SOURCE: First Choice Healthcare Solutions, Inc.

First Choice Healthcare Solutions, Inc.

May 17, 2016 08:30 ET

First Choice Healthcare Solutions Announces Record Results for First Quarter 2016

Three Month Revenues Climb 189% to $7.24 Million From $2.51 Million; Adjusted EBITDA Rises 263% to $1.04 Million From $285,000; Management to Host Conference Call and Webcast This Morning

MELBOURNE, FL--(Marketwired - May 17, 2016) - First Choice Healthcare Solutions, Inc. (OTCQB: FCHS) ("FCHS," "First Choice" or the "Company"), one of the nation's only non-physician-owned, publicly traded healthcare services companies focused on the delivery of total musculoskeletal solutions with an emphasis on Orthopaedics, including spine care and treatment, today announced its first quarter results for the three months ended March 31, 2016.

Financial Highlights for the Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015:

  • Total revenues rose 189% to a record $7,241,753, up from $2,505,167. The increase was mainly attributable to the integration of The B.A.C.K. Center ("TBC") and Crane Creek Surgery Center ("CCSC") into the First Choice platform. The Company completed variable interest entity transactions with TBC and CCSC, effective May 1, 2015 and October 1, 2015, respectively.

    • Net patient service revenues increased 195% to $6.62 million from $2.24 million.
    • Rental revenue totaled $626,612 compared to $265,103.

  • On a non-GAAP basis, adjusted EBITDA from operations rose 263% to $1,036,072 from $285,358. With the $9,188,968 gain realized from the sale of the Company's real estate asset, Marina Towers, on March 31, 2016, non-GAAP adjusted EBITDA totaled $10,225,045.
  • On a GAAP basis, income from operations totaled $569,083 compared to $413,769.
  • With the one-time gain from the sale of Marina Towers, net income climbed to $9,566,941, or $0.36 earnings per fully diluted share, compared to $30,689, or $0.00 earnings per fully diluted share. 
  • Net cash provided by the Company's operating activities increased to $317,224, which compared to net cash used in its operations of $173,931 in the first three months of 2015. 

As of March 31, 2016, cash totaled $10,051,999; accounts receivables were $7,448,429 and total stockholders' equity was $12,751,181. This compared to cash and restricted cash of $1,954,412; accounts receivable of $6,623,894 and total stockholders' equity of $3,038,733, reported as of December 31, 2015. 

Chris Romandetti, Chairman, President and CEO of First Choice, stated, "Our record first quarter financial results speak to the successful execution of several key growth initiatives that have culminated in strong, positive performance across all key operating metrics. Moreover, with the sale and leaseback of Marina Towers at the end of the first quarter period, we are empowered with capital resources necessary to strategically enhance and accelerate our growth. We are very proud of the progress First Choice has continued to demonstrate and will look to perpetuate our success in coming quarters." 

Conference Call and Webcast
First Choice will host a conference call and webcast for the investment community this morning beginning at 11:00 AM Eastern Standard Time to discuss its financial results and recent corporate developments. Participants can register for the conference by navigating to http://dpregister.com/10086315. Please note that registered participants will receive the dial-in number upon registration. 

The conference call will also be webcasted, which can be accessed through First Choice's investor relations website by navigating to http://ir.myfchs.com/ir-calendar and clicking on "First Quarter 2016 Conference Call and Webcast." Webcast participants will be required to register to access the call. For those who cannot listen to the live broadcast, a replay will be available shortly after the call on the investor relations page of First Choice's website, found at http://ir.myfchs.com/.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use this non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. This non-GAAP financial measure also facilitates management's internal comparisons to our historical performance and liquidity. We believe this non-GAAP financial measure is useful to investors both because they allow for greater transparency with respect to a key metric used by management in its financial and operational decision-making. For more information on this non-GAAP financial measure, please see the table captioned "Reconciliation of non-GAAP Adjusted EBITDA Performance."

For additional details relating to First Choice's first quarter 2016 results, please refer to the Interim Report on Form 10-Q filed with the U.S. Securities and Exchange Commission and found at www.sec.gov.

