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Q2 2008 Financial and Operational Highlights
-- Record second quarter revenues of $12.7 million, increased 28% vs. Q2
2007.
-- Record second quarter net income of $0.5 million or $0.02 per share,
increased 85% vs. Q2 2007.
-- Second quarter patient care revenue increased 27% vs. Q2 2007.
-- Patient days increased 6% vs. Q2 2007.
-- Balance sheet continued to strengthen: Total liabilities reduced by
$0.3 million from Q1 2008. Shareholders' equity increased more than $1
million since 6/30/07.
-- Construction of the Seven Hills Behavioral Institute near Las Vegas,
Nevada continued as scheduled and remains on track to open in Q4 2008.
Seven Hills is projected to contribute annualized revenue of approximately
$12 million, along with higher margins than PHC's other inpatient
facilities.
-- Expanded agreement for services with major railroad customer.
Key Financial Indicators (In thousands, except per-share amounts.) Q2 2008 vs. Q2 2007 Q2 2008 Q2 2007 Change % Change Consolidated revenues $ 12,694 $ 9,952 $ 2,742 28% Patient care revenues $ 10,131 $ 7,947 $ 2,184 27% Net Income Before Taxes $ 787 $ 423 $ 364 86% Net Income $ 482 $ 261 $ 221 85% Earnings per share - Basic $ 0.02 $ 0.01 $ 0.01 100% Earnings per share - Diluted $ 0.02 $ 0.01 $ 0.01 100%
Second Quarter Financial Results
For the three months ended December 31, 2007, and compared to the same quarter a year ago, total net revenue from operations increased 28% to $12.7 million, as compared to $10.0 million for the three months ended December 31, 2006. This increase is primarily attributable to an increase in net revenue of the company's patient care segment, which was up 27% to $10.1 million from $7.9 million in the same year-ago period. Revenue from the pharmaceutical studies segment increased 63% to $1.4 million as compared to $0.9 million for the same quarter last year. Contract support services revenue provided by the company's Wellplace subsidiary remained relatively stable at $1.1 million.
Income from operations for the quarter totaled $0.8 million, an increase of 38% from the $0.6 million reported for the same period last year. Net income before taxes increased 86% to a record $0.8 million from $0.4 million for the same year-ago period.
Net income for the quarter was $0.5 million, or $0.02 per fully diluted share (based on 20.5 million fully diluted shares), an increase of 100% compared to net income of $0.3 million, or $0.01 per fully diluted share (based on 19.4 million shares) for the second quarter of last year.
"This was the best second quarter in company history," said Pioneer's President and CEO Bruce A. Shear, "It follows last quarter's similar record. Historically, our second quarters have often been the seasonally weakest in each fiscal year, and we are especially proud that we nearly doubled our net income despite the pre-operational expenses of our new Seven Hills facility. Since the previous quarter, we also added nearly a million dollars in cash to the balance sheet, while reducing our long term liabilities substantially."
Continued Shear, "This record performance was driven by another quarter of strong growth in our patient care segment. Like the first quarter's doubling of net income over the prior year, the doubling this quarter demonstrates the return of our investment in our Las Vegas market expansion. We expect substantial growth in both revenue and income to continue, especially as our new Seven Hills facility comes online later this fiscal year and we realize the fruition of some of our wellness program initiatives. Add to this a strong balance sheet and it is plain to see that Pioneer enjoys a very strong foundation as we seek new opportunities for growth and expansion in the second half of fiscal 2008 and beyond."
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: 1-800-762-9058 International callers: 1-480-248-5085 Conference ID#: 3835589
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 March 14, 2008:
Toll-Free Replay number: 1-800-406-7325 International Replay number: 1-303-590-3030 Replay PIN #: 3835589
If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 949-574-3860.
About PHC, Inc.
