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| 8-K - AMERICAN MEDICAL ALERT CORP | v201539_8k.htm |
| EX-99.1 - AMERICAN MEDICAL ALERT CORP | v201539_ex99-1.htm |
Exhibit
99.2
American
Medical Alert Corp. Reaffirms 2010 Guidance
and
2011 Outlook with the Execution of New Agreements
OCEANSIDE,
NY – November 8, 2010 – American Medical Alert Corp. (NASDQ: AMAC) today
announced the Company affirms its guidance for 2010 and longer
term outlook for 2011. The Company projects that gross revenues,
consisting primarily of monthly recurring revenue (MRR), will increase by
approximately 3% to $40,500,000 for 2010 as compared to 2009. The
Company also projected that gross revenues will increase from 8% to 11% in 2011
as compared to projected 2010 results. The Company anticipates
greater improvements in revenue enhancement commencing in the fourth quarter of
2010 and continuing over the next twelve to eighteen months, based, in part, on
the execution of certain agreements and others which are in final stages of
negotiation. Activities include:
New
Business Highlights
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HSMS
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Successfully
executed agreement and pilot with one of the country’s largest national
home care companies. Planned national rollout is scheduled to continue
through 2011.
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Executed
a multi-facility hospital system private label PERS conversion beginning
fourth quarter.
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Launch
and promotion of MedSmart Medication Management
System.
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TBCS
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Recently
entered into three significant pharmaceutical manufacturer service
agreements demonstrating scalability in this marketing
vertical.
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Endorsement
by the Texas Hospital Association (THA) and HealthSHARE; representing our
second group purchasing organization (GPO)
agreement.
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Acquisition
of a small New Jersey based after hours company to augment and integrate
into our existing operations.
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“These
activities are indicators of AMAC’s ability to generate revenue momentum. New
PERS activity could potentially generate recurring revenue from over 5,000 PERS
subscribers combined once fully implemented in 2011 and we anticipate additional
pharmaceutical specialty awards for work commencing in 2011. Within both
divisions, we are currently engaged in various business negotiations with
several other larger health organizations which will foster revenue momentum”
commented Jack Rhian, AMAC’s President and CEO.
1
Mr.
Rhian, continued, “Our growth and sustainability are based on a disciplined
approach to defining new call center service categories, developing innovative
health monitoring technologies and extending the value we create through the
execution of new relationships with large healthcare and pharmaceutical
entities. We recognized and anticipated that building a stable
recurring model with such entities would require a longer sales cycle than that
of our traditional, small to mid size customer but believed these relationships
would provide for greater revenue acceleration over the long run and we are
committed to this strategy. As such, during the past several
quarters, our business development teams in both divisions have secured
multiple, new service agreements with larger healthcare organizations that have
the potential to generate incremental double digit revenue
growth. More specifically in support of our projections, the Company
has executed agreements in the following areas:
PERS
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During
the second quarter AMAC secured a new relationship with one of the
nation’s largest home care companies. Based on the success experienced in
the first set of pilot implementations, national rollout is planned to
continue through 2011. Under the terms of this unique service
model, the Company has the potential to grow and retain its subscriber
base at a much greater rate than in other distribution
models.
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Most
recently the Company has also secured a large private label service
agreement with a multi-facility hospital system, with the first
conversion, approximately 900 units, scheduled to commence in fourth
quarter. This agreement has the potential to generate even
greater revenue if, as contemplated by the hospital system, other
hospitals in that system join the program after the initial
rollout.
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In
addition to these successful efforts which will contribute to our organic
growth in the HSMS division, we are currently engaged in the final
negotiations with several other larger health organizations which will
foster revenue momentum.
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TBCS
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In
addition to the two significant pharmaceutical manufacturer agreements
announced earlier this year, we have been awarded a third large service
award with a new pharmaceutical company demonstrating scalability in this
marketing vertical. With new revenue activity underway, other
pharmaceutical specialty work derived from these internationally
recognized organizations is anticipated in
2011.
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During
the third quarter, AMAC was awarded endorsement by the Texas Hospital
Association (THA) and HealthSHARE; representing our second group
purchasing organization (GPO) agreement by which Texas hospitals are able
to access AMAC’s hospital solutions in a GPO environment with the
confidence derived from HealthSHARE’s extensive vendor
screening.
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AMAC
recently acquired a small New Jersey based after hours company to augment
and integrate into our existing
operations.
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Other
Noteworthy Initiatives
We are
aggressively ramping up our advertising efforts in support of our MedSmart
direct to consumer campaign and beginning November 8, 2010 intend to increase
awareness and drive product sales during fourth quarter 2010 and 2011. While the
political advertising barrage delayed our ability to drive the campaign through
DRTV during our initial rollout, we believe there is significant demand for this
solution and are prepared to take first mover position to quickly achieve market
share.
