HealthTronics, Inc. Announces Second Quarter Results, Major Reorganization Plan Underway.AUSTIN, Texas -- HealthTronics, Inc. (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 : HTRN HTRN Research Triangle Park Training System HTRN Hyper Terminal ): --Senior term debt repaid in full, freeing capacity to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. growth opportunities --Newly deployed Revolix laser and ClariPath Laboratories show early success --Performance improvement initiatives undertaken HealthTronics, Inc. (NASDAQ: HTRN), a leading provider of Urology urology Medical specialty dealing with the urinary system and male reproductive organs. It traces its origin to medieval lithologists, itinerant healers who specialized in surgical removal of bladder stones. services and products, today announced its financial results for the second quarter ended June 30, 2006. Revenue from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the second quarter 2006 totaled $37.9 million as compared to $39.2 million for the same period in 2005. Net income for the second quarter in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principals totaled $1.4 million or $0.04 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. During the quarter, the Company incurred significant non-recurring expenses primarily relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a recently initiated reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. . Approximately $650,000 was expenses for the performance improvement study being performed by Bain & Company, a global leader in business and management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects . These costs are reported in corporate expenses and the Company expects to incur additional costs through fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. related to this engagement. Another $200,000 was incurred relating to the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. and recruitment of new executives. Severance and legal expenses relating to former executives amounted to approximately $1.1 million for the quarter. In addition to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. non-recurring items, the Company incurred approximately $300,000 in stock option expenses and another $150,000 of research & development expenses relating to the HIFU HIFU High-intensity focused ultrasound Surgery A method that focuses ultrasound to heat/ablate target tissue without injuring surrounding structures. See Sonablate 200™. clinical trials. Excluding the total of the aforementioned expenses, fully diluted earning per share Noun 1. earning per share - the portion of a company's profit allocated to each outstanding share of common stock net income, net profit, profit, profits, earnings, lucre, net - the excess of revenues over outlays in a given period of time (including depreciation would have been $0.08 for the second quarter ended June 30, 2006. Second quarter results reflect the Company's repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of its Urology Services and Medical Products segments, and the $140 million 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). of its Specialty Vehicle division, which is reported in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Medical Products now incorporates the expenditures for the Company's HIFU FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. clinical trials, as well as results of operations from the clinical pathology clinical pathology n. 1. The practice of pathology as it pertains to the care of patients. 2. The subspecialty in pathology concerned with the theoretical and technical aspects of laboratory technology that pertain to the laboratory. The division realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. will facilitate a close scrutiny of the Company's cost structure in light of the Specialty Vehicle divestiture. The success of the divestiture positions HealthTronics with a strong, delevered balance sheet, which will facilitate the pursuit of strategic growth opportunities. Sam B. Humphries, President and Chief Executive Officer commented, "With the divestiture of AK Specialty Vehicles we have the unique opportunity to refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. the Company back to our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
abbr. benign prostatic hyperplasia BPH Benign prostatic hypertrophy, a very common noncancerous cause of prostatic enlargement in older men. and ClariPath Laboratories continue to demonstrate significant potential in the Medical Products division. Financially, we are very well positioned with the full retirement of the Company's $125 million Senior Term Loan B, which provides essential capacity for growth via strategic acquisitions." Second Quarter Milestones Sam B. Humphries Appointed New President 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. On April 26, 2006, HealthTronics appointed Sam B. Humphries as President and Chief Executive Officer. Mr. Humphries previously served as Chief Executive Officer of Uroplasty, Inc. (NASDAQ: UPI UPI abbr. United Press International ) and was a partner of the Ascent Medical Technology Fund, L.P. Mr. Humphries has more than 25 years of healthcare and medical device industry experience, including serving as and President and Chief Executive Officer of American Medical Systems Inc. (NASDAQ: AMMD AMMD Aerodynamic Mass Median Diameter ). He also served in several management positions with General Electric Medical. James S. B. Whittenburg Appointed President - Urology Services On June 14, 2006 HealthTronics appointed James S.B. Whittenburg as President