ORLANDO, Fla., Aug. 16 /PRNewswire-FirstCall/ -- PainCare Holdings, Inc. , one of the nation’s leading providers of pain-focused medical and surgical solutions and services, today provided an update on its ongoing financial and operational restructuring plans and reported its financial results for the three and six month reporting periods, ended June 30, 2007.
PainCare anticipates filing the related Form 10Q with the SEC no later than close of business on Tuesday, August 21, 2007. The Company could not complete the Form 10-Q within the prescribed time, because the Registrant effected numerous dispositions of physician practices during the quarter resulting in the need for additional time to complete the associated accounting and financial reporting. Although PainCare believes that the financial data included within this press release is accurate, it may be subject to change upon the filing of the Form 10Q.
OPERATIONAL HIGHLIGHTS AND RESTRUCTURING UPDATE:
-- The Company has completed the sale of Center for Pain Management ASC and an associated pain practice, both based in Maryland, back to its original shareholders. The transaction provided for a one-time cash payment to PainCare of $5 million by the original shareholders, forgiveness of the outstanding $7.8 million note due and payable to the shareholders, and forgiveness of $2 million in earn-out obligations that were payable to the shareholders in accordance with the terms and conditions of the original acquisition.
-- The Company has completed a transaction with Surgery Partners Holdings, LLC providing for the sale of PainCare’s controlling interest in the ambulatory surgery center located in Lake Worth, Florida for total cash consideration of $10 million and an additional $2.3 million in potential earn- out cash payments.
-- The Company has also signed a definitive agreement with Surgery Partners, LLC providing for the sale of PainCare’s controlling interest in the ambulatory surgery center located in Coral Gables, Florida. Upon closing of the transaction, which is expected to occur within the next 30 days following receipt of regulatory approvals, the Company will receive approximately $4.4 million in cash proceeds.
-- Through its financial restructuring efforts, PainCare is in the process of reducing debt obligation from $37.5 million to approximately $8.5 million. Further, the Company is working to restructure the remaining $8.5 million.
-- The Company has initiated an operational restructuring initiative providing for the divestiture or closing of certain non-performing or non-core physician practices. Further, at the corporate level, PainCare has implemented an overhead reduction initiative that has, to date, resulted in expenses being significantly reduced over that of the year-ago period. Additional cost-cutting programs are continually being evaluated.
-- PainCare’s wholly-owned subsidiary, Integrated Pain Solutions, has made considerable progress in establishing its operating platform, and recently announced the signing of its first customer, Coalition America. Currently, the Company is engaged in establishing its proprietary provider networks in key markets around the country in anticipation of launching revenue generating operations late in the third quarter.
OVERVIEW OF 2007 SECOND QUARTER AND YEAR-TO-DATE FINANCIAL RESULTS
-- Total revenues from continuing operations for the second quarter were $9.6 million, a 12% decrease from $10.8 million in the prior year’s second quarter. For the six months ended June 30, 2007, total revenues declined 13% to $19.4 million from $23 million in the comparable six month reporting period in 2006.
-- The Company had a non-cash, non-recurring goodwill impairment charge of $15.2 million in the second quarter of this year. In addition, due to the divestiture of certain business interests, loss from discontinued operations resulted in a non-cash, non-recurring charge totaling $28.1 million during the three months ended June 30, 2007.
-- Net loss for the second quarter of this year was $61.6 million, or $.92 loss per diluted share, compared to a net loss of $550,000, or $0.01 loss per diluted share in the second quarter of 2006. For the six months ended June 30, 2007, net loss totaled $64.8 million, or $0.97 loss per diluted share, compared to net income of $17.7 million, or $0.25 per diluted share, reported for the first six months of last year.
