Pediatric Services OF America (NASDAQ:PSAI)
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Pediatric Services of America, Inc., d/b/a PSA
Healthcare (Nasdaq: PSAI) announced today financial results for the
second quarter of fiscal year 2006.
Recent corporate developments and the highlights of PSA's results
for the second quarter ended March 31, 2006 include:
-- Entered into a definitive agreement to purchase select assets
of Melmedica Children's Healthcare, Inc., an Illinois
corporation;
-- Increased nursing hours staffed by 3.5%, to 806,000 hours from
779,000 hours in first quarter; and
-- Completed the accounting and pharmacy service obligations
under the Transition Services Agreement with Accredo Health,
Inc. and are on schedule to complete all service
responsibilities by May 31, 2006, which will allow PSAI to
focus solely on growing its existing businesses.
For the second quarter of fiscal 2006, net revenue from continuing
operations increased $1,269,000 to $43,502,000 as compared to
$42,233,000 in the first quarter of fiscal year 2006. Net income was
$598,000 in the second quarter of fiscal year 2006 as compared to
$24,182,000 for the first quarter of fiscal year 2006. Diluted net
income per share was $0.08 in the second quarter of fiscal year 2006
as compared to $3.33 in the first quarter of fiscal year 2006. Net
income for the first quarter of fiscal 2006 includes $777,000 of
income, net of tax, from discontinued operations and a $24,579,000
gain, net of tax, on disposal of our discontinued operations. In
addition, an expense of approximately $837,000 was recorded in the
first quarter of fiscal 2006 for the write-off of the deferred
financing fees and call premium related to the full redemption of the
10% Senior Subordinated Notes due 2008 and termination of the credit
agreement with GE Capital Corp.
"We are pleased to announce that we have entered into an agreement
to acquire the pediatric nursing services business of Melmedica
Children's Healthcare, Inc., and we remain focused on the pipeline of
potential acquisition targets we have in place," said Daniel J. Kohl,
President and CEO of PSAI. "In addition, our nurse recruiting programs
seem to be having a positive impact on nursing hours staffed, our PPEC
business is performing well and cash collections continue to be
strong. As such, the trends of our core businesses seemed headed in
the right direction."
For fiscal year 2006, PSAI continues to expect that earnings from
continuing operations will be in the range of $0.16-$0.19.
Conference Call
A conference call to discuss these results has been scheduled for
Wednesday, May 10, 2006 at 11:00 a.m. ET. The dial-in number for all
Participants is 800-374-1702. Note: To join the Q&A session, please
press the asterisk followed by 1. If you are unable to listen to the
live broadcast, replays of the conference call will be available until
May 24, 2006 by dialing 800-642-1687. To connect with the replay of
the conference call, please refer to the Pediatric Services of
America, Inc. Earnings Call, Passcode: 8012072 #.
PSA provides comprehensive pediatric home health care services
through a network of over 100 branch offices in 19 states, including
satellite offices and branch office start-ups. Through these offices
PSA provides a combination of services, including pediatric private
duty nursing (PDN), pediatric day treatment centers (PPECs) and
respiratory therapy and equipment services (RTES). Additional
information on PSA may be found on the Company's website at
http://www.psakids.com.
NOTE: This press release contains certain forward-looking
statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) relating to future financial
performance of PSA Healthcare, Inc. (the "Company"). When used in this
press release, the words "may," "targets," "goal," "will," "could,"
"should," "would," "believe," "feel," "expects," "confident,"
"anticipate," "estimate," "intend," "plan," "potential" and similar
expressions may be indicative of forward-looking statements. These
statements by their nature involve substantial risks and
uncertainties, certain of which are beyond the Company's control. The
Company cautions that various factors, including the factors described
hereunder and those discussed in the Company's other filings with the
Securities and Exchange Commission, as well as general economic
conditions, industry trends, the Company's anticipated uses of the
proceeds from the sale of its Pharmacy Business, the integration of
the Melmedica acquisition, the Company's ability to collect for
equipment sold or rented, assimilate and manage previously acquired
field operations, collect accounts receivable, including receivables
related to acquired businesses and receivables under appeal, hire and
retain qualified personnel and comply with and respond to billing
requirements issues, including those related to the Company's billing
and collection system, nurse shortages, competitive bidding, HIPAA
regulations, Average Wholesale Price ("AWP") reductions, adverse
litigation, workers' compensation losses, availability and cost of
medical malpractice insurance and reduced state funding levels and
nursing hours authorized by Medicaid programs, and the impact of
changes resulting from the recently enacted Medicare Act, could cause
actual results or outcomes to differ materially from those expressed
in any forward-looking statements of the Company made by or on behalf
of the Company. Any forward-looking statement speaks only as of the
date on which such statement is made, and the Company undertakes no
obligation to update any forward-looking statement or statements to
reflect events or circumstances after the date on which such statement
is made or to reflect the occurrence of an unanticipated event. New
factors emerge from time to time, and it is not possible for
management to predict all of such factors. Further, management cannot
assess the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking
statements.
