First Choice Healthcare Solutions Announces Third Quarter 2016 Results
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E-mailMELBOURNE, FL -- (Marketwired) -- 11/15/16 -- First Choice Healthcare Solutions, Inc. (OTCQB: FCHS) ("FCHS," "First Choice" or the "Company"), one of the nation's only non-physician-owned, publicly traded healthcare services companies focused on the delivery of total musculoskeletal solutions with an emphasis on Orthopaedic and Spine care, today reported its financial results for the three and nine months ended September 30, 2016.
Financial Highlights for the Comparable Nine Month Reporting Periods in 2016 and 2015, respectively:
- Total revenues up 72% to $22.56 million from $13.12 million
- Non-GAAP adjusted EBITDA* increased to $3.51 million from $2.62 million
- Notwithstanding the one-time $9.21 million gain from the sale of Marina Towers and other property and improvements, net income attributable to First Choice totaled $1.05 million, or $0.04 earnings per diluted share, compared to approximately $165,200, or $0.01 earnings per diluted share
Financial Highlights for the Comparable Three Month Reporting Periods in 2016 and 2015, respectively:
- Total revenues increased 22% to $7.70 million, up from $6.29 million
- Non-GAAP adjusted EBITDA* totaled $1.45 million, compared to $1.85 million
- Net income attributable to First Choice totaled approximately $545,000, or $0.02 earnings per diluted share, compared to approximately $631,281, or $0.03 earnings per diluted share
As of September 30, 2016, cash totaled $6.59 million, accounts receivable were $9.48 million and total stockholders' equity attributable to First Choice was $13.41 million. This compared to cash of $1.60 million, restricted cash of $360,000, accounts receivable of $6.62 million and total stockholders' equity attributable to First Choice of $2.12 million as of the end of December 2015.
Chris Romandetti, President and Chief Executive Officer of First Choice, stated, "While we are very pleased with our success in perpetuating revenue growth year-over-year, we are particularly gratified that our strategies to strengthen operating margins on total revenues has also continued to be positively impactful. Moreover, recruitment of new best-in-class physicians to our Space Coast, Florida care delivery platform continues to advance very well. Expansion initiatives being implemented in our ancillary services channels are also moving forward, while our Medical Centers of Excellence continue to sustain and further strengthen our overall profitability. And, given First Choice's strong working capital position, we are well positioned to assess and pursue a broad range of non-dilutive options for capital to finance even more dynamic growth in the future."
"All things considered, we are very pleased with our year-to-date progress. Looking ahead, we intend to persist in executing smart, purpose-driven business-building strategies that will allow us to achieve even more pronounced revenue and earnings growth in the coming year while notably enhancing sustainable long term value for our fellow shareholders," concluded Romandetti.
Public Conference Call & Webcast First Choice's executive management team will host a conference this morning, beginning at 11:00 AM. Participants can register and access the conference call by dialing toll-free 866-682-6100. The conference call will also be webcasted, which can be accessed through First Choice's investor relations website by navigating to http://ir.myfchs.com/ and clicking on "Third Quarter 2016 Conference Call and Webcast." Participants will be required to register to access the call. For those who cannot listen to the live broadcast, a replay will be available shortly after the call on the investor relations page of First Choice's website, found at http://ir.myfchs.com/.
*About Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP EBITDA, which is factored by adding back any non-cash or non-recurring gain or expense to the Net Income Attributable to First Choice. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use this non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. This non-GAAP financial measure also facilitates management's internal comparisons to our historical performance and liquidity. We believe this non-GAAP financial measure is useful to investors both because they allow for greater transparency with respect to a key metric used by management in its financial and operational decision-making. For more information on this non-GAAP financial measure, please see the table captioned "Reconciliation of Non-GAAP Adjusted EBITDA Performance."
For additional details relating to First Choice's third quarter 2016 results, please refer to the Interim Report on Form 10-Q filed with the U.S. Securities and Exchange Commission and found at www.sec.gov.
