First Choice Healthcare Solutions Reports Second Quarter 2017 Results

Strategic Partnerships Under Evaluation as Company Expands Operational Presence

MELBOURNE, Fla., Aug. 15, 2017 (GLOBE NEWSWIRE) -- First Choice Healthcare Solutions, Inc. (OTCQB:FCHS) ("FCHS," "First Choice" or the "Company"), one of the nation's only non-physician-owned, publicly traded healthcare services companies focused on the delivery of total musculoskeletal solutions with an emphasis on Orthopaedics and Spine care, today announced its financial results for the three months ended June 30, 2017. 

Second Quarter Highlights:

  • Total revenues increased 7.3% in the second quarter of 2017 to $8,214,691 from $7,653,100 in the same period of 2016
  • 2017 second quarter net patient service revenue rose 8.7% to a record $7,630,917 from $7,023,262 in the same period of 2016
  • Net loss attributable to First Choice for the second quarter totaled $131,575 or $0.00 loss per share, compared to a net income of $153,137, or $0.01 earnings per share for the second quarter of 2016 
  • Non-GAAP adjusted EBITDA*, after deducting certain non-cash and one-time cash gains and expenses, totaled $593,008 in the second quarter of 2017, compared to $861,646 for the same period in 2016
  • As of June 30, 2017, cash on the balance sheet totaled $3,242,006
  • During the second quarter of 2017 the Company repurchased 32,388 shares of common stock under the share buyback program and has continued purchasing shares.  The total shares purchased through August 11, 2017 is 98,426 shares.  In addition to the repurchased shares, an unearned  service agreement returned an additional 142,500 shares to treasury.  The total shares returned to treasury is 240,926, representing approximately 1% of the outstanding shares at December 31, 2016.
  • In the first half of 2017, First Choice has successfully completed opening three of its five planned physical therapy facilities. The Company is on track to open the two additional facilities before year end.

“We made great progress during the second quarter as we position the Company to benefit from a 16% increase over the number of completed surgeries in the first quarter.  We continue to position the company to capitalize on market trends by moving high cost surgeries into our outpatient surgery center.  Further, we are exploring strategic relationships which would enhance our ability to expand our operations and drive shareholder value creation,” stated Chris Romandetti, President and CEO of First Choice. 

Details for Conference Call and Webcast

First Choice's management team will host a conference call and webcast for the investment community later today beginning at 11:30 AM Eastern Time to discuss the results and recent corporate developments. Participants can register and access the conference call by dialing toll-free 1-866-682-6100 (for U.S. and Canada dial-in) or 1-862-255-5401 (for international dial-in). The conference call will also be webcasted, which will be accessible through First Choice's investor relations website by navigating to http://ir.myfchs.com/ and clicking on "Second Quarter 2017 Conference Call and Webcast”. Participants will be required to register to access the call. For those who cannot listen to the live broadcast, a replay will be available shortly after the call on the investor relations page of First Choice's website, found at http://ir.myfchs.com/

* Non-GAAP Financial Measures

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 this 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”.

For additional details relating to First Choice's Second Quarter 2017 results, please refer to the Interim Report on Form 10-Q filed with the U.S. Securities and Exchange Commission and found at www.sec.gov.

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, Neurology, Interventional Pain Management and related diagnostic and ancillary services in key expansion markets throughout the Southeastern 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.com, www.myfcmg.com, www.thebackcenter.net and www.cranecreeksurgerycenter.com.

