SOURCE: HearUSA
WEST PALM BEACH, FL–(Marketwire – August 10, 2010) – HearUSA, Inc. (
leader among the nation’s hearing care providers, reported financial
results for the second quarter ended June 26, 2010.
Financial Results for Second Quarter 2010
In the second quarter of 2010, net revenues increased 9% to $21.4 million
from $19.6 million in the previous quarter, but decreased 6% from $22.7
million in the second quarter of 2009. The decrease year-over-year was
principally the result of some insurance plans eliminating, changing or
limiting their hearing care benefits at the beginning of 2010. The company
implemented a number of plans and strategies during the first quarter of
2010 which helped to replace most of the lost insurance business, including
increased marketing to its existing insurance base and private pay
customers. The company also increased the marketing of its AARP Hearing
Care Program and made it available to AARP members in 45 states through all
177 HearUSA centers and a network of independent AARP Hearing Care Program
providers. These combined efforts were the primary cause of the 9% increase
in second quarter revenue over the previous quarter.
The loss from continuing operations totaled $1.9 million in the second
quarter of 2010, compared to a loss of $2.5 million in the previous
quarter, and income of $963,000 in the second quarter of 2009. The loss
from continuing operations includes AARP advertising costs of $957,000
incurred in the second quarter of 2010 compared to $253,000 in the previous
quarter and none incurred in the second quarter of 2009. Advertising,
royalties and administrative costs associated with the AARP program totaled
$1.3 million in the second quarter of 2010, $588,000 in the previous
quarter and $142,000 in the second quarter of 2009.
Net loss attributable to common stockholders was $2.2 million or $(0.05)
per basic and diluted share in the second quarter of 2010, as compared to a
net loss of $2.7 million or $(0.06) per basic and diluted share in the
previous quarter of 2010, and net income of $1.1 million, or $0.03 per
basic and $0.02 per diluted share, in the same year-ago period. Net loss
attributable to common shareholders in the second quarter of 2009 included
income from discontinued operations of $336,000 or $0.01 per basic and
diluted share.
Management Commentary
“Our focus during the second quarter of 2010 was to increase revenues to
offset the loss of the managed care business in the first quarter and to
expand the reach of the AARP program,” said Stephen Hansbrough, CEO and
chairman of HearUSA. “The 9% increase in revenues over the first quarter of
2010 and the successful launch of the AARP program to AARP members in a
total of 45 states has given us a strong base for continued success going
into the third quarter.
“We have seen appointments grow at an accelerating pace since we launched
our AARP national advertising campaign, and AARP included the HearUSA
program in its publications and web sites in the latter half of the second
quarter. We expect this momentum to continue and believe that center
revenues will grow between 9% and 15% in the second half of 2010 when
compared to the first half, and our target is to grow center revenues 15%
to 20% in 2011 when compared to 2010.
“We will focus primarily on expanding the number of independent providers
participating in the AARP network during the rest of 2010 and expect to
have more than 800 participating providers by the end of the year,”
continued Mr. Hansbrough. “Both HearUSA and AARP will also continue to
increase awareness and member communications during the remainder of the
year. We believe that it will take time to fully develop the provider
network and educate the AARP membership base. Our targets for 2011 are to
expand the AARP network to more than 2,000 participating providers and
generate AARP network sales of over 30,000 units.”
Conference Call
HearUSA will hold a conference call at 4:30 p.m. Eastern time, August 10,
2010, to discuss its second quarter 2010 financial results. The company’s
senior management will host the presentation, which will be followed by a
question and answer period.
To participate in the call, dial the appropriate number 5-10 minutes prior
to the start time, request the HearUSA conference call and provide the
conference ID: 7HEARUSA.
Date: Tuesday, August 10, 2010
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Domestic callers: 1-800-862-9098
International callers: 1-785-424-1051
Conference ID#: 7HEARUSA
A Web simulcast and replay will be available via the investor relations
section of the company’s website at www.hearusa.com.
