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HearUSA Reports Fourth Quarter and Fiscal 2008 Results
WEST PALM BEACH, FL--(MARKET WIRE)--Mar 26, 2009 -- HearUSA, Inc. (AMEX:EAR - News), the recognized leader in hearing care for the nation's top managed care providers through more than 200 company-owned hearing care centers and a network of more than 1,900 affiliated providers, reported financial results for the fourth quarter and year ended December 27, 2008.
Highlights
-- Record fiscal 2008 net revenues totaling $112 million, up 9% over
fiscal 2007
-- Net loss of ($0.09) per basic and diluted share for fiscal 2008 vs.
($0.09) per basic and diluted share in fiscal 2007
-- 20 completed acquisitions in fiscal 2008, with combined trailing
12-month revenues of $7.1 millionFinancial Results for Fiscal 2008
For the full year 2008, net revenues totaled a record $112.0 million, an increase of 9% from $102.8 million in 2007. The 9% increase was comprised of a 10% increase attributable to centers acquired over the last 12 months partially offset by a 1% decline in organic growth experienced mainly in the fourth quarter.
Income from operations totaled $3.9 million in 2008 compared to $6.8 million in 2007. Income from operations in 2008 included $791,000 in amortization and implementation costs associated with the AARP agreement and $1.0 million of restructuring severance costs. Income from operations in 2007 included $518,000 of restructuring severance costs.
Net loss applicable to common stockholders totaled $3.3 million or ($0.09) per basic and diluted share in 2008 compared to $3.4 million or ($0.09) per basic and diluted share in 2007. The net loss applicable to common stockholders in 2008 included $1.6 million in interest, amortization and implementation costs associated with the AARP agreement ($0.04 per basic and diluted share) and a $981,000 gain ($0.03 per basic and diluted share) on the restructuring of the AARP agreement. The net loss applicable to common stockholders in 2007 included $3.5 million ($0.10 per basic and diluted share) of interest charges associated with the conversion of the 2003 convertible subordinated notes and warrants.
The company acquired 20 centers in 2008, with aggregate estimated trailing twelve month revenues of $7.1 million.
Financial Results for Fourth Quarter 2008
In the fourth quarter 2008, net revenues totaled $24.5 million, a decrease of 15% from $28.7 million in the previous quarter and a decrease of 11% from $27.4 million in the fourth quarter of 2007. The 11% decrease was comprised of a 6% increase attributable to centers acquired over the last 12 months offset by a 17% decline in organic growth. The decline in the fourth quarter was a result of the sharp decline in the US economy negatively impacting the number of units sold, the return rate and the average selling price.
Loss from operations was $1.7 million in the fourth quarter of 2008 compared to income from operations of $1.9 million in the fourth quarter of 2007. The loss from operations in the fourth quarter of 2008 included $630,000 of amortization and implementation costs associated with the AARP agreement.
The net loss applicable to common stockholders in the fourth quarter of 2008 was $2.8 million or ($0.08) per basic and diluted share. This compares to net income of $39,000 or $0.00 per basic and diluted share in the same year-ago quarter. The net loss applicable to common stockholders in the fourth quarter of 2008 included $1.1 million of interest, amortization and implementation costs associated with the AARP agreement ($0.03 per basic and diluted share) and a $981,000 gain ($0.03 per basic and diluted share) on the restructuring of the AARP agreement.
"The sharp economic downturn in the fourth quarter of 2008 severely impacted all sectors of the economy and ours was no exception," said Stephen J. Hansbrough, HearUSA's chairman and CEO. "As reported in recent releases, we have acted swiftly and decisively to deal with today's realities. We are confident that the steps we have taken will allow us to execute our strategic plan and meet our goals and objectives for 2009 and beyond."
Conference Call
HearUSA will hold a conference call later today to discuss its fourth quarter and fiscal year 2008 financial results. The company's senior management will host the presentation, which will be followed by a question and answer period.
Date: Thursday, March 26, 2009
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Domestic callers: 1-800-894-5910
International callers: 1-785-424-1052
Conference ID#: 7HEARUSA
Internet simulcast and replay: http://viavid.net/dce.aspx?sid=00005FC2If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 1-949-574-3860.
A replay of the call will be available later that evening and will be accessible until April 09, 2009.
Toll-free replay number: 1-800-677-6124
International replay number: 1-402-220-0664
(No passcode required)About HearUSA
HearUSA, Inc. provides hearing care to patients primarily through more than 200 company-owned hearing care centers, which offer a complete range of quality hearing aids with an emphasis on the latest digital technology. HearUSA Centers are located in California, Florida, New York, New Jersey, Pennsylvania, Massachusetts, Ohio, Michigan, Missouri, North Carolina, and the province of Ontario, Canada. The company also derives revenues from its HearUSA Hearing Care Network, comprised of over 1,900 affiliated audiologists in 49 states, as well as its website that enables online purchases of hearing related products, such as batteries, hearing aid accessories and assistive listening devices. For further information, click on "investor information" at the HearUSA website: www.hearusa.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995 including those relating to the steps taken in response to the economic downturn and the Company's expectation that they will allow the Company to execute its strategic plan and meet its goals and objectives for 2009 and beyond. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as maintenance of revenue levels from acquired centers; the company's ability to maintain cost controls and limit expenses; the ability of the company to maintain unit sales of Siemens hearing aids; market demand for the company's goods and services; changes in the pricing environment; general economic conditions in those geographic regions where the company's centers are located; consumer confidence in the general economy; the impact of competitive products; and other risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including the company's Form 10-K for the fiscal year ended December 27, 2008.
