First Choice Healthcare Reports Third Quarter 2014 Results

MELBOURNE, FL--(Marketwired - Nov 17, 2014) -  First Choice Healthcare Solutions, Inc. (OTCQB: FCHS) ("FCHS" or "First Choice"), a diversified holding company focused on delivering clinically superior, patient-centric, multi-specialty care through state-of-the-art medical centers of excellence, today announced its third quarter results for the three and nine months ended September 30, 2014.

Financial Highlights for the Three Months Ended September 30, 2014 Compared to the Three Months Ended September 30, 2013:

• Total revenues were $1,891,045, up 14% from $1,654,730.
  
  
  • Net patient service revenue less provision for bad debts generated by our flagship Medical Center of Excellence, First Choice Medical Group, rose 17% to $1,627,157 from $1,395,610.
  • Rental revenue from our real estate holding, Marina Towers, remained relatively flat at $263,888 compared to $259,120.
    
    
• After factoring non-cash expenses related to depreciation, bad debt expense and stock-based compensation totaling $502,210, net loss from operations was $140,886. This compared to net income from operations of $142,864 after factoring $211,800 in non-cash depreciation and stock-based compensation expenses.
  
  
  • Notwithstanding the noted non-cash expenses, income from operations increased modestly to $361,324 from $354,664.
    
    
• Net loss totaled $375,620, or $0.02 loss per basic and diluted share, representing a 105% increase over a net loss of $183,409, or $0.01 loss per basic and diluted share. 

Financial Highlights for the Nine Months Ended September 30, 2014 Compared to the Nine Months Ended September 30, 2013:

• Total revenues climbed 38% to $6,232,962 from $4,525,981.
  
  
  • Net revenues from patient service less provision for debts increased 46% to $5,448,428 from $3,739,435.
  • Rental revenue remained flat at $784,534 compared to $786,546.
    
    
• Net loss from operations totaled $148,254 after factoring non-cash expenses related to depreciation, bad debt expense and stock-based compensation of $976,345. This compared to net income from operations of $286,909, inclusive of non-cash expenses of $529,678 for depreciation and stock-baed compensation.
  
  
  • Notwithstanding the non-cash expenses, net income from operations increased to $828,091 from $816,587.
    
    
• After factoring interest expense of $651,228 and amortization financing costs of $62,058, the net loss for the first nine months of 2014 totaled $859,290, or $0.05 loss per basic and diluted share. For the comparable nine-month period in 2013, net loss was $558,871, or $0.04 loss per basic and diluted share, after giving consideration to $983,966 in interest expense and amortization financing costs of $51,477, offset by $187,351 related to a gain on change in fair value of a derivative liability.
  
  
• Adjusted EBITDA¹ was $402,517, compared to $1,006,250.

As of September 30, 2014, the Company had cash and restricted cash totaling $477,690; accounts receivable of $2,114, 525; total liabilities of $13,732,759, which included $8,938,980 in long term debt; and total stockholders' deficit of $1,798,933. 

"We are pleased that our third quarter revenue results continued to reflect the momentum we are building at First Choice Medical Group," stated Chris Romandetti, Chairman, President and CEO of First Choice. "As we approach the yearend, we remain squarely focused on achieving sustainable positive operating cash flow while investing back in our business through strategic acquisitions, continued expansion of our core leadership team and ongoing innovation in our systems of operations."

¹ This press release includes information relating to Adjusted EBITDA Modified for Non-Cash Items, which is a financial measures that has not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). This non-GAAP financial measure is not a measurement of financial performance under GAAP, and should not be considered as an alternative to GAAP measures or as indications of operating performance or any other measure of performance derived in accordance with GAAP. We do not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial measures. These non-GAAP financial measures have been included in this press release because they are measures used by our management and board of directors to understand our business, make operating decisions and understanding and evaluating our operating results.

Adjusted EBITDA is a non-GAAP financial measure defined by us as net income/loss before interest expense, net, depreciation and amortization expenses and stock-based compensation expense. We have presented Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. You should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, loss, and our GAAP financial results. For a reconciliation of non-GAAP financial measures to the nearest comparable GAAP financial measures for each of the periods indicated, "Reconciliation of Adjusted EBITDA Modified for Non-Cash Items" included in this press release.

