Pediatric Services OF America (NASDAQ:PSAI)
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Pediatric Services of America, Inc. (Nasdaq: PSAI)
announces financial results for the first quarter of fiscal year 2006.
The highlights of PSAI's results for the first quarter ended
December 31, 2005 include:
-- Completed the sale of the Pharmacy business;
-- Made significant progress in fulfilling its obligations under
the Transition Services Agreement with Accredo Health Group
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;
-- Completed the full redemption of the outstanding 10% Senior
Subordinated Notes due 2008 (the "Notes") and terminated the
credit facility with GE Capital Corp.
For the first quarter of fiscal 2006, net revenue from continuing
operations decreased less than one percent to $42,233,000 from
$42,406,000 in the fourth quarter of fiscal year 2005. Consolidated
net income was $24,182,000 in the first quarter of fiscal year 2006 as
compared to $1,559,000 for the fourth quarter of fiscal year 2005.
Diluted net income per share was $3.33 in the first quarter of fiscal
year 2006 as compared to $0.21 in the fourth quarter of fiscal year
2005. 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 Notes and termination of the credit agreement with
GE Capital Corp.
"With the completion of the sale of our Pharmacy business, we were
able to fully redeem our $20,350,000 outstanding debt and terminate
the credit facility," said Daniel J. Kohl, President and CEO of PSAI.
"In addition, we have identified a significant number of acquisition
opportunities. We are pleased with how quickly we've been able to
build a pipeline of potential acquisition targets, but we intend to
proceed in a measured manner in order to ensure we are completing only
high-quality transactions."
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
Thursday, February 9, 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 February 23, 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: 4855785 #.
PSAI 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
PSAI 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 PSAI 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 Pediatric Services of America, 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 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
December 31, September 30,
2005 2005
------------ -------------
Net revenue $42,233 $42,406
Costs and expenses:
Costs of goods and services 21,531 21,978
Other operating costs and expenses
Administrative and marketing
salaries, wages and benefits 8,996 8,888
Business insurance 1,646 1,203
Overhead 3,666 3,533
---------- ---------
Other operating costs and
expenses 14,308 13,624
Corporate, general and administrative
Salaries, wages and benefits 3,750 3,916
Business insurance 64 56
Professional services 894 1,446
Overhead 719 666
---------- ---------
Corporate, general and
administrative 5,427 6,084
Provision for doubtful accounts 445 547
Depreciation and amortization 995 993
---------- ---------
Total costs and expenses 42,706 43,226
---------- ---------
Operating loss (473) (820)
Other income 3 -
Loss on early extinguishment of debt (837) -
Interest income 385 62
Interest expense (560) (608)
---------- ---------
Loss from continuing operations
before income tax benefit (1,482) (1,366)
Income tax benefit (308) (1,231)
---------- ---------
Loss from continuing operations (1,174) (135)
Discontinued operations:
Income from discontinued
operations before income tax
expense 1,281 2,806
Income tax expense 504 1,112
------- ------
Income from discontinued
operations 777 1,694
---------- ---------
Gain on disposal of discontinued
operations before income tax
expense 40,524 -
Income tax expense 15,945 -
------- ------
Gain on disposal of discontinued
operations 24,579 -
---------- ---------
Net income $24,182 $1,559
========== =========
Income per share data:
Basic net income per share data:
Loss from continuing operations $(0.16) $(0.02)
Income from discontinued operations 0.11 0.23
Gain on disposal of discontinued
operations 3.38 -
---------- ---------
Net income $3.33 $0.21
========== =========
Diluted net income per share data:
Loss from continuing operations $(0.16) $(0.02)
Income from discontinued operations 0.11 0.23
Gain on disposal of discontinued
operations 3.38 -
---------- ---------
Net income $3.33 $0.21
========== =========
Weighted average shares outstanding:
Basic 7,269 7,258
========== =========
Diluted 7,269 7,258
========== =========
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
December 31, 2005 September 30, 2005
----------------- ------------------
Cash and cash equivalents $64,272 $19,037
Accounts receivable, less
allowance for doubtful accounts 25,760 26,232
Long-term obligations, net of
current maturities - 20,350
Total stockholders' equity 98,304 73,569
Respiratory
Therapy,
Equipment
and Consolidated
Nursing PPEC Services Total
--------------------------------------
Three months ended December 31, 2005
Net revenue $25,375 $2,558 $14,300 $42,233
Costs of goods and services
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 ended September 30, 2005
Net revenue $25,447 $2,658 $14,301 $42,406
Costs of goods and services
Nursing and therapist
salaries, wages, benefits
and supplies 16,746 167 212 17,125
Pharmacy product and supplies - - 1,827 1,827
Disposables/Supplies 11 5 3,010 3,026
--------------------------------------
Total cost of goods and
services 16,757 172 5,049 21,978
Other operating costs and
expenses
Administrative and marketing
salaries, wages and benefits 3,455 1,370 4,063 8,888
Business Insurance 761 77 365 1,203
Overhead 1,324 436 1,773 3,533
--------------------------------------
Total operating costs and
expenses 5,540 1,883 6,201 13,624
Provision for doubtful accounts 113 (50) 484 547
Depreciation 45 46 748 839
--------------------------------------
Branch office contribution
margin $2,992 $607 $1,819 $5,418
======================================
Three Months Three Months
Ended Ended
December 31, September 30,
2005 2005
------------- --------------
Total profit for reportable segments $5,111 $5,418
Corporate, general and administrative (5,427) (6,084)
Corporate depreciation and amortization (157) (154)
Other income 3 -
Loss on early extinguishment of debt (837) -
Interest income 385 62
Interest expense (560) (608)
------------- --------------
Loss from continuing operations, before
income tax benefit $(1,482) $(1,366)
============= ==============
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