Pediatric Services of America, Inc. (Nasdaq: PSAI) announces
financial results for the first quarter of fiscal year 2006. The
highlights of PSAI's results for the first quarter ended December
31, 2005 include: -- Completed the sale of the Pharmacy business;
-- Made significant progress in fulfilling its obligations under
the Transition Services Agreement with Accredo Health Group Inc.
and are on schedule to complete all service responsibilities by May
31, 2006, which will allow PSAI to focus solely on growing its
existing businesses; -- Completed the full redemption of the
outstanding 10% Senior Subordinated Notes due 2008 (the "Notes")
and terminated the credit facility with GE Capital Corp. For the
first quarter of fiscal 2006, net revenue from continuing
operations decreased less than one percent to $42,233,000 from
$42,406,000 in the fourth quarter of fiscal year 2005. Consolidated
net income was $24,182,000 in the first quarter of fiscal year 2006
as compared to $1,559,000 for the fourth quarter of fiscal year
2005. Diluted net income per share was $3.33 in the first quarter
of fiscal year 2006 as compared to $0.21 in the fourth quarter of
fiscal year 2005. Net income for the first quarter of fiscal 2006
includes $777,000 of income net of tax from discontinued operations
and a $24,579,000 gain net of tax on disposal of our discontinued
operations. In addition, an expense of approximately $837,000 was
recorded in the first quarter of fiscal 2006 for the write-off of
the deferred financing fees and call premium related to the full
redemption of the Notes and termination of the credit agreement
with GE Capital Corp. "With the completion of the sale of our
Pharmacy business, we were able to fully redeem our $20,350,000
outstanding debt and terminate the credit facility," said Daniel J.
Kohl, President and CEO of PSAI. "In addition, we have identified a
significant number of acquisition opportunities. We are pleased
with how quickly we've been able to build a pipeline of potential
acquisition targets, but we intend to proceed in a measured manner
in order to ensure we are completing only high-quality
transactions." For fiscal year 2006, PSAI continues to expect that
earnings from continuing operations will be in the range of
$0.16-$0.19. Conference Call A conference call to discuss these
results has been scheduled for Thursday, February 9, 2006 at 11:00
a.m. ET. The dial-in number for all Participants is 800-374-1702.
Note: To join the Q&A session, please press the asterisk
followed by 1. If you are unable to listen to the live broadcast,
replays of the conference call will be available until February 23,
2006 by dialing 800-642-1687. To connect with the replay of the
conference call, please refer to the Pediatric Services of America,
Inc. Earnings Call, Passcode: 4855785 #. PSAI provides
comprehensive pediatric home health care services through a network
of over 100 branch offices in 19 states, including satellite
offices and branch office start-ups. Through these offices PSAI
provides a combination of services, including pediatric private
duty nursing (PDN), pediatric day treatment centers (PPECs) and
respiratory therapy and equipment services (RTES). Additional
information on PSAI may be found on the Company's website at
http://www.psakids.com. NOTE: This press release contains certain
forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) relating to future
financial performance of Pediatric Services of America, Inc. (the
"Company"). When used in this press release, the words "may,"
"targets," "goal," "will," "could," "should," "would," "believe,"
"feel," "expects," "confident," "anticipate," "estimate," "intend,"
"plan," "potential" and similar expressions may be indicative of
forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, certain of which are
beyond the Company's control. The Company cautions that various
factors, including the factors described hereunder and those
discussed in the Company's other filings with the Securities and
Exchange Commission, as well as general economic conditions,
industry trends, the Company's anticipated uses of the proceeds
from the sale of its Pharmacy Business, the Company's ability to
collect for equipment sold or rented, assimilate and manage
previously acquired field operations, collect accounts receivable,
including receivables related to acquired businesses and
receivables under appeal, hire and retain qualified personnel and
comply with and respond to billing requirements issues, including
those related to the Company's billing and collection system, nurse
shortages, competitive bidding, HIPAA regulations, Average
Wholesale Price ("AWP") reductions, adverse litigation, workers'
compensation losses, availability and cost of medical malpractice
insurance and reduced state funding levels and nursing hours
authorized by Medicaid programs, and the impact of changes
resulting from the recently enacted Medicare Act, could cause
actual results or outcomes to differ materially from those
expressed in any forward-looking statements of the Company made by
or on behalf of the Company. Any forward-looking statement speaks
only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of an unanticipated event. New factors emerge from time