of the Urology Services Division. Mr. Whittenburg was previously Senior Vice President of Development and General Counsel and has been heavily involved with the Company's Urology Services division. His primary focus will be strengthening HealthTronics' physician relationships and driving value for both the Company and its physician partners. Mr. Whittenburg commented, "We have two primary objectives in Urology Services. The first is to drive better returns for us and our physician partners through initiatives aimed at improving equipment utilization and pricing at the local service level. The second is to optimize optimize - optimisation where and how we perform our non-local, operational activities to ensure that we and our partners benefit from the scale we enjoy as the largest provider of lithotripsy Lithotripsy Definition Lithotripsy is the use of high-energy shock waves to fragment and disintegrate kidney stones. The shock wave, created by using a high-voltage spark or an electromagnetic impulse, is focused on the stone. services in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . We are confident that these initiatives will strengthen the bedrock of our business - our physician relationships." Specialty Vehicle Divestiture In June, HealthTronics announced that it agreed to sell its Specialty Vehicles division for $140 million to Oshkosh Truck Oshkosh Truck NYSE: OSK, is a manufacturer of specialty trucks and truck bodies for defense, industrial and fire emergency applications. It is based in Oshkosh, Wisconsin and employs about 7,000 people worldwide in five countries. Corp. (NYSE NYSE See: New York Stock Exchange : OSK OSK On Screen Keyboard OSK Osaka Shosen Kaisha (Japanese shipping line) OSK One Shot Kill (gaming clan) OSK Oslo Seilflyklubb (Norwegian: Oslo Gliding Club) ) in an all cash transaction. The deal was closed on July 31, 2006 and HealthTronics' subsequently retired its Senior Secured Term Loan B in full. The transaction will provide greater access to the capital markets and broaden the Company's prospects for key strategic acquisitions and the pursuit of new medical technologies. Medical Products Division Formed The Medical Products division, formerly the Medical Device division, has been expanded to include capital equipment, medical devices, field service engineering, anatomical pathology anatomical pathology n. The study of the structural and compositional changes that occur in organs and tissues as a result of disease. Also called pathological anatomy. and research & development. Christopher B. Schneider, who previously served a dual role as Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. - Urology Services division and President - Medical Device division, will now devote his full attention to the Medical Products division and will serve as its President. Mr. Schneider commented, "During the second quarter, our capital equipment business delivered 27 units consisting of lithotripters, surgical imaging systems and patient management tables. In April, we delivered our first Revolix surgical laser for the treatment of benign prostatic hyperplasia benign prostatic hyperplasia n. Abbr. BPH A nonmalignant enlargement of the prostate gland commonly occurring in men after the age of 50, and sometimes leading to compression of the urethra and obstruction of the flow of urine. (BPH) and ended the quarter with a total of nine units deployed within our physician partnership network. Physician response has been very positive in regard to the enhanced surgical technique and the positive clinical outcomes. Additionally, the Revolix offers an added economic benefit in comparison to both holmium holmium (hōl`mēəm) [Lat.,=Stockholm], metallic chemical element; symbol Ho; at. no. 67; at. wt. 164.9304; m.p. about 1,474°C;; b.p. about 2,425°C;; sp. gr. 8.78 at 25°C;; valence +3. and KTP KTP Knowledge Transfer Partnership KTP Potassium Titanyl Phosphate KTP Kartu Tanda Penduduk (Indonesian ID card) KTP Kaj Tiel Plu (Esperanto: Et Cetera) KTP KTiOPO4 laser technologies." Mr. Schneider continued, "Our anatomical pathology laboratory, marketed under the brand name ClariPath Laboratories, experienced solid growth in case volume during the second quarter after beginning operations in January, 2006. To date, the lab has processed over 2,000 clinical cases, and revenue is meeting the Company's expectations. ClariPath is expected to show more rapid growth as it leverages its state of the art technology and deploys a direct sales organization." About HealthTronics, Inc. HealthTronics provides healthcare services primarily to the Urology community, and manufactures, services and distributes a variety of specialty medical products. For more information, visit www.healthtronics.com. Statements by the Company's management made in this press release that are not strictly historical, including statements regarding plans, objective and future financial performance, are "forward-looking" statements that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Although HealthTronics believes that the expectations reflected in such 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. are reasonable, no assurance can be given that the expectations will prove to be correct. Factors that could cause actual results to differ materially from HealthTronics' expectations include, among others, the existence of demand for and acceptance of HealthTronics' services, regulatory approvals, economic conditions, the impact of competition and pricing, financing efforts and other factors described from time to time in HealthTronics' periodic filings with the Securities and Exchange Commission.
HEALTHTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
($ in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
------- --------- ------- ---------
Revenue: (Restated) (Restated)
Urology Services $32,519 $ 34,182 $64,941 $ 67,542
Medical Products 5,210 4,814 11,411 7,512
Other 151 196 303 390
------- --------- ------- ---------
Total revenue 37,880 39,192 76,655 75,444
------- --------- ------- ---------
Cost of services and general
and administrative expenses:
Urology Services 14,190 15,715 30,815 30,231
Medical Products 5,612 2,729 11,674 3,452
Corporate 2,539 1,192 4,124 2,729
Depreciation and amortization 2,944 2,954 5,821 5,981
------- --------- ------- ---------
25,285 22,590 52,434 42,393
------- --------- ------- ---------
Operating income 12,595 16,602 24,221 33,051
Other income (expenses):
Interest and dividends 111 149 242 290
Interest expense (323) (301) (649) (576)
------- --------- ------- ---------
(212) (152) (407) (286)
------- --------- ------- ---------
Income from continuing
operations before provision
for income taxes and minority
interest 12,383 16,450 23,814 32,765
Minority interest in
consolidated income 11,337 11,414 21,707 22,848
Provision for income taxes 497 2,009 985 4,218
------- --------- ------- ---------
Income from continuing
operations 549 3,027 1,122 5,699
Income (loss) from discontinued
operations, net of tax 819 (452) 1,519 (1,590)
------- --------- ------- ---------
Net income $ 1,368 $ 2,575 $ 2,641 $ 4,109
======= ========= ======= =========
Basic earnings per share:
Income from continuing
operations $ 0.02 $ 0.09 $ 0.03 $ 0.17
Discontinued operations $ 0.02 $ (0.01) $ 0.04 $ (0.05)
------- --------- ------- ---------
Net income $ 0.04 $ 0.08 $ 0.07 $ 0.12
======= ========= ======= =========
Weighted average shares
outstanding 35,056 34,040 34,981 33,538
======= ========= ======= =========
Diluted earnings per share:
Income from continuing
operations $ 0.02 $ 0.08 $ 0.03 $ 0.16
Discontinued operations $ 0.02 $ (0.01) $ 0.04 $ (0.04)
------- --------- ------- ---------
Net income $ 0.04 $ 0.07 $ 0.07 $ 0.12
======= ========= ======= =========
Weighted average shares
outstanding 35,361 35,218 35,306 34,627
======= ========= ======= =========
HealthTronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
($ in thousands) 2006 2005
----------- ------------
ASSETS
Total current assets $ 76,552 $ 86,486
Property and equipment, net 36,250 34,760
Assets held for sale 105,777 97,040
Other assets 264,329 264,446
----------- ------------
$ 482,908 $ 482,732
=========== ============
LIABILITIES
Total current liabilities $ 24,925 $ 35,674
Long-term debt, net of current portion 128,120 128,688
Liabilities held for sale 23,988 17,948
Other long-term liabilities 26,827 24,974
----------- ------------
Total liabilities 203,860 207,284
Minority interest 33,006 33,966
Total stockholders' equity 246,042 241,482
----------- ------------
$ 482,908 $ 482,732
=========== ============
HealthTronics, Inc.
