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PEABODY, Mass.--(BUSINESS WIRE)--Sept. 25, 2007--PHC, Inc., d.b.a. Pioneer Behavioral Health (AMEX:PHC), a leading provider of inpatient and outpatient behavioral health services and pharmaceutical research, announced financial results for the fourth quarter and fiscal year 2007 ended June 30, 2007.
Fourth Quarter and Fiscal 2007 Financial Highlights
-- Record revenues at $12.8 million, up 23% over Q4 FY2006
-- Record quarterly income before taxes up 68% over same year-ago
quarter
-- Quarterly net income up 62% sequentially to $0.8 million or
$0.04 per share
-- Patient care revenue increased 38% for Q4 FY07 over Q4 FY06
-- Fifth consecutive year of record revenues; up 19%
year-over-year to $45.1 million
-- Fiscal year income before taxes totaled $2.8 million vs. $2.7
million in fiscal 2006
-- Fiscal year net income of $1.7 million, or $0.09 per fully
diluted share
Key Financial Indicators
(In thousands, except per-share amounts.)
Q4 2007 vs. Q4 2006 Q4 2007 Q4 2006 Change % Change
Consolidated revenues $12,795 $10,412 $2,383 23%
Patient care revenues 10,177 7,391 2,786 38%
Net income before taxes 1,421 848 573 68%
Net Income* 822 2,364 (1,542) (65%)
Earnings per share - Basic* 0.04 0.13 (0.09) (69%)
Earnings per share - Diluted* 0.04 0.12 (0.08) (67%)
FY 2007 vs. FY 2006 FY2007 FY 2006
Consolidated revenues $45,127 $38,013 $7,114 19%
Patient care revenues 36,023 27,862 8,161 29%
Net income before taxes 2,829 2,735 94 3%
Net Income* 1,682 4,045 (2,363) (58%)
Earnings per share - Basic* 0.09 0.22 (0.13) (59%)
Earnings per share - Diluted* 0.09 0.21 (0.12) (57%)
* Includes one-time gain of $1.6 million in Fiscal Year 2006 due to
the change in the valuation allowance
Operational Highlights for Fiscal 2007
-- Patient days increased 5,291 days year-over-year, primarily
due to an increase of 20 additional beds.
-- PHC's Harmony Healthcare subsidiary signed a ten-year, $80
Million contract with a major healthcare provider. This was
the largest in company history and is expected to increase
Harmony's annual revenue by 160%.
-- Construction of the Seven Hills Behavioral Institute near Las
Vegas, Nevada continues, keeping it on track to opening in
early 2008. Seven Hills is projected to contribute annualized
revenue of approximately $12 million, with higher margins than
the company's other inpatient facilities.
-- Reduced cost of capital by successfully renegotiating the
company's line of credit, increasing it to $6.5 million and at
a lower, more conventional interest rate.
-- The Boston Globe added PHC to its "Globe 100" list of top
performing companies in Massachusetts.
-- Common Stock began trading on the American Stock Exchange.
Fourth Quarter Financial Results
For the three months ended June 30, 2007 and compared to the same quarter a year ago:
Total net revenue from operations increased 23% to a record $12.8 million as compared to $10.4 million a year ago. The increase is primarily attributable to an increase in net revenue of the company's patient care segment, which was up 38% to $10.2 million from $7.4 million last year. This was offset by a 22% decrease in revenue from the pharmaceutical studies segment, which totaled $1.5 million as compared to $1.9 million last year. Contract support services revenue provided by PHC's Wellplace subsidiary was essentially unchanged from last year at $1.1 million.
Income from operations for the quarter totaled $1.2 million, an increase of 32% from $921,000 reported a year ago. Net Income before taxes increased 68% to a record $1.4 million from $848,000 a year ago.
Net income was $822,000 or $0.04 per fully diluted share (based on 20.5 million fully diluted shares), a decrease of 65% compared to net income of $2.4 million or $0.12 per fully diluted share (based on 19.3 million shares) last year, due to last year's tax loss carry forward recapture. However, net income in the fourth fiscal quarter represented an increase of 160% over the third fiscal quarter net income of $316,000 or $0.02 per fully diluted share (based on 20.6 million fully diluted shares).
Total operating expenses for the quarter increased 22% to $11.6 million from $9.5 million last year. Included in this increase were expenses related to ramping up new programs and services associated with new contracts and the Seven Hills Behavioral Institute.
The company's provision for doubtful accounts increased to $706,700 in the quarter from $445,600 a year ago. The percentage of bad debt expense to net patient care revenue for the quarter was 6.9% percent as compared to 5.3% percent for the year.
Patient care operating expenses increased 39% as compared to the same year-ago period, reflecting the ramp up on new major contracts and hospital completion. Pharmaceutical patient care expenses increased 9% and contract support expenses increased nearly 3%. The increase in patient care expense reflects the company's investments in its Las Vegas market initiatives, including the Seven Hills project and the company's 10-year, $80 million agreement with Health Plan of Nevada's Behavioral Healthcare Options network agreement announced in December 2006.
