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8-K - AMERICAN MEDICAL ALERT CORP | v201539_8k.htm |
EX-99.2 - AMERICAN MEDICAL ALERT CORP | v201539_ex99-2.htm |
Exhibit
99.1
Contact:
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Randi
Baldwin
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Senior
Vice President, Marketing
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American
Medical Alert Corp.
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(516)
536-5850 ext: 3109
randi.baldwin@amac.com
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AMERICAN
MEDICAL ALERT CORP. REPORTS
THIRD
QUARTER 2010 RESULTS
OCEANSIDE, New York. –November 9,
2010 –American Medical Alert Corp. (NASDAQ: AMAC) a provider of
healthcare communication services and advanced telehealth monitoring
technologies, today announced operating results for the quarter and nine months
ended September 30, 2010, the highlights of which are as follows:
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·
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HSMS division achieves another
new high for the Company with respect to its gross profit level, which was
62% for the quarter ended September 30,
2010.
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·
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Within both the HSMS and TBCS
divisions, new agreements have been executed which will help to propel
revenue growth for the fourth quarter 2010 and
2011.
|
|
·
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The Company paid a special
dividend of $0.10 per share in September 2010, the second of its kind paid
in 2010.
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·
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Company’s investment in the
next generation of mobile PERS shows promise as development is progressing
nicely as we continue to move forward towards a late 2011
rollout.
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·
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Company invests in excess of
$400,000 in the third quarter for TV and print production and the roll-out
of its aggressive advertising campaign to market its MedSmart product
direct to consumers.
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·
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Company reaffirms guidance as
announced and more fully described in yesterday’s
announcement.
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·
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Company acquires a telephone
answering service company which will add revenue and
profitability.
|
Revenues
for the quarter ended September 30, 2010, consisting primarily of monthly
recurring revenues (MRR), decreased 1% to $10,009,388 as compared to $10,138,155
for the same period in 2009. Net income for the quarter ended
September 30, 2010 decreased 14% to $638,731 or $.06 per diluted share as
compared to $744,145 or $.08 per diluted share for the same period in
2009. This variance is directly associated with the investment in
advertising with respect to the Company’s MedSmart system during the third
quarter of 2010. Net income for the quarter ended September 30, 2010
excludes $231,025 of the Company’s share of equity in net loss from investment
in limited liability company net of income taxes, incurred with respect to the
Company’s joint venture with Qualcomm and Hughes Telematics, Inc. (known as “the
Lifecomm Joint Venture”). This equity loss represents the Company’s
share of R&D and other selling, general and administrative expenses incurred
for the development of the next generation mobile PERS. This equity
loss, which is expected to increase over the next several quarters, is not
related to the Company’s current business operations. As it relates to this
equity loss, the Company will realize a significant tax benefit and have less
cash outlay relating to income taxes. The Company’s net income
for the quarter ended September 30, 2010 including the effect of this charge was
$407,706, or $.04 per diluted share.
1
Revenues
for the nine months ended September 30, 2010 was $29,632,780, as compared to
$29,586,450 for the same period in 2009. Net income for the nine
months ended September 30, 2010 increased 9% to $2,317,442 or $0.24 per diluted
share as compared to net income of $2,125,780 or $0.22 per diluted share for the
previous year. Net income for the nine months ended September 30, 2010 excludes
$299,461 of the Company’s share of equity loss, net of income taxes, incurred
with respect to the Lifecomm Joint Venture as discussed above. Net
income for the nine months ended September 30, 2010 including the effect of this
charge was $2,017,981, or $0.21 per diluted share. Net Income for the
trailing twelve months increased 13% to $3,081,175 as compared to $2,715,091 for
the same period in 2009. This 13% growth rate excludes $299,461 of the Company’s
share of equity loss, net of income taxes, incurred in 2010 with respect to the
Company’s joint venture with Qualcomm and Hughes Telematics, Inc. and excludes a
one time non operating charge of $521,627 for loss on abandonment incurred in
2008 (which affects the results for the twelve months ended September 30, 2009).
The trailing twelve month net income, including these items, for the period
ended September 30, 2010 and 2009 would have been $2,781,714 and $2,193,091,
respectively.
Earnings
before interest, taxes and depreciation and amortization (“EBITDA”) for the nine
months ended September 30, 2010, which includes $507,512 of the Company’s share
of equity loss incurred with respect to the Lifecomm Joint Venture, was
$6,260,015 as compared to $6,723,948 for the same period in
2009. EBITDA for the trailing twelve months ended September 30, 2010
and 2009 was $8,529,861 and $8,045,690, respectively.
