DALLAS, Aug. 16 /PRNewswire-FirstCall/ -- Crdentia Corp. (OTC:CRDT)
(BULLETIN BOARD: CRDT) , a leading U.S. provider of healthcare
staffing services, today announced financial results for the three
months ended June 30, 2006. Second Quarter Results The Company
reported second quarter 2006 revenue of $11.3 million, a 23%
increase compared to revenue of $9.2 million for second quarter
2005. The increase in revenues during the quarter was primarily the
result of the Company's acquisition of Staff Search Ltd. in April
2006 coupled with organic business growth. The Company also
reported a net income of $1.4 million for the second quarter 2006
as compared to a net loss of $(0.7) million for the second quarter
2005. "I am quite pleased with the progress Crdentia is making
towards our stated objective of expanding our healthcare staffing
businesses in attractive markets throughout the country and
achieving the critical mass necessary to improve our competitive
position in the industry," said James D. Durham, Chairman and Chief
Executive Officer of Crdentia Corp. "The strong 23% year-over-year
top line growth we recorded in the quarter was driven by our April
2006 acquisition of Staff Search Ltd. and is an excellent example
of our business model focused on acquiring a base of operations in
a given market and augmenting the business with Crdentia's
multidimensional arsenal of staffing services to better serve our
diversified clientele. In addition to the Company's revenue growth,
we also generated net income of $1.4 million during the quarter, a
significant improvement compared to a net loss of $(0.7) million in
the same period last year." Liquidity Position and Balance Sheet At
June 30, 2006, the Company had total cash and cash equivalents of
$0.1 million compared to cash and cash equivalents of $0.4 million
at year end 2005. Total stockholders' equity was $23.1 million at
June 30, 2006, an increase from $6.6 million at year end 2005.
During the first six months of 2006, the Company raised
approximately $2.0 million in debentures and an additional $1.5
million in equity. These proceeds were used to repay $1.65 million
on a term loan, with the balance used for general working capital
purposes. The Company is currently looking to raise additional
capital to refinance existing indebtedness, improve Crdentia's
capital structure and finance working capital requirements. About
Crdentia Corp. Crdentia Corp. is one of the nation's leading
providers of healthcare staffing services. Crdentia seeks to
capitalize on an opportunity that currently exists in the
healthcare industry by targeting the critical nursing and allied
shortage issue. There are many small, private companies that are
addressing the rapidly expanding needs of the healthcare industry.
Unfortunately, due to their relatively small capitalization, they
are unable to maximize their potential, obtain outside capital or
expand. By consolidating well-run small private companies into a
larger public entity, Crdentia intends to facilitate access to
capital, the acquisition of technology, providing greater diversity
of client services and expanded distribution that, in turn, drive
internal growth. For more information, visit
http://www.crdentia.com/. Forward Looking Statements Statements
contained in this release that are not historical facts are
forward-looking statements that involve risks and uncertainties.
Among the important factors which could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to, those discussed in "Risk Factors"
in the Company's Forms 10-KSB, Forms 10-QSB, and other filings with
the Securities and Exchange Commission. Such risk factors include,
but are not limited to, a limited operating history with no
earnings; reliance on the Company's management team, members of
which have other business interests; the ability to successfully
implement the Company's business plan; the ability to continue as a
going concern; the ability to fund the Company's business and
acquisition strategy; the growth of the temporary healthcare
professional staffing business; difficulty in managing operations
of acquired businesses; uncertainty in government regulation of the
healthcare industry; and the limited public market for the
Company's common stock. The actual results that the Company
achieves may differ materially from any forward-looking statements
due to such risks and uncertainties. We undertake no obligation to
revise or update publicly any forward-looking statements for any
reason. For Further Information: AT THE COMPANY: AT FINANCIAL
RELATIONS BOARD: James D. Durham Lasse Glassen Chairman and CEO
310-854-8313 972-850-0780 CRDENTIA CORP. Unaudited Condensed
Consolidated Statements of Operations Three Months Six Months Ended
June 30, Ended June 30, 2006 2005 2006 2005 Revenue from services
$11,312,679 $9,207,508 $20,297,502 $14,329,821 Direct operating
expenses 8,964,495 7,110,117 16,200,014 11,158,937 Gross profit
2,348,184 2,097,391 4,097,488 3,170,884 Operating expenses:
Selling, general, and administrative expenses 3,090,962 2,175,271
5,691,747 3,891,151 Loss on impairment of intangibles 123,000 --
123,000 -- Gain from settlement of acquisition claim -- --
(1,064,693) -- Gain from extinguishment of debt (3,215,490) --
(3,215,490) -- Non-cash stock based compensation 451,369 191,488
829,629 270,334 Total operating expenses 449,841 2,366,759
2,364,193 4,161,485 Income (loss) from operations 1,898,343
(269,368) 1,733,295 (990,601) Interest expense, net (450,415)
(474,884) (1,643,954) (998,918) Income (loss) before income taxes
1,447,928 (744,252) 89,341 (1,989,519) Income tax expense -- -- --
-- Net income (loss) $1,447,928 $(744,252) $89,341 $(1,989,519)
Deemed dividend on preferred stock (45,554,618) -- (45,554,618) --
Non-cash preferred stock dividends -- (200,792) -- (2,362,979) Net
loss attributable to common stockholders $(44,106,690) $(945,044)
$(45,465,277) $(4,352,498) Basic and diluted loss per common share
attributable to common stockholders $(3.26) $(0.35) $(5.41) $(2.15)
Weighted average number of common shares outstanding-- basic and
diluted 13,520,008 2,671,462 8,396,203 2,021,089 CRDENTIA CORP.