If you have any difficulty connecting with the conference call or webcast,
please contact the Liolios Group at 1-949-574-3860.
A telephone replay of the call will be available later that evening and
will be accessible until August 17, 2010:
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay Pin Number: 11721
About HearUSA
HearUSA is the recognized leader in hearing care for the nation’s top
managed care organizations through its 177 company-owned centers and
network of more than 2,000 hearing care providers. HearUSA is the nation’s
only hearing care provider accredited by URAC, an independent, nonprofit
health care accrediting organization dedicated to promoting health care
quality through accreditation, certification and commendation. HearUSA is
also the administrator of the AARP Hearing Care Program, designed to help
millions of Americans aged 50+ who have untreated hearing loss. For more
information about HearUSA visit www.hearusa.com, or go to
www.hearingshop.com for a wide selection of hearing related products
available for purchase online.
Forward Looking Statements
This press release contains forward-looking statements within the meaning
of the Securities Litigation Reform Act of 1995, including those statements
that HearUSA plans to expand its AARP program to include more than 800
participating independent hearing care providers during the course of 2010
and over 2,000 participating providers in 2011; that the company expects
second quarter 2010 momentum to continue; that the company believes that
center revenues will grow between 9% and 15% in the second half of 2010
when compared to the first half of 2010; that the company’s target is to
grow revenues 15% to 20% in 2011 when compared to 2010; and that the
company plans to generate AARP network sales of over 30,000 units. These
statements involve certain risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements.
Potential risks and uncertainties include such factors as the company’s
continuing ability to replace lost and decreased revenue from insurance
contracts with increased self-pay revenue, replacement insurance agreements
and other revenue; the company’s ability to attract and retain a sufficient
number of independent providers in all 50 states to participate in the AARP
program; the company’s ability to successfully integrate the AARP program
into its company-owned centers; the ability of the Company to capitalize on
the advertising efforts for the AARP program; the company’s ability to
control costs; the company’s ability to generate sufficient cash flows to
fund its various advertising campaigns; the ability of the company to
maintain unit sales of Siemens hearing aids; market demand for the
company’s goods and services; changes in the pricing environment; general
economic conditions in those geographic regions where the company’s centers
are located; consumer confidence in the general economy; the impact of
competitive products; and other risks and uncertainties described in the
company’s filings with the Securities and Exchange Commission, including
the company’s Form 10-K for the fiscal year ended December 26, 2009.
HearUSA, Inc.
Consolidated Statements of Operations
Three Months Ended June 26, 2010 and June 27, 2009
(unaudited)
June 26, June 27,
2010 2009
------------ ------------
(Dollars in thousands,
except per share amounts)
Net revenues
Hearing aids and other products $ 19,796 $ 20,653
Services 1,613 2,014
------------ ------------
Total net revenues 21,409 22,667
------------ ------------
Operating costs and expenses
Hearing aids and other products 5,290 5,072
Services 412 388
------------ ------------
Total cost of products sold and services
excluding depreciation and amortization 5,702 5,460
Center operating expenses 12,209 10,908
General and administrative expenses 3,769 3,661
Depreciation and amortization 564 588
------------ ------------
Total operating costs and expenses 22,244 20,617
------------ ------------
Income (loss) from operations (835) 2,050
Non-operating income (expenses)
Gain (loss) on foreign exchange (5) 375
Interest income 5 -
Interest expense (841) (1,252)
------------ ------------
Income (loss) from continuing operations
before income tax expense (1,676) 1,173
Income tax expense (220) (210)
------------ ------------
Income (loss) from continuing operations (1,896) 963
Discontinued operations attributable to
HearUSA, Inc.
