Complete Wellness Centers, Inc. Reports Financial Results for Third Quarter.WASHINGTON--(BUSINESS WIRE)--Nov. 17, 1998-- Complete Wellness Centers Plans To Divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. Weight Loss Centers, Focus on Integrated Medical Centers as Core Business Complete Wellness Centers, Inc. ("CWC CWC Chemical Weapons Convention CWC Cricket World Cup CWC Central Wyoming College CWC Ceylon Workers' Congress (trade union; Sri Lanka) CWC Ceylon Workers Congress (Sri Lanka) "), the largest nationwide organization of integrated medical centers, announced its financial results for the three and nine months ended September 30, 1998. Revenues for the third quarter of 1998 increased to $5,812,108 versus $2,484,366 in the third quarter of 1997. For the year-to- date, revenues accrued to $20,847,009 versus $5,289,068 for the same period in 1997. The Company's third quarter 1998 net loss amounted to $2,335,456 or $.92 per share-basic as compared to net loss of $769,348 or $.50 per share-basic for the same quarter last year. (See accompanying table). Specifically, of the Company's $2,335,456 losses in the third quarter of 1998, $1,142,226 was related to the operations of Complete Wellness Weight Management ("CWWM"), due to seasonality in the weight management industry; $178,408 was related to the operations of Optimum Health Services health services Managed care The benefits covered under a health contract , Inc. ("OHS"); and $22,899 was related to the operations of Complete Billing Inc. ("CBI CBI abbr. cumulative book index CBI Confederation of British Industry CBI n abbr (= Confederation of British Industry) → C.E.O.E. "). These three businesses have or will be discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . Additionally, the Company experienced extraordinary expenses, such as legal fees, of $350,000 in the third quarter. Without the discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and the extraordinary expenses, the Company's third quarter net loss would have been $641,923. The Company also announced that its wholly-owned subsidiary, CWWM, will be sold or closed as part of Complete Wellness Centers' long-range plan to concentrate on medically integrated clinic development. The 56 weight loss centers purchased from Nutri/System in December 1997 have operated under the CWWM banner since that time. The Company will seek to continue to utilize Nutri/System products and services in its integrated medical centers. This action is consistent with the objective of the Company's previously announced proposed spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of another subsidiary, OHS, a medical management organization that develops networks for both traditional and alternative healthcare practitioners. Upon completion of the respective divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). and spin-off, these operations will be treated as discontinued operations. C. Thomas McMillen, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Complete Wellness Centers, Inc. stated, "Recent studies in alternative medicine announced last week in the national press clearly indicate that focusing on the rapid growth of our core business is the key to our success. In that respect, the Company has signed 11 new contracts for medical integration in the last 30 days and has a total of 40 in backlog. Our belief that integrative medicine integrative medicine combines conventional medicine with complementary and alternative therapies. integrative medicine The 'new medicine' A term for the incorporation of alternative therapies into mainstream medical practice. is on the forefront of healthcare today Healthcare Today is a monthly newsmagazine published in the United Kingdom by Mayden Publishing. The style and layout of the magazine is similar to that of The Week but its focus is purely on health-related news. continues to be affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. ." Separately, as disclosed in a public filing last week, the Company assisted its institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. , Wexford Management L.L.C., Spectrum Investors L.L.C., and Imprimis IMPRIMIS. In the first place; as, imprimis, I direct my just debts to be paid. See Item. Investors L.L.C., in arranging for a private sale of 100,000 shares which was the entire consideration for the restructuring of their investment in the Company to a convertible preferred instrument redeemable by the Company. There are no other shares involved in the transaction. Complete Wellness Centers, Inc., a multi-disciplinary physician practice management company, now manages 82 Complete Wellness Medical Centers, all of which provide both traditional and alternative healthcare services. The Company's common stock and warrants trade on the NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on Small Cap market under the symbols, CMWL and CMWLW, respectively. The Company, from time to time, may discuss forward-looking information. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are estimates by the Company's management. Such statements are subject to various risks and uncertainties that may be beyond the Company's control, and may cause results to differ from management's current expectations and should not be relied upon by the investors in the Company. Prospective investors may contact Michael Brigante, Chief Financial Officer of the Company, to obtain copies of the prospectuses which include certain information about the offerings. -0-
COMPLETE WELLNESS CENTERS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenue:
Integrated medical
clinics $4,546,277 $2,418,831 $14,099,241 $5,223,533
Weight management
centers 1,183,258 0 6,487,210 0
Other income 82,573 65,535 260,558 65,535
Total operating
revenue 5,812,108 2,484,366 20,847,009 5,289,068
Direct expenses:
Salary and
consulting costs 1,678,928 873,488 4,548,467 1,975,420
Management fees 2,144,369 1,329,597 6,869,608 2,571,362
Cost of Product Sold 416,386 0 1,524,223 0
Rent 679,878 45,771 1,933,592 156,506
Advertising and
marketing 222,435 21,314 829,104 74,199
Bad debt expense 1,048,762 305,782 3,008,863 778,926
Total direct expenses 6,190,758 2,575,952 18,713,857 5,556,413
Network development
cost 178,409 0 606,084 0
General and
administrative 1,744,833 682,280 4,737,720 1,711,561
Depreciation and
amortization 35,708 18,203 148,338 54,506
Operating loss (2,337,600) (792,069) (3,358,990) (2,033,412)
Interest expense 0 3,366 1,487 28,235
Interest income 2,144 35,229 27,597 82,599
Minority interest 0 17,961 0 23,812
Net loss before income
taxes (2,335,456) (742,245) (3,332,880) (1,955,236)
Income taxes 0 27,103 0 31,307
Net loss after
income taxes ($2,335,456) ($769,348) ($3,332,880) ($1,986,543)
Loss per share - basic ($0.92) ($0.50) ($1.31) ($1.13)
Weighted average common
shares - basic 2,539,020 1,540,744 2,536,725 1,765,533
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