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First Choice Healthcare Solutions Reports Second Quarter 2018 Results

MELBOURNE, Fla., Aug. 15, 2018 (GLOBE NEWSWIRE) -- First Choice Healthcare Solutions, Inc. (OTCQB: FCHS) ("First Choice" or the "Company"), a fully integrated, non-physician-owned, publicly traded healthcare delivery platform providing a full life cycle of Orthopaedic and spine care for patients through diagnosis, treatment and recovery, today reported its financial results for the three and six month periods  ended June 30, 2018.

Second Quarter 2018 Highlights

  • Total revenue was $9.4 million, representing a 14.7% increase over prior year and 7.2% sequential increase over the prior quarter.
  • Income from operations was approximately $460,000 compared to a loss of approximately $221,000 for the comparable prior year period.  Sequentially, income from operations increased 71.5%.
  • Adjusted EBITDA increased over 131% to approximately $820,000 and Adjusted EBITDA margin improved by 440 basis points to 8.7% from the comparable prior year period.  Sequentially, Adjusted EBITDA grew 11.3%
  • Days Sales Outstanding decreased 19 days over same period prior year and decreased by one day sequentially.
  • Cash balance of $8.4 million or $0.26 per share
  • Surgeries increased to 954, a 11.2% growth over the prior year and 3.6% sequential growth.

Chris Romandetti, President and CEO of First Choice, stated, “For the second quarter we are pleased to report net patient service revenue of approximately $8.8 million, a 15.7% increase over the prior year and 7.6% increase sequentially, representing over 131% Adjusted EBITDA growth over the prior year.  I am proud to say we have also achieved positive net income attributable to FCHS shareholders of approximately $432,000 compared to a loss of $132,000 when compared to same period last year, totaling a positive change of $564,000.”

Romandetti added “During the second quarter we successfully renegotiated our reimbursement rates with multiple payors granting increases of between 5 and 18 percent with additional escalators in future years.  Our surgeries performed continue to grow, and our average patient value is trending upward.  These positive developments allowed us to experience stronger Adjusted EBITDA and net income margins which we expect to continue to trend in a positive direction.”

Financial Results for Second Quarter of 2018 and First Half of 2018
Total revenue was $9.4 million for the second quarter of 2018, an increase of 14.7% compared to $8.2 million for the same period in 2017.  For the six months ended June 30, 2018 total revenue was $18.2 million an increase of 14.3% compared to $15.9 million for the comparable period last year.

Net income attributable to First Choice was $431,549 for the second quarter of 2018, compared to net loss of $131,575 for the same period in 2017.  For the six months ended June 30, 2018, net income attributable to First Choice was $710,887 compared to net income of $70,944 for the comparable period last year.

Non-GAAP adjusted EBITDA increased by 131% to $819,605 for the second quarter of 2018 compared to $353,653 for the same period in 2017.  For the six months ended June 30, 2018 Non-GAAP adjusted EBITDA was $1,555,682, an increase of 85% compared to $841,058 for the comparable period last year.

Conference Call and Webcast Information
The Company will host a conference call with the investment community on Wednesday, August 15th at 11:00 a.m. Eastern Time featuring remarks by Chris Romandetti, President and CEO of First Choice, and Phillip Keller, CFO of First Choice.

To access the call, please use the following information: 
Date:Wednesday, August 15, 2018
Time:11:00 a.m. ET, 8:00 a.m. PT
Toll-free dial-in number:(866) 682-6100
International dial-in number:(862) 298-0702
  

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gillian Lee at 321-725-0090 extension 160.

The conference call will be broadcast live and available for replay at https://www.webcaster4.com/Webcast/Page/1527/26710 and via the investor relations section of the Company's website at http://ir.myfchs.com/.

(*) Use of Non-GAAP Financial Information
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. This non-GAAP financial measure also facilitates management's internal comparisons to our historical performance and liquidity. We believe this non-GAAP financial measure is useful to investors both because they allow for greater transparency with respect to a key metric used by management in its financial and operational decision-making. For more information on this non-GAAP financial measure, please see the table captioned "Reconciliation of non-GAAP Adjusted EBITDA Performance".

