SOURCE: First Choice Healthcare Solutions, Inc.

First Choice Healthcare Solutions, Inc.

April 03, 2017 08:30 ET

First Choice Healthcare Solutions Reports 2016 Year-End Results

Management to Host Conference Call and Webcast Today at 1:30 PM ET to Discuss Results

MELBOURNE, FL--(Marketwired - Apr 3, 2017) - 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 and Spine care, today announced its 2016 financial results for the 12 months ended December 31, 2016.

Key 2016 Financial Highlights Compared to 2015

  • Total revenues increased 51% to $29,464,082 from $19,517,664.
  • Net patient service revenue rose 52% to $27,053,190 from $17,770,697.
  • Non-GAAP adjusted EBITDA*, after deducting non-cash and one-time cash gains and expenses, increased 90% to $3,348,658 from $1,727,693.
  • Non-GAAP adjusted EBITDA* as a percentage of net patient service revenues improved to 14% from 10% after deducting non-controlling revenues contributed by Crane Creek Surgery Center of $3,046,034 in 2016 and $674,878 in 2015.
  • Net income attributable to First Choice totaled $9,174,383, or $0.38 earnings per share, compared to a net loss of $3,421,841, or $0.17 loss per share. 
  • As of December 31, 2016, cash on the balance sheet totaled $4,593,638 and accounts receivable totaled $9,536,830. This compared to cash of $1,594,998, restricted cash of $359,414 and accounts receivable of $6,623,894 as of the end of 2015. 

Chris Romandetti, President and CEO of First Choice, stated, "We are pleased with our Company's strong year-over-year results and take pride in the fact that our business model continues to prove that our approach to managing the business of healthcare is delivering results. We were particularly pleased with the improvement in our non-GAAP adjusted EBITDA results, which nearly doubled. When evaluating our overall performance, it is important to note that our net patient service revenues were impacted by the recently announced temporary loss of Dr. Richard Harrison, one of First Choice Medical Group's Board Certified Orthopaedic surgeons and a decorated colonel in the United States Army Reserves Medical Corps, who was deployed this past October through the end of January in Iraq as a key trauma surgeon for a joint U.S. Military and Coalition Task Force fighting the war on terror. Nonetheless, 2016 was a year in which all of our providers distinguished themselves as world class physicians and medical specialists, helping to establish First Choice through our Medical Centers of Excellence in Melbourne, Florida as the largest provider of Orthopaedic and Spine care and treatment on Florida's high growth Space Coast."

Continuing, Romandetti said, "Looking ahead, we are reiterating our 2017 guidance of $40-$45 million in revenues and adjusted EBITDA of 15%-20% of revenues. We have been experiencing continued growth in our ancillary service areas, particularly in our Physical and Occupational Therapy unit, which is on pace to open four new centers serving Brevard and surrounding counties in Florida this year. Moreover, earlier this year, we were delighted to welcome another top-rated Spine surgeon to The B.A.C.K. Center, Dr. James Billys. With additional providers expected to be joining the First Choice family in the coming months and given several other expansion initiatives being actively pursued, the future has never looked brighter for our Company."

Details for Conference Call and Webcast
First Choice's management team will host a conference call and webcast for the investment community later today beginning at 1:30 PM Eastern Time to discuss the results and recent corporate developments. Participants can register and access the conference call by dialing toll-free 866-682-6100 (for U.S. and Canada dial-in) or 862-255-5401 (for international dial-in). The conference call will also be webcasted, which will be accessible through First Choice's investor relations website on Monday morning by navigating to http://ir.myfchs.com/ and clicking on "2016 Year-End Conference Call and 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/.

* 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 2016 year-end results, please refer to the Annual Report on the amended Form 10-K filed earlier today with the U.S. Securities and Exchange Commission and found at www.sec.gov.

FINANCIAL CHARTS TO FOLLOW

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.  
CONSOLIDATED BALANCE SHEETS  
DECEMBER 31, 2016 AND 2015  
             
    2016     2015  
ASSETS                
Current assets                
Cash (amounts related to VIE of $708,858 and $1,556,303)   $ 4,593,638     $ 1,594,998  
Cash-restricted     -       359,414  
Accounts receivable, net (amounts related to VIE of $6,010,961 and $4,544,308)     9,536,830       6,623,894  
Employee loans (amounts related to VIE of $491,850 and $636,293)     820,341       672,293  
Prepaid and other current assets (amounts related to VIE of $329,427 and $183,465)     422,512       316,773  
Capitalized financing costs, current portion (amounts related to VIE of $-0- and $1,317)     -       39,533  
Total current assets     15,373,321       9,606,905  
                 
