American Medical Alert (NASDAQ:AMAC)
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American Medical Alert Corp. (NASDAQ: AMAC) a provider of healthcare
communication services and advanced telehealth monitoring technologies,
today announced operating results for the quarter and nine months ended
September 30, 2008, the highlights of which are as follows:
Company-wide operating income increased approximately 43% for the
nine months ended September 30, 2008 as compared to same period last
year.
Company continues to show financial strength in its balance sheet
as of September 30, 2008. Liquidity and working capital increase,
while debt to equity ratio falls below .2 to 1.
Health Safety and Monitoring Services (HSMS) segment revenues
increased by approximately 15% for the nine months ended September 30,
2008 as compared to same period last year, led by the Walgreens Ready
Response® program.
Revenues for the quarter ended September 30, 2008, consisting primarily
of monthly recurring revenues (MRR), increased 10% to $9,671,087 as
compared to $8,771,670 for the same period in 2007. Net income for the
quarter ended September 30, 2008 increased 9% to $461,534 or $.05 per
diluted share as compared to $422,929 or $.04 per diluted share for the
same period in 2007.
Revenues for the nine months ended September 30, 2008 increased 9% to
$28,846,153, as compared to $26,373,312 for the same period in 2007. Net
income for the nine months ended September 30, 2008 increased 15% to
$1,371,917 or $0.14 per diluted share as compared to a net income of
$1,196,897 or $0.12 per diluted share for the previous year. Net Income
for the trailing twelve months ended September 30, 2008 and 2007 was
$1,689,252 and $1,655,462 respectively, representing an increase of 2%.
To measure the Company’s financial performance
from operations, a metric which excludes non-operational items should be
utilized. The non-operational items include interest, taxes and other
income. These non-operational items positively impacted the Company’s
net income in 2007 to a much greater extent than in 2008. Operating
income, which excludes these items, for the three months ended September
30, 2008 increased 127% to $760,941 as compared to operating income of
$335,244 for the previous year. Operating income for the nine months
ended September 30, 2008 increased 43% to $2,301,636 as compared to
operating income of $1,614,157 for the previous year.
Earnings before interest, taxes and depreciation and amortization (“EBITDA”)
for the nine months ended September 30, 2008 increased 3% to $5,780,627
as compared to $5,612,802 for the same period in 2007. EBITDA for the
trailing twelve months ended September 30, 2008 and 2007 was $7,611,341
and $7,382,981 respectively, a 3% increase. Similar to the discussion
above with respect to net income, the relatively small increase in
EBITDA is reflective of the effect of the non-operational items referred
to above in the 2007 reporting period.
The Company continues to generate positive operating cash flow and ended
the quarter with a cash balance of $1,856,103, as compared to $911,525
at December 31, 2007. The Company also reduced its long-term debt by
$1,180,529 during the period from December 31, 2007 to September 30,
2008. Additionally, the Company had working capital of $4,725,397 as of
September 30, 2008, compared to $3,601,469 at December 31, 2007,
representing a 31% increase.
Subject to the discussion below, the Company affirms its earnings
guidance issued on August 5, 2008 that net income will increase by 25%
to $1,900,000 for 2008 while revenue guidance of $39,200,000 is
projected to fall short by approximately one (1) to two (2) percent.
Although we are highly insulated from most of the market turmoil,
certain contracts, which management anticipated to be executed in early
2008 within the TBCS division, are now expected to be executed before
the end of 2008. This delay is the primary reason for the projected
shortfall.
As previously reported, included on the Company’s
balance sheet in other assets are prepaid licensing fees and other
associated costs, which were paid in 2005 and 2006, relating to a
telehealth based technology initiative to provide the Company with a
next generation telehealth platform. The technology entity fulfilling
this project has experienced a funding shortfall and will likely not
complete the project. The Company’s agreement
with the entity provides that the Company has the right to take control
over the project and complete it, either directly or through a third
party entity. While the Company is confident it can complete the
project, it may choose to forego the continuation of the project if it
determines that it has a superior alternative to pursue its telehealth
interests based on competitive and funding criteria. In the event the
Company determines not to proceed, the Company would realize a one-time
non-operational write-down of approximately $815,000. This would not
adversely impact the Company’s core business
operation, including revenue stream, working capital or liquidity.