"This second consecutive quarter of record-breaking revenue exceeded our expectations," said Bruce A. Shear, Pioneer's president and CEO. "It was driven by a 38% expansion of our patient care revenues. The quarter-over-quarter increase in our net profit is reflective of the fact that direct expense related to our Las Vegas contract expansion is behind us, and we see this income growth trend continuing as our new Seven Hills facility comes on line in fiscal 2008."
Full Year Fiscal 2007 Financial Results
For the 12 months ended June 30, 2007, as compared to the previous fiscal year:
Total net revenue was $45.1 million, a 19% increase from $38.0 million in the previous year -- representing the fifth consecutive year of record revenue. The increase is largely due to a 29% increase in net patient care revenues, which increased to $36.0 million from $27.9 million in fiscal 2006. The improvement in net patient care revenue is mostly the result of a new capitated contract. This was offset by a 21% year-over-year decrease in pharmaceutical study revenues which total $4.6 million versus $5.8 million in fiscal 2006. This decrease is largely due to the delay in the start of some significant studies and an unusually large study that occurred in the last half of fiscal 2006. Contract support services revenue increased 4% from $4.4 million to $4.5 million year-over-year, primarily due to increases in contract rates.
Total operating expenses were $42.1 million, an increase of 21% from $34.8 million in fiscal 2006. The increase was primarily due to a 38% increase in patient care expense resulting from increased patient census and utilization of patient services. The provision for bad debt remained approximately the same as the previous year at $1.9 million and administrative expenses increased 13% to $12.7 million.
Income from operations for the fiscal year was $3.0 million, a 5% decrease from $3.2 million in fiscal 2006. Net income was $1.7 million or $0.09 per basic and fully diluted share (based on 19.3 million shares), a decrease of 58% from $4.1 million or $0.21 per basic and $0.20 per fully diluted share (based on 18.2 million shares) in the prior year. This decrease is primarily the result of a $1.1 million provision for tax expense recorded in fiscal 2007, as compared to $1.3 million in income tax benefit recorded in fiscal 2006.
Income before taxes increased 3% to a record $2.8 million from $2.7 million in fiscal 2006. This increase was primarily due to the two new contracts added during the year that are projected to increase gross revenues by $10 million annually and increased patient census. This increase is significant since it includes ramp-up costs of these contracts and uncapitalized costs of the Meditech software implementation in progress and the construction in progress of the Seven Hills Behavioral Institute.
"Fiscal 2007 was an excellent year for Pioneer, as we realized a number of major milestones across our organization," said Shear. "Our Harmony Healthcare subsidiary signed the largest contract in company history and we started construction on our new major facility near Las Vegas. Our success was reflected in another year of record revenues and record pre-tax profit, as well as record stockholders' equity. Supported by an expanded and more favorable credit facility, our pipeline for new business and outlook for internal expansion has never been stronger. This has set the stage for another record year in fiscal 2008."
The company's cash and equivalents totaled $3.4 million at June 30, 2007, an increase from $1.6 million at the end of the previous fiscal year. Total net receivables from patient care at 2007 fiscal year end was $6.6 million, a decrease of 6% from $7.0 million at the previous year end. The balance sheet current ratio was 2:1 at June 30, 2007. Stockholders' equity increased 36% to a record $18.3 million at June 30, 2007 from $13.5 million at the end of the previous year.
Teleconference Information
PHC will host a conference call today at 4:30 p.m., Eastern Time. A question and answer session will follow management's presentation.
To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the PHC conference call and provide the conference ID.
Domestic callers: 1-800-683-1525 International callers: 1-973-872-3197 Conference ID#: 9241101
A web simulcast of the call can be accessed via PHC's website at www.phc-inc.com. The call will be available for replay starting at 7:30 p.m. Eastern Time until October 25, 2007:
Toll-Free Replay number: 1-877-519-4471 International Replay number: 1-973-341-3080 Replay PIN #: 9241101
If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 949-574-3860.
About PHC, Inc.
PHC, dba Pioneer Behavioral Health, operates companies that provide inpatient and outpatient behavioral health care services, clinical research and Internet- and telephonic-based referral services. The companies contract with national insurance companies, government payors, and major transportation and gaming companies, among others, to provide such services. For more information, please visit www.phc-inc.com.
Statement under the Private Securities Litigation Reform Act of 1995
This press release may include "forward-looking statements" that are subject to risks and uncertainties. Forward-looking statements include information about possible or assumed future results of the operations or the performance of the Company and its future plans and objectives. Various future events or factors may cause the actual results to vary materially from those expressed in any forward-looking statements made in this press release. For a discussion of these factors and risks, see the company's annual report on Form 10-K for the most recently ended fiscal year.
