PSA HealthCare (Nasdaq: PSAI) announced today financial results for
the third quarter of fiscal year 2006. Highlights of PSA's results
for the third quarter ended June 30, 2006 include: -- Purchased,
closed and began integration of select assets of Melmedica
Children's Healthcare, Inc. -- Increased nursing hours staffed by
nearly four percent, to 837,000 hours in the third quarter, from
806,000 hours in second quarter; and -- Continued strong cash
collections For the third quarter of fiscal 2006, net revenue from
continuing operations increased $1,143,000 to $44,645,000 as
compared to $43,502,000 in the second quarter of fiscal year 2006.
Net income was $624,000 in the third quarter of fiscal year 2006 as
compared to $598,000 for the second quarter of fiscal year 2006.
Diluted net income per share was $0.08 in both the second and third
quarter of fiscal year 2006. "We are on schedule with the
integration of the Melmedica Children's Healthcare operations and
are rationalizing costs towards our internal pro-forma targets,"
said Daniel J. Kohl, President and CEO of PSA HealthCare. "In
addition, our PDN nurse recruiting programs continued to have a
positive impact on nursing hours staffed, and our PPEC business
continues to perform well." "Despite the positive revenue trends
exhibited in the PDN segment during the quarter, we must improve
our PDN margins. These margins have declined slightly due to the
amount of capital we have invested to recruit and integrate the
nurses that we anticipate will help ensure long-term growth. This,
coupled with the fact that the potential impact of the data breach
on the Company in the fourth quarter cannot currently be
quantified, does not allow us to reaffirm our previously provided
earnings guidance for fiscal year 2006. It is important to remember
that only $120,000 of pre-tax income represents a $0.01 of pre-tax
earnings per share." Conference Call A conference call to discuss
these results has been scheduled for Wednesday, August 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
August 23, 2006 by dialing 800-642-1687. To connect with the replay
of the conference call, please refer to the PSA HealthCare Earnings
Call, Passcode: 2878473 #. PSA provides comprehensive pediatric
home health care services through a network of over 100 branch
offices in 20 states, including satellite offices and branch office
start-ups. Through these offices, PSA 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 PSA may be found on the
Company's website at http://www.psahealthcare.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 PSA Healthcare (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 integration of the
Melmedica acquisition, 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 PSA HEALTHCARE CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per
Share Data) Three Months Ended June 30, March 31, 2006 2006 -------
------- Net revenue $44,645 $43,502 Costs and expenses: Costs of
goods and services (exclusive of depreciation shown separately
below) 23,233 22,300 Other operating costs and expenses
Administrative and marketing salaries, wages and benefits 9,340
9,031 Business insurance 1,718 1,966 Overhead 3,685 3,784 -------
------- Other operating costs and expenses 14,743 14,781 Corporate,
general and administrative Salaries, wages and benefits 3,516 3,329
Business insurance 68 59 Professional services 784 1,044 Overhead
746 675 ------- ------- Corporate, general and administrative 5,114
5,107 Provision for doubtful accounts 274 19 Depreciation and
amortization 1,069 1,013 ------- ------- Total costs and expenses
44,433 43,220 ------- ------- Operating income 212 282 Other income
46 5 Interest income 656 626 Interest expense - (4) ------- -------
Income from continuing operations before income tax expense 914 909
Income tax expense 358 334 ------- ------- Income from continuing
operations 556 575 Discontinued operations: Income from
discontinued operations before income tax (benefit) expense - -
Income tax benefit (2) - ---- -------- Income from discontinued
operations 2 - ------- ------- Gain on disposal of discontinued
operations before income tax (benefit) expense 38 Income tax
(benefit) expense (66) 15 ---- -------- Gain on disposal of
discontinued operations 66 23 ------- ------- Net income $ 624 $
598 ======= ======= Income per share data: Basic net income per
share data: Income from continuing operations $ 0.07 $ 0.08 Income
from discontinued operations 0.00 - Gain on disposal of
discontinued operations 0.01 0.00 ------- ------- Net income $ 0.08
$ 0.08 ======= ======= Diluted net income per share data: Income
from continuing operations $ 0.07 $ 0.08 Income from discontinued
operations 0.00 - Gain on disposal of discontinued operations 0.01
0.00 ------- ------- Net income $ 0.08 $ 0.08 ======= =======
Weighted average shares outstanding: Basic 7,492 7,372 =======
======= Diluted 7,492 7,372 ======= ======= CONDENSED CONSOLIDATED
BALANCE SHEET INFORMATION June 30, March 31, 2006 2006 ---------
-------- Cash and cash equivalents $ 53,116 $ 57,458 Accounts
receivable, less allowance for doubtful accounts 26,115 26,102
Total stockholders' equity 102,264 100,918 *T -0- *T Respiratory
Therapy, Equipment and Consolidated Nursing PPEC Services Total
--------------------------------------- Three Months Ended June 30,
2006 Net revenue $27,582 $ 2,746 $14,317 $44,645 Costs of goods and
services (exclusive of depreciation shown separately below) Nursing
and therapist salaries, wages, benefits and supplies 18,228 145 265
18,638 Pharmacy product and supplies - - 1,845 1,845
Disposables/Supplies 12 10 2,728 2,750 ------- ------- -------
------- Total cost of goods and services 18,240 155 4,838 23,233
Other operating costs and expenses Administrative and marketing
salaries, wages and benefits 3,631 1,528 4,181 9,340 Business
Insurance 1,112 105 501 1,718 Overhead 1,444 437 1,804 3,685
------- ------- ------- ------- Total operating costs and expenses
6,187 2,070 6,486 14,743 Provision for doubtful accounts 59 (62)
277 274 Depreciation 45 46 811 902 ------- ------- ------- -------
Branch office contribution margin $ 3,051 $ 537 $ 1,905 $ 5,493
======= ======= ======= ======= Three Months Ended March 31, 2006
Net revenue $26,404 $ 2,799 $14,299 $43,502 Costs of goods and
services (exclusive of depreciation shown separately below) Nursing
and therapist salaries, wages, benefits and supplies 17,341 126 322
17,789 Pharmacy product and supplies - - 1,763 1,763
Disposables/Supplies 12 15 2,721 2,748 ------- ------- -------
------- Total cost of goods and services 17,353 141 4,806 22,300
Other operating costs and expenses Administrative and marketing
salaries, wages and benefits 3,408 1,502 4,121 9,031 Business
Insurance 1,302 106 558 1,966 Overhead 1,400 441 1,943 3,784
------- ------- ------- ------- Total operating costs and expenses
6,110 2,049 6,622 14,781 Provision for doubtful accounts 106 (46)
(41) 19 Depreciation 38 46 767 851 ------- ------- ------- -------
Branch office contribution margin $ 2,797 $ 609 $ 2,145 $ 5,551
======= ======= ======= ======= Three Months Three Months Ended
Ended June 30, March 31, 2006 2006 ------------ ------------ Total
profit for reportable segments $ 5,493 $ 5,551 Corporate, general
and administrative (5,114) (5,107) Corporate depreciation and
amortization (167) (162) Other income 46 5 Interest income 656 626
Interest expense - (4) ------------ ------------ Income from
continuing operations, before income tax expense $ 914 $ 909
======= ======= *T
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