SOURCE: American CareSource

November 12, 2007 07:05 ET

American CareSource Holdings Announces Strong Third Quarter Financial Results

Company Reports Q3 Profit of $188 Thousand, or $0.01 per Share

DALLAS, TX--(Marketwire - November 12, 2007) - American CareSource Holdings, Inc. (AMEX: XSI) today announced financial and operational results for the third quarter and nine months ended September 30, 2007. Highlights include:


*   The Company reported a quarterly profit of $188 thousand in net income,
    or $0.01 per share -- a first in its ten year history.
*   Achieved $7.1 million in revenue for the quarter, a record 114% rise
    in revenues for Q3 2007 compared to Q3 2006.
*   Achieved two consecutive quarters of 77% quarter over quarter growth
    from Q1 2007 to Q3 2007. This is the largest increase in sequential
    revenue in the Company's history.
*   The Company generated EBITDA, as adjusted, of $357 thousand for
    the quarter and $(306) thousand year to date.
       --  EBITDA, as adjusted, is defined as income (loss) from
           operations less depreciation and amortization, non-cash warrant
           and option compensation expense and executive severance. EBITDA,
           as adjusted, should be considered in addition to, but not in
           lieu of, income (loss) from operations reported under generally
           accepted accounting principles (GAAP).
*   Claims volume increased to 40,317 for Q3 2007, up 139% over Q3 2006.
*   Recent key executive changes to lead the Company:
       --  David S. Boone promoted to Chief Executive Officer
       --  Steven J. Armond appointed Chief Financial Officer

Revenues for the third quarter of 2007 rose 114% to $7.1 million compared to $3.3 million in the third quarter of 2006. For the nine months ended September 30, 2007, the Company reported revenues of $13.4 million, a 55% increase compared to revenues of $8.6 million in the same period of 2006.

The Company reported net income of $188 thousand, or $0.01 per share, for the third quarter of 2007, compared to a net loss of $116 thousand, or $0.01 per share, in the same period last year. Factors affecting positive current quarter results include increases in revenue from Texas True Choice and HealthSmart, and the implementation of AAG and InterPlan Health Group.

For the nine months ended September 30, 2007, the Company reported a net loss of $1,139 thousand, or $0.08 per share, compared to a net loss of $641 thousand, or $0.05 per share, for the same period in 2006. Excluding the one time charge for the departure of the Company's former Chief Executive Officer, the net loss for the nine months ended September 30, 2007 was $801 thousand.

Cash provided by operations was $143 thousand in the third quarter of 2007 versus cash used of $177 thousand in the third quarter of 2006. At September 30, 2007, the Company had $3.6 million in cash and cash equivalents compared to $5.0 million at December 31, 2006.

Commenting on the Company's most recent results, David S. Boone, Chief Executive Officer, noted, "We are pleased with our third quarter results, which we believe reflect the progress we are achieving along a number of financial milestones. Most importantly, we believe that this increase in revenue demonstrates an inflection point in our evolution as a Company.

"We recently welcomed Steve Armond to the executive team as the Company's Chief Financial Officer. In this position, and given his deep experience in financial management, planning and analysis and corporate administration, Steve will play a critical role in seeing that American CareSource achieves both its financial and operational milestones going forward. We are glad to have him aboard."

Conference Call

As previously announced, American CareSource will hold a conference call to discuss financial results of the third quarter ended September 30, 2007 as follows:


Date:            Monday, November 12, 2007
Time:            11:00 AM ET/10:00 AM CT
Dial-in numbers: 888-812-8518 (U.S. & Canada) or 913-312-1488
Live webcast:    www.anci-care.com, under "News and Events"

The teleconference replay will be available two hours after completion through Monday, November 19, 2007 at 888-203-1112 (U.S. only) or 719-457-0820. The replay passcode is 8264771. The archived webcast will be available for one year on the Company's investor website, www.anci-care.com, under "News and Events."

About American CareSource Holdings, Inc.

American CareSource Holdings, the first national, publicly traded ancillary care network services company, offers a comprehensive national network of more than 24,000 ancillary provider sites. Through its product offerings, American CareSource helps its clients reduce the cost of ancillary services rendered through its network of providers in more than 30 service categories. The Company's ancillary network and management provides a complete outsourced solution for a wide variety of healthcare payors and plan sponsors including self-insured employers, indemnity insurers, PPOs, HMOs, third party administrators and both federal and local governments.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements that are not historical facts contained in this release are forward-looking statements. It is possible that the assumptions made by American CareSource Holdings, Inc. for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve further risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, and intellectual property rights, and the outcome of competitive products, risks in product development, the results of financing effort, the ability to complete transactions, and other risks identified in this release, and the Securities and Exchange Commission filings of American CareSource Holdings, Inc.

AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                                        As of
                                              September 30,  December 31,
ASSETS                                            2007           2006
                                              -------------  -------------
CURRENT ASSETS
  Cash                                        $   3,630,133  $   5,025,380
  Accounts Receivable                             2,467,471      1,334,950
  Other                                             614,869         33,515
                                              -------------  -------------
Total Current Assets                              6,712,473      6,393,845

Net Property, Plant, and Equipment                  318,144        266,555

Other Assets
  Certificate of Deposit, Restricted                145,000        145,000
  Intangible Assets                               1,547,633      1,707,819
  Goodwill                                        4,361,299      4,361,299
                                              -------------  -------------
  Total Other Assets                              6,053,932      6,214,118
                                              -------------  -------------
Total Assets                                  $  13,084,549  $  12,874,518
                                              =============  =============

Liabilities and Stockholders' Equity

Current Liabilities
  Due to Service Providers                    $   1,881,702  $   1,077,174
  Accounts Payable and Accrued Liabilities        1,174,305        761,926
  Current Maturities of Long-Term Debt               55,041        352,718
                                              -------------  -------------
Total Current Liabilities                         3,111,048      2,191,818

Long-Term Debt                                       59,910        101,541
                                              -------------  -------------

Total Liabilities                                 3,170,958      2,293,359

STOCKHOLDERS' EQUITY:

Common Stock-par value $0.01, 40,000,000
 shares authorized and 14,654,167 and
 14,486,615 shares issued and outstanding as
 of September 30, 2007 and December 31, 2006
 respectively                                       146,542        144,866

Preferred Stock-par value $0.01, 10,000,000
 shares authorized and none outstanding                   -              -

Additional Paid in Capital                       17,457,604     17,034,176
Deferred Debt Issuance Cost                               -        (46,300)
Accumulated (Deficit)                            (7,690,555)    (6,551,583)
                                              -------------  -------------

Total Stockholders' Equity                        9,913,591     10,581,159

Total Liabilities and Equity                  $  13,084,549  $  12,874,518
                                              =============  =============




AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


                                                  Three Months Ended
                                                     September 30,
                                                  2007           2006
                                              -------------  -------------
REVENUES
Net Ancillary Health                          $   7,088,499  $   3,283,570
Patient Claims Processing                                 -         29,870
                                              -------------  -------------
Net Revenue                                       7,088,499      3,313,440

Total Cost of Revenues                            6,091,789      2,689,471
                                              -------------  -------------

Net Margin                                          996,710        623,969
                                              -------------  -------------

Selling, General, and Administrative Expense        766,648        665,841
Depreciation and Amortization                        86,445         77,271
                                              -------------  -------------

Total Operating Expense                             853,093        743,112
                                              -------------  -------------

Operating (Loss)                                    143,617       (119,143)
                                              -------------  -------------

Net Interest (Income)                               (47,430)       (57,241)
Interest Expense                                      2,836          8,174
Debt Issuance Cost                                        -         46,300
                                              -------------  -------------

Total Other (Income) Expense                        (44,594)        (2,767)
                                              -------------  -------------

Net Income (Loss) Before Income Tax                 188,211       (116,376)
Income Tax Expense                                        -              -
                                              -------------  -------------

Net Income (Loss)                             $     188,211  $    (116,376)
                                              =============  =============

NET INCOME (LOSS) PER SHARE - BASIC           $        0.01  $       (0.01)
WEIGHTED AVERAGE COMMON SHARES - BASIC           14,555,314     14,472,867

NET INCOME (LOSS) PER SHARE - DILUTED         $        0.01  $       (0.01)
WEIGHTED AVERAGE COMMON SHARES - DILUTED         16,888,882     14,472,867

Reconciliation of Income (Loss) from
 Operations to EBITDA, as adjusted

Operating Income (Loss)                       $     143,617  $    (119,143)
Depreciation and Amortization                        86,445         77,271
                                              -------------  -------------
EBITDA *                                            230,062        (41,872)

Executive severance                                       -              -
Non-cash Option/Warrant Compensation Expense        127,161         63,223
EBITDA, as adjusted *                         $     357,223  $      21,351


