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8-K - FORM 8-K - First Physicians Capital Group, Inc. | c12699e8vk.htm |
Exhibit 99.1
9663 Santa Monica Blvd., #959 Beverly Hills, CA 90210 Tel: (310) 860-2501 Fax: (310) 860-1854 info@fpcapitalgroup.com |
First Physicians Capital Group Provides Fiscal 2011 First Quarter Update
Tuesday, February 15, 2011
BEVERLY HILLS, Calif. First Physicians Capital Group, Inc. (FPCG or the Company) (OTC BB:
FPCG) provided in a press release issued today a strategic and operations update for the Companys
first fiscal quarter ended December 31, 2010.
As communicated in January 2011, FPCG has undertaken several strategic initiatives to reorganize
its operations in response to local market economic conditions and the expected impact of changes
in healthcare law. In pursuit of this reorganization, we are divesting underperforming facilities
and reducing or outsourcing administrative functions to better align cost structures and business
volume. The Companys strategy is transitioning away from exclusively majority ownership in
healthcare delivery companies to a focus on the opportunistic retention or acquisition of minority
ownership positions. Additionally, the Company plans on providing healthcare management services
for our facilities in conjunction with strategic partners and to secure financing for equipment and
real estate used by our healthcare entities. The Company will also pursue acquisitions of,
investments in, or strategic partnerships with other companies providing similar services in its
markets.
Since the beginning of the current fiscal year 2011, the Company has:
| Completed the sales of The Chandler Clinic in December 2010 and Johnston Memorial
Hospital in Tishomingo in January 2011. |
| Entered into Letters of Intent for the complete or partial sale of additional operating
assets, or for the formation of strategic partnerships with respect to its remaining
portfolio of operating assets. |
| Formed First Physicians Realty Group, LLC, its wholly-owned real estate subsidiary, and
acquired the real estate holdings from its portfolio of Oklahoma assets (Southern Plains
Medical Group) and related entities. |
| Established a line of credit of up to $1.5 million at First Physicians Realty Group. The
Company has received an initial deposit of $350,000 with additional borrowings subject to
final terms and conditions. |
| Continued to focus on bringing its working capital ratios closer to preferred industry
levels over time by working in partnership with new and existing vendors and lenders, and
removing underperforming operations as a first step. |
Preliminary financial highlights for the quarter include:
| Net Revenue from Services of $8.7 million and EBITDA of ($0.6) million. |
| EBITDA before FPCG Corporate Overhead of ($0.1) million. |
| Pro Forma EBITDA before FPCG Corporate Overhead of $0.5 million. Pro Forma EBITDA
factors in adjustments made for: 1) sales of The Chandler Clinic and Johnston Memorial
Hospital; 2) reduction in back office and administrative functions as part of these sales;
and 3) removal of non-recurring and transaction-related expenses in remaining assets. |
9663 Santa Monica Blvd., #959 Beverly Hills, CA 90210 Tel: (310) 860-2501 Fax: (310) 860-1854 info@fpcapitalgroup.com |
While the Company believes that its financial performance, working capital position, and liquidity
ratios may improve as it completes the potential transactions currently in LOI, there can be no
guarantee of success. Such success is contingent upon completing certain transactions and related
financings currently under review.