Income from discontinued operations, net of
income tax benefit of $270 in 2009 - 250
Gain on sale of discontinued operations - 1,632
Income tax expense on sale of discontinued
operations - (1,546)
------------ ------------
Income from discontinued operations - 336
------------ ------------
Net income (loss) (1,896) 1,299
Net income attributable to noncontrolling
interest (238) (131)
------------ ------------
Net income (loss) attributable to HearUSA,
Inc. (2,134) 1,168
Dividends on preferred stock (32) (35)
------------ ------------
Net Income (loss) attributable to HearUSA,
Inc. common stockholders $ (2,166) $ 1,133
============ ============
Loss from continuing operations attributable
to HearUSA, Inc. common stockholders per
common share - basic $ (0.05) $ 0.02
============ ============
Loss from continuing operations attributable
to HearUSA, Inc. common stockholders per
common share - diluted $ (0.05) $ 0.02
============ ============
Net loss attributable to HearUSA, Inc. common
stockholders per common share - basic $ (0.05) $ 0.03
============ ============
Net loss attributable to HearUSA, Inc. common
stockholders per common share - diluted $ (0.05) $ 0.02
============ ============
Weighted average number of shares of common
stock outstanding - basic 44,922 44,837
============ ============
Weighted average number of shares of common
stock outstanding - diluted 44,922 45,340
============ ============
Amounts attributable to HearUSA, Inc. common
stockholders:
Income (loss) from continuing operations, net
of tax $ (2,134) $ 832
Discontinued operations, net of tax - 336
============ ============
Net income (loss) attributable to HearUSA,
Inc. common stockholders $ (2,134) $ 1,168
============ ============
HearUSA, Inc.
Consolidated Balance Sheets
(unaudited)
June 26, December 26,
ASSETS 2010 2009
------------ ------------
(Dollars in thousands,
except per share amounts)
Current assets
Cash and cash equivalents $ 4,026 $ 7,037
Short-term marketable securities 1,306 4,106
Accounts and notes receivable, less allowance
for doubtful accounts of $677 and $616 5,506 5,554
Inventories 1,409 1,844
Prepaid expenses and other 417 464
------------ ------------
Total current assets 12,664 19,005
Property and equipment, net 3,463 4,021
Goodwill 51,928 51,495
Intangible assets, net 12,529 12,816
Deposits and other 698 731
Restricted cash and cash equivalents 3,252 3,245
------------ ------------
Total Assets $ 84,534 $ 91,313
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 9,458 $ 7,070
Accrued expenses 1,907 2,253
Accrued salaries and other compensation 3,224 3,520
Current maturities of long-term debt 5,357 5,983
Income taxes payable - 1,974
Dividends payable 35 35
------------ ------------
Total current liabilities 19,981 20,835
------------ ------------
Long-term debt 33,781 36,139
Deferred income taxes 7,775 7,335
------------ ------------
Total long-term liabilities 41,556 43,474
------------ ------------
Commitments and contingencies
------------ ------------
Stockholders' equity
Preferred stock (aggregate liquidation
preference $2,330, $1 par, 7,500,000 shares
authorized)
Series H Junior Participating
(none outstanding) - -
Series J (233 shares outstanding) - -
------------ ------------
Total preferred stock - -
Common stock: $.10 par; 75,000,000 shares
authorized 45,451,160 and 45,381,750 shares
issued 4,545 4,538
Additional paid-in capital 138,359 137,863
Accumulated deficit (119,804) (114,982)
Treasury stock, at cost: 523,662 common shares (2,485) (2,485)
------------ ------------
Total HearUSA, Inc. Stockholders' Equity 20,615 24,934
Noncontrolling interest 2,382 2,070
------------ ------------
Total Stockholders' equity 22,997 27,004
------------ ------------
Total Liabilities and Stockholders' Equity $ 84,534 $ 91,313
============ ============
HearUSA, Inc.
Stephen J. Hansbrough
Chairman and CEO
Tel 561-478-8770, ext. 132
Investor Relations
Scott Liolios or Ron Both
Liolios Group, Inc.
Email: Email Contact
Tel 949-574-3860