FINANCIAL CHARTS TO FOLLOW

   
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
             
    March 31,     December 31,  
    2016     2015  
    (unaudited)        
ASSETS                
Current assets                
Cash (amounts related to VIE of $1,624,203 and $1,556,303)   $ 10,051,999     $ 1,594,998  
Cash-restricted     -       359,414  
Accounts receivable, net (amounts related to VIE of $4,806,623 and $4,544,308)     7,448,429       6,623,894  
Employee loans (amounts related to VIE of $882,226 and $636,293)     918,226       672,293  
Prepaid and other current assets (amounts related to VIE of $151,931 and $183,465)     225,150       316,773  
Capitalized financing costs, current portion (amounts related to VIE of $329 and $1,317)     329       39,533  
  Total current assets     18,644,133       9,606,905  
                 
Property, plant and equipment, net of accumulated depreciation of $989,481 and $3,075,648 (amounts related to VIE of $724,859 and $773,808)     2,689,335       8,613,502  
                 
Other assets                
Goodwill (amount relating to VIE of $899,465)     899,465       899,465  
Deferred costs, net of amortization of $295,757 and $215,096     2,930,670       3,011,331  
Patient list, net of accumulated amortization of $80,000 and $75,000     220,000       225,000  
Patents, net of accumulated amortization of $42,975 and $38,200     243,525       248,300  
Investments (amounts related to VIE of $22,005 and $16,914)     22,005       16,914  
Deferred Tax Asset     181,029       --  
Deposits     17,003       2,571  
  Total other assets     4,513,697       4,403,581  
                 
Total assets   $ 25,847,165     $ 22,623,988  
                 
                 
LIABILITIES AND EQUITY                
Current liabilities                
Accounts payable and accrued expenses (amounts related to VIE of $2,321,972 and $2,319,056)   $ 4,078,887     $ 3,937,244  
Accounts payable, related party (amount related to VIE of $251,588)     251,588       251,588  
Stock based payable     1,280,200       1,198,900  
Advances, related party     133,796       43,082  
AMT Tax Payable     181,029       -  
Settlement payable     450,000       600,000  
Line of credit, short term (amount related to VIE of $439,524 and $416,888)     2,939,524       2,566,888  
Note payable, related party, current portion (amount related to VIE of $437,372 and $428,645)     437,372       428,645  
Notes payable, current portion (amount related to VIE of $7,235 and $10,341)     507,209       7,652,941  
Unearned revenue     42,704       42,704  
Deferred rent, short term portion (amount related to VIE of $118,810)     118,810       118,810  
  Total current liabilities     10,421,119       16,840,802  
                 
Long term debt:                
Deposits held     67,432       67,432  
Notes payable, long term portion     406,830       535,822  
Deferred rent, long term portion (amount related to VIE of $2,200,603 and $2,141,199)     2,200,603       2,141,199  
  Total long term debt     2,674,865       2,744,453  
                 
Total liabilities     13,095,984       19,585,255  
                 
Equity                
Preferred stock, $0.01 par value; 1,000,000 shares authorized, Nil issued and outstanding     -       -  
Common stock, $0.001 par value; 100,000,000 shares authorized, 22,967,626 and 22,867,626 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively     22,968       22,868  
Common stock subscription     175,000       175,000  
Additional paid in capital     21,288,692       21,196,792  
Accumulated deficit     (9,707,976 )     (19,274,917 )
Total stockholders' equity attributable to First Choice Healthcare Solutions, Inc.     11,778,684       2,119,743  
Non-controlling interest     972,497       918,990  
  Total equity     12,751,181       3,038,733  
                 
Total liabilities and equity   $ 25,847,165     $ 22,623,988  
                 
   
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(unaudited)  
             
    Three months ended March 31,  
    2016     2015  
Revenues:                
Patient Service Revenue   $ 6,877,665     $ 2,285,288  
Provision for bad debts     (262,524 )     (45,224 )
Net patient service revenue less provision for bad debts     6,615,141       2,240,064  
Rental Revenue     626,612       265,103  
  Total Revenue     7,241,753       2,505,167  
                 
Operating expenses:                
Salaries and benefits     2,780,569       946,120  
Other operating expenses     1,187,274       451,485  
General and administrative     2,405,877       553,284  
Depreciation and amortization     298,950       140,509  
  Total operating expenses     6,672,670       2,091,398  
                 
Net income from operations     569,083       413,769  
                 
Other income (expense):                
Gain on sale of property and improvements     9,188,968       -  
Miscellaneous income (expense)     58,857       750  
Amortization financing costs     (15,325 )     (20,686 )
Interest expense, net     (181,135 )     (363,144 )
  Total other expense     9,051,365       (383,080 )
                 
