WEST PALM BEACH, Fla., May 10 /PRNewswire-FirstCall/ -- HearUSA, Inc. today announced first quarter revenues of $16.9 million compared to $17.4 million for the comparable period last year. Losses for the first quarter were $1.6 million or $.05 per share compared to a net income of $201,000 or $.01 per share for the year ago prior period.
Paul A. Brown, M.D., Chairman of the Board of HearUSA, stated, “Unlike the first quarter of 2003, we did not benefit in the first quarter of 2004 from approximately $1.5 million in revenues from income of a special contract and an excess of undelivered hearing aids from the prior quarter. Although the first two months of 2004 were slow, revenues were especially strong, averaging over $1.5 million per week during the five week month of March. Marketing efforts for our contracted healthcare organizations which were delayed while the healthcare organizations reviewed how the new Medicare legislation affected their plans have now been implemented. We are expecting to see an increase in revenues from this part of business in the second quarter.”
Mr. Stephen Hansbrough, Chief Executive Officer, added, “New Medicare legislation has prompted a number of our contracted healthcare providers to increase their hearing aid benefit, to add a benefit for a second hearing aid or to convert from a fee-for-service to a capitation program. We expect this to favorably impact our results in the second quarter. With the anticipated increase in revenues from our managed care marketing and the revenues from the recently announced contract with the Department of Veterans Affairs, we expect revenues in our 2004 second quarter to exceed revenues of the second quarter of 2003. Contracts have been signed with new healthcare providers which will become active in both mid-year 2004 and beginning 2005. So, not withstanding our difficult first quarter, we are expecting results to improve significantly as 2004 progresses.”
About HearUSA
HearUSA provides hearing care to patients whose health insurance and managed care organizations have contracted with the company for such care and to retail “self-pay” patients. The 156 centers are located in California, Florida, New York, New Jersey, Massachusetts, Ohio, Michigan, Wisconsin, Minnesota, Missouri and Washington and the province of Ontario Canada. For additional information, click on “investor information” at HearUSA’s website http://www.hearusa.com/ .
This press release contains forward looking statements within the meaning of the Securities Litigation Reform Act of 1995, including our expectation of an increase in revenues from contracted healthcare organizations, the favorable effect of the Medicare legislation on our contracted healthcare providers, expected revenues from the recently announced contract with the Department of Veterans Affairs, our expectation that revenues in our 2004 second quarter will exceed revenues of the second quarter of 2003, and our expectation that results will improve significantly as 2004 progresses. Potential risks and uncertainties include such factors as the success of our marketing efforts to the healthcare provider beneficiaries, the successful initiation of the new contract with the Department of Veterans Affairs, changes in market conditions and other risks described in our Form 10-K filed with the Securities and Exchange Commission.
HearUSA, Inc. Consolidated Balance Sheets March 27, December 27, ASSETS 2004 2003 Current assets Cash and cash equivalents $2,612,164 $6,714,881 Investment securities 435,000 435,000 Accounts and notes receivable, less allowance for doubtful accounts of $418,309 and $490,881 6,117,695 6,539,149 Inventories 881,274 979,092 Prepaid expenses and other 948,328 1,115,393 Total current assets 10,994,461 15,783,515 Property and equipment, net 4,579,569 4,969,265 Goodwill 33,229,262 33,222,779 Intangibles assets, net 11,455,467 11,577,097 Deposits and other 658,971 630,694 $60,917,730 $66,183,350 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $4,837,091 $6,750,234 Accrued expenses 2,417,548 2,492,094 Accrued salaries and other compensation 2,345,467 1,706,252 Current maturities of long-term debt 4,678,934 6,436,271 Dividends payable 505,958 728,699 Total current liabilities 14,784,998 18,113,550 Long-term debt 19,798,372 20,579,977 Commitments and contingencies - - Convertible subordinated notes, net of debt discount of $6,928,411 and $7,423,596 571,589 76,404 Mandatorily redeemable convertible preferred stock 4,627,561 4,600,107 Stockholders’ equity Preferred stock (Aggregate liquidation preference $2,330,000, $1 par, 5,000,000 shares authorized Series H Junior Participating (0 shares outstanding) - - Series J (233 shares outstanding) 233 233 1998 Convertible (0 shares outstanding) - - Total preferred stock 233 233 Common stock: $.10 par; 50,000,000 shares authorized 29,912,930 and 29,528,432 shares issued 2,991,293 2,952,845 Stock subscription (412,500) (412,500) Additional paid-in capital 120,195,853 120,226,050 Accumulated deficit (100,117,660) (98,501,791) Accumulated other comprehensive income 963,132 1,033,616 Treasury stock, at cost: 523,662 and 523,662 common shares (2,485,141) (2,485,141) Total stockholders’ equity 21,135,210 22,813,312 $60,917,730 $66,183,350 Consolidated Statements of Operations Three Months Ended March 27, 2004 and March 29, 2003 March 27, March 29, 2004 2003 Net revenues $16,934,600 $17,411,728 Operating costs and expenses Cost of products sold 4,990,482 4,816,239 Center operating expenses 9,142,814 8,415,702 General and administrative expenses 2,455,249 2,446,128 Depreciation and amortization 614,790 908,918 Total operating costs and expenses 17,203,335 16,586,987 Income (loss) from operations (268,735) 824,741 Non-operating income (expense): Interest income 3,857 4,218 Interest expense (including approximately $532,000 and $0 of non-cash debt discount amortization) (1,173,272) (522,885) Income (loss) from continuing operations (1,438,150) 306,074 Discontinued operations Income (loss) from discontinued operations - 43,478 Net income (loss) (1,438,150) 349,552 Dividends on preferred stock (177,719) (148,324) Net income (loss) applicable to common stockholders $(1,615,869) $201,228 Net income (loss) from continuing operations, including dividends on preferred stock, per common share - basic $(0.05) $0.01 Net income (loss) from continuing operations, including dividends on preferred stock, per common share - basic diluted $(0.05) $0.00 Net income (loss) applicable to common stockholders per common share - basic $(0.05) $0.01 Net income (loss) applicable to common stockholders per common share - diluted $(0.05) $0.00 Weighted average number of shares of common stock outstanding - basic 30,423,652 30,426,106 Weighted average number of shares of common stock outstanding - diluted 30,423,652 55,836,097
HearUSA, Inc.
CONTACT: Paul A. Brown, M.D., Chairman of HearUSA, Inc., +1-561-478-8770ext. 123, Karl Plath or Brien Gately, both of The Investor Relations Company,+1-847-296-4200, or Henri Perron of Renmark Financial Communications,+1-514-939-3989
Web site: http://www.hearusa.com/