PHC, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30,
------------------------
2007 2006
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $3,395,173 $1,820,105
Accounts receivable, net of allowance for
doubtful accounts of $3,764,585 and
$3,100,586 at June 30, 2007 and 2006,
respectively 6,524,387 6,955,475
Pharmaceutical research receivables 1,942,268 1,470,019
Prepaid expenses 688,600 490,655
Other receivables and advances 868,628 751,791
Deferred tax assets 2,354,000 3,110,000
----------- ------------
Total current assets 15,817,073 14,598,045
----------- ------------
Accounts receivable, non-current 35,000 40,000
Other receivables 91,697 53,457
Property and equipment, net 2,121,191 1,799,888
Deferred financing costs, net of amortization
of $143,376 and $106,422 at June 30, 2007
and 2006, respectively 163,733 117,023
Customer relationships, net of amortization
of $380,000 and $260,000 at June 30, 2007
and 2006, respectively 2,020,000 2,140,000
Goodwill 3,508,576 2,664,643
Other assets 3,465,356 571,931
----------- ------------
Total assets $27,178,609 $21,984,987
=========== ============
LIABILITIES
Current liabilities:
Accounts payable $1,261,841 $1,509,659
Current maturities of long-term debt 1,134,300 918,013
Revolving credit note 1,518,742 1,603,368
Deferred revenue 433,301 385,742
Current portion of obligations under
capital leases 205,858 57,881
Accrued payroll, payroll taxes and benefits 1,631,693 1,619,672
Accrued expenses and other liabilities 1,702,772 1,026,419
----------- ------------
Total current liabilities 7,888,507 7,120,754
Long-term debt, less current maturities 381,255 1,021,546
Obligations under capital leases 226,706 61,912
Deferred tax liabilities 432,000 325,000
----------- ------------
Total liabilities 8,928,468 8,529,212
----------- ------------
Commitments and contingent liabilities
STOCKHOLDERS' EQUITY
Preferred stock, 1,000,000 shares authorized,
none issued or outstanding -- --
Class A Common Stock, $.01 par value;
30,000,000 shares authorized, 19,622,076 and
17,874,966 shares issued at June 30, 2007
and 2006, respectively 196,221 178,749
Class B common stock, $.01 par value;
2,000,000 shares authorized, 775,760 and
775,760 issued and outstanding at June 30,
2007 and 2006, respectively, each
convertible into one share of Class A Common
Stock 7,758 7,758
Additional paid-in capital 26,812,808 23,718,197
Treasury stock, 199,098 and 199,098 class A
common shares at cost at June 30, 2007 and
2006, respectively. (191,700) (191,700)
Accumulated deficit (8,574,946) (10,257,229)
----------- ------------
Total stockholders' equity 18,250,141 13.455,775
----------- ------------
Total liabilities and
stockholders' equity $27,178,609 $21,984,987
=========== ============
PHC, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the Years Ended June 30,
2007 2006 2005
----------- ----------- -----------
Revenues:
Patient care, net $36,022,529 $27,861,701 $26,087,088
Pharmaceutical study 4,564,314 5,799,815 4,509,338
Contract support services 4,540,634 4,351,576 3,466,832
----------- ----------- -----------
Total revenues 45,127,477 38,013,092 34,063,258
----------- ----------- -----------
Operating expenses:
Patient care expenses 19,738,357 14,269,540 12,905,286
Patient care expenses,
pharmaceutical 2,182,357 2,242,900 1,676,749
Cost of contract support
services 3,102,551 2,676,340 2,197,518
Provision for doubtful accounts 1,933,499 1,912,516 1,272,037
Administrative expenses 12,722,007 11,210,296 9,667,138
Administrative expenses,
pharmaceutical 2,438,802 2,517,074 2,757,118
----------- ----------- -----------
Total operating expenses 42,117,573 34,828,666 30,475,846
----------- ----------- -----------
Income from operations 3,009,904 3,184,426 3,587,412
----------- ----------- -----------
Other income (expense):
Interest income 159,946 68,397 73,176
Interest expense (649,166) (606,893) (654,871)
Other income, net 308,599 89,449 76,760
----------- ----------- -----------
Total other expense, net (180,621) (449,047) (504,935)
----------- ----------- -----------
Income before income taxes 2,829,283 2,735,379 3,082,477
Benefit from (provision for)
income taxes (1,147,000) 1,310,103 73,423
----------- ----------- -----------
Net income $1,682,283 $4,045,482 $3,155,900
=========== =========== ===========
Basic net income per common share $0.09 $0.22 $0.18
=========== =========== ===========
Basic weighted average number of
shares outstanding 19,287,665 18,213,901 17,574,678
=========== =========== ===========
Fully diluted net income per
common share $0.09 $0.21 $0.17
=========== =========== ===========
Fully diluted weighted average
number of shares outstanding 19,704,697 19,105,193 18,364,076
=========== =========== ===========
CONTACT: PHC, Inc.
Company Contact:
Bruce A. Shear, President & CEO, 978-536-2777
or
Investor Relations Contact:
Liolios Group, Inc.
Ron Both/Geoffrey Plank, 949-574-3860
SOURCE: PHC, Inc.