Net income before provision for income taxes     9,620,448       30,689  
                 
Income taxes (benefit)     -       -  
                 
Net income     9,620,448       30,689  
                 
Non-controlling interest (note 15)     (53,507 )     -  
                 
NET INCOME ATTRIBUTABLE TO FIRST CHOICE HEALTHCARE SOLUTIONS, INC.   $ 9,566,941     $ 30,689  
                 
Net income per common share, basic   $ 0.42     $ 0.00  
                 
Net income per common share, diluted   $ 0.36     $ 0.00  
                 
Weighted average number of common shares outstanding, basic     22,886,307       18,062,046  
                 
Weighted average number of common shares outstanding, diluted     26,219,641       22,090,565  
                 
   
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(unaudited)  
             
    Three months ended March 31,  
    2016     2015  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net Income   $ 9,620,448     $ 30,689  
Adjustments to reconcile net loss to cash provided by operating activities:                
Depreciation and amortization     298,950       140,509  
Amortization of financing costs     15,325       20,686  
Bad debt expense     262,524       45,224  
Gain on sale of property     (9,188,968 )     -  
Common stock issued in connection with loan extension     92,000       99,000  
Stock based compensation     81,300       48,250  
Changes in operating assets and liabilities:                
Accounts receivable     (1,087,059 )     (492,641 )
Prepaid expenses and other     91,623       26,075  
Restricted funds     359,414       (66,478 )
Employee loans     (245,933 )     -  
Accounts payable and accrued expenses     122,628       (38,121 )
Settlement payable     (150,000 )     -  
Deposits     (14,432 )     -  
Deferred rent     59,404       -  
Unearned income     -       12,876  
  Net cash provided by (used in) operating activities     317,224       (173,931 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Proceeds from sale of property     15,068,497          
Purchase of equipment     (126,073 )     (8,284 )
  Net cash provided by (used in) investing activities     14,942,424       (8,284 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from advances     90,714       74,000  
Proceeds from lines of credit     372,636       140,000  
Net payments on notes payable     (7,265,997 )     (198,078 )
  Net cash (used in) provided by financing activities     (6,802,647 )     15,922  
                 
Net increase (decrease) in cash and cash equivalents     8,457,001       (166,293 )
Cash and cash equivalents, beginning of period     1,594,998       279,087  
                 
Cash and cash equivalents, end of period   $ 10,051,999     $ 112,794  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for interest   $ 181,135     $ 264,144  
Cash paid during the period for taxes   $ -     $ -  
                 
Supplemental Disclosure on non-cash investing and financing activities:                
Common stock issued in settlement of accrued expenses   $ -     $ 15,000  
                 
 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE
(unaudited)
 
Net Income   $ 9,566,941     $ 30,689
Gain on sale of property and improvements     (9,188,968 )     -
Depreciation and amortization     298,950       140,509
Amortization of financing costs     15,325       20,686
Bad debt expense     262,524       45,224
Stock-based compensation     81,300       48,250
Adjusted EBITDA   $ 1,036,072     $ 285,358
               
 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE WITH GAIN ON SALE OF PROPERTY INCLUDED
(unaudited)
 
Net Income   $ 9,566,941   $ 30,689
Depreciation and amortization     298,950     140,509
Amortization of financing costs     15,325     20,686
Bad debt expense     262,524     45,224
Stock-based compensation     81,300     48,250
Adjusted EBITDA   $ 10,225,040   $ 285,358
             

About First Choice Healthcare Solutions, Inc.
Headquartered in Melbourne, Florida, First Choice Healthcare Solutions (FCHS) is implementing a defined growth strategy aimed at expanding its network of non-physician-owned medical centers of excellence, which concentrate on treating patients in the following specialties: Orthopaedics, Spine Surgery, Neurology, Interventional Pain Management and related diagnostic and ancillary services in key expansion markets throughout the Southeastern U.S. Serving Florida's Space Coast, the Company's flagship integrated platform currently administers over 100,000 patient visits each year and is comprised of First Choice Medical Group, The B.A.C.K. Center and Crane Creek Surgery Center. For more information, please visit www.myfchs.com, www.myfcmg.com, www.thebackcenter.net and www.cranecreeksurgerycenter.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.

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