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
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
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ASSETS 2007 2007
------------ ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 3,707,113 $ 3,395,173
Accounts receivable, net of allowance for
doubtful accounts of $2,872,746 at
December 31, 2007 and $3,764,583 at June 30,
2007 6,145,555 6,524,387
Pharmaceutical receivables 1,667,911 1,942,268
Prepaid expenses 486,023 688,600
Other receivables and advances 888,088 868,628
Deferred income tax asset 1,344,920 2,015,000
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Total current assets 14,239,610 15,434,056
Accounts receivable, non-current 35,000 35,000
Other receivables 79,868 91,697
Property and equipment, net 2,559,369 2,121,191
Deferred financing costs, net of
amortization of $208,148 and $150,124 at
December 31, 2007 and June 30, 2007 542,346 613,865
Customer relationships, net of amortization
of $440,000 at December 31, 2007 and
$380,000 at June 30, 2007, respectively 1,960,000 2,020,000
Goodwill 3,508,576 3,508,576
Other assets 3,722,545 3,465,356
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Total assets $ 26,647,314 $ 27,289,741
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,385,328 $ 1,261,841
Current maturities of long-term debt 1,117,123 1,134,300
Revolving credit note 653,826 1,518,742
Deferred revenue 66,048 433,301
Current portion of obligations under
capital leases 184,463 205,858
Accrued payroll, payroll taxes and benefits 1,646,583 1,631,693
Accrued expenses and other liabilities 1,380,078 1,702,772
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Total current liabilities 6,433,449 7,888,507
Long-term debt, net of current maturities 418,345 831,387
Obligations under capital leases 288,664 226,706
Deferred tax liability 93,000 93,000
------------ ------------
Total liabilities 7,233,458 9,039,600
------------ ------------
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, 19,752,728
and 19,622,076 shares issued at December
31, 2007 and June 30, 2007, respectively 197,527 196,221
Class B common stock, $.01 par value,
2,000,000 shares authorized, 775,760 issued
and outstanding at December 31, 2007 and
June 30, 2007, respectively, each
convertible into one share of Class A
common stock 7,758 7,758
Additional paid-in capital 27,124,340 26,812,808
Treasury stock, 362,698 shares and 199,098
shares of Class A common stock at December
31, 2007 and June 30, 2007, respectively,
at cost (622,666) (191,700)
Accumulated deficit (7,293,103) (8,574,946)
------------ ------------
Total stockholders' equity 19,413,856 18,250,141
------------ ------------
Total liabilities and
stockholders' equity $ 26,647,314 $ 27,289,741
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
Revenues: 2007 2006 2007 2006
Patient care, net $ 10,131,201 $ 7,946,670 $ 20,274,636 $ 15,823,102
Pharmaceutical
studies 1,421,853 873,920 2,842,818 1,925,303
Contract support
services 1,141,376 1,131,770 2,281,142 2,266,161
------------ ------------ ------------ ------------
Total revenues 12,694,430 9,952,360 25,398,596 20,014,566
------------ ------------ ------------ ------------
Operating expenses:
Patient care
expenses 5,472,592 4,431,765 10,768,666 8,486,731
Patient care
expenses,
pharmaceutical 816,814 421,549 1,426,606 908,486
Cost of contract
support services 823,571 687,174 1,626,219 1,525,729
Provision for
doubtful
accounts 342,342 347,458 764,568 799,983
Administrative
expenses 3,799,897 2,929,865 7,409,833 5,926,006
Administrative
expenses,
pharmaceutical 605,757 529,555 1,177,613 1,208,663
------------ ------------ ------------ ------------
Total operating
expenses 11,860,973 9,347,366 23,173,505 18,855,598
------------ ------------ ------------ ------------
Income from
operations 833,457 604,994 2,225,091 1,158,968
------------ ------------ ------------ ------------
Other income
(expense):
Interest income 52,504 33,808 85,039 66,657
Other income 18,472 (3,135) 32,571 (4,078)
Interest expense (117,319) (212,441) (248,700) (332,271)
------------ ------------ ------------ ------------
Total other
expenses, net (46,343) (181,768) (131,090) (269,692)
------------ ------------ ------------ ------------
Income before
provision for
taxes 787,114 423,226 2,094,001 889,276
Provision for
income taxes 305,282 162,138 812,158 344,905
------------ ------------ ------------ ------------
Net income
applicable to
common
shareholders $ 481,832 $ 261,088 $ 1,281,843 $ 544,371
============ ============ ============ ============
Basic net income
per common share $ 0.02 $ 0.01 $ 0.06 $ 0.03
------------ ------------ ------------ ------------
Basic weighted
average number of
shares outstanding 20,143,636 18,758,151 20,140,208 18,636,146
------------ ------------ ------------ ------------
Diluted net income
per common share $ 0.02 $ 0.01 $ 0.06 $ 0.03
Diluted weighted
average number of
shares outstanding 20,485,294 19,409,232 20,494,963 19,280,727
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Company Contact: PHC, Inc. Bruce A. Shear President & CEO Tel: 978-536-2777 Investor Relations Contact: Liolios Group, Inc. Scott Kitcher Tel: 949-574-3860
SOURCE: Pioneer Behavioral Health