Safe Harbor Statement
Certain information set forth in this news announcement may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of First Choice Healthcare Solutions, Inc. Such forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management beliefs and certain assumptions made by its management. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Information concerning factors that could cause the Company's actual results to differ materially from those contained in these forward-looking statements can be found in the Company's periodic reports on Form 10-K and Form 10-Q, and in its Current Reports on Form 8-K, filed with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether because of new information, future events, or otherwise to reflect future events or circumstances or reflect the occurrence of unanticipated events.

About First Choice Healthcare Solutions, Inc.
Headquartered in Melbourne, Florida, First Choice Healthcare Solutions (FCHS) is implementing a defined growth strategy aimed at expanding its network of non-physician-owned medical centers of excellence, which concentrate on treating patients in the following specialties: Orthopaedics, Spine Surgery, Interventional Pain Management, Physical Therapy and other ancillary and diagnostic services in key expansion markets throughout the U.S.  Serving Florida's Space Coast, the Company's flagship integrated platform currently administers over 100,000 patient visits each year and is comprised of First Choice Medical Group, The B.A.C.K. Center and Crane Creek Surgery Center. For more information, please visit www.myfchs.comwww.myfcmg.comwww.thebackcenter.net and www.cranecreeksurgerycenter.com.

Contact Information:
First Choice Healthcare Solutions, Inc.
Gillian Lee
Phone: 321-725-0090 ext. 160
Email: IR@myfchs.com

  
 FIRST CHOICE HEALTHCARE SOLUTIONS, INC 
CONSOLIDATED BALANCE SHEETS 
 June 30,December 31, 
  2018  2017  
ASSETS   
Current assets   
Cash$  8,411,528 $  2,015,534  
Accounts receivable, net   10,451,686    8,699,714  
Employee loans   1,640,827    1,316,684  
Prepaid and other current assets   670,263    515,356  
  Total current assets   21,174,304    12,547,288  
        
Property, plant and equipment, net   2,457,021    2,295,163  
        
Other assets   3,789,672    3,908,781  
    
Total assets$  27,420,997 $  18,751,232  
        
LIABILITIES AND EQUITY    
Current liabilities   
Accounts payable and accrued expenses$  2,759,754 $  2,379,404  
Accounts payable, related party   251,588    251,588  
AMT tax payable   254,791    223,899  
Line of credit, short term   440,024    440,024  
Notes payable, current portion    42,670    29,552  
Unearned revenue   27,612    44,607  
Deferred rent, short term portion   40,857    105,171  
  Total current liabilities   3,817,296    3,474,245  
    
Long term liabilities:   
Deposits held   41,930    41,930  
Line of Credit   1,100,000    1,100,000  
Notes payable, long term portion   140,615    60,146  
Deferred rent, long term portion   2,696,302    2,589,568  
  Total long term    3,978,847    3,791,644  
    
Total liabilities   7,796,143    7,265,889  
        
Redeemable common stock   7,500,000    -   
    
Equity    
Preferred stock   -     -   
Common stock   32,481    27,357  
Additional paid in capital   25,074,577    25,185,487  
Treasury stock   -     (249,265) 
Accumulated deficit   (13,278,131)   (13,989,018) 
Total stockholders' equity attributable to FCHS   11,828,927    10,974,561  
Non-controlling interest (note 12)   295,927    510,782  
  Total equity    12,124,854    11,485,343  
    
Total liabilities and equity$  27,420,997 $  18,751,232  
        

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC 
CONSOLIDATED STATEMENTS OF OPERATIONS 
       
 For the three months ended June 30, For the six months ended June 30, 
  2018   2017   2018   2017  
Revenues:      
Patient Service Revenue$  9,108,898  $  7,870,271  $  17,590,570  $  15,277,257  
Allowance for bad debts   (283,443)    (239,354)    (562,005)    (504,350) 
Net patient service revenue less provision for bad debts   8,825,455     7,630,917     17,028,565     14,772,907  
Rental Revenue   596,897     583,774     1,179,684     1,162,137  
  Total Revenue   9,422,352     8,214,691     18,208,249     15,935,044  
       