Jack Rhian, President and Chief Executive Officer, explained, “It
is rewarding to announce the positive third quarter results of
operations and the overall strength of our fundamentals at a time when
the general economy is experiencing such negativity. This year’s
performance within our HSMS division is the result of a collective
effort by both our operations team continuing to extract cost while the
business development team successfully executed on our vision to
position AMAC as the provider of choice for its spectrum of digital
health and wellness solutions.
While the TBCS division continues to significantly contribute to the
Company’s overall profitability and positive
cash flow, this division experienced a shortfall in the expected amount
of top line growth. Nonetheless, we have a high degree of confidence
that the projected new work from several hospital groups as well as an
increased pace of project-based contracts within our PhoneScreen
Clinical Trials group will come to fruition. The outlook for both
divisions going into 2009 is positive.
Moreover, the Company maintains a strong balance sheet and generates
positive cash flow from operations to go along with the long-term
business opportunities for further top and bottom line growth. Our
relationship with our bank is solid and we have a significant credit
facility to capitalize on growth opportunities. Notwithstanding our
strong financial position, the Company is carefully considering other
steps designed to take advantage of our relatively strong financial and
operating position including acquisitions of additional accretive
account bases that could integrate into our existing infrastructure in
either our HSMS or TBCS divisions and a plan to step up our IR/PR
activities to attract greater attention from the investor community.
In addition, it is unfortunate that our stock price has been affected by
the current economic turmoil and unstable financial markets. However, it
presents an excellent buying opportunity that I and certain executives
and board members intend to take advantage of after the blackout period
following this release is over.”
The Company invites investors and others to listen to the conference
call live over the Internet or by dialing in to 877-407-0782 at 10:30
a.m. ET.
What:
American Medical Alert Corp. Third Quarter 2008 Results
When:
Wednesday November 5, 2008, 10:30 a.m. ET
Where:
http://www.investorcalendar.com/IC/CEPage.asp?ID=136490
How:
Log on to the web at the address above, andclick on the audio link
or dial in 877-407-0782 to participate.
About American Medical Alert Corp.
AMAC is a healthcare communications company dedicated to the provision
of support services to the healthcare community. AMAC's product and
service portfolio includes Personal Emergency Response Systems (PERS)
and emergency response monitoring, electronic medication reminder
devices, disease management monitoring appliances and healthcare
communication solutions services. AMAC operates nine communication
centers under local trade names: H-LINK OnCall, Long Island City, NY and
Clovis NM, North Shore TAS, Port Jefferson, NY, Live Message America,
Audubon, NJ, ACT Teleservice, Newington, CT and Springfield, MA, MD
OnCall, Cranston RI and Capitol Medical Bureau Rockville, MD, American
MediConnect and PhoneScreen Chicago, IL to support the delivery of high
quality, healthcare communications.
Use of Non-GAAP Financial Information
In addition to the results reported in accordance with accounting
principles generally accepted in the United States (“GAAP”)
included in this press release, the Company has provided information
regarding certain non-GAAP financial measures. These measures are “earnings
before interest, taxes and depreciation and amortization (“EBITDA”)”
and “operating income”.
Such information is reconciled to its closest GAAP measure in accordance
with the Securities and Exchange Commission rules and is included in the
attached supplemental data.
Management believes that the non-GAAP financial measures used in this
press release are useful to both management and investors in their
analysis of the Company’s financial position
and results of operations. Management believes that EBITDA is a useful
measure of the Company's financial performance as it is an indicator of
the Company's ability to generate cash flow to make acquisitions,
reinvest in new telehealth products and liquidate liabilities.
Management also uses EBITDA for planning purposes to determine
appropriate levels of operating and capital investments. Management also
believes operating income is a useful measure as it more accurately
reflects the performance of the Company’s
core operations and excludes any non-operational or one-time events
which may skew the analysis of management or outside investors in
evaluating the Company.
EBITDA and operating income are non-GAAP financial measures and although
management and some members of the investment community utilize it to
measure financial performance, EBITDA and operating income should not be
viewed as a substitute for financial data prepared in accordance with
GAAP or as measures of profitability. Additionally, the non-GAAP
financial measure as presented by AMAC may not be comparable to
similarly titled measures reported by other companies.
Forward Looking Statements
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Forward-looking statements may be
identified by the use of forward-looking terminology such as "may,"
"will," "expect," "believe," "estimate," "anticipate," "continue," or
similar terms, variations of those terms or the negative of those terms.
