In the news release, HearUSA Reports Strong Second Quarter and Six Month Results, issued earlier today by HearUSA, Inc. over PR Newswire, we are advised by a representative of the company that the second paragraph, first sentence, should read "...a loss of three cents per share in the second quarter of 2004" rather than "...a loss of three cents per share in the second quarter of 2005". Also, in the third paragraph, third sentence, non-cash debt discount amortization expense for the first six months of 2004 should be listed "$1,060,000" rather than "$1,060,000 million” as originally issued inadvertently. Complete, corrected release follows:
HearUSA Reports Strong Second Quarter and Six Month Results -- Total Second Quarter Revenues Reach $19.1 Million -- Income from Second Quarter Operations Reaches $1.2 million -- Company Posts Second Quarter Profit of $154,076
WEST PALM BEACH, Fla., Aug. 11 /PRNewswire-FirstCall/ -- HearUSA, Inc. today reported revenues in the second quarter of 2005 of $19.1 million, an increase of 11 percent over revenues of $17.2 million in the comparable period last year. Revenues for the first six months of 2005 reached $38.1 million, an increase of 15% over the $33.2 million reported for the prior year period. Centers divested in the second quarter of 2005 are treated as discontinued operations.
Net income for the second quarter ended July 2, 2005 was $154,076, approximately break-even on a per share basis, compared with a net loss of $948,008, or a loss of three cents per share in the second quarter of 2004. For the six months ended July 2, 2005, HearUSA reported a net loss of $290,807, or a loss of one cent per share, compared with a net loss of $2,563,789, or a loss of eight cents per share, in the first six months of 2004.
The second quarter results for the current year include approximately $528,000 of non-cash expenses related to debt discount amortization. Debt discount amortization in the second quarter a year ago amounted to $532,000. For the first six months of 2005, non-cash debt discount amortization expense amounted to $1,100,000 vs. $1,060,000 for the comparable period in 2004, the company noted.
“In addition to achieving record revenues, it should be noted that results for the second quarter reflected the continuing efforts we’ve made to improve the efficiency of our operations, to eliminate unprofitable centers and to continue to reduce costs,” said President and Chief Executive Officer Stephen J. Hansbrough. “Taking into consideration the recent acquisitions and divestitures we’ve made but prior to any additional acquisitions, we estimate that our breakeven is now approximately $19.3 million per quarter,” Mr. Hansbrough noted. “Our strengthening financial condition was also reflected in our balance sheet as of the end of the second quarter,” Mr. Hansbrough concluded.
“Although we have made significant progress this year, we are looking toward further growth in the future both from ongoing operations and from strategic acquisitions,” stated founder and Chairman Paul A. Brown, M.D. “To that end, we have made adjustments in our management. We have hired a new Vice President of Business Development whose responsibilities will include seeking out and evaluating acquisition opportunities. Additionally, we have also reassigned one of our senior operating executives to business integration. With these changes, we will be better able to both grow our revenue base through strategic acquisitions and make certain that our acquisitions are smoothly and rapidly integrated,” Dr. Brown added.
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. Company-owned centers are located in California, Florida, New York, New Jersey, Massachusetts, Ohio, Michigan and Missouri and the province of Ontario, Canada. In addition, the company has a network of approximately 1,400 affiliated audiologists in 49 states. For further information, click on “investor information” at HearUSA’s website, http://www.hearusa.com .
HearUSA will hold a webcast Friday, August 12, 2005 at 9:00 A.M. Eastern Time to allow securities analysts and shareholders the opportunity to hear management discuss the company’s Second Quarter Results. The call is being webcast by Vcall and can be accessed at HearUSA’s website at http://www.hearusa.com or investors can access the webcast at < http://www.vcall.com/CEPage.asp?ID=92770 >. The conference can also be listened to by telephone by dialing (toll free) 877-407-9210 (international) 201-689-8049.