FINANCIAL CHARTS TO FOLLOW

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
			September 30,				December 31,
			2014				2013
			(unaudited)
ASSETS
Current assets
Cash			$	137,018			$	739,158
Cash-restricted				340,672				256,246
Accounts receivable, net				2,114,525				1,272,155
Prepaid and other current assets				264,440				140,580
Capitalized financing costs, current portion				57,348				57,348
	Total current assets			2,914,003				2,465,487
Property, plant and equipment, net of accumulated depreciation of $2,341,377 and $1,959,127				8,425,452				8,662,057
Other assets
Capitalized financing costs, long term portion				69,483				131,540
Patient list, net of accumulated amortization of $50,000 and $35,000				250,000				265,000
Patents, net of amortization of $14,325				272,175				286,500
Deposits				2,713				2,713
	Total other assets			594,371				685,753
Total assets			$	11,933,826			$	11,813,297
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses			$	1,078,142			$	459,000
Stock based payable				28,750				166,340
Advances				50,000				-
Line of credit, short term				1,202,000				800,000
Convertible note payable, short term portion				1,611,626				-
Notes payable, current portion				781,162				743,787
Unearned revenue				42,099				74,934
	Total current liabilities			4,793,779				2,244,061
Long term debt:
Deposits held				72,901				72,901
Convertible note payable, long term portion				537,209				2,347,403
Notes payable, long term portion				8,328,870				8,935,473
	Total long term debt			8,938,980				11,355,777
Total liabilities				13,732,759				13,599,838
Stockholders' deficit
Preferred stock, $0.001 par value; 1,000,000 shares authorized, Nil issued and outstanding				-				-
Common stock, $0.001 par value; 100,000,000 shares authorized, 17,688,804 and 16,747,248 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively				17,689				16,747
Additional paid in capital				12,406,205				11,560,249
Accumulated deficit				(14,222,827	)			(13,363,537	)
	Total stockholders' deficit			(1,798,933	)			(1,786,541	)
Total liabilities and stockholders' deficit			$	11,933,826			$	11,813,297

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
			Three months ended September 30,								Nine months ended September 30,
			2014				2013				2014				2013
Revenues:
Patient service revenue			$	1,917,597			$	1,395,610			$	5,814,140			$	3,739,435
Provision for bad debts				(290,440	)			-				(365,712	)			-
Net patient service revenue less provision for bad debts				1,627,157				1,395,610				5,448,428				3,739,435
Rental revenue				263,888				259,120				784,534				786,546
	Total Revenue			1,891,045				1,654,730				6,232,962				4,525,981
Operating expenses:
Salaries & benefits				925,513				735,888				3,081,840				2,000,436
Other operating expenses				407,699				353,034				1,264,046				965,923
General & administrative				548,635				298,566				1,623,755				898,911
Depreciation and amortization				150,084				124,378				411,575				373,803
	Total operating expenses			2,031,931				1,511,866				6,381,217				4,239,073
Net (loss) income from operations				(140,886	)			142,864				(148,255	)			286,908
Other income (expense):
Miscellaneous income				750				750				2,250				2,313
Gain on change in fair value of derivative liability				-				(1,631	)			-				187,351
Amortization Financing costs				(20,686	)			(22,802	)			(62,058	)			(51,477	)
Interest expense, net				(214,798	)			(302,590	)			(651,228	)			(983,966	)
	Total other income (expense)			(234,734	)			(326,273	)			(711,036	)			(845,779	)
Net loss before provision for income taxes				(375,620	)			(183,409	)			(859,290	)			(558,871	)
Income taxes (benefit)				-				-				-				-
NET LOSS			$	(375,620	)		$	(183,409	)		$	(859,290	)		$	(558,871	)
Net loss per common share, basic and diluted			$	(0.02	)		$	(0.01	)		$	(0.05	)		$	(0.04	)
Weighted average number of common shares outstanding, basic and diluted				17,523,044				13,416,949				17,092,088				13,005,773

 

1Adjusted EBITDA Modified for Non-Cash Items
				Nine Months Ended September 30,
				2014				2013
	NET LOSS			$	(859,290	)		$	(588,870	)
	Amortization				62,058				51,477
	Depreciation				411,575				373,803
	Interest				651,228				983,966
	Taxes				-				-
	Non-Cash Item: Stock-Based Compensation				137,001				155,875
		EBITDA		$	402,571			$	1,006,250

About First Choice Healthcare Solutions, Inc.
Headquartered in Melbourne, Florida, First Choice Healthcare Solutions (FCHS) is actively engaged in developing a network of multi-specialty medical centers of excellence throughout the southeastern U.S., which are distinguished as premier destinations for clinically superior, patient-centric care. Through its wholly owned subsidiary FCID Medical, Inc., the Company currently operates one Medical Center of Excellence, First Choice Medical Group of Brevard, which specializes in the delivery of musculoskeletal medicine and rehabilitative care. FCHS' commercial real estate interests, which house its medical centers of excellence, are managed by its wholly owned subsidiary, FCID Holdings, Inc. For more information, please visit www.myfchs.com or www.myfcmg.com. 

Safe Harbor Statement
Certain information set forth in this news announcement may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of First Choice Healthcare Solutions, Inc. Such forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management beliefs and certain assumptions made by its management. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Information concerning factors that could cause the Company's actual results to differ materially from those contained in these forward-looking statements can be found in the Company's periodic reports on Form 10-K and Form 10-Q, and in its Current Reports on Form 8-K, filed with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise to reflect future events or circumstances or reflect the occurrence of unanticipated events.