Table 1. First Physicians Capital Group, Inc. Preliminary Unaudited Consolidated Income Statement
for Fiscal Quarter Ended December 31, 2010 (in thousands)
Fiscal Qtr | ||||||||||||||||||||
Ended | ||||||||||||||||||||
12/31/09 | Fiscal Qtr Ended 12/31/10 | |||||||||||||||||||
Pro Forma | ||||||||||||||||||||
FPCG | FPCG | Assets Sold/ | Pro Forma | FPCG | ||||||||||||||||
Consol | Consol | Held for Sale | Adj(1) | Consol | ||||||||||||||||
Revenue from services |
$ | 10,328 | $ | 8,748 | $ | 1,118 | $ | (64 | ) | $ | 7,566 | |||||||||
Cost and expenses: |
||||||||||||||||||||
Selling, general and
administrative expenses |
11,398 | 9,332 | 1,379 | (379 | ) | 7,574 | ||||||||||||||
Amortization of stock-based
Compensation |
278 | 258 | | | 258 | |||||||||||||||
Impairment of long-lived
assets and goodwill |
| | | | | |||||||||||||||
Depreciation and amortization |
319 | 354 | 29 | | 325 | |||||||||||||||
Total costs and expenses |
11,995 | 9,944 | 1,408 | (379 | ) | 8,157 | ||||||||||||||
Operating income |
(1,667 | ) | (1,196 | ) | (291 | ) | 315 | (590 | ) | |||||||||||
Interest expense |
(706 | ) | (376 | ) | (21 | ) | | (355 | ) | |||||||||||
Other income (expense) |
436 | (2) | 19 | | | 19 | ||||||||||||||
Minority interest |
(180 | ) | (120 | ) | | | (120 | ) | ||||||||||||
Net loss from operations
before taxation and non-cash
beneficial conversion feature |
(2,117 | ) | (1,673 | ) | (312 | ) | 315 | (1,046 | ) | |||||||||||
Taxation |
| | | | | |||||||||||||||
Non-cash beneficial conversion
feature preferred dividend |
(47 | ) | | | | | ||||||||||||||
Net loss allocable to
common stockholders |
$ | (2,164 | ) | $ | (1,673 | ) | $ | (312 | ) | $ | 315 | $ | (1,046 | ) | ||||||
EBITDA(3) |
$ | (1,063 | )(4) | $ | (565 | ) | $ | (261 | ) | $ | 315 | $ | 12 | |||||||
FPCG Corporate Overhead |
(790 | ) | (452 | ) | | | (452 | ) | ||||||||||||
EBITDA less |
||||||||||||||||||||
FPCG Corporate Overhead |
$ | (273 | ) | $ | (113 | ) | $ | (261 | ) | $ | 315 | $ | 463 |
Notes: |
||
(1) | Adjusts for significant reductions in Oklahoma administrative and back-office overhead and
removal of non-recurring and transaction-related expenses. |
|
(2) | Other Income for fiscal quarter ended December 31, 2009 includes $429K in insurance proceeds
received in November 2009. |
|
(3) | EBITDA calculated as follows: Operating Income plus Other Income plus Depreciation and
Amortization + Amortization of Stock-based Compensation + Impairment of long-lived assets and
goodwill (if any). |
|
(4) | EBITDA for fiscal quarter ended December 31, 2009 excludes $429K of Other Income (insurance
proceeds received in November 2009). |
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9663 Santa Monica Blvd., #959 Beverly Hills, CA 90210 Tel: (310) 860-2501 Fax: (310) 860-1854 info@fpcapitalgroup.com |
Table 2. First Physicians Capital Group, Inc. Consolidated Income Statement for Fiscal Year Ended
September 30, 2010 (in thousands)
Fiscal Year | ||||||||||||||||
Ended | ||||||||||||||||
9/30/09 | Fiscal Year Ended 9/30/10 | |||||||||||||||
Pro Forma | ||||||||||||||||
FPCG | FPCG | Assets Sold/ | FPCG | |||||||||||||
Consol | Consol | Held for Sale | Consol | |||||||||||||
Revenue from services |
$ | 39,090 | $ | 39,502 | $ | 5,170 | $ | 34,332 | ||||||||
Cost and expenses: |
||||||||||||||||
Selling, general and
administrative expenses |
44,075 | 44,153 | 8,137 | 36,016 | ||||||||||||
Amortization of stock-based
compensation |
1,245 | 1,077 | | 1,077 | ||||||||||||
Impairment of long-lived
assets and goodwill |
209 | 187 | | 187 | ||||||||||||
Depreciation and amortization |
1,102 | 1,383 | 124 | 1,259 | ||||||||||||
Total costs and expenses |
46,631 | 46,800 | 8,262 | 38,538 | ||||||||||||
Operating income |
(7,541 | ) | (7,298 | ) | (3,092 | ) | (4,206 | ) | ||||||||