FINANCIAL CHARTS TO FOLLOW PAINCARE HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS June 30, December 31, 2007 2006 (unaudited) Assets Current assets: Cash and cash equivalents $931,569 $2,695,460 Accounts receivable, net of allowance for doubtful accounts ($1,148,006) 7,940,064 8,650,466 Deposits and prepaid expenses 636,413 649,668 Note receivable 319,551 500,000 Current deferred tax asset 594,043 1,921,825 Income tax receivable 7,690,737 4,135,376 Current assets of discontinued operations 6,650,142 12,567,030 Total current assets 24,762,519 31,119,825 Property and equipment, net 8,480,135 8,994,837 Goodwill, net 42,161,346 56,455,055 Other assets 3,295,967 4,847,679 Non-current assets of discontinued operations 10,027,655 62,131,631 Total assets $88,727,622 $163,549,027 Liabilities and Stockholders’ Equity Liabilities: Accounts payable and accrued expenses $4,907,757 $4,295,402 Accrued interest 3,037,915 781,971 Acquisition consideration payable 811,998 4,026,209 Current portion of notes payable 22,436,759 34,053,378 Current portion of convertible debentures 12,839,354 12,415,480 Derivative liabilities 600,000 600,000 Current portion of capital lease obligations 1,196,410 1,383,790 Current liabilities of discontinued operations 312,486 2,042,215 Total current liabilities 46,142,679 59,598,445 Capital lease obligations, less current portion 1,399,172 1,717,138 Deferred tax liability non-current 2,141,084 2,425,697 Non-current liabilities of discontinued operations 2,905,141 264,968 Total liabilities 52,588,076 64,006,248 Minority interests related to discontinued operations 2,904,605 2,191,797 Stockholders’ equity: Common stock, $.0001 par value. Authorized 200,000,000 shares; issued and outstanding 67,532,050 and 66,292,721 shares, respectively 6,753 6,629 Preferred stock, $.0001 par value. Authorized 10,000,000 shares; issued and outstanding - 0 - shares Additional paid in capital 143,410,198 142,763,156 Accumulated deficit (45,465,595) (18,983,089) Current period loss (64,812,762) (26,482,506) Cumulative Translation Adjustment 96,347 46,792 Total stockholders’ equity 33,234,941 97,350,982 Total liabilities and stockholders’ equity $88,727,622 $163,549,027 PAINCARE HOLDINGS, INC. Consolidated Statements of Operations For the Three and Six Months Ended June 30, 2007 and 2006 (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2007 2006 2007 2006 (As restated) (As restated) Revenues: Pain management $6,111,888 $6,568,065 $12,276,948 $12,339,476 Surgeries 859,172 1,604,047 2,201,365 3,485,077 Ancillary services 2,605,306 2,669,732 5,466,076 7,163,899 Total revenues 9,576,366 10,841,844 19,944,389 22,988,452 Cost of revenues 5,208,931 3,000,576 8,710,749 5,683,077 Gross profit 4,367,435 7,841,268 11,233,640 17,305,375 General and administrative expense 8,201,889 10,477,491 17,945,618 9,685,231 Impairment 15,225,074 -- 15,225,074 -- Amortization expense 191,017 564,045 222,600 1,006,957 Depreciation expense 473,911 401,812 901,478 838,405 Operating income (loss) (19,724,456) (3,602,080) (23,061,130) 5,774,782 Interest income (expense) (1,539,452) (1,424,349) (3,277,368) (2,038.000) Derivative benefit (expense) -- 98,396 -- 10,492,951 Other income (expense) (35,464) 313,840 (10,215) 440,421 Income (loss) from continuing operations before income taxes (21,299,372) (4,614,193) (26,348,713) 14,670,154 Benefit (provision) for income taxes (12,188,730) 1,466,685 (10,448,932) (1,927,304) Income (loss) from continuing operations (33,488,102) (3,147,508) (36,797,645) 12,742,850 Discontinued operations: Income (loss) from discontinued operations (less applicable income tax (expense) benefit of $1,997,784, 1,912,165, (1,806,790), and $3,233,891) (4,891,906) 2,597,757 (4,514,110) 3,932,840 Loss on disposal of discontinued operations (less applicable income tax benefit of $7,975,277 and 8,100,639) (23,257,657) -- (23,501,007) -- Income (loss) from discontinued operations, net of tax (28,149,563) 2,597,757 (28,015,117) 3,932,840 Income (loss) from operations before a cumulative effect of a change in accounting principle (61,637,665) (549,751) (64,812,762) 16,675,690 Cumulative effect of a change in accounting principle (net of tax of $661,283) -- -- -- 991,925 Net income (loss) $(61,637,665) $(549,751)$(64,812,762) $17,667,615 Basic income (loss) per common share: Income (loss) from continuing operations