SOURCE: HearUSA

HearUSA

November 10, 2009 16:05 ET

HearUSA Reports Third Quarter 2009 Results

Net Revenues of $21.8 Million Generates Net Income of $713,000 or $0.02 per Diluted Share

WEST PALM BEACH, FL--(Marketwire - November 10, 2009) - HearUSA, Inc. (AMEX: EAR), the recognized leader in hearing care for the nation's top managed care organizations through 178 company-owned hearing care centers and a network of 1,900 affiliated providers, reported financial results for the third quarter ended September 26, 2009.

Third Quarter 2009 Financial Results

Net revenues from continuing operations decreased 4% to $21.8 million from $22.7 million in the previous quarter and decreased 11% from $24.5 million in the same year-ago period. Revenues from continuing operations exclude revenues from the company's Canadian unit, which was sold on April 27, 2009. The year-over-year decrease was due to a 14% decline in organic revenue, partially offset by a 2% increase attributable to centers acquired over the last 12 months and approximately $290,000 in contracted transition services provided to the acquirer of the Canadian unit.

Net income attributable to common stockholders was $713,000 or $0.02 per diluted share in the third quarter of 2009, as compared to net income of $1.1 million or $0.03 per diluted share in the previous quarter and a net loss of $75,000 or $(0.00) per diluted share in the same period a year ago. Net income attributable to common shareholders included income from discontinued operations of $427,000 or $0.01 per diluted share in the third quarter of 2009, $336,000 or $0.01 per diluted share in the second quarter of 2009 and $720,000 or $0.02 per diluted share in the third quarter of 2008.

Income from continuing operations totaled $502,000 in the third quarter of 2009, compared to $963,000 in the previous quarter and a loss of $278,000 in the same year-ago period. Income from continuing operations excludes the operating results of the company's Canadian operations for all periods and includes AARP program related costs of $189,000 in the third quarter of 2009, $142,000 in the second quarter of 2009, and $428,000 in the third quarter of 2008.

Management Commentary

"Our ability to exercise strong cost controls along with effective resource management allowed us to achieve another profitable quarter in this challenging economic climate," said Stephen J. Hansbrough, HearUSA's chairman and CEO. "We have made the tough calls and avoided the unprofitable strategies that benefit sales at the expense of profits. We believe this approach has enabled us to establish a cost structure that can maximize the potential of a rising top line in 2010."

Gino Chouinard, HearUSA's president and COO, added, "In 2009, our main focus has been to realign our expense structure and return the company to profitability. Thanks to our margin improvement initiatives and $8 million in annual expense reductions, we have now achieved two consecutive quarters of positive net income. In 2010, we will focus on generating revenue growth by maximizing new and existing third party relationships, implementing new marketing strategies, expanding internal training and motivational programs, and making accretive acquisitions."

Conference Call

HearUSA will hold a conference call later today to discuss its third quarter 2009 financial results. The company's senior management will host the presentation, which will be followed by a question and answer period.

   Date: Tuesday, November 10, 2009
   Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
   Domestic callers: 1-800-894-5910
   International callers: 1-785-424-1052
   Conference ID#: 7HEARUSA

If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 1-949-574-3860.

A replay of the call will be available later that evening and will be accessible until November 24, 2009:

   Toll-free replay number: 1-800-388-9074
   International replay number: 1-402-220-1117
   (No passcode required)

About HearUSA, Inc.

HearUSA is the recognized leader in hearing care for the nation's top managed care organizations through its network of more than 2,000 hearing care providers, including 178 company-owned locations. HearUSA is the nation's only hearing care network 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.

                             HearUSA, INC.
            UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
   For the Three Months Ended September 26, 2009 and September 27, 2008
                             (unaudited)


                                              September 26,  September 27,
                                                  2009           2008
                                              -------------  -------------
                                             (Dollars in thousands, except
                                                   per share amounts)

Net revenues
Hearing aids and other products               $      19,616  $      22,716
Services                                              2,212          1,813
                                              -------------  -------------
Total net revenues                                   21,828         24,529
                                              -------------  -------------

Operating costs and expenses
Hearing aids and other products                       4,543          5,963
Services                                                441            571
                                              -------------  -------------
Total cost of products sold and services
 excluding depreciation and amortization              4,984          6,534