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2016 2015
------------- -------------
(unaudited)
ASSETS
Current assets
Cash (amounts related to VIE of $1,445,090 and
$1,556,303) $ 6,591,035 $ 1,594,998
Cash-restricted - 359,414
Accounts receivable, net (amounts related to
VIE of $5,558,273 and $4,544,308) 9,477,069 6,623,894
Employee loans (amounts related to VIE of
$509,350 and $636,293) 783,009 672,293
Prepaid and other current assets (amounts
related to VIE of $269,352 and $183,465) 446,721 316,773
Capitalized financing costs, current portion
(amounts related to VIE of $-0- and $1,317) - 39,533
------------- -------------
Total current assets 17,297,834 9,606,905
------------- -------------
Property, plant and equipment, net of
accumulated depreciation of $1,065,517 and
$3,075,648 (amounts related to VIE of
$717,557 and $773,808) 2,629,309 8,613,502
------------- -------------
Other assets
Goodwill (amount relating to VIE of $899,465) 899,465 899,465
Deferred costs, net of amortization of
$457,079 and $215,096 2,769,348 3,011,331
Patient list, net of accumulated amortization
of $90,000 and $75,000 210,000 225,000
Patents, net of accumulated amortization of
$52,525 and $38,200 233,975 248,300
Investments (amounts related to VIE of $22,005
and $16,914) 22,005 16,914
Deferred tax asset 181,029 -
Deposits 2,571 2,571
------------- -------------
Total other assets 4,318,393 4,403,581
------------- -------------
Total assets $ 24,245,536 $ 22,623,988
============= =============
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses (amounts
related to VIE of $1,751,197 and $2,319,056) $ 2,827,742 $ 3,937,244
Accounts payable, related party (amount
related to VIE of $251,588) 251,588 251,588
Stock-based payable 253,991 1,198,900
Advances - 43,082
AMT tax payable 181,029 -
Settlement payable - 600,000
Line of credit, short term (amount related to
VIE of $439,524 and $416,888) 2,939,524 2,566,888
Note payable, related party, current portion
(amount related to VIE of $-0- and $428,645) - 428,645
Notes payable, current portion (amount related
to VIE of $1,021 and $10,341) 517,666 7,652,941
Unearned revenue 43,650 42,704
Deferred rent, short term portion (amount
related to VIE of $237,620 and $118,810) 237,620 118,810
------------- -------------
Total current liabilities 7,252,810 16,840,802
------------- -------------
Long term debt:
Deposits held 41,930 67,432
Notes payable, long term portion 143,856 535,822
Deferred rent, long term portion (amount
related to VIE of $2,200,603 and $2,141,199) 2,253,060 2,141,199
------------- -------------
Total long term debt 2,438,846 2,744,453
------------- -------------
Total liabilities 9,691,656 19,585,255
------------- -------------
Equity
Preferred stock, $0.01 par value; 1,000,000
shares authorized, Nil issued and outstanding - -
Common stock, $0.001 par value; 100,000,000
shares authorized, 24,238,613 and 22,867,626
shares issued and outstanding as of September
30, 2016 and December 31, 2015, respectively 24,239 22,868
Common stock subscription - 175,000
Additional paid-in capital 22,393,921 21,196,792
Accumulated deficit (9,009,899) (19,274,917)
------------- -------------
Total stockholders' equity attributable to
First Choice Healthcare Solutions, Inc. 13,408,261 2,119,743
Non-controlling interest (note 14) 1,145,619 918,990
------------- -------------
Total equity 14,553,880 3,038,733
------------- -------------
Total liabilities and equity $ 24,245,536 $ 22,623,988
============= =============
FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended Nine months ended
September 30, September 30,
2016 2015 2016 2015
------------ ------------ ------------ ------------
Revenues:
Patient Service
Revenue $ 7,403,084 $ 5,775,986 $ 21,571,205 $ 11,871,574
Provision for bad
debts (319,319) - (849,037) (51,485)
------------ ------------ ------------ ------------
Net patient service
revenue less
provision for bad
debts 7,083,765 5,775,986 20,722,168 11,820,089
Rental Revenue 585,978 516,136 1,842,428 1,301,515
------------ ------------ ------------ ------------
Total Revenue 7,669,743 6,292,122 22,564,596 13,121,604
Operating expenses:
Salaries and
benefits 3,158,172 2,240,109 9,077,783 5,311,710
Other operating
expenses 1,405,489 670,923 4,166,139 1,685,830
General and
administrative 2,404,996 2,234,647 7,346,614 4,437,801
Depreciation and
amortization 195,821 273,263 631,571 558,189
------------ ------------ ------------ ------------
Total operating
expenses 7,164,478 5,418,942 21,222,107 11,993,530
------------ ------------ ------------ ------------
Net income from
operations 505,265 873,180 1,342,489 1,128,074
Other income
(expense):
Gain on sale of
property and
improvements - - 9,212,346 -
Miscellaneous income
(expense) 135,544 (18,400) 241,213 22,719
Amortization
financing costs - (20,592) (15,654) (60,507)
Interest expense,
net (56,560) (202,907) (288,748) (925,045)
------------ ------------ ------------ ------------
Total other expense 78,984 (241,899) 9,149,157 (962,833)
------------ ------------ ------------ ------------
Net income before
provision for
income taxes 584,249 631,281 10,491,646 165,241
Income taxes
(benefit) - - - -
------------ ------------ ------------ ------------
Net income 584,249 631,281 10,491,646 165,241
Non-controlling
interest (39,309) - (226,628) -
------------ ------------ ------------ ------------
NET INCOME
ATTRIBUTABLE TO
FIRST CHOICE
HEALTHCARE
SOLUTIONS, INC. $ 544,940 $ 631,281 $ 10,265,018 $ 165,241
============ ============ ============ ============
Net income per
common share, basic $ 0.02 $ 0.03 $ 0.44 $ 0.01
============ ============ ============ ============
Net income per
common share,
diluted $ 0.02 $ 0.03 $ 0.39 $ 0.01
