First Physicians Capital Group, Inc. (“FPCG” or the “Company”)
(OTCBB: FPCG), an operator of healthcare services firms primarily
in rural and suburban markets in the U.S., reported results for the
Company’s second fiscal quarter ended March 31, 2010.
Highlights for the second fiscal quarter were:
- Achieved Net Revenue from
Services of $9.6 million in the second quarter of Fiscal 2010 and
$19.9 million in the six month period ended March 31, 2010. This
represented a 6% decrease from $10.2 million for the second quarter
of Fiscal 2009 and a 5% decrease from $21.0 million for the six
month period ended March 31, 2009.
- Achieved Adjusted EBITDA from
Operations before Corporate Overhead of $0.7 million in the second
quarter of Fiscal 2010 and $1.7 million in the six month period
ended March 31, 2010. This represented a 42% decrease from $1.2
million for the second quarter of Fiscal 2009 and a 53% decrease
from $3.6 million for the six month period ended March 31,
2009.
- Continued reductions in
operating expenses and corporate overhead at our Southern Plains
Medical Group (SPMG) facilities in Oklahoma as well as at the
holding company level.
- Extended maturities on existing
convertible bridge loans issued between February and April 2009 by
18-36 months and reduced interest rates from 16% to 10%.
- Reduced short-term debt from
$4.4 million as of December 31, 2009 to zero and repositioned all
of FPCG bank and investor debt as long-term debt, creating
opportunities to more efficiently provide working capital for
growth.
- FPCG plans to divest certain
non-strategic and non-core operating assets in Fiscal 2010. The
financial table provided below presents results excluding the
potential divested assets and a reconciliation to Net Revenue from
Services and Net Income as reported in FPCG’s Fiscal 2010 Second
Quarter 10-Q filing.
Important Notice
It should be noted that EBITDA and Adjusted EBITDA from
Operations are financial measures that are not recognized under
accounting principles generally accepted in the United States of
America (GAAP). Adjusted EBITDA from Operations should not be
considered as an alternative to, or more meaningful than, net
income, operating income, cash flows from operations or other
traditional indications of a company’s operating performance or
liquidity that are derived in accordance with GAAP. In addition,
the Company’s calculations of Adjusted EBITDA from Operations may
not be comparable to similarly titled measures being disclosed by
other companies, limiting their usefulness as comparative measures.
The Company discloses Adjusted EBITDA from Operations as it is a
commonly referred to financial metric used in the investing
community to evaluate the performance of companies in our industry.
The Company believes that disclosure of Adjusted EBITDA from
Operations is helpful to those reviewing its performance, as
Adjusted EBITDA from Operations provides information on the
Company’s ability to meet debt service, capital expenditure and
working capital requirements and management believes that Adjusted
EBITDA from Operations is also a useful indicator of the Company’s
operating performance.
To better facilitate comparisons from reporting period to
reporting period on the productivity of our healthcare facilities
operations, a non-GAAP supplemental chart is provided below. These
financials reconcile to our GAAP results contained in our periodic
filings with the SEC. We highlight for our investors and partners
the following:
- Net Revenue from Services
- Healthcare facilities EBITDA
before Bad Debt expense
- Bad Debt expense
- Adjusted EBITDA from Operations
before Corporate Overhead
- SPMG Corporate Expense, our
overhead expense at the SPMG operating subsidiary headquartered in
Oklahoma City, OK
- FPCG Corporate Expense, our
overhead expense at the corporate holding company
Fiscal Quarter Ended Six
Months Ended Fiscal Year Ended 3/31/2010
3/31/2009
3/31/2010 3/31/2009
9/30/2009 9/30/2008
Net Revenue From Services,
excluding potential divested assets (Note 1)
$ 8,656,871 $ 8,797,797 $
18,064,769 $ 18,326,815 $
34,559,323 $ 25,665,027
Net Revenue From Services from
potential divested assets
947,766 1,381,827 1,867,657
2,674,003 4,530,485
3,976,177
Total Net Revenue From Services $
9,604,637 $ 10,179,624 $
19,932,426 $ 21,000,818 $
39,089,808 $ 29,641,204
Healthcare facilities EBITDA