Operating expenses:      
Salaries and benefits   4,735,940     4,004,159     9,065,225     7,720,534  
Other operating expenses   2,702,864     2,631,823     5,335,650     5,161,006  
General and administrative   1,324,950     1,606,111     2,678,786     2,779,945  
Depreciation and amortization   198,908     193,424     400,820     382,912  
  Total operating expenses   8,962,662     8,435,517     17,480,481     16,044,397  
       
Net (loss) income from operations   459,690     (220,826)    727,768     (109,353) 
       
Other income (expense):      
Gain on sale of equipment   17,400     -      17,400   
Miscellaneous income (expense)   41,884     53,696     82,206     103,798  
Interest expense, net   (37,219)    (30,107)    (60,731)    (62,181) 
  Total other income   22,065     23,589     38,875     41,617  
       
Net (loss) income before provision for income taxes   481,755     (197,237)    766,643     (67,736) 
       
Income taxes (benefit)   -      -      -      -   
       
Net (loss) income   481,755     (197,237)    766,643     (67,736) 
       
Non-controlling interest (note 10)   (50,206)    65,662     (55,756)    138,680  
       
NET (LOSS)  INCOME ATTRIBUTABLE TO FIRST
CHOICE HEALTHCARE SOLUTIONS, INC.
$  431,549  $  (131,575) $  710,887  $  70,944  
       
Net (loss) income per common share, basic$  0.01  $  (0.00) $  0.02  $  0.00  
       
Net (loss) income per common share, diluted$  0.01  $  (0.00) $  0.02  $  0.00  
       
Weighted average number of common shares outstanding, basic   32,378,940     26,843,848     30,505,275     26,549,810  
       
Weighted average number of common shares outstanding, diluted   33,178,940     26,843,848     31,305,275     27,349,810  
                 

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
   
 For the six months ended June 30,
  2018  2017 
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net Income $  766,643 $  (67,736)
Adjustments to reconcile net income to cash used in operating activities:  
Depreciation and amortization   400,820    382,912 
Bad debt expense   562,005    504,350 
Stock based compensation   272,868    325,021 
Gain on sale of equipment   (17,400)   -  
Changes in operating assets and liabilities:  
Accounts receivable    (2,313,977)   (1,823,255)
Prepaid expenses and other current assets   (154,907)   (98,287)
Employee loans   (324,143)   (345,591)
Other assets   (55,625)   -  
Accounts payable and accrued expenses   380,350    138,085 
Income taxes   24,754    -  
Deferred rent   42,420    103,743 
Unearned income   (16,995)   17,101 
  Net cash used in operating activities   (433,187)   (863,657)
   
CASH FLOWS FROM INVESTING ACTIVITIES:  
Proceeds from sale of equipment   17,400    -  
Purchase of 25% interest in Crane Creek   (400,000)   -  
Purchase of equipment   (381,806)   (197,588)
  Net cash (used in) provided by investing activities   (764,406)   (197,588)
   
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from sale of common stock   7,500,000    -  
Proceeds from notes payable   120,754    22,113 
Purchase of treasury stock   -     (49,954)
Payments on notes payable   (27,167)   (262,546)
  Net cash provided by (used in) financing activities   7,593,587    (290,387)
   
Net increase in cash, cash equivalents and restricted cash   6,395,994    (1,351,632)
Cash and cash equivalents, beginning of period   2,015,534    4,593,638 
   
Cash, cash equivalents and restricted cash, end of period$  8,411,528 $  3,242,006 
       

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC 
NON GAAP EBITDA 
       
 For the three months  ended June 30, For the six months  ended June 30, 
  2018  2017   2018  2017  
NET (LOSS)  INCOME ATTRIBUTABLE TO
FIRST CHOICE HEALTHCARE SOLUTIONS
$  431,549 $  (131,575) $  710,887 $  70,944  
Interest   37,219    30,107     60,731    62,181  
Taxes   -     -      -     -   
Depreciation and Amortization   198,908    193,424     400,820    382,912  
Stock Based Compensation   151,929    261,697     383,244    325,021  
Adjusted EBITDA   819,605    353,653     1,555,682    841,058  
  8.7% 4.3%  8.5% 5.3% 
       
Wednesday, August 15, 2018 - 08:30