HearUSA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
----------------------------------------
December 27, December 29, December 30,
2008 2007 2006
------------ ------------ ------------
(Dollars and shares in thousands, except
per share amounts)
Net revenues
Hearing aids and other products $ 104,392 $ 95,936 $ 82,820
Services 7,596 6,868 5,966
------------ ------------ ------------
Total net revenues 111,988 102,804 88,786
------------ ------------ ------------
Operating costs and expenses
Hearing aids and other products 30,171 26,017 24,942
Services 2,311 2,088 1,761
------------ ------------ ------------
Total cost of products sold and
services excluding depreciation
and amortization 32,482 28,105 26,703
Center operating expenses 57,450 50,401 42,281
General and administrative
expenses (including
approximately $849,000 and
$606,000 in 2008 and 2007 of
non-cash employee stock-based
compensation expense) 15,176 15,227 14,005
Depreciation and amortization 2,963 2,248 1,988
------------ ------------ ------------
Total operating costs and
expenses 108,071 95,981 84,977
------------ ------------ ------------
Income from operations 3,917 6,823 3,809
Non-operating income (expense):
Gain from insurance settlement - - 203
Gain on restructuring of contract 981 - -
Interest income 42 164 152
Interest expense (including
approximately $763,000 of
non-cash interest expense on
long-term contractual commitment,
$421,000 and $117,000 of non-cash
interest expense on discounted
notes payable in 2008 and 2007,
$192,000, $3.5 million and $2.7
million of non-cash debt discount
amortization and a non-cash
reduction of approximately
$319,000 for the decrease in the
fair value of the warrant
liability in 2006) (5,755) (8,022) (5,964)
------------ ------------ ------------
Loss before income tax expense
and minority interest in income
of consolidated Joint Venture (815) (1,035) (1,800)
Income tax expense (1,126) (769) (741)
Minority interest in income of
consolidated Joint Venture (1,260) (1,478) (633)
------------ ------------ ------------
Net loss (3,201) (3,282) (3,174)
Dividends on preferred stock (139) (137) (138)
------------ ------------ ------------
Net loss applicable to common
stockholders $ (3,340) $ (3,419) $ (3,312)
============ ============ ============
Net loss from continuing
operations, including dividends
on preferred stock, applicable
to common stockholders - basic
and diluted $ (0.09) $ (0.09) $ (0.10)
============ ============ ============
Net loss applicable to common
stockholders per common share -
basic and diluted $ (0.09) $ (0.09) $ (0.10)
============ ============ ============
Weighted average number of shares
of common stock outstanding 38,635 36,453 32,225
============ ============ ============
HearUSA, INC.
CONSOLIDATED BALANCE SHEETS
December 27, December 29,
ASSETS 2008 2007
------------ ------------
(Dollars in thousands)
Current assets
Cash and cash equivalents $ 3,553 $ 3,369
Accounts and notes receivable, less allowance
for doubtful accounts of $506,000 and $498,000 7,371 8,825
Inventories 1,682 2,441
Prepaid expenses and other 502 1,283
Deferred tax asset 62
------------ ------------
Total current assets 13,108 15,980
Property and equipment, net 4,876 4,356
Goodwill 65,953 63,134
Intangible assets, net 15,630 16,165
Deposits and other 810 691
Restricted cash and cash equivalents 224 216
------------ ------------
Total Assets $ 100,601 $ 100,542
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,959 $ 12,467
Accrued expenses 3,208 2,523
Accrued salaries and other compensation 3,713 3,521
Current maturities of long-term debt 6,915 10,746
Current maturities of subordinated notes, net
of debt discount of $60,000 in 2007 - 1,480
Dividends payable 34 34
Minority interest in net income of consolidated
joint venture, currently payable 1,526 1,221
------------ ------------
Total current liabilities 20,355 31,992
------------ ------------
Long-term debt 49,099 36,499
Deferred income taxes 7,284 6,462
------------ ------------
Total long-term liabilities 56,383 42,961
------------ ------------
Commitments and contingencies - -
------------ ------------
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) - -
------------ ------------
Total preferred stock - -
Common stock: $.10 par; 75,000,000 shares
authorized 44,828,384 and 38,325,414 shares
issued 4,483 3,833
Stock subscription - (412)
Additional paid-in capital 137,032 133,261
Accumulated deficit (116,416) (113,076)
Accumulated other comprehensive income 1,249 4,468
Treasury stock, at cost: 523,662 common shares (2,485) (2,485)
------------ ------------
Total Stockholders' Equity 23,863 25,589
------------ ------------
Total Liabilities and Stockholders' Equity $ 100,601 $ 100,542
============ ============
Contact:
Company Contact:
Stephen J. Hansbrough
Chairman & CEO
HearUSA, Inc.
(561) 478-8770
Investor Relations:
Scott Liolios or Ron Both
Liolios Group, Inc.
Email Contact
(949) 574-3860
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