ORLANDO, Fla., Nov. 9 /PRNewswire-FirstCall/ -- PainCare Holdings, Inc. , one of the nation's leading providers of pain-focused medical and surgical solutions and services, today announced results for the three and nine months ended September 30, 2006.
Financial Results for the Nine Months Ended September 30, 2006 Compared to the Nine Months Ended September 30, 2005 (restated):
* Revenues increased 35% to $69.07 million, up from $50.99 million. * On a Non-GAAP basis, net income declined to $4.51 million from $8.99 million. * Non-GAAP diluted earnings per share was $0.07 compared to $0.15. * Net income on a GAAP basis was $8.86 million, compared to a net loss on a GAAP basis of $7.28 million. * GAAP earnings per fully diluted common share rose to $0.12 from a GAAP loss per fully diluted common share of $0.15.
Financial Results for the Three Months Ended September 30, 2006 Compared to the Three Months Ended September 30, 2005 (restated):
* Revenues rose 6.3% to $22.17 million from $20.86 million. * On a Non-GAAP basis, net loss was $213,000 compared to net income of $4.28 million. * Non-GAAP income per diluted share was $0.00 compared to $0.07. * Net loss on a GAAP basis was $2.22 million, compared to net income on a GAAP basis of $9.37 million. * GAAP loss per fully diluted common share was $0.03 compared to GAAP earnings per fully diluted common share of $0.15.
As of September 30, 2006, the Company had approximately $3.42 million in cash, approximately $26.87 million in receivables, and approximately $130.12 million in total stockholders' equity.
Randy Lubinsky, PainCare's Chief Executive Officer, noted, "There is no getting around the fact that 2006 has presented a series of costly challenges and obstacles that PainCare has had to face and work hard to overcome. As we fast approach year-end, we remain focused on achieving five key objectives: 1) divest our ambulatory surgery centers and using the cash proceeds to retire or materially reduce our debt load; 2) prepare to launch our new managed services organization, Integrated Pain Solutions, in the first quarter of 2007; 3) adopt a much more hands-on approach to manage and organically grow our national network of pain practices; 4) resolve the shareholder class action law suit; and 5) implement enhanced governance and reporting practices to achieve maximum transparency and corporate stewardship."
The Company's management team will host a teleconference this afternoon beginning at 4:15 PM Eastern, and invites all interested parties to join management in a discussion regarding the Company's financial results, corporate progression and other meaningful developments. The conference call can be accessed via telephone by dialing toll free 1-800-866-5043 or via the Internet at www.paincareholdings.com. For those unable to participate at that time, a replay of the webcast will be available for 90 days on www.paincareholdings.com.
To supplement PainCare's consolidated financial statements presented in accordance with Generally Accepted Accounting Principles ("GAAP"), PainCare provides non-GAAP net income (loss) and non-GAAP net income (loss) per share data. The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
PainCare's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance by excluding certain charges, gains and tax effects that may not be indicative of our core business operating results. PainCare believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing PainCare's performance. We include these non- GAAP financial measures because we believe they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. Non-GAAP measures are reconciled to comparable GAAP measures in the table entitled "Reconciliation of GAAP to Non-GAAP Results" following the text of this press release.