Interest income |
42 | 42 | 4 | 38 | ||||||||||||
Interest expense |
(2,094 | ) | (2,012 | ) | (824 | ) | (1,188 | ) | ||||||||
Other income (expense) |
(281 | ) | 453 | (1) | | 453 | (1) | |||||||||
Minority interest |
(177 | ) | (681 | ) | | (681 | ) | |||||||||
Net loss from operations
before taxation and non-cash
beneficial conversion feature |
(10,051 | ) | (9,496 | ) | (3,913 | ) | (5,583 | ) | ||||||||
Taxation |
| | | | ||||||||||||
Non-cash beneficial conversion
feature preferred dividend |
(317 | ) | (48 | ) | | (48 | ) | |||||||||
Net loss allocable to
common stockholders |
$ | (10,368 | ) | $ | (9,544 | ) | $ | (3,913 | ) | $ | (5,631 | ) | ||||
EBITDA(2) |
$ | (5,266 | ) | $ | (4,626 | )(3) | $ | (2,968 | ) | $ | (1,658 | )(3) | ||||
FPCG Corporate Overhead |
(3,607 | ) | (2,660 | ) | | (2,660 | ) | |||||||||
EBITDA less
|
||||||||||||||||
FPCG Corporate Overhead |
$ | (1,659 | ) | $ | (1,966 | ) | $ | (2,968 | ) | $ | 1,002 |
Notes: |
||
(1) | Other Income for fiscal year ended September 30, 2010 includes $429K in insurance proceeds
received in November 2009. |
|
(2) | EBITDA calculated as follows: Operating Income plus Other Income plus Depreciation and
Amortization + Amortization of Stock-based Compensation + Impairment of long-lived assets and
goodwill (if any). |
|
(3) | EBITDA for fiscal year ended September 30, 2010 excludes $429K of Other Income (insurance
proceeds received in November 2009). |
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9663 Santa Monica Blvd., #959 Beverly Hills, CA 90210 Tel: (310) 860-2501 Fax: (310) 860-1854 info@fpcapitalgroup.com |
Important Notice
It should be noted that EBITDA is a financial measure that is not recognized under accounting
principles generally accepted in the United States of America (GAAP). EBITDA should not be
considered as an alternative to, or more meaningful than, net income, operating income, cash flows
from operations or other traditional indications of a companys operating performance or liquidity
that are derived in accordance with GAAP. In addition, the Companys calculations of EBITDA may not
be comparable to similarly titled measures being disclosed by other companies, limiting their
usefulness as comparative measures. The Company discloses EBITDA as it is a commonly referred to
financial metric used in the investing community to evaluate the performance of companies in our
industry. The Company believes that disclosure of EBITDA is helpful to those reviewing its
performance, as EBITDA provides information on the Companys ability to meet debt service, capital
expenditure and working capital requirements and management believes that EBITDA is also a useful
indicator of the Companys operating performance.
To better facilitate comparisons from reporting period to reporting period on the productivity of
our healthcare facilities operations, non-GAAP supplemental information is provided. The Company
highlights:
| Revenue from Services |
| Provisions for Doubtful Accounts (Bad Debt Expense) |
| EBITDA less FPCG Corporate Overhead |
| FPCG Corporate Overhead, our overhead expense at the corporate holding company |
About First Physicians Capital Group, Inc.
First Physicians Capital Group, Inc. is an operator of healthcare services firms in the U.S. For
more information, please visit www.fpcapitalgroup.com.
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 Companys financing
plans; (ii) trends affecting the Companys financial condition or results of operations; (iii) the
Companys 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 Companys
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 risks disclosed in the
Companys Forms 10-K and 10-Q filed with the Securities Exchange Commission.
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