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 as a result of new information, future events, or otherwise to reflect future events or circumstances or reflect the occurrence of unanticipated events.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
    June 30,   December 31,
    2017   2016
    (unaudited)    
ASSETS        
Current assets        
Cash (amounts related to VIE of $921,972 and $708,858)   $ 3,242,006     $ 4,593,638  
Accounts receivable, net (amounts related to VIE of $6,082,888 and $6,010,961)     10,855,735       9,536,830  
Employee loans (amounts related to VIE of $491,550 and $491,850)     1,031,044       820,341  
Prepaid and other current assets (amounts related to VIE of $453,420 and $329,427)     655,687       422,512  
Total current assets     15,784,472       15,373,321  
                 
Property, plant and equipment, net of accumulated depreciation of $1,367,489 and $1,165,219 (amounts related to VIE of $653,892 and $693,629)     2,540,364       2,544,816  
                 
Other assets (amounts related to VIE of $921,470)     4,047,085       4,227,957  
                 
Total assets   $ 22,371,921     $ 22,146,094  
                 
LIABILITIES AND EQUITY                
Current liabilities                
Accounts payable and accrued expenses (amounts related to VIE of $1,622,119 and $1,366,143)   $ 2,221,316     $ 2,083,231  
Accounts payable, related party (amount related to VIE of $251,588)     251,588       251,588  
AMT tax payable     181,029       181,029  
Line of credit, short term (amount related to VIE of $439,524)     1,539,524       1,539,524  
Notes payable, current portion     277,855       519,452  
Unearned revenue     44,037       26,936  
Deferred rent, short term portion (amount related to VIE of $237,923)     237,923       237,923  
Total current liabilities     4,753,272       4,839,683  
                 
Long term liabilities                
Deposits held     41,930       41,930  
Notes payable, long term portion     15,695       14,531  
Deferred rent, long term portion (amount related to VIE of $2,266,195 and $2,214,909)     2,397,337       2,293,594  
Total long term liabilities     2,454,962       2,350,055  
                 
Total liabilities     7,208,234       7,189,738  
                 
Equity                
Preferred stock, $0.01 par value; 1,000,000 shares authorized, Nil issued and outstanding            
Common stock, $0.001 par value; 100,000,000 shares authorized, 26,971,038 and 24,631,327 shares issued; 26,938,650 and 24,631,327 shares outstanding as of June 30, 2017 and December 31, 2016, respectively     26,971       24,631  
Additional paid in capital     24,343,291       24,020,610  
Treasury stock, 32,388 and 0 common shares, at cost, respectively     (49,954 )      
Accumulated deficit     (10,029,590 )     (10,100,534 )
Total stockholders’ equity attributable to First Choice Healthcare Solutions, Inc.     14,290,718       13,944,707  
Non-controlling interest (note 10)     872,969       1,011,649  
Total equity     15,163,687       14,956,356  
                 
Total liabilities and equity   $ 22,371,921     $ 22,146,094  


FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
    For the three months ended June 30,   For the six months ended June 30,
    2017   2016   2017   2016
Revenues:                
Patient Service Revenue   $ 7,870,271     $ 7,290,456     $ 15,277,257     $ 14,168,121  
Allowance for bad debts     (239,354 )     (267,194 )     (504,350 )     (529,718 )
Net patient service revenue less provision for bad debts     7,630,917       7,023,262       14,772,907       13,638,403  
Rental Revenue     583,774       629,838       1,162,137       1,256,450  
Total Revenue     8,214,691       7,653,100       15,935,044       14,894,853  
                                 
Operating expenses:                                
Salaries and benefits     3,591,451       3,139,042       6,945,827       5,919,611  
Other operating expenses     2,631,823       2,428,310       5,161,006       4,473,885  
General and administrative     2,018,819       1,680,807       3,554,652       3,228,383  
Depreciation and amortization     193,424       136,800       382,912       435,750  
Total operating expenses     8,435,517       7,384,959       16,044,397       14,057,629  
                                 
Net (loss) income from operations     (220,826 )     268,141       (109,353 )     837,224  
                                 
Other income (expense):                                
Gain on sale of property and improvements           23,378             9,212,346  
Miscellaneous income (expense)     53,696       46,812       103,798       105,669  
Amortization of financing costs           (329 )           (15,654 )
Interest expense, net     (30,107 )     (51,053 )     (62,181 )     (232,188 )
Total other income     23,589       18,808       41,617       9,070,173  
                                 