Unaudited Condensed Consolidated Balance Sheets June 30, December
31, 2006 2005 Current assets: Cash and cash equivalents $111,526
$434,921 Accounts receivable, net of allowance for doubtful
accounts of $207,771 at June 30, 2006 and $275,000 at December 31,
2005 5,630,000 4,566,975 Unbilled receivables 740,743 625,899 Other
current assets 641,302 464,865 Total current assets 7,123,571
6,092,660 Property and equipment, net 460,165 418,837 Goodwill
24,532,476 22,977,377 Intangible assets, net 1,972,732 1,985,585
Other assets 867,939 518,001 Total assets $34,956,883 $31,992,460
Current liabilities: Revolving lines of credit $5,131,323
$4,672,096 Accounts payable and accrued expenses 1,945,818
1,447,905 Accrued dividends on convertible preferred stock --
800,748 Accrued employee compensation and benefits 1,059,189
980,005 Debentures, net of discount of $1,450,003 289,997 -- Notes
payable 1,410,000 3,215,490 Current portion of notes payable to
lender, net of discount of $140,150 at June 30, 2006 and $200,168
at December 31, 2005 907,651 1,147,634 Other current liabilities
190,723 321,963 Total current liabilities 10,934,701 12,585,841
Note payable to lender, less current portion, net of discount of
$200,167 -- 1,149,833 Long term bonus payable 850,996 801,084 Other
long-term liabilities 7,032 7,032 Total liabilities 11,792,729
14,543,790 Commitments and contingencies Convertible preferred
stock, 10,000,000 shares authorized: Series C convertible preferred
stock $0.0001 par value, 183,028 shares issued and outstanding at
December 31, 2005 (liquidation preference of $54,908,400 at
December 31, 2005) -- 10,020,048 Series C preferred stock warrants
-- 839,555 Stockholders' equity: Common stock, par value $0.0001,
150,000,000 shares authorized, 14,437,601 shares issued and
14,329,966 shares outstanding at June 30, 2006 and 3,515,766 shares
issued and 3,408,125 shares outstanding at December 31, 2005 1,444
352 Additional paid in capital 126,286,828 109,802,174 Treasury
stock, 107,641 shares at cost -- -- Accumulated deficit
(103,124,118) (103,213,459) Total stockholders' equity 23,164,154
6,589,067 Total liabilities and stockholders' equity $34,956,883
$31,992,460 CRDENTIA CORP. Unaudited Condensed Consolidated
Statements of Cash Flows Six Months Ended June 30, 2006 2005
Operating activities Net income (loss) $89,341 $(1,989,519)
Adjustments to reconcile net income (loss) to net cash used in
operating activities: Amortization of long-term bonus payable
49,912 45,181 Non-cash interest expense 1,157,612 435,171
Depreciation and amortization 523,633 382,882 Loss on impairment of
intangibles 123,000 -- Gain on disposal of fixed assets (500) --
Gain on settlement of acquisition claim (1,064,693) -- Gain on
extinguishment of debt (3,215,490) -- Non-cash stock based
compensation 829,629 270,334 Changes in operating assets and
liabilities, net of effects of acquisitions Accounts receivable
(1,063,025) (330,206) Unbilled receivables (114,844) (357,763)
Other assets and liabilities (333,224) 166,281 Accounts payable and
accrued expenses 162,876 (1,489,439) Accrued employee compensation
and benefits 79,184 375,900 Net cash used in operating activities
(2,776,589) (2,491,178) Investing activities Purchases of property
and equipment (88,608) (25,907) Cash paid for acquisition of
subsidiaries, net of cash received -- (4,939,180) Other -- 9,505
Net cash used in investing activities (88,608) (4,955,582)
Financing activities Issuance of common stock for cash 1,500,000 --
Exercise of warrants for Series C preferred stock, net of expenses
-- 7,713,083 Net increase in revolving lines of credit 459,227
414,836 Repayment of subordinated convertible note (12,500)
(12,500) Proceeds from notes payable to majority stockholder --
1,050,000 Repayment of notes payable to majority stockholder --
(1,450,000) Proceeds from debentures and warrants 2,000,000 --
Repayment of note payable to lender (1,650,000) -- Proceeds from
note payable 245,075 -- Repayment of notes payable to sellers --
(138,156) Debt issuance costs -- (21,639) Net cash provided by
financing activities 2,541,802 7,555,624 Net increase (decrease) in
cash and cash equivalents (323,395) 108,864 Cash and cash
equivalents at beginning of period 434,921 362,472 Cash and cash
equivalents at end of period $111,526 $471,336 DATASOURCE: Crdentia
Corp. CONTACT: James D. Durham, Chairman and CEO of Crdentia Corp.,
+1-972-850-0780; or Lasse Glassen, +1-310-854-8313, , for Crdentia
Corp. Web site: http://www.crdentia.com/
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