TIGroup Second Quarter Revenue Up 57% To $10.2M; Company Announces New Agreements and Financings
05/15/09
Highlights from operating results for the second fiscal quarter were:
- Revenue from medical services for the second fiscal quarter totaled $10.2 million. This represented an increase of 57% from $6.5 million for the three-month period ended March 31, 2008. Revenue from medical services totaled $21 million for the first half of the fiscal year. This represented an increase of 86% from $11.3 million for the comparable period ended March 31, 2008.
- Revenue was effectively flat on a sequential quarterly basis but up significantly on a comparable year-over-year basis.
- Healthcare operations, which included earnings from surgery centers, critical access hospitals and medical clinics, generated adjusted EBITDA of $453,000 for the three-month period and approximately $1.28 million for the six-month period ended March 31, 2009.
- The company-wide operating loss before non-cash charges for the quarter ended March 31, 2009 was ($585,000) compared to operating income of $321,000 for the period ending March 31, 2008. For the current six months the operating loss was ($737,000) versus operating income of $402,000 for the comparable period ending March 31, 2008. Adjusted company-wide EBITDA was negative ($948,000) reflecting the add-back of non-cash stock-based compensation, depreciation/amortization and interest to the overall net loss of ($1.87 million).
- The company retained a strong cash position with close to $4 million in available and restricted cash.
Business development and financing activity highlights for the quarter were:
- Through April 2009, the company completed financings totaling $2.4 million in convertible notes with a conversion feature at $0.625 per share and Series 5A warrant exercises at a price of $0.50. The company continues to receive strong support from its existing investor base.
- The company agreed to a definitive transaction and documentation with Chandler Medical Group to acquire the business located near the Stroud Regional Medical Center in Oklahoma. On May 1, 2009 the two companies began working together with the company providing billing services for Chandler.
- The company reached agreement in principle to significantly expand its presence in San Diego with a leading medical provider group through the Del Mar Outpatient Surgery Center. The agreement is subject to completion and final documentation, which is expected to be finalized by the end of the third fiscal quarter ending June 30, 2009.
- The company received written commitment for $6 million toward the recapitalization of the Southern Plains Medical Center property and building. This transaction is expected to include the refinancing of an existing $4.5 million bank note due in October 2009 and will free up $1.5 million in restricted cash. The closing is expected during this current quarter subject to completion of due diligence, appraisals, documentation and financing. The company will retain majority ownership of the building and property after the refinancing.
TIGroup Chairman and CEO David Hirschhorn said, “Our second fiscal quarter was another quarter of important accomplishments and progress. Even in a difficult market, we maintained our top line and generated positive EBITDA in operations. Additionally, we moved closer to finishing the refinancing of our balance sheet with the goal of achieving a 3-to-1 working capital ratio during this calendar year.
“We remain cautiously optimistic that we can continue our growth through the balance of the fiscal year. There are many obvious challenges in both the national and local economies faced by all businesses. These challenges are heightened for our industry by possible changes to our healthcare system for providers, hospitals, insurance companies, employers and the insured by the current administration in Washington D.C. However, our post March 31, 2009 business development pipeline and prospective financing transactions are expected to continue to fuel our growth and help us accomplish our overall goal of profitability in 2009.”
Financial tables are provided below.
About Tri-Isthmus Group, Inc.
Tri-Isthmus Group, Inc. (TIGroup) is a financial solutions provider focused on healthcare services operations designed to deliver quality healthcare outside of traditional urban hospital settings. The company is building a portfolio of interests in ambulatory surgical centers, rural hospitals, surgical hospitals and other centers operating in partnership with physicians. For more information, visit www.tig3.com.
A profile for investors can be accessed at www.hawkassociates.com/profile/tisg.cfm. For investor relations information, contact Frank Hawkins or Julie Marshall, Hawk Associates, at 305-451-1888, e-mail: tigroup@hawkassociates.com. An online investor kit including press releases, current price quotes, stock charts and other valuable information for investors may be found at www.hawkassociates.com and www.americanmicrocaps.com. To receive free e-mail notification of future releases for TIGroup, sign up at www.hawkassociates.com/about/alert. .
Safe-Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the” Exchange Act”), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company’s financing plans; (ii) trends affecting the company’s financial condition or results of operations; (iii) the company’s growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend” and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk disclosed in the company’s Forms 10-K and 10-Q filed with the SEC.
