OptiCare Health Systems Reports First Quarter 2004 Financial Results

WATERBURY, Conn., May 14 /PRNewswire-FirstCall/ -- OptiCare Health Systems, Inc. announced today that for the quarter ended March 31, 2004, OptiCare reported positive net income of $4,000. This compares to net income of $160,000 for the first quarter of 2003. Net revenues totaled $30,372,000 for the quarter ended March 31, 2004 compared to $31,996,000 for the same period in 2003.

For the first quarter of 2004, the company reported a net loss to common shareholders, after preferred stock dividends, of $170,000, or $0.01 per share. For the same period in 2003, the company reported net income available to common shareholders, after preferred stock dividends, of $20,000, or $0.00 per share.

"We are pleased with the progress our businesses are making," commented Dean J. Yimoyines, Chairman and Chief Executive Officer. "Our Consumer Vision segment performed very well as a result of increasingly effective sales efforts and its focus on higher margin products, and, in our Managed Vision business, sales of our new direct-to-employer product line have been steadily growing. We also recognized improved results at Wise Optical, where increased sales and reduced operating expenses reflect the many efforts we have made to strengthen the operations of this business."

Bill Blaskiewicz, Chief Financial Officer, added, "We have been working successfully to enhance OptiCare's balance sheet. As of March 31, 2004, we were able to reduce the company's debt by $2.0 million from year-end 2003 and by $23.8 million from year-end 2001. All of these improvements are helping us develop a strong foundation for OptiCare and create future growth opportunities for our company."

About OptiCare Health Systems, Inc.

OptiCare Health Systems, Inc. is an integrated eye care services company focused on vision benefits management, the distribution of products and software services to eye care professionals, and consumer vision services, including medical, surgical and optometric services and optical retail.

This press release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. OptiCare's actual results could differ materially from those expressed or indicated by any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risk that OptiCare may not be able to improve cash flow, may not be able to successfully integrate its acquisitions, to retain and attract qualified employees, the impact of current and future governmental regulations in existing lines of business, OptiCare's ability to successfully and profitably manage its operations and growth of the operations, if any, the risks related to managed care contracting, and the ability of OptiCare to successfully raise capital on commercially reasonable terms, if at all. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in OptiCare's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ending December 31, 2003. Forward-looking statements speak only as of the date they are made, and OptiCare undertakes no duty or obligation to update any forward-looking statements in light of new information or future events.

OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) March 31, December 31, March 31, 2004 2003 2003 ASSETS CURRENT ASSETS: Cash and cash equivalents $1,925 $1,695 $3,937 Accounts receivable, net 10,795 9,369 12,144 Inventories 6,292 5,918 9,231 Deferred income taxes, current -- -- 1,660 Other current assets 1,110 567 762 TOTAL CURRENT ASSETS 20,122 17,549 27,734 Property and equipment, net 4,312 4,683 5,572 Goodwill, net 19,195 19,195 20,516 Intangible assets, net 1,151 1,179 1,309 Deferred income taxes, non-current -- -- 3,140 Other assets 3,251 3,249 4,599 TOTAL ASSETS $48,031 $45,855 $62,870 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $9,620 $5,644 $12,090 Accrued expenses 5,720 5,507 5,940 Current portion of long-term debt 380 1,124 2,763 Other current liabilities 1,391 1,552 1,258 TOTAL CURRENT LIABILITIES 17,111 13,827 22,051 Long-term debt-related party -- -- 16,036 Other long-term debt, less current portion 10,174 11,469 7,799 Other liabilities 519 512 678 TOTAL NON-CURRENT LIABILITIES 10,693 11,981 24,513 Series B 12.5% mandatorily redeemable, convertible preferred stock-related party 5,809 5,635 5,158 STOCKHOLDERS' EQUITY: Series C preferred stock-related party 1 1 -- Common stock 31 30 30 Additional paid-in-capital 79,701 79,700 63,924 Accumulated deficit (65,315) (65,319) (52,806) TOTAL STOCKHOLDERS' EQUITY 14,418 14,412 11,148 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $48,031 $45,855 $62,870 OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Amounts in thousands, except share data) (Unaudited) Three Months Ended March 31, 2004 2003 NET REVENUES: Managed vision $6,043 $7,408 Product sales 18,128 17,722 Other services 5,581 5,028 Other income 620 1,838 Total net revenues 30,372 31,996 OPERATING EXPENSES: Medical claims expense 4,644 5,744 Cost of product sales 13,365 13,901 Cost of services 2,279 2,126 Selling, general and administrative 9,322 8,808 Depreciation 403 355 Amortization 28 44 Interest 321 751 Total operating expenses 30,362 31,729 Income before income taxes 10 267 Income tax expense 6 107 Net income 4 160 Preferred stock dividends (174) (140) Net income (loss) available to common stockholders $(170) $20 EARNINGS (LOSS) PER SHARE: Net income (loss) per common share: Basic $(0.01) $0.00 Diluted $(0.01) $0.00

OptiCare Health Systems, Inc.

CONTACT: Christopher J. Walls, General Counsel of OptiCare HealthSystems, Inc., +1-203-596-2236; or Jody Burfening or Harriet Fried of Lippert-Heilshorn & Associates, +1-212-838-3777, for OptiCare Health Systems, Inc.

MORE ON THIS TOPIC