PAINCARE HOLDINGS, INC. Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2006 and 2005 (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2006 2005 2006 2005 (As restated) (As restated) Revenues: Pain management $11,571,040 $14,904,949 $37,285,682 $35,460,297 Surgeries 1,494,045 1,389,222 4,979,122 4,444,255 Ancillary services 9,109,648 4,569,489 26,809,715 11,083,701 Total revenues 22,174,733 20,863,660 69,074,519 50,988,253 Cost of revenues 6,365,451 3,279,321 16,476,191 8,295,102 Gross profit 15,809,282 17,584,339 52,598,328 42,693,151 General and administrative expense 13,871,940 4,665,623 41,933,888 30,981,678 Amortization expense 642,891 339,371 1,760,296 872,271 Depreciation expense 627,838 418,665 1,799,433 924,542 Operating income (loss) 666,613 12,160,680 7,104,711 9,914,660 Interest income (expense) (2,077,429) (1,606,028) (6,105,344) (3,797,438) Derivative benefit (expense) 8,558 3,143,397 10,501,509 (10,103,350) Other income (expense) (239,539) 91,938 213,998 235,321 Income (loss) before income taxes (1,641,797) 13,789,987 11,714,874 (3,750,807) Benefit (provision) for income taxes 483,924 (4,141,058) (1,020,400) (3,155,996) Income (loss) before minority interests (1,157,873) 9,648,929 10,694,474 (6,906,803) Minority interests in net earnings of consolidated subsidiaries 1,065,635 280,060 1,835,974 377,132 Net income (loss) $(2,223,508) $9,368,869 $8,858,500 (7,283,935) Basic income (loss) per common share $(0.03) $0.18 $0.14 $(0.15) Basic weighted average common shares outstanding 64,482,619 53,495,697 64,040,150 49,859,872 Diluted income (loss) per common share $(0.03) $0.15 $0.12 $(0.15) Diluted weighted average common shares outstanding 64,482,619 65,020,702 74,166,535 49,859,872 Reconciliation of GAAP to Non-GAAP Results to Follow PainCare Holdings, Inc. Reconciliation of GAAP to Non-GAAP results Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2006 2005 2006 2005 Non-GAAP Net Income Reported Net Income $(2,223,508) $9,368,869 $8,858,500 $(7,283,935) (GAAP basis) Equity-based compensation expense(1) 342,316 (5,241,297) 1,524,331 6,735,862 Derivative expense (benefit)(2) (8,558) (3,143,397) (10,501,509) 10,103,350 Amortization of debt discount(3) 418,457 1,196,210 1,368,839 2,134,926 Non recurring expenses(4) 2,182,348 - 5,812,688 - Income tax effect of non-GAAP adjustments(5) (924,287) 2,096,519 (2,553,725) (2,694,345) Non-GAAP net income (213,232) 4,276,904 4,509,124 8,995,857 Non-GAAP Net Income Per Diluted Share Impact of assumed conversions interest expense, net of tax - 121,551 328,617 451,165 Net income available to common shareholders plus assumed conversions (Non-GAAP basis) $ (213,232) $4,398,455 $4,837,741 $ 9,447,022 Non-GAAP net income per diluted share $ 0.00 $ 0.07 $ 0.07 $ 0.15 Shares used in diluted shares calculation(6) 66,010,656 65,020,702 74,166,535 62,860,091 1. During the quarter ended September 30, 2005 the Company recorded non-cash compensation expense using the intrinsic value method for the variable option plan. During the quarter ended September 30, 2006 the Company recorded non-cash compensation expense using FAS 123R. These items are recorded in 'General and administrative expenses' in the Company's Consolidated Statement of Operations. 2. The Derivative expense (benefit) is associated with the convertible debentures and reflects the non-cash fair value adjustments of the host instrument and the embedded conversion feature using FAS 133 and EITF 00- 19. These items are recorded as a separate item under below Operating income in the Company's Consolidated Statement of Operations. 3. Amortization of debt discount reflects the non-cash amount of interest expense associated with the convertible instruments under FAS 133 and EITF 00-19. These items are recorded in 'Interest expense' in the Company's Consolidated Statement of Operations. 4. Non-recurring expenses includes certain audit, consulting, and legal fees incurred as a result of the restatement and class action lawsuits. Additionally, the initial non-recurring Sarbanes-Oxley implementation fees are excluded. These items are included in 'General and administrative expenses' in the Company's Consolidated Statement of Operations. 5. The tax rate applied is the effective rate. The Derivative expense (benefit) and associated interest is a permanent difference for tax purposes and is excluded in the tax calculation. 6. The adjustments for three months ended March 31, 2006 and nine months ended September 30,2006 changed from a net loss to net income. The Company adjusted the diluted shares to reflect the actual number of potentially dilutive shares. The potentially dilutive shares for the three months ending September 30, 2006 were 1,528,037 and the potentially dilutive shares for the nine months ending September 30, 2005 were 13,000,219.
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: Media Relations Suzanne Beranek at 407.475.0763 or via email at suzanne@beranekcommunications.com Investor/Shareholder Relations Dodi Handy, Elite Financial Communications Group, LLC at 407-585-1080 or via email at prz@efcg.net
PainCare Holdings, Inc.CONTACT: Media Relations, Suzanne Beranek, +1-407-475-0763, orsuzanne@beranekcommunications.com, or Investor-Shareholder Relations, DodiHandy of Elite Financial Communications Group, LLC, +1-407-585-1080, orprz@efcg.net
Web site: http://www.paincareholdings.com//