Tables Follow ... HearUSA, Inc. Consolidated Balance Sheet July 2, December 25, ASSETS 2005 2004 (unaudited) (audited) Current assets Cash and cash equivalents $3,755,332 $2,615,379 Restricted cash and investment securities 435,000 435,000 Accounts and notes receivable, less allowance for doubtful accounts of $358,431 and $373,583 5,722,337 5,876,699 Inventories 713,337 877,206 Prepaid expenses and other 1,159,992 558,921 Total current assets 11,785,998 10,363,205 Property and equipment, net 3,132,579 3,346,788 Goodwill 35,475,029 33,210,380 Intangible assets, net 11,444,003 11,092,594 Deposits and other 537,852 549,924 Assets of discontinued operations - 738,924 $62,375,461 $59,301,815 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $6,441,470 $6,644,600 Accrued expenses 2,365,991 2,303,601 Accrued salaries and other compensation 2,598,736 1,982,559 Current maturities of long-term debt 4,784,219 4,152,908 Dividends payable 73,600 177,996 Total current liabilities 16,264,016 15,261,664 Long-term debt, less current maturities 16,924,238 17,296,125 Convertible subordinated notes, net of debt discount of $4,414,603 and $5,443,879 3,085,397 2,056,121 Total long-term debt and convertible subordinated notes 20,009,635 19,352,246 Commitments and contingencies - - Mandatorily redeemable convertible preferred stock 4,766,940 4,709,921 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) 233 233 Total preferred stock 233 233 Common stock: $.10 par; 75,000,000 shares authorized 31,591,760 and 30,060,690 shares issued 3,159,176 3,006,069 Stock subscription (412,500) (412,500) Additional paid-in capital 121,786,160 120,197,937 Accumulated deficit (102,259,259) (101,968,452) Accumulated other comprehensive income 1,546,201 1,639,838 Treasury stock, at cost: 523,662 common shares (2,485,141) (2,485,141) Total stockholders’ equity 21,334,870 19,977,984 $62,375,461 $59,301,815 HearUSA, Inc. Consolidated Statements of Operations Six Months Ended July 2, 2005 and June 26, 2004 Six Months Ended July 2, June 26, 2005 2004 (unaudited) (unaudited) Net revenues Hearing aids and other products $35,371,022 $30,701,917 Services 2,718,853 2,537,313 Total net revenues 38,089,875 33,239,230 Operating costs and expenses Hearing aids and other products 9,968,892 8,370,735 Services 935,949 1,003,714 Total cost of products sold and services 10,904,842 9,374,449 Center operating expenses 18,032,934 17,544,501 General and administrative expenses 5,966,285 4,948,825 Depreciation and amortization 973,181 1,073,813 Total operating costs and expenses 35,877,242 32,941,588 Income from operations 2,212,633 297,642 Non-operating income (expense): Gain from insurance proceeds 129,596 - Interest income 28,829 7,444 Interest expense (including approximately $1,096,000 and $1,064,000 of non-cash debt discount amortization) (2,360,179) (2,329,031) Net income (loss) from continuing operations 10,879 (2,023,945) Discontinued operations: Gain on disposition of assets 365,158 - Income (loss) from discontinued operations (299,767) (186,347) Net income (loss) from discontinued operations 65,391 (186,347) Net income (loss) 76,270 (2,210,292) Dividends on preferred stock (367,077) (353,497) Net loss applicable to common stockholders $(290,807) $(2,563,789) Net loss from continuing operations, including dividends on preferred stock applicable to common stockholders - basic and diluted $(0.01) $(0.08) Net loss applicable to common stockholders per common share - basic and diluted $(0.01) $(0.08) Weighted average number of shares of common stock outstanding - basic 31,199,595 30,423,755 Weighted average number of shares of common stock outstanding - diluted 31,199,595 30,423,755 HearUSA, Inc. Consolidated Statements of Operations Three Months Ended July 2, 2005 and June 26, 2004 Three Months Ended July 2, June 26, 2005 2004 (unaudited) (unaudited) Net revenues Hearing aids and other products $17,778,788 $15,877,986 Services 1,279,672 1,312,937 Total net revenues 19,058,460 17,190,923 Operating costs and expenses Hearing aids and other products 5,101,956 4,239,753 Services 437,292 450,403 Total cost of products sold and services 5,539,248 4,690,156 Center operating expenses 8,829,042 9,012,295 General and administrative expenses 3,002,401 2,493,576 Depreciation and amortization 492,657 519,190 Total operating costs and expenses 17,863,348 16,715,217 Income from operations 1,195,112 475,706 Non-operating income (expense): Gain from insurance proceeds 129,596 - Interest income 17,145 3,587 Interest expense (including approximately $528,000 and $532,000 of non-cash debt discount amortization) (1,177,566) (1,155,758) Net income (loss) from continuing operations 164,287 (676,465) Discontinued operations: Gain on disposition of assets 365,158 - Income (loss) from discontinued operations (201,922) (95,765) Net income (loss) from discontinued operations 163,236 (95,765) Net income (loss) 327,523 (772,230) Dividends on preferred stock (173,447) (175,778) Net income (loss) applicable to common stockholders $154,076 $(948,008) Net loss from continuing operations, including dividends on preferred stock, applicable to common stockholders - basic and diluted $(0.00) $(0.03) Net income (loss) applicable to common stockholders per common share - basic and diluted $0.00 $(0.03) Weighted average number of shares of common stock outstanding - basic 31,933,380 30,423,705
HearUSA, Inc.
CONTACT: Paul A. Brown, M.D., Chairman, of HearUSA, Inc., +1-561-478-8770,Ext. 123, or Brien Gately of The Investor Relations Company,+1-847-296-4200
Web site: http://www.hearusa.com/