Net (loss) income before provision for income taxes     (197,237 )     286,949       (67,736 )     9,907,397  
                                 
Income taxes (benefit)                        
                                 
Net (loss) income     (197,237 )     286,949       (67,736 )     9,907,397  
                                 
Non-controlling interest (note 10)     65,662       (133,812 )     138,680       (187,319 )
                                 
NET (LOSS) INCOME ATTRIBUTABLE TO FIRST CHOICE HEALTHCARE SOLUTIONS, INC.   $ (131,575 )   $ 153,137     $ 70,944     $ 9,720,078  
                                 
Net (loss) income per common share, basic   $ (0.00 )   $ 0.01     $ (0.00 )   $ 0.42  
                                 
Net (loss) income per common share, diluted   $ (0.00 )   $ 0.01     $ (0.00 )   $ 0.36  
                                 
Weighted average number of common shares outstanding, basic     26,843,848       23,862,943       26,549,810       23,374,625  
                                 
Weighted average number of common shares outstanding, diluted     26,843,848       27,196,277       27,349,810       26,707,959  


FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
     
    For the six months ended June 30,
    2017   2016
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net (loss) income   $ (67,736 )   $ 9,907,397  
Adjustments to reconcile net(loss) income to cash used in operating activities:                
Depreciation and amortization     382,912       435,750  
Amortization of financing costs           15,654  
Bad debt expense     504,350       529,718  
Gain on sale of property           (9,212,346 )
Common stock issued in connection with loan extension           92,000  
Stock based compensation     325,021       334,433  
Changes in operating assets and liabilities:                
Accounts receivable     (1,823,255 )     (2,275,252 )
Prepaid expenses and other current assets     (233,175 )     95,617  
Restricted funds           359,414  
Employee loans     (210,703 )     (412,113 )
Accounts payable and accrued expenses     138,085       (650,425 )
Settlement payable           (600,000 )
Deposits           (22,698 )
Deferred rent     103,743       145,038  
Unearned income     17,101       (16,350 )
Net cash used in operating activities     (863,657 )     (1,274,163 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Proceeds from sale of property           15,113,497  
Purchase of equipment     (197,588 )     (149,507 )
Net cash (used in) provided by investing activities     (197,588 )     14,963,990  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
(Repayments) of advances           (43,082 )
Proceeds from notes payable     22,113        
Proceeds from line of credit           372,636  
Purchase of treasury stock     (49,954 )      
Payments on notes payable     (262,546 )     (7,828,777 )
Net cash used in financing activities     (290,387 )     (7,499,223 )
                 
Net (decrease) increase in cash and cash equivalents     (1,351,632 )     6,190,604  
Cash and cash equivalents, beginning of period     4,593,638       1,594,998  
                 
Cash and cash equivalents, end of period   $ 3,242,006     $ 7,785,602  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                
Cash paid during the period for interest   $ 62,181     $ 237,943  
Cash paid during the period for taxes   $     $  
                 
Supplemental disclosure of non-cash investing and financing activities:                
Common stock issued in settlement of accrued expenses   $     $ 597,067  


FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE
 
    For the three months ended
June 30,
    For the six months ended
June 30,
    2017     2016     2017   2016  
                           
Net income (loss)    $ (131,575 )   $ 153,137     $ 70,944   $ 9,720,078  
Interest     29,878       51,053       61,952     232,188  
Taxes                      
Depreciation and Amortization     193,654       137,129       383,142     451,404  
Bad Debt     239,354       267,194       504,350     529,718  
Stock Issuance- non cash transactions     261,697       253,133       325,021     334,433  
Building                     (9,188,968 )
Adjusted EBITDA   $ 593,008     $ 861,646     $ 1,345,409   $ 2,078,853  
CONTACT INFORMATION

Investor Relations
Mike Cole
MZ Group
949-259-4988
mike.cole@mzgroup.us

Primary Logo

Source: First Choice Healthcare Solutions

Press Releases