Center operating expenses                            10,811         12,781
General and administrative expenses                   3,694          3,217
Depreciation and amortization                           593            520
                                              -------------  -------------
Total operating costs and expenses                   20,082         23,052
                                              -------------  -------------
Income from operations                                1,746          1,477
Non-operating income (expenses)
Gain on foreign exchange                                 99              -
Interest income                                           4              7
Interest expense                                     (1,137)        (1,548)
                                              -------------  -------------
Income (loss) from continuing operations
 before income tax expense and discontinued
 operations                                             712            (64)
Income tax expense                                     (210)          (214)
                                              -------------  -------------
Income (loss) from continuing operations                502           (278)
Discontinued operations
Income (loss) from discontinued operations,
 net of income tax expense                              (15)           720
Gain on sale of discontinued operations                 529              -
Income tax expense on gain on sale of
 discontinued operations                                (87)             -
                                              -------------  -------------
Income from discontinued operations                     427            720
                                              -------------  -------------
Net income                                              929            442

Net income attributable to noncontrolling
 interest                                              (182)          (482)
                                              -------------  -------------
Net income (loss) attributable to controlling
 interest                                               747            (40)
Dividends on preferred stock                            (34)           (35)
                                              -------------  -------------
Net income (loss) attributable to common
 stockholders                                 $         713  $         (75)
                                              =============  =============

Income (loss) from continuing operations
 attributable to common stockholders per
 common share - basic                         $        0.01  $       (0.02)
                                              =============  =============
Income (loss) from continuing operations
 attributable to common stockholders per
 common share - diluted                       $        0.01  $       (0.02)
                                              =============  =============

Net income (loss) attributable to common
 stockholders per common share - basic        $        0.02  $       (0.00)
                                              =============  =============
Net income (loss) attributable to common
 stockholders per common share - diluted      $        0.02  $       (0.00)
                                              =============  =============
Weighted average number of shares of common
 stock outstanding - basic                           44,838         38,408
                                              =============  =============
Weighted average number of shares of common
 stock outstanding - diluted                         45,810         38,408
                                              =============  =============



                             HearUSA, INC.
                UNAUDITED CONSOLIDATED BALANCE SHEETS
                             (unaudited)


                                              September 26,  December 27,
ASSETS                                            2009           2008
                                              -------------  -------------
                                             (Dollars in thousands, except
                                                     for par values)
Current assets
Cash and cash equivalents                     $       8,436  $       3,553
Short-term marketable securities                      6,406              -
Accounts and notes receivable, less allowance
 for doubtful accounts of $644 and $506               5,628          7,371
Inventories                                           1,882          1,682
Prepaid expenses and other                              797            502
                                              -------------  -------------
Total current assets                                 23,149         13,108
Property and equipment, net                           4,150          4,876
Goodwill                                             51,309         65,953
Intangible assets, net                               12,997         15,630
Deposits and other                                      770            810
Restricted cash and cash equivalents                  3,225            224
                                              -------------  -------------
Total Assets                                  $      95,600  $     100,601
                                              =============  =============


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable                              $       9,885  $       5,011
Accrued expenses                                      3,217          3,208
Accrued salaries and other compensation               3,103          3,713
Current maturities of long-term debt                  6,372          6,915
Income taxes payable                                  1,870              -
Dividends payable                                        35             34
                                              -------------  -------------
Total current liabilities                            24,482         18,881
                                              -------------  -------------
Long-term debt                                       37,308         49,099
Deferred income taxes                                 7,085          7,284
                                              -------------  -------------
Total long-term liabilities                          44,393         56,383
                                              -------------  -------------
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, 44,880,045 and 44,828,384
 shares issued                                        4,488          4,483
Additional paid-in capital                          137,577        136,924
Accumulated deficit                                (114,810)      (116,360)
Accumulated other comprehensive income                    -          1,249
Treasury stock, at cost: 523,662 common
 shares                                              (2,485)        (2,485)
Noncontrolling interest                               1,955          1,526
                                              -------------  -------------
Total Stockholders' equity                           26,725         25,337
                                              -------------  -------------
Total Liabilities and Stockholders' Equity    $      95,600  $     100,601
                                              =============  =============

Contact Information

  • Company Contact:
    Stephen J. Hansbrough
    Chairman & CEO
    HearUSA, Inc.
    561-478-8770

    Investor Relations:
    Scott Liolios or Ron Both
    Liolios Group, Inc.
    Email Contact
    949-574-3860