The
Company continues to demonstrate financial strength within its balance sheet
even taking into effect (i) its $4,000,000 investment in a joint venture with
Qualcomm, Inc. and Hughes Telematics, Inc. to develop a next generation mobile
PERS system, (ii) the payment of two dividends (each of $0.10 per share) during
2010 aggregating approximately $1,900,000, (iii) investing over $400,000 in
advertising fees to promote MedSmart and (iv) the acquisition of a telephone
answering service company with an initial cash outlay of approximately $600,000,
as indicated below:
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·
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At
September 30, 2010, the Company had cash on hand of approximately
$3,700,000, which exceeds the Company’s bank debt of approximately
$3,000,000.
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·
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The
Company’s working capital was $8,584,629 at September 30, 2010,
representing a ratio of 3.30 to 1.
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·
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The
Company continues to maintain a favorable debt to equity ratio of .10 to 1
at September 30, 2010.
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Jack
Rhian, AMAC’s Chief Executive Officer and President, explained, “While we are
pleased with the Company’s earnings and free cash flow generation, we
acknowledge that we must also deliver a greater level of new revenue along with
these earnings and free cash flow results. Towards that end, as explained in
detail as part of yesterday’s announcement on guidance, we have secured new
business relationships and believe that we are in the process of securing
additional new business relationships that will allow us to return to double
digit revenue growth in 2011. New demands in the healthcare
landscape, driven by accountability and simultaneous cost reduction, create
further opportunity for AMAC to thrive in both divisions. AMAC, with its
technology rich portfolio of Remote Patient Monitoring (“RPM”) enabling devices
supported by its national healthcare exclusive call center infrastructure, is in
a unique and superior position to benefit from the demographic and economic
trends that will drive new demand from providers and consumers
alike.”
2
Rhian
continued, “We have spent a good portion of this year not only securing the
necessary new technology to transition and expand our current RPM offerings, but
also, and perhaps more importantly, to establish a technology driven enhancement
of our portfolio that will allow us to vastly increase our customer universe
base. The new Lifecomm Telehealth and Medsmart products represent a significant
product evolution, one that should pay off handsomely in new revenue. Our new
products will allow marketing to a larger portion of the active senior cohort.
In the TBCS division, our services are now scaled to accommodate for brand
support in the pharmaceutical industry as well as the complex communication
needs of large healthcare systems.
Taken
together, as our business development plan continues to implement, we believe
the synergies created will allow for significant and sustainable revenue and
profit growth in 2011 and beyond. We have laid down the foundation for AMAC to
once again become a growth story and believe that our true value, driven by
impressive revenue and profit growth, will be appropriately reflected in our
share price.”
As
previously announced, the Company will host a webcast on Tuesday, November 9,
2010 to discuss its financial results for the quarter ended September 30, 2010,
guidance for fiscal 2010, longer term outlook for 2011, and other business
trends. The Company invites investors and others to listen to the
conference call live over the Internet or by dialing in to (877) 407-9205 at
10:00 a.m. ET.
What:
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American
Medical Alert Corp. Third Quarter 2010 Results
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When:
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Tuesday
, November 9, 2010 at 10:00 a.m. ET
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Where:
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http://www.investorcalendar.com/IC/CEPage.asp?ID=162295
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How:
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Log
on to the web at the address above, and click on the audio link or
dial
in 877-407-9205 to participate.
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Following
the conference call, the webcast will be available on the VCall website at http://www.investorcalendar.com/IC/CEPage.asp?ID=162295.
The financial information presented in the webcast will also be available at
http://amac.com/press.cfm.
About American Medical Alert
Corp.
AMAC is a
healthcare communications company dedicated to the provision of support services
to the healthcare community. AMAC's product and service portfolio includes
Personal Emergency Response Systems (PERS) and emergency response monitoring,
electronic medication reminder devices, disease management monitoring appliances
and healthcare communication solutions services. AMAC operates nine US based
communication centers under local trade names: HLINK OnCall, North Shore TAS,
Live Message America, ACT Teleservice, MD OnCall, Capitol Medical Bureau,
American MediConnect, Alpha Message Center and Phone Screen to support the
delivery of high quality, healthcare communications.
Use
of Non-GAAP Financial Information
In
addition to the results reported in accordance with accounting principles
generally accepted in the United States (“GAAP”) included in this press release,
the Company has provided information regarding certain non-GAAP financial
measure. This measure is “earnings before interest, taxes and
depreciation and amortization (“EBITDA”)” and “Net Income before Equity in net
loss from investment in a limited liability company and Loss on
Abandonment”. Such information is reconciled to its closest GAAP
measure in accordance with the Securities and Exchange Commission rules and is
included in the attached supplemental data.