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PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
Three Months Ended
March 31, December 31,
2006 2005
--------- ------------
Net revenue $43,502 $42,233
Costs and expenses:
Costs of goods and services (exclusive
of depreciation shown separately below) 22,300 21,531
Other operating costs and
expenses
Administrative and marketing
salaries, wages and benefits 9,031 8,996
Business insurance 1,966 1,646
Overhead 3,784 3,666
------- -------
Other operating costs
and expenses 14,781 14,308
Corporate, general and
administrative
Salaries, wages and benefits 3,329 3,750
Business insurance 59 64
Professional services 1,044 894
Overhead 675 719
------- -------
Corporate, general and
administrative 5,107 5,427
Provision for doubtful accounts 19 445
Depreciation and amortization 1,013 995
------- -------
Total costs and expenses 43,220 42,706
------- -------
Operating income (loss) 282 (473)
Other income 5 3
Loss on early extinguishment of debt - (837)
Interest income 626 385
Interest expense (4) (560)
------- -------
Income (loss) from continuing operations
before income tax expense (benefit) 909 (1,482)
Income tax expense (benefit) 334 (308)
------- -------
Income (loss) from continuing operations 575 (1,174)
Discontinued operations:
Income from discontinued operations
before income tax expense - 1,281
Income tax expense - 504
------- -------
Income from discontinued operations - 777
------- -------
Gain on disposal of discontinued
operations before income tax
expense 38 40,524
Income tax expense 15 15,945
------- -------
Gain on disposal of discontinued
operations 23 24,579
------- -------
Net income $ 598 $24,182
======= =======
Income per share data:
Basic net income per share data:
Income (loss) from continuing operations $ 0.08 $ (0.16)
Income from discontinued operations - 0.11
Gain on disposal of discontinued
operations 0.00 3.38
------- -------
Net income $ 0.08 $ 3.33
======= =======
Diluted net income per share data:
Income (loss) from continuing operations $ 0.08 $ (0.16)
Income from discontinued operations - 0.11
Gain on disposal of discontinued
operations 0.00 3.38
------- -------
Net income $ 0.08 $ 3.33
======= =======
Weighted average shares outstanding:
Basic 7,372 7,269
======= =======
Diluted 7,372 7,269
======= =======
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
March 31, December 31,
2006 2005
------------ ---------------
Cash and cash equivalents $ 57,458 $ 64,272
Accounts receivable, less allowance for
doubtful accounts 26,102 25,760
Total stockholders' equity 100,918 98,304
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Respiratory
Therapy,
Equipment
and Consolidated
Nursing PPEC Services Total
---------------------------------------
Three Months Ended March 31, 2006
Net revenue $26,404 $ 2,799 $14,299 $43,502
Costs of goods and services
(exclusive of depreciation
shown separately below)
Nursing and therapist
salaries, wages, benefits
and supplies 17,341 126 322 17,789
Pharmacy product and
supplies - - 1,763 1,763
Disposables/Supplies 12 15 2,721 2,748
------- ------- ------- -------
Total cost of
goods and
services 17,353 141 4,806 22,300
Other operating costs and
expenses
Administrative and
marketing salaries, wages
and benefits 3,408 1,502 4,121 9,031
Business Insurance 1,302 106 558 1,966
Overhead 1,400 441 1,943 3,784
------- ------- ------- -------
Total
operating
costs and
expenses 6,110 2,049 6,622 14,781
Provision for doubtful
accounts 106 (46) (41) 19
Depreciation 38 46 767 851
------- ------- ------- -------
Branch office contribution
margin $ 2,797 $ 609 $ 2,145 $ 5,551
======= ======= ======= =======
Three months ended December 31, 2005
Net revenue $25,375 $ 2,558 $14,300 $42,233
Costs of goods and services
(exclusive of depreciation
shown separately below)
Nursing and therapist
salaries, wages, benefits
and supplies 16,771 136 226 17,133
Pharmacy product and
supplies - - 1,722 1,722
Disposables/Supplies 13 8 2,655 2,676
------- ------- ------- -------
Total cost of
goods and
services 16,784 144 4,603 21,531
Other operating costs and
expenses
Administrative and
marketing salaries, wages
and benefits 3,380 1,421 4,195 8,996
Business Insurance 1,103 93 450 1,646
Overhead 1,434 424 1,808 3,666
------- ------- ------- -------
Total
operating
costs and
expenses 5,917 1,938 6,453 14,308
Provision for doubtful
accounts (38) 43 440 445
Depreciation 40 45 753 838
------- ------- ------- -------
Branch office contribution
margin $ 2,672 $ 388 $ 2,051 $ 5,111
======= ======= ======= =======
Three Months Three Months
Ended Ended
March 31, December 31,
2006 2005
---------- ------------
Total profit for reportable segments $ 5,551 $ 5,111
Corporate, general and administrative (5,107) (5,427)
Corporate depreciation and amortization (162) (157)
Other income 5 3
Loss on early extinguishment of debt - (837)
Interest income 626 385
Interest expense (4) (560)
---------- ----------
Income (loss) from continuing operations,
before income tax expense (benefit) $ 909 $ (1,482)
========== ==========
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