Important factors that could cause actual results to differ materially
from those indicated by such forward-looking statements are set forth in
the Company's filings with the Securities and Exchange Commission (SEC),
including the Company's Annual Report on Form 10-K, the Company's
Quarterly Reports on Forms 10-Q, and other filings and releases. These
include uncertainties relating to government regulation, technological
changes, costs relating to ongoing FCC remediation efforts, our
expansion plans, and product liability risks.
Statements of income for the three and nine months ended September 30,
2008 and 2007 and balance sheets as of September 30, 2008 and December
31, 2007 are attached.
AMAC SELECTED FINANCIAL DATA
Three Months Ended
Nine Months Ended
9/30/2008
9/30/2007
9/30/2008
9/30/2007
Revenues
$
9,671,087
$
8,771,670
$
28,846,153
$
26,373,312
Cost of Goods Sold
$
4,519,411
$
4,367,821
$
13,774,753
$
12,953,787
Selling, General & Administrative Costs
$
4,390,735
$
4,068,605
$
12,769,764
$
11,805,368
Other Expenses (Income)
$
(20,593
)
$
(404,685
)
$
( 23,281
)
$
(495,740
)
Income before Provision for Income Taxes
$
781,534
$
739,929
$
2,324,917
$
2,109,897
Net Income
$
461,534
$
422,929
$
1,371,917
$
1,196,897
Net Income per Share
Basic
$
0.05
$
0.05
$
0.15
$
0.13
Diluted
$
0.05
$
0.04
$
0.14
$
0.12
Basic Weighted Average
Shares Outstanding
9,439,592
9,307,412
9,421,121
9.257,776
Diluted Weighted Average
Shares Outstanding
9,689,775
9,854,059
9,702,142
9,708,253
CONDENSED BALANCE SHEET
Sept 30,
2008
December 31,2007
(Unaudited)
ASSETS
Current Assets
$
9,617,037
$
8,672,362
Fixed Assets – Net
10,783,945
10,799,313
Other Assets
15,145,755
15,481,546
Total Assets
$
35,546,737
$
34,953,221
Current Liabilities
$
4,891,640
$
5,070,893
Deferred Income Tax
942,000
947,000
Long-term Debt
3,620,000
4,694,316
Long-term portion of capital lease
673
32,425
Other Liabilities
605,481
537,922
Total Liabilities
$
10,059,794
$
11,282,556
Stockholders’ Equity
25,486,943
23,670,665
Total Liabilities and Stockholders’
Equity
$
35,546,737
$
34,953,221
Operating Income for the nine and three months ended September 30,
2008 and 2007.
Nine MonthsEnded
Six MonthsEnded
Three MonthsEnded
9/30/2008
6/30/2008
9/30/2008
Net Income
1,371,917
910,383
461,534
Add Backs:
Taxes
953,000
633,000
320,000
Interest Expense
224,073
166,868
57,205
Deductions:
Other Income
(247,354)
(169,556)
(77,798)
Operating Income
2,301,636
760,941
Nine MonthsEnded
Six MonthsEnded
Three MonthsEnded
9/30/2007
6/30/2007
9/30/2007
Net Income
1,196,897
773,968
422,929
Add Backs:
Taxes
913,000
596,000
317,000
Interest Expense
375,605
255,136
120,469
Deductions:
Other Income
(871,345)
(346,191)
(525,154)
Operating Income
1,614,157
335,244
Earnings before interest, taxes and depreciation and amortization
(EBITDA) for the nine months ended September 30, 2008 and 2007.
Add:
Less:
9/30/08
12/31/2007
Subtotal
9/30/2007
Total
Net Income
1,371,917
1,514,232
2,866,149
1,196,897
1,689,252
Add Backs:
Taxes
953,000
1,146,000
2,099,000
913,000
1,186,000
Interest
224,073
481,166
705,239
375,605
329,634
Depreciation & Amort.
3,231,637
4,302,118
7,533,755
3,127,300
4,406,455
EBITDA
5,780,627
7,611,341
Add:
Less:
9/30/07
12/31/2006
Subtotal
9/30/2006
Total
Net Income
1,196,897
1,262,529
2,459,426
803,964
1,655,462
Add Backs:
Taxes
913,000
869,000
1,782,000
680,000
1,102,000
Interest
375,605
394,613
770,218
262,788
507,430
Depreciation & Amort.
3,127,300
3,515,262
6,642,562
2,524,473
4,118,089
EBITDA
5,612,802
7,382,981