before cumulative effect of a change in accounting principle $(.50) $(.05) $(.55) $.20 Income (loss) from discontinued operations $(.42) $.04 $(.42) $.06 Cumulative effect of a change in accounting principle -- -- -- $.02 Net income (loss) $(.92) $(.01) $(.97) $.28 Diluted income (loss) per common share: Income (loss) from continuing operations before cumulative effect of a change in accounting principle $(.50) $(.05) $(.55) $.18 Income (loss) from discontinued operations $(.42) $.04 $(.42) $.05 Cumulative effect of a change in accounting principle -- -- -- $.01 Net income (loss) $(.92) $(.01) $(.97) $.25 Basic weighted average common shares outstanding 67,263,159 64,482,619 66,842,451 63,011,366 Diluted weighted average common shares outstanding 67,263,159 64,482,619 66,842,451 71,718,631
About PainCare Holdings, Inc.
Headquartered in Orlando, Florida, PainCare Holdings, Inc. is one of the nation’s leading providers of pain-focused medical and surgical solutions and services. Through its proprietary network of acquired or managed physician practices, and in partnership with independent physician practices and medical institutions throughout the United States and Canada, PainCare is committed to utilizing the most advanced science and technologies to diagnose and treat pain stemming from neurological and musculoskeletal conditions and disorders.
Through its wholly-owned subsidiary, Caperian, Inc., PainCare offers medical real estate and development services. Through Integrated Pain Solutions, the Company is engaged in pioneering the nation’s first managed services organization that offers a multi-disciplinary healthcare network focused on the treatment of pain. For more information on PainCare Holdings, please visit www.paincareholdings.com.
This press release contains forward-looking statements that may be subject to various risks and uncertainties. Such forward-looking statements are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management’s current expectations or beliefs as well as assumptions made by, and information currently available to, management. These forward-looking statements, which may include statements regarding our future financial performance or results of operations, including expected revenue growth, cash flow growth, future expenses, future operating margins and other future or expected performance, are subject to the following risks: the acquisition of businesses or the launch of new lines of business, which could increase operating expenses and dilute operating margins; the inability to attract new patients by our owned practices, the managed practices and the limited management practice; increased competition, which could lead to negative pressure on our pricing and the need for increased marketing; the inability to maintain, establish or renew relationships with physician practices, whether due to competition or other factors; the inability to comply with regulatory requirements governing our owned practices, the managed practices and the limited management practices; that projected operating efficiencies will not be achieved due to implementation difficulties or contractual spending commitments that cannot be reduced; and to the general risks associated with our businesses.
In addition to the risks and uncertainties discussed above you can find additional information concerning risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements in the reports that we have filed with the Securities and Exchange Commission. The forward-looking statements contained in this press release represent our judgment as of the date of this release and you should not unduly rely on such statements. Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise after the date of this press release. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in the filing may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements.
FOR MORE INFORMATION, PLEASE CONTACT: Investor/Shareholder Relations Dodi Handy, President and CEO, or Daniel Conway, Chief Strategist Elite Financial Communications Group, LLC at 407-585-1080 or via email at prz@efcg.net
PainCare Holdings, Inc.
CONTACT: Investor-Shareholder Relations, Dodi Handy, President and CEO, orDaniel Conway, Chief Strategist, of Elite Financial Communications Group,LLC, +1-407-585-1080, prz@efcg.net
Web site: http://www.paincareholdings.com//
