OptiCare Reports Third Quarter 2004 Financial Results

OptiCare Reports Third Quarter 2004 Financial Results 


WATERBURY, Conn., Nov. 15  /PRNewswire-FirstCall/ -- OptiCare Health Systems,
Inc. (AMEX:OPT) announced today that it reported total net revenues for the
nine months ended September 30, 2004 of $88.3 million, down from $95.7 million
for the nine months ended September 30, 2003 and total net revenues for the
three months ended September 30, 2004 of $27.9 million, down from $32.3 million
for the three months ended September 30, 2003. The Company also reported a loss
from continuing operations for the nine months ended September 30, 2004 of $2.7
million, down from a loss from continuing operations of $10.5 million for the
nine months ended September 30, 2003; loss from continuing operations for the
three months ended September 30, 2004 of $1.8 million, down from a loss from
continuing operations of $8.4 million for the three months ended September 30,
2003; net loss to common stockholders for the nine months ended September 30,
2004 of $4.6 million, down from a net loss to common stockholders of $11.0
million for the nine months ended September 30, 2003; and net loss to common
stockholders for the three months ended September 30, 2004 of $2.4 million,
down from a net loss to common stockholders of $8.6 million for the three
months ended September 30, 2003.

About OptiCare Health Systems, Inc.

OptiCare Health Systems, Inc. is an integrated eye care services company
focused on vision benefits management and the distribution of products 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.
These statements include, but are not limited to, statements containing words
such as "plan," "anticipate," "expect," "intend," "believe," "will," or similar
expressions. The company'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
impact of the restatements, the reaction of the company's stockholders,
customers, venders and lenders to the reviews and restatements, the risk that
the company 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, the company'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 the company 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 the
company's filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K/A for the fiscal year ending December 31, 2003.
Forward-looking statements speak only as of the date they are made, and the
company 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)

                                     September      December     September
                                      30, 2004      31, 2003     30, 2003
   ASSETS                                                      As Restated
   CURRENT ASSETS:
    Cash and cash equivalents          $2,950        $1,695       $2,233
    Accounts receivable, net            7,989         7,867       10,025
    Inventories                         5,160         5,770        6,296
    Assets held for sale                    -         1,652        1,535
    Other current assets                1,174           565          592
      TOTAL CURRENT ASSETS             17,273        17,549       20,681
   Property and equipment, net          3,732         4,647        5,180
   Goodwill, net                       17,917        17,892       18,231
   Intangible assets, net               1,096         1,179        1,207
   Assets held for sale,
    non-current                             -         1,339        1,475
   Other assets                         3,531         3,249        2,990

   TOTAL ASSETS                       $43,549       $45,855      $49,764

   LIABILITIES AND STOCKHOLDERS'
    EQUITY
   CURRENT LIABILITIES:
    Accounts payable                   $8,739        $5,525       $8,705
    Accrued expenses                    7,050         5,379        6,284
    Current portion of long-term
     debt                              10,090        10,828        9,057
    Liabilities of held for sale
     business                               -         1,241        1,324
    Other current liabilities             950           548          421
      TOTAL CURRENT LIABILITIES        26,829        23,521       25,791
   Long-term debt, less current
    portion                                78         1,775        1,549
   Other liabilities                      513           512          522
      TOTAL NON-CURRENT LIABILITIES       591         2,287        2,071

   Series B 12.5% mandatorily
    redeemable, convertible             6,163         5,635        5,476
    preferred stock-related party

   STOCKHOLDERS' EQUITY:
   Series C preferred stock-
    related party                           1             1            1
   Common stock                            31            30           30
   Additional paid-in-capital          79,347        79,700       79,853
   Accumulated deficit                (69,413)      (65,319)     (63,458)
      TOTAL STOCKHOLDERS' EQUITY        9,966        14,412       16,426
   TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY              $43,549       $45,855      $49,764


              OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
             Condensed Consolidated Statements of Operations
                (Amounts in thousands, except share data)
                               (Unaudited)

                                       Three Months           Nine Months
                                          Ended                  Ended
                                       September 30,          September 30,
                                      2004      2003        2004      2003
   NET REVENUES:
    Managed vision                  $6,547     $7,118    $18,864    $22,006
    Product sales                   16,615     20,023     52,452     56,961
    Other services                   4,776      4,809     15,236     13,982
    Other income                         -        352      1,718      2,720
      Total net revenues            27,938     32,302     88,270     95,669

   OPERATING EXPENSES:
    Medical claims expense           4,914      5,993     14,274     17,250
    Cost of product sales           12,937     15,683     40,900     44,251
    Cost of services                 1,870      2,024      6,338      5,922
    Selling, general and
     administrative                  9,231      9,749     27,248     27,488
    Goodwill impairment loss             -      1,300          -      1,300
    Loss from early extinguishment
     of debt                             -          -          -      1,847
    Depreciation                       432        632      1,243      1,334
    Amortization                        27         29         83         87
    Interest                           300        330        896      1,719
      Total operating expenses      29,711     35,740     90,982    101,198

   Loss from continuing
    operations before taxes         (1,773)    (3,438)    (2,712)    (5,529)
   Income tax expense (benefit)        (20)     5,001         32      4,929
   Loss from continuing operations  (1,753)    (8,439)    (2,744)   (10,458)

   Discontinued operations
    Loss from discontinued
     operations (including
     loss on disposal of $1,005
     in 2004)                         (421)       (57)    (1,350)       (52)
    Income tax benefit                   -         20          -         18
    Loss on discontinued
     operations                       (421)       (37)    (1,350)       (34)


   Net loss                         (2,174)    (8,476)    (4,094)   (10,492)

   Preferred stock dividends          (177)      (159)      (528)      (459)

   Net loss to common
    stockholders                   $(2,351)    (8,635)   $(4,622)  $(10,951)


   LOSS PER SHARE- BASIC AND DILUTED:
   Loss from continuing operations  $(0.06)    $(0.29)    $(0.11)    $(0.37)
   Discontinued operations           (0.02)      0.00      (0.04)      0.00
   Net loss                          (0.08)     (0.29)     (0.15)     (0.37)


DATASOURCE: OptiCare Health Systems, Inc.



CONTACT:  Vincent S. Miceli, Director of External Reporting of OptiCare

Health Systems, Inc., [phone]

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