to time, and it is not possible for management to predict all of
such factors. Further, management cannot assess the impact of each
such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
-0- *T PEDIATRIC SERVICES OF AMERICA, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data)
Three Months Ended December 31, September 30, 2005 2005
------------ ------------- Net revenue $42,233 $42,406 Costs and
expenses: Costs of goods and services 21,531 21,978 Other operating
costs and expenses Administrative and marketing salaries, wages and
benefits 8,996 8,888 Business insurance 1,646 1,203 Overhead 3,666
3,533 ---------- --------- Other operating costs and expenses
14,308 13,624 Corporate, general and administrative Salaries, wages
and benefits 3,750 3,916 Business insurance 64 56 Professional
services 894 1,446 Overhead 719 666 ---------- --------- Corporate,
general and administrative 5,427 6,084 Provision for doubtful
accounts 445 547 Depreciation and amortization 995 993 ----------
--------- Total costs and expenses 42,706 43,226 ----------
--------- Operating loss (473) (820) Other income 3 - Loss on early
extinguishment of debt (837) - Interest income 385 62 Interest
expense (560) (608) ---------- --------- Loss from continuing
operations before income tax benefit (1,482) (1,366) Income tax
benefit (308) (1,231) ---------- --------- Loss from continuing
operations (1,174) (135) Discontinued operations: Income from
discontinued operations before income tax expense 1,281 2,806
Income tax expense 504 1,112 ------- ------ Income from
discontinued operations 777 1,694 ---------- --------- Gain on
disposal of discontinued operations before income tax expense
40,524 - Income tax expense 15,945 - ------- ------ Gain on
disposal of discontinued operations 24,579 - ---------- ---------
Net income $24,182 $1,559 ========== ========= Income per share
data: Basic net income per share data: Loss from continuing
operations $(0.16) $(0.02) Income from discontinued operations 0.11
0.23 Gain on disposal of discontinued operations 3.38 - ----------
--------- Net income $3.33 $0.21 ========== ========= Diluted net
income per share data: Loss from continuing operations $(0.16)
$(0.02) Income from discontinued operations 0.11 0.23 Gain on
disposal of discontinued operations 3.38 - ---------- --------- Net
income $3.33 $0.21 ========== ========= Weighted average shares
outstanding: Basic 7,269 7,258 ========== ========= Diluted 7,269
7,258 ========== ========= CONDENSED CONSOLIDATED BALANCE SHEET
INFORMATION December 31, 2005 September 30, 2005 -----------------
------------------ Cash and cash equivalents $64,272 $19,037
Accounts receivable, less allowance for doubtful accounts 25,760
26,232 Long-term obligations, net of current maturities - 20,350
Total stockholders' equity 98,304 73,569 Respiratory Therapy,
Equipment and Consolidated Nursing PPEC Services Total
-------------------------------------- Three months ended December
31, 2005 Net revenue $25,375 $2,558 $14,300 $42,233 Costs of goods
and services Nursing and therapist salaries, wages, benefits and
supplies 16,771 136 226 17,133 Pharmacy product and supplies 1,722
1,722 Disposables/Supplies 13 8 2,655 2,676
-------------------------------------- Total cost of goods and
services 16,784 144 4,603 21,531 Other operating costs and expenses
Administrative and marketing salaries, wages and benefits 3,380
1,421 4,195 8,996 Business Insurance 1,103 93 450 1,646 Overhead
1,434 424 1,808 3,666 -------------------------------------- Total
operating costs and expenses 5,917 1,938 6,453 14,308 Provision for
doubtful accounts (38) 43 440 445 Depreciation 40 45 753 838
-------------------------------------- Branch office contribution
margin $2,672 $388 $2,051 $5,111
====================================== Three months ended September
30, 2005 Net revenue $25,447 $2,658 $14,301 $42,406 Costs of goods
and services Nursing and therapist salaries, wages, benefits and
supplies 16,746 167 212 17,125 Pharmacy product and supplies - -
1,827 1,827 Disposables/Supplies 11 5 3,010 3,026
-------------------------------------- Total cost of goods and
services 16,757 172 5,049 21,978 Other operating costs and expenses
Administrative and marketing salaries, wages and benefits 3,455
1,370 4,063 8,888 Business Insurance 761 77 365 1,203 Overhead
1,324 436 1,773 3,533 -------------------------------------- Total
operating costs and expenses 5,540 1,883 6,201 13,624 Provision for
doubtful accounts 113 (50) 484 547 Depreciation 45 46 748 839
-------------------------------------- Branch office contribution
margin $2,992 $607 $1,819 $5,418
====================================== Three Months Three Months
Ended Ended December 31, September 30, 2005 2005 -------------
-------------- Total profit for reportable segments $5,111 $5,418
Corporate, general and administrative (5,427) (6,084) Corporate
depreciation and amortization (157) (154) Other income 3 - Loss on
early extinguishment of debt (837) - Interest income 385 62
Interest expense (560) (608) ------------- -------------- Loss from
continuing operations, before income tax benefit $(1,482) $(1,366)
============= ============== *T
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