FINANCIAL TABLES
TRI-ISTHMUS GROUP, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except shares and per share data) |
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March 31, 2009 |
September 30, 2008
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| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 2,418 | $ | 2,970 | |||
| Restricted cash | 1,522 | 1,514 | |||||
| Accounts receivable, net of allowance for uncollectible accounts | 6,739 | 6,289 | |||||
| Advance to affiliated entity | 72 | 72 | |||||
| Prepaid expenses | 517 | 103 | |||||
| Other current assets | 2,230 | 1,754 | |||||
| Total current assets | 13,498 | 12,702 | |||||
| Property and equipment, net | 16,863 | 12,277 | |||||
| Goodwill | 968 | 759 | |||||
| Other Assets | 965 | 760 | |||||
| Total assets | $ | 32,294 | $ | 26,498 | |||
| LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS’ DEFICIT | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ | 2,789 | $ | 2,944 | |||
| Accrued expenses | 3,203 | 2,715 | |||||
| Note payable | 1,170 | - | |||||
| Current maturities of long-term debt | 4,562 | 4,144 | |||||
| Total current liabilities | 11,724 | 9,803 | |||||
| Long-term debt, net of current portion | 10,159 | 5,455 | |||||
| Commitments and contingencies | |||||||
| Minority interest | 1,262 | 967 | |||||
| The accompanying notes are an integral part of these condensed consolidated financial statements. Quarterly comparative financial information is based on unaudited financial reports, prepared by management, based on previous quarterly filings. | |||||||
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TRI-ISTHMUS GROUP, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except shares and per share data) |
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March 31, 2009 |
September 30, 2008 |
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| (Unaudited) | |||||||||||
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Non-redeemable Preferred Stock: |
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| Preferred stock Series 1-A ($0.01 par value, 67,600 shares authorized; 67,600 shares issued and outstanding as of March 31, 2009 and September 30, 2008) | |||||||||||
| $ | 166 | $ | 166 | ||||||||
| Preferred stock Series 2-A ($0.01 par value, 3,900 shares authorized; 3,900 shares issued and outstanding as of March 31, 2009 and September 30, 2008) | |||||||||||
| 25 | 25 | ||||||||||
| Total non-redeemable preferred stock | $ | 191 | $ | 191 | |||||||
| Redeemable preferred stock: | |||||||||||
| Preferred stock Series 5-A ($0.01 par value, 9,000 shares authorized; 8,987 shares issued and outstanding as of March 31, 2009 and September 30, 2008) | $ | 7,819 | $ | 7,819 | |||||||
| Preferred stock Series 6-A ($0.01 par value, 5,000 shares authorized; 4,607 shares issued and outstanding as of March 31, 2009 and September 30, 2008) | 4,113 | 4,113 | |||||||||
| Preferred stock Series B issued by subsidiary ($0.01 par value, 38,250 shares authorized, 19,990 shares issued and outstanding as of March 31, 2009 and September 30, 2008) | 2,500 | 2,500 | |||||||||
| Total redeemable preferred stock | $ | 14,432 | $ | 14,432 | |||||||
| Common stock ($0.01 par value, 100,000,000 shares authorized; 10,322,929 shares issued and outstanding as of March 31, 2009 and September 30, 2008) | $ | 103 | $ | 103 | |||||||
| Additional paid-in capital | 72,963 | 71,301 | |||||||||
| Accumulated deficit | (78,488 | ) | (75,702 | ) | |||||||
| Other comprehensive loss | (52 | ) | (52 | ) | |||||||
| Total shareholders’ deficit | (5,474 | ) | (4,350 | ) | |||||||
| Total liabilities, preferred stock and shareholders’ deficit | $ | 32,294 | $ | 26,498 | |||||||
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The accompanying notes are an integral part of these condensed consolidated financial statements. Quarterly comparative financial information is based on unaudited financial reports, prepared by management, based on previous quarterly filings. |
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TRI-ISTHMUS GROUP, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands except share and per share data) (Unaudited) |
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| Three months ended | Six months ended | |||||||||||||||
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March 31, 2009 |
March 31, 2008 |
March 31, 2009 |
March 31, 2008 |