3
Management
believes that the non-GAAP financial measures used in this press release is
useful to both management and investors in their analysis of the Company’s
financial position and results of operations. Management believes that EBITDA is a
useful measure of the Company's financial performance as it is an indicator of
the Company's ability to generate cash flow to make acquisitions, declare and
pay dividends, reinvest in new telehealth products and liquidate liabilities.
Management also uses EBITDA for planning purposes to determine appropriate
levels of operating and capital investments. Management also believes reporting
Net Income before Equity in net loss from investment in a limited
liability company and Loss on
Abandonment more accurately reflects the performance of the Company’s core operations and excludes a
non-operational item which may skew the analysis of management or outside
investors in evaluating the Company.
EBITDA
and Net Income before Equity in net loss from investment in a limited liability
company and Loss on Abandonment are non-GAAP financial measures and although
management and some members of the investment community utilize it to measure
financial performance, EBITDA and Net Income before Equity in net loss from
investment in a limited liability company and Loss on Abandonment should
not be viewed as a substitute for financial data prepared in accordance with
GAAP or as a measure of profitability. Additionally, the non-GAAP
financial measure as presented by AMAC may not be comparable to similarly titled
measures reported by other companies.
Forward
Looking Statements
This
press release contains forward-looking statements that involve a number of risks
and uncertainties. Forward-looking statements may be identified by the use of
forward-looking terminology such as "may," "will," "expect," "believe,"
"estimate," "anticipate," "continue," or similar terms, variations of those
terms or the negative of those terms. Important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are set forth in the Company's filings with the Securities and
Exchange Commission (SEC), including the Company's Annual Report on Form 10-K,
the Company's Quarterly Reports on Forms 10-Q, and other filings and releases.
These include uncertainties relating to government regulation, technological
changes and product liability risks. In addition, certain statements related to
the future expectations and timing for the development and commercialization of
Lifecomm’s mobile PERS solution, constitute forward-looking
statements. Important factors which might cause a difference between
actual and expected events include: (i) greater than expected and/or increased
costs or unexpected delays associated with the development and commercialization
of Lifecomm’s mobile PERS solution, (ii) inability to successfully develop the
technology to support Lifecomm’s mobile PERS solution, (iii) uncertainty
relating to consumer interest in and acceptance of Lifecomm’s mobile PERS
solution, (iv) risks associated with changes in the competitive or regulatory
environment in which Lifecomm operates; and (v) risks associated with
prosecuting or defending allegations or claims of infringement of intellectual
property rights. Further,
any of the Company’s new products such as MedSmart and TeleSmart, are subject to
the risks inherent in any new product introduction, including market acceptance
and technology concerns that are frequently encountered in connection with
initial use of a new product. New business opportunities referred to herein,
including contracts in negotiation, may not come to fruition. The Company
does not undertake any obligation to update these forward-looking statements for
events occurring after the date of this press release.
Statements
of income for the three and nine months ended September 30, 2010 and 2009 and
balance sheets as of September 30, 2010 and December 31, 2009 are
attached.
4
AMAC
SELECTED FINANCIAL DATA
Three
Months Ended
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Nine
Months Ended
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|||||||||||||||
9/30/2010
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9/30/2009
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9/30/2010
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9/30/2009
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|||||||||||||
Revenues
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$ | 10,009,388 | $ | 10,138,155 | $ | 29,632,780 | $ | 29,586,450 | ||||||||
Cost
of Goods Sold
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4,556,485 | 4,670,545 | 13,602,815 | 13,855,052 | ||||||||||||
Selling,
General & Administrative Costs
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4,369,598 | 4,245,159 | 12,134,682 | 12,238,349 | ||||||||||||
Interest
Expense
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18,991 | 17,330 | 45,258 | 61,632 | ||||||||||||
Equity
in net loss from investment in a limited liability
company
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391,385 | - | 507,512 | - | ||||||||||||
Other
Expenses (Income)
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(17,777 | ) | (56,024 | ) | (77,468 | ) | (172,363 | ) | ||||||||
Income
before Provision for Income Taxes
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690,706 | 1,261,145 | 3,419,981 | 3,603,780 | ||||||||||||
Net
Income
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$ | 407,706 | $ | 744,145 | $ | 2,017,981 | $ | 2,125,780 | ||||||||
Net
Income per Share
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||||||||||||||||
Basic
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$ | 0.04 | $ | 0.08 | $ | 0.21 | $ | 0.22 | ||||||||
Diluted
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$ | 0.04 | $ | 0.08 | $ | 0.21 | $ | 0.22 | ||||||||
Basic
Weighted Average
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||||||||||||||||
Shares
Outstanding
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9,559,005 | 9,495,036 | 9,544,931 | 9,472,938 | ||||||||||||
Diluted
Weighted Average
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||||||||||||||||