============ ============ ============ ============
Weighted average
number of common
shares outstanding,
basic 24,238,613 20,958,877 23,664,723 19,249,783
============ ============ ============ ============
Weighted average
number of common
shares outstanding,
diluted 27,751,946 22,992,211 26,998,057 21,583,117
============ ============ ============ ============
FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine months ended September 30,
2016 2015
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 10,491,646 $ 165,241
Adjustments to reconcile net income to
cash (used in) provided by operating
activities:
Depreciation and amortization 631,571 558,189
Amortization of financing costs 15,654 60,507
Bad debt expense 849,037 51,485
Gain on sale of property (9,212,346) -
Common stock issued in connection with
loan extension - 227,000
Note payable issued in settlement of
litigation - 50,749
Stock-based compensation 668,591 859,991
Changes in operating assets and
liabilities:
Accounts receivable (3,702,212) (1,678,545)
Prepaid expenses and other (129,948) 203,699
Restricted funds 359,414 (77,378)
Employee loans (110,716) (19,728)
Accounts payable and accrued expenses (1,718,516) 140,254
Settlement payable (600,000) -
Deposits (25,502) (5,469)
Deferred rent 230,671 39,603
Unearned income 946 3,941
--------------- ---------------
Net cash (used in) provided by operating
activities (2,251,710) 579,539
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash from variable interest entity - 679,673
Proceeds from sale of property 15,113,497 -
Payment of acquisition deposit - (141,352)
Purchase of equipment (239,418) (92,609)
--------------- ---------------
Net cash provided by investing
activities 14,874,079 445,712
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) proceeds from advances (43,082) 431,406
Payments on lines of credit 372,636 (331,162)
Net payments on notes payable (7,955,886) (653,023)
--------------- ---------------
Net cash used in financing activities (7,626,332) (552,779)
Net increase in cash and cash equivalents 4,996,037 472,472
Cash and cash equivalents, beginning of
period 1,594,998 279,087
--------------- ---------------
Cash and cash equivalents, end of period $ 6,591,035 $ 751,559
=============== ===============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $ 288,748 $ 925,045
=============== ===============
Cash paid during the period for taxes $ - $ -
=============== ===============
Supplemental Disclosure on non-cash
investing and financing activities:
Common stock issued in settlement of
accrued expenses $ 481,900 $ 15,000
=============== ===============
Common stock issued for future services $ - $ 1,153,777
=============== ===============
Common stock issued in settlement of
related party advances $ - $ 655,407
=============== ===============
Common stock issued in settlement of
convertible note and interest $ - $ 2,236,907
=============== ===============
Fair value of options issued to acquire
management control of variable interest
entity $ - $ 3,226,427
=============== ===============
FIRST CHOICE HEATLHCARE SOLUTIONS, INC.
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2016 2015 2016 2015
-------------------------------------- ------------
Net Income Attributable
to FCHS $ 544,940 $ 631,281 $ 10,265,018 $ 165,241
Gain on sale of
property and
improvements - - (9,212,346) -
Depreciation and
amortization 195,822 273,263 631,571 558,189
Amortization of
financing costs - 20,592 15,654 60,507
Bad debt expense 319,319 - 849,037 51,485
Stock-based
compensation 322,158 720,241 720,174 859,991
Interest expense, net 56,560 202,907 288,748 925,045
-------------------------------------- ------------
Adjusted EBITDA $ 1,438,799 $ 1,848,284 $ 3,557,856 $ 2,620,458
About First Choice Healthcare Solutions, Inc. Headquartered in Melbourne, Florida, First Choice Healthcare Solutions (FCHS) is implementing a defined growth strategy aimed at expanding its network of non-physician-owned medical centers of excellence, which concentrate on treating patients in the following specialties: Orthopaedics, Spine Surgery, Neurology, Interventional Pain Management and related diagnostic and ancillary services in key expansion markets throughout the Southeastern U.S. Serving Florida's Space Coast, the Company's flagship integrated platform currently administers over 100,000 patient visits each year and is comprised of First Choice Medical Group, The B.A.C.K. Center and Crane Creek Surgery Center. For more information, please visit www.myfchs.com, www.myfcmg.com, www.thebackcenter.net and www.cranecreeksurgerycenter.com.
Safe Harbor Statement Certain information set forth in this news announcement may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of First Choice Healthcare Solutions, Inc. Such forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management beliefs and certain assumptions made by its management. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Information concerning factors that could cause the Company's actual results to differ materially from those contained in these forward-looking statements can be found in the Company's periodic reports on Form 10-K and Form 10-Q, and in its Current Reports on Form 8-K, filed with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise to reflect future events or circumstances or reflect the occurrence of unanticipated events.
Investor Contact: Wolfe Axelrod Weinberger Associates Donald C. Weinberger [email protected] Stephen D. Axelrod, CFA [email protected] Phone: 212-370-4505 At First Choice Healthcare Solutions, Inc. Phone: 321-802-5830 Email: [email protected]
Source: First Choice Healthcare Solutions, Inc.
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