BANGOR, Maine, Nov. 16 /PRNewswire-FirstCall/ -- Nyer Medical Group, Inc. yesterday reported results for the 1st quarter of fiscal year 2005. Revenues from continuing operations for the three months ended September 30, 2004 decreased $53,312 to $15,188,611 as compared to $15,241,023 as reported for the same period last year. Net income for the three months ended September 30, 2004 was $64,050 or $.02 per common share as compared to $182,461 or $.05 per common share for the same period ended September 30, 2003.
Karen Wright, President and Chief Executive Officer of Nyer Medical Group, Inc., stated, “We are pleased with the results for the first quarter of fiscal 2005. We implemented approximately $500,000 in annual cost savings at the end of September 2004, by reducing corporate overhead, streamlining operations and consolidation of one of our subsidiaries which will be reflected in the 2nd quarter of fiscal year 2005. The cost savings could have an effect on Company earnings of approximately $.13 per common share for the remainder of fiscal year 2005 and the beginning of fiscal year 2006.”
The pharmacy segment’s sales decreased $100,018 to $12,989,359 or 1.0% for the three months ended September 30, 2004 as compared to $13,089,377 for the three months ended September 30, 2003. The main reason for the decrease was due to a conversion of a contract with a federally qualified health center from sales of the pharmacy’s inventory and receipt of a dispensing fee to sales of the health center’s inventory and receipt of a dispensing fee by approximately $500,000. Management expects an increase in pharmacy sales due to an aging population, increases in Medicare prescription benefits and with more prescription drugs coming to market. These factors point to increases in the prescription drug market. The pharmacies’ selling, general and administrative expenses increased $128,875 to $2,354,199 or 5.8% for the three months ended September 30, 2004 as compared to $2,225,324 for the three months ended September 30, 2003. The increases came from increased labor costs of approximately $139,000, increased rent of $15,300, decreased advertising by approximately $76,500 and increased depreciation of $15,700 and normal increases in overhead expenses.
The medical segment’s sales increased $46,706 for the three months ended September 30, 2004 to $2,199,252 or 2.2% as compared to $2,152,546 for the three months ended September 30, 2003. The increase was due to the Internet’s increase of approximately $221,000. The medical supply company’s sales decreased $181,000 for the same period in 2003 with $96,500 of this amount from a bulk inventory sale. Additionally, the Company sales in Florida declined approximately $39,000 due to unusual weather conditions in the state. The segment continues to experience increased pressure from larger competitors who can offer lower prices. The medical segment had a slight increase in its selling, general and administrative expenses of $3,606 or 1.0% to $632,598 for the three months ended September 30, 2004 as compared to $628,992 for the three months ended September 30, 2003.
The Corporate segment’s overhead decreased by $5,531 or 5.5% to $95,503 for the three months ended September 30, 2004 as compared to $101,034 for the three months ended September 30, 2003. This was mainly due to a decrease in public relation fees.
Nyer Medical Group, Inc., is a holding company that operates pharmacies in the greater Boston area and a medical products distribution business that distributes and markets medical equipment and supply products to hospitals, physicians and nursing homes using relationship-based telemarketing, direct sales personnel, catalogs and the Internet. These orders are filled by the Company’s distribution centers located in New England, South Florida and Nevada.
The Company has guaranteed certain obligations from its discontinued operations, and the Company had a loss in its medical and corporate segments in recent years and has a cash flow deficiency in the segments. The continued existence of the Company and specifically, the medical and corporate segments, is dependent upon the medical segment obtaining profitability, up streaming funds from its pharmacy segment or raising capital. The Company’s pharmacy subsidiary has an operating agreement with the Company which includes cash management. The minority shareholders of the pharmacy subsidiary have declined to provide the Company with sufficient cash to sustain its present operations and fund the medical segment, if necessary. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
In order to increase working capital in the medical and corporate segments, a Company subsidiary obtained a $300,000 line of credit in October 2004. The line of credit is collateralized by property owned by the subsidiary and is guaranteed by the Company. The Company cannot draw on the line without approval from a committee of the board established for this purpose. As of the date of this release, the line of credit has not been used.
Management’s plan to return to profitability includes: 1) revamping management at the corporate and medical segments, 2) instituting cost cutting measures to reduce and control general and administrative costs; and 3) consolidating certain entities to reduce costs. There is no assurance that management’s business plan will be successful or that the Company will achieve profitability.
For further information contact Alliance Capital Resources, Inc., Jack Sutton (909) 597-2476.
Safe Harbor under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All statements in this release that are not historical facts, including, but not limited to, statements regarding expected cost savings, a positive impact on earnings for the remainder of fiscal year 2005 and the beginning of fiscal year 2006, the factors required for the continued existence of the Company, management’s plan to return to profitability and management expecting increases in pharmacy sales, are forward-looking statements and are subject to risk and uncertainties. Such risk and uncertainties include, but are not limited to, sustained profitability and any possible change in our core business. Among the factors that change the anticipated results are changes in the capital equity markets. Nyer does not undertake any obligation to update these forward-looking statements.
Nyer Medical Group, Inc.
CONTACT: Jack Sutton of Alliance Capital Resources, Inc., +1-909-597-2476
Web site: http://nyermedicalgroup.com/