Shares
Outstanding
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9,858,343 | 9,756,468 | 9,842,901 | 9,689,676 | ||||||||||||
CONDENSED
BALANCE SHEET
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||||||||||||||||
September
30,
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December
31,
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|||||||||||||||
2010
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2009
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(Unaudited)
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||||||||||||||||
ASSETS
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||||||||||||||||
Current
Assets
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$ | 12,321,817 | $ | 13,779,968 | ||||||||||||
Fixed
Assets – Net
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7,573,791 | 8,756,827 | ||||||||||||||
Other
Assets
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17,136,830 | 13,291,829 | ||||||||||||||
Total
Assets
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$ | 37,032,438 | $ | 35,828,624 | ||||||||||||
Current
Liabilities
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$ | 3,737,188 | $ | 4,833,638 | ||||||||||||
Deferred
Income Tax
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1,064,000 | 1,235,000 | ||||||||||||||
Long-term
Debt
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2,330,001 | 1,195,000 | ||||||||||||||
Other
Liabilities
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673,016 | 648,603 | ||||||||||||||
Total
Liabilities
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$ | 7,804,205 | $ | 7,912,241 | ||||||||||||
Stockholders’
Equity
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29,228,233 | 27,916,383 | ||||||||||||||
Total
Liabilities and Stockholders’ Equity
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$ | 37,032,438 | $ | 35,828,624 |
5
Net
Income before Equity in net loss from investment in a limited liability company
for the three and nine months ended September 30, 2010 and 2009 reconciled to
net income.
Three
Months Ended
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Nine
Months Ended
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|||||||||||||||
9/30/2010
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9/30/2009
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9/30/2010
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9/30/2009
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Net
Income
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407,706 | 744,145 | 2,017,981 | 2,125,780 | ||||||||||||
Add
Backs:
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||||||||||||||||
Equity
in net loss from investment in a limited liability
company
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231,025 | - | 299,461 | - | ||||||||||||
Net
Income before Equity in net loss from investment in a limited
liability
|
638,731 | 744,145 | 2,317,442 | 2,125,780 |
Net
Income before Loss on Abandonment and Equity in net loss from investment in a
limited liability company for the trailing twelve month period ended September
30, 2010 and 2009 reconciled to net income.
9/30/2010
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9/30/2009
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|||||||
Net
Income
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2,781,714 | 2,193,464 | ||||||
Add
Backs:
|
||||||||
Loss
on Abandonment
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- | 521,627 | ||||||
Equity
in net loss from investment in a limited liability
company
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299,461 | - | ||||||
Net
Income before Equity in net loss from investment in a limited
liability company and Loss on Abandonment
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3,081,175 | 2,715,091 |
6
Earnings
before interest, taxes and depreciation and amortization for the nine months and
trailing twelve months ended September 30, 2010 and 2009
Add:
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Less:
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|||||||||||||||||||
9/30/10
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12/31/2009
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Subtotal
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9/30/2009
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Total
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||||||||||||||||
Net
Income
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2,017,981 | 2,889,513 | 4,907,494 | 2,125,780 | 2,781,714 | |||||||||||||||
Add
Backs:
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||||||||||||||||||||
Taxes
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1,402,000 | 1,925,000 | 3,327,000 | 1,478,000 | 1,849,000 | |||||||||||||||
Interest
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45,258 | 76,181 | 121,439 | 61,632 | 59,807 | |||||||||||||||
Depreciation
& Amort.
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2,794,776 | 4,103,100 | 6,897,876 | 3,058,536 | 3,839,340 | |||||||||||||||
EBITDA
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6,260,015 | 8,529,861 | ||||||||||||||||||
Add:
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Less:
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|||||||||||||||||||
9/30/09
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12/31/2008
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Subtotal
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9/30/2008
|
Total
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||||||||||||||||
Net
Income
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2,125,780 | 1,439,601 | 3,565,381 | 1,371,917 | 2,193,464 | |||||||||||||||
Add
Backs:
|
||||||||||||||||||||
Taxes
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1,478,000 | 1,007,000 | 2,485,000 | 953,000 | 1,532,000 | |||||||||||||||
Interest
|
61,632 | 279,451 | 341,083 | 224,073 | 117,010 | |||||||||||||||
Depreciation
& Amort.
|
3,058,536 | 4,376,317 | 7,434,853 | 3,231,637 | 4,203,216 | |||||||||||||||
EBITDA
|
6,723,948 | 8,045,690 |
###
7