*EBITDA is earnings before interest, taxes, depreciation, and amortization




AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


                                                   Nine Months Ended
                                                     September 30,
                                                  2007           2006
                                              -------------  -------------
REVENUES
Net Ancillary Health                          $  13,363,356  $   8,512,425
Patient Claims Processing                                 -         95,337
                                              -------------  -------------
Net Revenue                                      13,363,356      8,607,762

Total Cost of Revenues                           11,671,724      6,904,779
                                              -------------  -------------

Net Margin                                        1,691,632      1,702,983
                                              -------------  -------------


Selling, General, and Administrative Expense      2,677,919      2,038,718
Depreciation and Amortization                       248,161        235,618
                                              -------------  -------------

Total Operating Expense                           2,926,080      2,274,336
                                              -------------  -------------

Operating (Loss)                                 (1,234,448)      (571,353)
                                              -------------  -------------

Net Interest (Income)                              (151,062)      (132,753)
Interest Expense                                      9,286         63,082
Debt Issuance Cost                                   46,299        138,900
                                              -------------  -------------

Total Other (Income) Expense                        (95,477)        69,229
                                              -------------  -------------

Net Income (Loss) Before Income Tax              (1,138,971)      (640,582)
Income Tax Expense                                        -              -
                                              -------------  -------------

Net Income (Loss)                             $  (1,138,971) $    (640,582)
                                              =============  =============

NET INCOME (LOSS) PER SHARE - BASIC           $       (0.08) $       (0.05)
WEIGHTED AVERAGE COMMON SHARES - BASIC           14,511,642     14,066,192

NET INCOME (LOSS) PER SHARE - DILUTED         $       (0.08) $       (0.05)
WEIGHTED AVERAGE COMMON SHARES - DILUTED         14,511,642     14,066,192

Reconciliation of Income (Loss) from
 Operations to EBITDA, as adjusted

Operating Income (Loss)                       $  (1,234,448) $    (571,353)
Depreciation and Amortization                       248,160        235,617
                                              -------------  -------------
EBITDA *                                           (986,288)      (335,736)

Executive severance                                 338,010              -
Non-cash Option/Warrant Compensation Expense        342,012        137,615
                                              -------------  -------------
EBITDA, as adjusted *                         $    (306,266) $    (198,121)


*EBITDA is earnings before interest, taxes, depreciation, and amortization




AMERICAN CARESOURCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                   Nine Months Ended
                                                      September 30,
                                                  2007           2006
                                              -------------  -------------

OPERATING ACTIVITIES:
  Net loss                                    $  (1,138,971) $    (640,582)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Stock option compensation expense               319,965        137,615
    Depreciation and amortization                   248,160        235,618
    Compensation expense related to warrants         46,300        138,900
    Client management expense related to
     warrants                                        22,047              -
    (Gain) on disposal of assets                          -        (33,359)
  Changes in operating assets and
   liabilities:
    (Increase) decrease in accounts receivable   (1,132,521)    (1,514,904)
    (Increase) in other current assets             (550,488)      (107,524)
    Increase  in accounts payable and accrued
     liabilities                                    412,379        299,173
    Increase (decrease) in amounts payable
     to service providers                           804,528      1,060,363
                                              -------------  -------------

      Net cash (used in) operating activities      (968,601)      (424,700)
                                              -------------  -------------

INVESTING ACTIVITIES:
  Purchase of property and equipment               (139,563)      (161,866)
  Sales of equipment                                      -         65,225
                                              -------------  -------------
    Net cash (used in) investing activities        (139,563)       (96,641)
                                              -------------  -------------

FINANCING ACTIVITIES:
  Borrowings from line of credit                          -        200,000
  Net proceeds from new debt                              -        135,000
  Payment on line of credit or long term debt      (339,308)    (3,714,121)
  Net proceeds from the exercising of stock
   options                                           52,225         34,575
  Net proceeds from the sale of capital stock             -      9,069,848
                                              -------------  -------------

    Net cash provided by (used in) financing
     activities                               $    (287,083) $   5,725,302
                                              -------------  -------------

NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS                                  $  (1,395,247) $   5,203,961

CASH AND CASH EQUIVALENTS AT BEGINNING OF
 PERIOD                                           5,025,380         23,399
                                              -------------  -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD    $   3,630,133  $   5,227,360
                                              =============  =============

Supplemental disclosures cash flow information
  Cash paid for interest                      $      28,147  $      48,591
Supplemental disclosure of non-cash financing
 activity
  Issuance of warrants in payment of client
   management fees                            $      52,913              -



Contact Information

  • Contact:
    David S. Boone
    Chief Executive Officer
    American CareSource Holdings, Inc.
    Tel: 972-308-6830