Supplemental Financial Information
Continuing Operations
For the Three Months Ended June 30, 2006
Unaudited
In thousands, except per share data
2nd Quarter YTD
------------------- -------------------
2006 2005 2006 2005
Summary of Results from Operations
Revenues $ 37,880 $ 39,192 $ 76,655 $ 75,444
EBITDA(a) $ 15,650 $ 19,705 $ 30,284 $ 39,322
Adjusted EBITDA(a) $ 4,313 $ 8,291 $ 8,577 $ 16,474
Net Income from Continuing
Operations $ 549 $ 3,027 $ 1,122 $ 5,699
EPS $ 0.02 $ 0.09 $ 0.03 $ 0.16
Number of Shares 35,361 35,218 35,306 34,627
Segment Information
Revenues:
Urology Services $ 32,519 $ 34,182 $ 64,941 $ 67,542
Medical Products $ 5,210 $ 4,814 $ 11,411 $ 7,512
Adjusted EBITDA(a):
Urology Services $ 7,031 $ 7,145 $ 12,527 $ 14,626
Medical Products $ (375) $ 2,144 $ (215) $ 4,226
Other Information:
Cashflow from Operations $ 12,680 $ 4,955 $ 24,926 $ 12,933
Net Draws (Payments) on
Senior Credit Facility $ (751) $ (313) $ (751) $ 687
Net Debt $125,669 $135,217 $125,669 $135,217
Days Sales Outstanding 41.0 30.8 41.0 35.0
Capital Expenditures, net to
HealthTronics $ 2,394 $ 985 $ 3,430 $ 3,038
(a) See accompanying reconciliation of EBITDA and Adjusted EBITDA
HealthTronics, Inc.
Reconciliation of EBITDA and Adjusted EBITDA
Continuing Operations
For the Three Months Ended June 30, 2006
Unaudited
In thousands
2nd Qtr YTD
------------------- -------------------
Consolidated 2006 2005 2006 2005
------------ -------- -------- -------- --------
Income from Continuing
Operations $ 549 $ 3,027 $ 1,122 $ 5,699
Add Back(deduct):
Provision for income taxes 497 2,009 985 4,218
Interest expense 323 301 649 576
Depreciation and
amortization 2,944 2,954 5,821 5,981
-------- -------- -------- --------
Adjusted EBITDA 4,313 8,291 8,577 16,474
Add Back:
Minority interest expense 11,337 11,414 21,707 22,848
-------- -------- -------- --------
EBITDA $ 15,650 $ 19,705 $ 30,284 $ 39,322
======== ======== ======== ========
Urology Services Segment
------------------------
Revenues $ 32,519 $ 34,182 $ 64,941 $ 67,542
Expenses:
Cost of Services (15,972) (16,004) (33,160) (31,464)
Other Income (Expenses) 1,835 381 2,472 1,396
-------- -------- -------- --------
EBITDA 18,382 18,559 34,253 37,474
Minority interest expense (11,351) (11,414) (21,726) (22,848)
-------- -------- -------- --------
Adjusted EBITDA $ 7,031 $ 7,145 $ 12,527 $ 14,626
======== ======== ======== ========
Medical Products Segment
------------------------
Revenues $ 5,210 $ 4,814 $ 11,411 $ 7,512
Expenses:
Cost of Services (5,483) (2,665) (11,759) (3,366)
Other Income (Expenses) (116) (5) 114 80
-------- -------- -------- --------
EBITDA $ (389) $ 2,144 $ (234) $ 4,226
======== ======== ======== ========
Minority interest expense 14 - 19 -
-------- -------- -------- --------
Adjusted EBITDA $ (375) $ 2,144 $ (215) $ 4,226
======== ======== ======== ========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion