FOR IMMEDIATE RELEASE
Company
Contact:
Investor Relations
Paul A. Brown, M.D, Founder &
Chairman
Scott Liolios or Ron Both
Stephen J. Hansbrough, President & CEO Liolios Group, Inc.
HearUSA, Inc info@liolios.com
(561) 478-8770
(949) 574-3860
HEARUSA REPORTS RECORD THIRD QUARTER 2007 RESULTS
Net Revenues Reach Fourth
Consecutive Record Quarter High
Net Revenues at $26.9
Million, up 22% vs. Year Ago Quarter
Net Income at Record $488,000
or $0.01 per share
Net Income from Operations at
Record $2.5 million or 9.3% of Revenues
West
Palm Beach, Fla. -- November 13, 2007 -- HearUSA, Inc. (AMEX: EAR), a leading
provider of hearing care through a fully integrated and professionally
accredited system of hearing care centers, reported financial results for the
third quarter ended September 29, 2007.
Net
revenues totaled a record $26.9 million, an increase of 8% from $24.9 million
in the previous quarter and an increase of 22% from
$22.0 million in the comparable quarter of the previous year. This fourth
consecutive quarter of record net revenues was attributable to a combination of
hearing centers acquired within the last 12 months and organic growth of 7% for
the quarter.
Income from
operations was a record $2.5 million or 9.3% of revenues, as compared to
$810,000 or 3.0% of revenues in the previous quarter and $405,000 or 1.8% of
net revenues a year ago. These substantially improved results come very close
to the company’s stated long term objective for income
from operations to be in the range of 10% to 12%. It should
be noted that income from operations includes a one-time charge of
$282,000 related to employee severance applicable to the third quarter.
The net
income applicable to common stockholders for the third quarter was a record
$488,000 or $0.01 per share, as compared to a net loss of $3.4 million or $0.09
per share in the previous quarter and net loss of $1.7 million or $0.05 per
share in the comparable quarter of the previous year.
HearUSA
acquired eight hearing care centers during the quarter, with combined estimated
trailing twelve-month ("TTM") revenues of $2.8 million. This brings
the total number of acquisitions for the first nine months of 2007 to 14, with
combined estimated TTM revenues of $6.9 million. At the end of the quarter, the
company had 12 letters of intent for the acquisition of an additional 17
centers with approximately $7.8 million TTM revenues.
Conference
Call
The company
will hold a conference call later today to discuss its third quarter financial
results. President and CEO Stephen J. Hansbrough and
Executive Vice President and CFO Gino Chouinard will
host the presentation, which will be followed by a
question and answer period.
Date: Tuesday, November 13, 2007
Time: 4:30 pm Eastern (1:30 pm
Pacific)
Toll Free Dial-In Number:
1-877-407-9210
International/Toll Dial-in Number:
1-201-689-8049
Conference ID Number: 261662
Internet Simulcast: http://www.vcall.com/IC/CEPage.asp?ID=123001
Please call
the conference telephone number 5-10 minutes prior to the start time. An
operator will register your name and organization and ask you to wait until the
call begins. If you have any difficulty connecting with the conference call,
please contact the Liolios Group at (949) 574-3860.
A replay of
the call will be available later that evening and accessible until November 27,
2007.
Toll-free Replay Number: 1-877-660-6853
International/Toll Replay Number: 1-201-612-7415
Conference ID Number: 261662; Account Number: 286
Internet Replay: http://www.vcall.com/IC/CEPage.asp?ID=123001
About HearUSA
HearUSA,
Inc. provides hearing care to patients primarily through more than 175
company-owned hearing care centers, which offer a complete range of quality
hearing aids with an emphasis on the latest digital technology. HearUSA Centers are located in
Forward
Looking Statements
This
press release contains forward-looking statements within the meaning of the
Securities Litigation Reform Act of 1995, including those concerning the
company being on track to meet or exceed the stated goals for 2007 including
improved profitability and an increase in net revenues of 15-20% over 2006. These statements involve certain risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Potential risks and
uncertainties include such factors as successful implementation of the
company’s acquisition program; integration of the newly acquired centers and
maintenance of revenue levels from those centers; the company’s ability
to maintain cost controls and limit expenses; the successful implementation of
the Siemens agreements; the ability of the company to maintain unit sales of
Siemens hearing aids; market demand for the company’s goods and services;
changes in the pricing environment; general economic conditions in those
geographic regions where the company’s centers are located; the impact of
competitive products; and other risks and uncertainties described in the
company’s filings with the Securities and Exchange Commission, including the
company’s Form 10-K for the fiscal year ended December 30, 2006.
HearUSA, Inc.
Consolidated Balance
Sheets
(unaudited)
|
|
September 29, |
December 30, |
|
ASSETS |
2007 |
2006 |
|
|
(Dollars in thousands) |
|
|
Current
assets |
|
|
|
$
3,526 |
$
2,326 |
|
|
Accounts
and notes receivable, less allowance for |
|
|
|
doubtful accounts of $505,497 and $434,098 |
8,851 |
7,591 |
|
Inventories |
2,209 |
2,371 |
|
Prepaid expenses and other |
986 |
1,400 |
|
Deferred tax asset |
78 |
67 |
|
Total current assets |
15,650 |
13,755 |
|
Property and equipment, net |
4,176 |
3,878 |
|
Goodwill |
50,970 |
|
|
Intangible assets, net |
13,592 |
|
|
Deposits and other |
705 |
876 |
|
Restricted cash and cash equivalents |
209 |
205 |
|
Total
Assets |
$
93,971 |
$
83,276 |
|
|
||
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
||
|
Current
liabilities |
|
|
|
$
11,016 |
$
10,463 |
|
|
Accrued
expenses |
2,929 |
2,509 |
|
Accrued
compensation |
3,069 |
2,826 |
|
Current
maturities of long-term debt |
8,391 |
|
|
Current maturities of convertible
subordinated notes, net of debt discount of $1,263,003 in 2006 |
2,487 |
|
|
Current maturities of subordinated
notes, net of debt discount of $134,169 and $452,228 |
1,308 |
|
|
Dividends
payable |
34 |
|
|
Minority
interest in net income of consolidated joint venture, currently payable |
633 |
|
|
Total
current liabilities |
28,651 |
|
|
Long-term
debt |
37,252 |
28,599 |
|
Deferred
income taxes |
5,948 |
5,234 |
|
Convertible
subordinated notes, net of debt discount of $217,923 in 2006 |
- |
2,282 |
|
Subordinated
notes, net of debt discount of $60,123 in 2006 |
- |
1,480 |
|
Warrant
liability |
- |
110 |
|
Total
long-term liabilities |
43,200 |
37,705 |
|
Commitments
and contingencies |
- |
- |
|
|
|
|
|
Stockholders’ equity |
|
|
|
Preferred stock
(aggregate liquidation preference $2,330,000, $1 par, 7,500,000 shares
authorized) |
|
|
|
Series H Junior Participating (none outstanding) |
- |
- |
|
Series J (233 shares outstanding) |
- |
- |
|
Total preferred stock |
- |
- |
|
|
|
|
|
Common
stock: $.10 par; 75,000,000 shares authorized 37,870,451 and 32,029,750 shares issued |
3,787 |
3,203 |
|
Stock
subscription |
(412) |
(412) |
|
Additional paid-in capital |
132,499 |
123,972 |
|
Accumulated
deficit |
(112,977) |
(109,521) |
|
Accumulated other comprehensive income |
4,175 |
2,163 |
|
Treasury stock, at cost:523,662 common shares |
(2,485) |
(2,485) |
|
Total Stockholders’ Equity |
24,587 |
16,920 |
|
Total
Liabilities and Stockholders’ Equity |
$
93,971 |
$
83,276 |
HearUSA, Inc.
Consolidated
Statements of Operations
Three Months
Ended September 29, 2007 and September 30, 2006
(unaudited)
|
|
September 29, |
September 30, |
|
|
2007 |
2006 |
|
|
(Dollars in thousands, except per
share amounts) |
|
|
|
|
|
|
Net
revenues |
|
|
|
Hearing
aids and other products |
$
25,050 |
$
20,519 |
|
Services |
1,812 |
1,523 |
|
Total net
revenues |
26,862 |
22,042 |
|
|
|
|
|
Operating costs and expenses |
|
|
|
Hearing aids and other products |
6,807 |
6,491 |
|
Services |
499 |
511 |
|
Total cost of products sold and services |
7,306 |
7,002 |
|
Center operating expenses |
12,585 |
10,598 |
|
General and administrative expenses |
3,890 |
3,540 |
|
Depreciation and amortization |
572 |
497 |
|
Total operating costs and expenses |
24,353 |
21,637 |
|
Income from operations |
2,509 |
405 |
|
Non-operating income
(expenses): |
|
|
|
Gain from insurance
proceeds |
- |
146 |
|
Interest income |
21 |
19 |
|
Interest
expense |
(1,330) |
(1,638) |
|
Income (loss) before income tax expense and minority
interest in income of consolidated joint venture |
1,200 |
(1,068) |
|
Income tax expense |
(284) |
(257) |
|
Minority interest in income of consolidated joint venture |
(394) |
(322) |
|
Net income (loss) |
522 |
(1,647) |
|
Dividends on preferred stock |
(34) |
(34) |
|
Net income (loss)
applicable to common stockholders |
$
488 |
$
(1,681) |
|
|
|
|
|
Net income (loss)
applicable to common stockholders per common share – basic |
$
0.01 |
$
(0.05) |
|
Net income (loss)
applicable to common stockholders per common share –diluted |
$
0.01 |
$
(0.05) |
|
|
|
|
|
Weighted average number
of shares of common stock outstanding – basic |
37,950 |
32,260 |
|
Weighted average number
of shares of common stock outstanding – diluted |
46,415 |
32,260 |
###