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| Revenue from services | $ | 10,180 | $ | 6,512 | $ | 21,001 | $ | 11,257 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Selling, general and administrative expenses | 10,765 | 6,833 | 21,738 | 11,659 | ||||||||||||
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Amortization of stock-based compensation |
208 | 62 | 516 | 81 | ||||||||||||
| Depreciation and amortization | 271 | 94 | 502 | 159 | ||||||||||||
| Total costs and expenses | 11,244 | 6,989 | 22,756 | 11,899 | ||||||||||||
| Operating loss | (1,064 | ) | (477 | ) | (1,755 | ) | (642 | ) | ||||||||
| Other income (expense) | (221 | ) | 52 | (183 | ) | 75 | ||||||||||
| Interest expense | (440 | ) | (315 | ) | (612 | ) | (509 | ) | ||||||||
| Minority interest | (142 | ) | (90 | ) | (236 | ) | (169 | ) | ||||||||
| Net loss from operations before taxation and non-cash beneficial conversion feature | (1,867 | ) | (830 | ) | (2,786 | ) | (1,245 | ) | ||||||||
| Taxation | - | - | - | - | ||||||||||||
| Net loss | $ | (1,867 | ) | $ | (830 | ) | $ | (2,786 | ) | $ | (1,245 | ) | ||||
| Non-cash beneficial conversion feature preferred dividend | - | (1,521 | ) | - | (1,521 | ) | ||||||||||
| Net loss attributable to common shareholders | $ | (1,867 | ) | $ | (2,351 | ) | $ | (2,786 | ) | $ | (2,766 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic | $ | (0.18 | ) | $ | (0.29 | ) | $ | (0.27 | ) | $ | (0.40 | ) | ||||
| Diluted | N/A | N/A | N/A | N/A | ||||||||||||
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The accompanying notes are an integral part of these condensed consolidated financial statements. Quarterly comparative financial information is based on unaudited financial reports, prepared by management, based on previous quarterly filings. |
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TRI-ISTHMUS GROUP, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands) (Unaudited) |
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| Six months ended | ||||||||
| March 31, 2009 | March 31, 2008 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,786 | ) | $ | (1,245 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Minority interest | 236 | 169 | ||||||
| Depreciation and amortization | 502 | 159 | ||||||
| Amortization of stock based compensation | 516 | 81 | ||||||
| Amortization of debt discount | 166 | 233 | ||||||
| Bad debt provision | 2,165 | 699 | ||||||
| Loss from sale of investments | 281 | - | ||||||
| Changes in working capital components: | ||||||||
| Accounts receivable | (2,615 | ) | (1,720 | ) | ||||
| Accounts payable | 333 | 48 | ||||||
| Others | (1,104 | ) | (314 | ) | ||||
| Net cash used in operating activities | (2,306 | ) | (1,890 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (3,744 | ) | (270 | ) | ||||
| Acquisition of subsidiaries, net of cash acquired | (50 | ) | 283 | |||||
| Repayment of advance | - | 33 | ||||||
| Proceeds from sale of equity interests in consolidated affiliates | 60 | - | ||||||
| Increase in restricted cash | (8 | ) | - | |||||
| Net cash provided by (used in) investing activities | (3,742 | ) | 46 | |||||
| Cash flows from financing activities: | ||||||||
| Drawdown of convertible loans | 2,150 | 1,650 | ||||||
| Repayment of notes | (5,182 | ) | (54 | ) | ||||
| Distributions to minority partners | (31 | ) | - | |||||
| Issuance of preferred stock Series 5-A, net of costs | - | 3,853 | ||||||
| Issuance of preferred stock Series 6-A, net of costs | - | 3,324 | ||||||
| Proceeds from long-term debt | 8,559 | - | ||||||
| Net cash provided by financing activities | 5,496 | 8,773 | ||||||
| Effect of exchange rates on cash | - | 1 | ||||||
| Net increase (decrease) in cash and cash equivalents | (552 | ) | 6,930 | |||||
| Cash and cash equivalents at beginning of period | 2,970 | 733 | ||||||
| Cash and cash equivalents at end of period | $ | 2,418 | $ | 7,663 | ||||
| Cash paid for interest | $ | 587 | $ | 509 | ||||
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The fair value of warrants issued in conjunction with the convertible notes amounted to $907,000. The beneficial conversion feature associated with the convertible notes amounted to $238,000. |
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The accompanying notes are an integral part of these condensed consolidated financial statements. Quarterly comparative financial information is based on unaudited financial reports, prepared by management, based on previous quarterly filings. |
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Source: Tri-Isthmus Group, Inc.