before Bad Debt Expense
$ 1,558,536 $ 2,183,903 $ 4,117,557 $ 5,465,807 $ 8,315,761 $
6,298,317 Bad Debt expense (877,321 ) (966,303 )
(2,383,521 ) (1,822,099 ) (3,870,996 )
(3,286,955 )
Adjusted EBITDA from Operations
before Corporate Overhead
681,215 1,217,600 1,734,036 3,643,708
4,444,765 3,011,362
SPMG Corporate Expense (operating
company)
(968,841 ) (1,169,935 ) (1,894,342 ) (2,637,147 ) (4,997,934 )
(3,537,860 ) FPCG Corporate Expense (629,701 )
(832,113 ) (1,419,789 ) (1,697,927 )
(3,606,948 ) (2,245,258 )
Adjusted EBITDA from
Operations (917,327 )
(784,448 ) (1,580,095 )
(691,366 ) (4,160,117 )
(2,771,756 )
Non-Cash Charges and Other
Items to Reconcile to Net Income
Interest Income and Other 13,069 56,664 13,807 94,132 20,932
306,870 Interest Expense (494,227 ) (417,413 ) (1,178,069 )
(568,531 ) (2,007,058 ) (800,435 ) Depreciation & Amortization
(321,807 ) (241,837 ) (612,766 ) (449,963 ) (992,910 ) (627,364 )
Amort. of Stock Based Comp (267,625 ) (208,732 ) (545,729 )
(516,413 ) (1,245,252 ) (339,190 ) Preferred Dividend – BCF (749 )
- (47,629 ) - (316,877 ) (2,877,654 ) Restructure (Severance) - -
(154,479 ) (308,958 ) (429,641 ) - Noncontrolling interests
(315,668 ) (142,480 ) (496,084 ) (236,179 ) (176,604 ) 1,367,890
Impairment Expense - - - - (208,942 ) (308,022 ) (Gain) Loss on
Sale of Investments - (280,614 ) - (280,614 ) (280,614 ) - One-time
charges (113,886 ) - (60,000 ) - - (50,000 ) Insurance proceeds - -
429,105 - - -
Payments to physicians related to
purchase agreement
(66,429 ) (81,250 ) (132,858 ) (162,500 ) (337,990 ) (81,250 )
Other closed facility expense (13,201 ) (2,251 )
(23,697 ) (23,762 ) (54,391 ) (957,150
)
Total Non-Cash Charges and
Other Items to Reconcile to Net Income
(1,580,523 ) (1,317,913 )
(2,808,399 ) (2,452,788 )
(6,029,347 ) (4,366,305 )
Net Income (Loss) excluding
potential divested assets (Note 1)
(2,497,850 ) (2,102,361 )
(4,388,494 ) (3,144,154 )
(10,189,464 ) (7,138,061 )
Net Income (Loss) from potential
divested assets
(195,809 ) 233,993 (469,392 )
358,204 (178,596 ) 27,165
Net Income
(Loss) $ (2,693,659 ) $
(1,868,368 ) $ (4,857,886 )
$ (2,785,950 ) $ (10,368,060
) $ (7,110,896 )
Note 1: FPCG plans to divest certain non-strategic and
non-core operating assets in Fiscal 2010. The financial table
provided above presents results excluding the potential divested
assets and a reconciliation to Net Revenue from Services and Net
Income as reported in FPCG’s Fiscal 2010 Second Quarter 10-Q
filing.
About First Physicians Capital Group, Inc.
First Physicians Capital Group, Inc. provides financial and
managerial services to physicians, physician groups, and healthcare
delivery centers in rural and suburban markets in the U.S. The
Company is building a portfolio of interests in healthcare services
operations outside the traditional urban hospital setting. FPCG
promotes quality medical care by offering improved access and
breadth of services. It unlocks the value of its investments by
developing strong, long-term and mutually beneficial relationships
with their physicians and the communities they serve. For more
information, please visit
http://www.firstphysicianscapitalgroup.com.
Safe-Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This press release may contain forward-looking
information within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), including
all statements that are not statements of historical fact regarding
the intent, belief or current expectations of the Company, its
directors or its officers with respect to, among other things: (i)
the Company’s financing plans; (ii) trends affecting the Company’s
financial condition or results of operations; (iii) the Company’s
growth strategy and operating strategy; and (iv) the declaration
and payment of dividends. The words “may,” “would,” “will,”
“expect,” “estimate,” “anticipate,” “believe,” “intend” and similar
expressions and variations thereof are intended to identify
forward-looking statements. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, many of which are beyond the
Company’s ability to control, and that actual results may differ
materially from those projected in the forward-looking statements
as a result of various factors including the risks disclosed in the
Company’s Forms 10-K and 10-Q filed with the Securities Exchange
Commission.
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