace health and
productivity management solutions. Serving more than 160 clients at
nearly 300 locations in the United States, I-trax offers on-site
health, fitness and wellness centers through its CHD Meridian
Healthcare, LLC and ProFitness Health Solutions, LLC subsidiaries
that deliver primary care, acute care corporate health,
occupational health and pharmacy care management services, as well
as fitness and wellness programming and integrated disease
management programs. CHD Meridian is focused on making the
workplace safe, helping companies achieve employer of choice
status, and 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, Coushatta Casino
Resort, Deutsche Bank, Eastman Chemical, Fieldale Farms, Horizon
Blue Cross Blue Shield of New Jersey, Lowe's, Toyota and Unum. For
more information, visit www.chdmeridian.com.
Safe Harbor Statement: This press release contains
forward-looking statements that are based on 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, statement of operations and
reconciliation of a non-GAAP financial measure.
I-TRAX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except share data)
Three Months Ended Year To Date
December 31 December 31
2007 2006 2007 2006
=========== ========== ========== ==========
Net revenue $ 39,958 $ 33,527 $ 143,193 $ 124,589
Costs and expenses:
Operating expenses 30,168 24,397 108,449 93,247
General and
administrative expenses 8,067 8,046 29,860 26,401
Lease termination expense - - 780 -
Depreciation and
amortization 1,163 746 4,166 3,259
----------- ---------- ---------- ----------
Total costs and expenses 39,398 33,189 143,255 122,907
Operating profit (loss) 560 338 (62) 1,682
Interest 141 132 565 474
Amortization of financing
costs 4 58 77 230
Other - - (1,421) -
----------- ---------- ---------- ----------
Income before provision for
income taxes 415 148 717 978
Provision for income
taxes 91 97 519 511
----------- ---------- ---------- ----------
Income from continuing
operations 324 51 198 467
Income from discontinued
operations - 1,299 - 1,299
----------- ---------- ---------- ----------
Net income 324 1,350 198 1,766
Less preferred stock
dividend 110 282 577 1,184
----------- ---------- ---------- ----------
Net income (loss)
applicable to common
stockholders $ 214 $ 1,068 $ (379) $ 582
=========== ========== ========== ==========
Net income (loss) per
common share, basic:
From continuing
operations $ 0.01 $ (0.01) $ (0.01) $ (0.02)
=========== ========== ========== ==========
From discontinued
operations $ - $ 0.04 $ - $ 0.04
=========== ========== ========== ==========
Net income (loss) per
common share $ 0.01 $ 0.03 $ (0.01) $ 0.02
=========== ========== ========== ==========
Net income (loss) per
common share, diluted:
From continuing
operations $ 0.00 $ (0.01) $ (0.01) $ (0.02)
=========== ========== ========== ==========
From discontinued
operations $ - $ 0.03 $ - $ 0.03
=========== ========== ========== ==========
Net income (loss) per
common share $ 0.00 $ 0.03 $ (0.01) $ 0.02
=========== ========== ========== ==========
Weighted average shares
Basic 41,269,808 36,526,863 40,274,272 36,039,650
=========== ========== ========== ==========
Diluted 43,263,842 38,038,940 40,274,272 37,614,510
=========== ========== ========== ==========
Reconciliation of net
income to EBITDA
Net income $ 324 $ 1,350 $ 198 $ 1,766
Add: Depreciation and
amortization 1,167 804 4,243 3,489
Add: Provision for income
taxes 91 97 519 511
Add: Interest 141 132 565 474
----------- ---------- ---------- ----------
EBITDA $ 1,723 $ 2,383 $ 5,525 $ 6,240
=========== ========== ========== ==========
Recconciliation of EBITDA
to Adjusted EBITDA
EBITDA $ 1,723 $ 2,383 $ 5,525 $ 6,240
Less: Income from
discontinued operations - (1,299) - (1,299)
Add: Lease termination
expense - - 780 -
----------- ---------- ---------- ----------
Adjusted EBITDA $ 1,723 $ 1,084 $ 6,305 $ 4,941
=========== ========== ========== ==========
I-TRAX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share data)
December 31, 2007 December 31, 2006
Assets
Current assets
Cash and cash equivalents $ 10,075 $ 6,558
Accounts receivable, net 29,450 21,704
Other current assets 943 1,526
----------------- -----------------
Total current assets 40,468 29,788
Property, plant and equipment, net 4,735 3,377
Intangible assets, net 76,296 70,181
Other assets 36 41
----------------- -----------------
Total assets $ 121,535 $ 103,387
================= =================
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 9,895 $ 10,376
Credit Facility - Current 3,939 -
Accrued purchase price - current 149 -
Other accruals and liabilities 16,939 16,189
----------------- -----------------
Total current liabilities 30,922 26,565
Credit Facility - long term 15,198 9,057
Accrued purchase price - long term 750 -
Other long term liabilities 5,660 2,074
----------------- -----------------
Total liabilities 52,530 37,696
Stockholders' equity
Preferred Stock 0 1
Common Stock 41 35
Paid in capital 140,496 136,623
Accumulated deficit (71,532) (70,968)
----------------- -----------------
Total stockholders' equity 69,005 65,691
----------------- -----------------
Total liabilities and stockholders'
equity $ 121,535 $ 103,387
================= =================
Company Contact: Michele Hart-Henry I-trax, Inc. (610) 459-2405
x109 Email Contact Public Relations Contact: Lindsay Rubin Edelman
(212) 704-8227 Email Contact 4 Hillman Drive, Suite 130 Chadds
Ford, PA, 19317 (610) 459-2405 www.i-trax.com
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