The
fourth quarter of 2010 will also mark the pilot launch of TeleSmart, AMAC’s low
cost vital sign monitoring system. In addition to piloting the
technology with key healthcare stakeholders, AMAC will enhance its support to
entities by providing in house clinical oversight to assume a more turnkey care
management responsibility. We believe this model will result in reducing
hospital readmissions at a more cost effective rate than other solutions
currently on the market and therefore can be scaled to hospitals and other
providers throughout the country. “
Jack
Rhian further commented; “With respect to the Lifecomm joint venture, as a
member of the Board of Directors of Lifecomm, I have been personally observing
with great enthusiasm the world class engineering effort behind the research and
development of this product. In my opinion, this solution will be the
next revolutionary event in the PERS industry with respect to its form, fit and
functionality and ability to monitor active seniors outside the
home. We anticipate this product to be commercially available at the
end of 2011.
In
addition to our aggressive organic growth strategies, we continue to review
acquisition opportunities and other alliances to accelerate revenue
growth.
These
results indicate that AMAC is well positioned to achieve its goals. I am pleased
to reaffirm guidance for the remainder of 2010 and 2011 and look forward to
having further discussions during our shareholders conference call to be held on
Tuesday, November 9th at
10:00am.”
As a
result of the Company’s plan to increase advertising expenditures, as part of a
comprehensive plan to drive an accelerated pace of new revenue growth, the
Company is projecting net income for 2010 ranging from $2,850,000 to $3,000,000,
or $0.29 to $0.31 per diluted share. The net income projection
excludes the impact of the net loss allocated to the Company in relation to its
minority investment in Lifecomm, LLC, a joint venture with Qualcomm, Inc. and
Hughes Telematics, Inc., as discussed below (the “Lifecomm Joint
Venture”).
The
Company is projecting net income ranging from $3,550,000 - $3,850,000 or $0.36
to $0.39 per diluted share, for the year ending December 31, 2011. As
part of this projection, the Company has forecast to spend from $600,000 to
$900,000, net of taxes, in television advertising dollars to continue its
efforts to drive accelerated revenue growth. This net income
calculation also excludes the impact of the net loss allocated to the Company in
connection with the Lifecomm Joint Venture. All per share amounts are
based on fully diluted shares as of June 30, 2010.
3
During 2010, as previously announced,
the Company made an investment in the Lifecomm Joint Venture, which was formed
as a limited liability company, for the development of the next generation
mobile PERS. The Company anticipates it will continue to be allocated net losses
from the Lifecomm Joint Venture until the product is completed and
commercialized. In accordance with accounting rules and regulations, the Company
is required to record its portion of net income or net loss associated with the
Lifecomm Joint Venture. The Company estimates its share of the net loss after
taxes for 2010 to range from $960,000 to $1,050,000. The Company’s projected net
income for 2010 after taking into effect this charge would range from $1,800,000
to $2,040,000, or $0.18 to $0.21 per diluted share based on the fully diluted
shares as of June 30, 2010. The 2011 projection also excludes the Company’s
portion of the net income (loss) associated with the Lifecomm Joint Venture,
which the Company estimates to range from $1,350,000 to $1,440,000. The
projected net income for 2011 after taking into effect this charge would range
from $2,110,000 to $2,500,000, or $0.21 to $0.25 per diluted share based on the
fully diluted shares as of June 30, 2010.
As a result of these projected charges,
the Company would realize a tax benefit of $640,000 to $700,000 for the year
ended December 31, 2010 and $900,000 to $960,000 for the year ended December 31,
2011. This cash savings from the tax benefit will be utilized to further support
the cash requirements of our aggressive business development expansion and to
fund potential acquisitions.
Additionally, once the next generation
mobile PERS is completed and commercialized, it is anticipated that the Lifecomm
Joint Venture will begin to become profitable and the Company’s net income will
be enhanced by its portion of the joint venture profits.
Conference Call
Details
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.
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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.
4
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 “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.
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 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.
Net
Income before Equity in net loss from investment in a limited liability company
and Loss on Abandonment is a non-GAAP financial measure and although management
and some members of the investment community utilize it to measure financial
performance, 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.
5
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.
6
Earnings
before Equity in net loss from investment in a limited liability
company:
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Year
Ended
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Year
Ended
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Projected
Range
12/31/2010
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Projected
Range
12/31/2011
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Net
Income
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$ | 1,800,000– 2,040,000 | $ | 2,110,000– 2,500,000 | ||||
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Add
Backs:
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Loss
allocated from investment in unconsolidated affiliate
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$ | 960,000 – 1,050,000 | $ | 1,350,000 – 1,440,000 | ||||
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Net
Income Before Equity in net loss from investment in a limited liability
company
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$ | 2,850,000 - $3,000,000 | $ | 3,550,000 - 3,850,000 | ||||
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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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