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Based in Oklahoma City
Foundation Healthcare, Inc. (OTCQB:FDNH), which focuses on the development and management of surgical hospitals and ancillary service lines, today reported its financial results for the year and quarter ended December 31, 2013.
Highlights include:
– Revenue of $26.1 million for the 2013 fourth quarter; a 48% increase from the 2012 fourth quarter of $17.6 million.
– Adjusted EBITDA of $3.4 million for the 2013 fourth quarter compared to $0.3 – Cash on hand of $4.2 million as of December 31, 2013
“When we completed the acquisition of the Foundation entities (Foundation Surgery Affiliates, LLC and Foundation Surgical Hospital Affiliates, LLC) in July 2013, we knew this was a transformative event which culminated in the changing of our name from Graymark Healthcare, Inc. to Foundation Healthcare, Inc. in December 2013. Following the successful integration of the companies during the 3rd quarter, we were able to focus our strategic efforts during the 4th quarter on the growth of our hospitals in San Antonio and El Paso, Texas. We look forward to expanding the combined business by growing our existing hospitals, increasing our geographic footprint and providing excellent experiences to all our patients. Foundation, as a public company, provides us with flexibility in building out our services in existing markets as well as establishing a presence in additional geographies,” stated Stanton Nelson, CEO of Foundation Healthcare, Inc.
“This is the second reporting quarter of the combined entity. Due to a number of onetime, noncash events in the period, such as impairment charges, we have provided an Adjusted EBITDA calculation that will give a better view of the Company’s operating financial performance,” added Mr. Nelson.
Fourth Quarter 2013 Financial Results
Net revenues in the fourth quarter of 2013 were $26.1 million, up from $17.6 million in the fourth quarter of 2012. Our net revenues are composed of patient services, management fees from affiliates, equity in earnings of affiliates and other revenue less our provision for doubtful accounts. Patient services revenue net of the provision for doubtful accounts increased $8.7 million or 64% during the three months ended December 31, 2013 compared with the fourth quarter of 2012. The increase in patient revenues includes a $5.6 million increase at our El Paso hospital due to a full quarter of results in 2013 coupled with a $3.1 million increase in our San Antonio hospital due to increased patient volumes and higher average revenue per case compared to the fourth quarter of 2012.
Operating expenses were $27.0 million in the fourth quarter of 2013, compared to $18.1 million in the year-ago fourth quarter primarily due to a full quarter of expenses related to our El Paso hospital and incremental infrastructure and other costs associated with the growth of our El Paso hospital and the transition to a public company. During the fourth quarter of 2013, we recorded impairment charges related to goodwill and equity investments of $1.0 million and $1.6 million, respectively. The goodwill impairment charge was related to the finalization of the fair value measurement of the reverse acquisition of legacy Graymark Healthcare business. We also recorded an impairment charge of $1.6 million related to our investment in an ASC in which the majority owner of the ASC has notified us of their intent to redeem our ownership interest at an amount that is less than our recorded investment.
Net loss attributable to Foundation Healthcare for the fourth quarter was $3.5 million or ($0.02) a share compared to $0.8 million or ($0.00) a share for the same quarter in 2012.
Adjusted EBITDA was $3.4 million during the 2013 4th quarter versus Adjusted EBITDA of $0.3 million during the 2012 4th quarter.
At December 31, 2013, cash and cash equivalents totaled $4.2 million, compared to $2.5 million at December 31, 2012.