Property, plant and equipment, net of accumulated depreciation of $1,165,219 and $3,075,648 (amounts related to VIE of $693,629 and $773,808)     2,544,816       8,613,502  
                 
Other assets (amounts related to VIE of $921,470 and $916,379)     4,227,957       4,403,581  
                 
Total assets   $ 22,146,094     $ 22,623,988  
                 
                 
LIABILITIES AND EQUITY                
Current liabilities                
Accounts payable and accrued expenses (amounts related to VIE of $1,366,143 and $2,319,056)   $ 2,083,231     $ 3,937,244  
Accounts payable, related party (amount related to VIE of $251,588)     251,588       251,588  
Stock-based payable     -       1,198,900  
Advances     -       43,082  
AMT tax payable     181,029       -  
Settlement payable     -       600,000  
Line of credit, short term (amount related to VIE of $439,524 and $416,888)     1,539,524       2,566,888  
Note payable, related party, current portion (amount related to VIE of $-0- and $428,645)     -       428,645  
Notes payable, current portion (amount related to VIE of $-0- and $10,341)     519,452       7,652,941  
Unearned revenue     26,936       42,704  
Deferred rent, short term portion (amount related to VIE of $237,923)     237,923       118,810  
  Total current liabilities     4,839,683       16,840,802  
                 
Commitments and contingencies     -       -  
                 
Long term debt:                
Deposits held     41,930       67,432  
Notes payable, long term portion     14,531       535,822  
Deferred rent, long term portion (amount related to VIE of $2,214,909 and $2,141,199)     2,293,594       2,141,199  
  Total long term debt     2,350,055       2,744,453  
                 
Total liabilities     7,189,738       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, 24,631,327 and 22,867,626 shares issued and outstanding as of December 31, 2016 and 2015, respectively     24,631       22,868  
Common stock subscription     -       175,000  
Additional paid in capital     24,020,610       21,196,792  
Accumulated deficit     (10,100,534 )     (19,274,917 )
Total stockholders' equity attributable to First Choice Healthcare Solutions, Inc.     13,944,707       2,119,743  
Non-controlling interest     1,011,649       918,990  
  Total equity     14,956,356       3,038,733  
                 
Total liabilities and equity   $ 22,146,094     $ 22,623,988  
                 
                 
   
FIRST CHOICE HEALTHCARE SOLUTIONS, INC  
CONSOLIDATED STATEMENTS OF OPERATIONS  
             
    Year ended December 31,  
    2016     2015  
Revenues:                
Patient Service Revenue   $ 27,978,106     $ 18,425,506  
Provision for bad debts     (924,916 )     (654,809 )
Net patient service revenue less provision for bad debts     27,053,190       17,770,697  
Rental Revenue     2,410,892       1,746,967  
  Total Revenue     29,464,082       19,517,664  
                 
Operating expenses:                
Salaries and benefits     12,570,398       9,337,740  
Other operating expenses     5,912,655       2,099,568  
General and administrative     10,019,667       7,144,538  
Litigation settlement     -       2,017,208  
Depreciation and amortization     821,709       852,985  
  Total operating expenses     29,324,429       21,452,039  
                 
Net income (loss) from operations     139,653       (1,934,375 )
                 
Other income (expense):                
Gain on sale of property and improvements     9,207,846       -  
Miscellaneous income (expense)     278,358       27,023  
                 
Amortization financing costs     (15,654 )     (75,833 )
Interest expense, net     (343,161 )     (1,220,980 )
  Total other income (expense)     9,127,389       (1,269,790 )
                 
Net income (loss) before provision for income taxes     9,267,042       (3,204,165 )
                 
Income taxes (benefit)     -       -  
                 
Net income (loss)     9,267,042       (3,204,165 )
                 
Non-controlling interest (note 15)     (92,659 )     (217,676 )
                 
NET INCOME (LOSS) ATTRIBUTABLE TO FIRST CHOICE HEALTHCARE SOLUTIONS, INC.   $ 9,174,383     $ (3,421,841 )
                 
Net income (loss) per common share, basic   $ 0.38     $ (0.17 )
                 
Net income (loss) per common share, diluted   $ 0.36     $ (0.17 )
                 
Weighted average number of common shares outstanding, basic     23,843,239       20,117,582  
                 
Weighted average number of common shares outstanding, diluted     25,309,905       20,117,582  
                 
                 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
             
    Year ended December 31,  
    2016     2015  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net Income (loss)   $ 9,267,042     $ 3,204,165 )
Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities:                
Depreciation and amortization     821,709       852,985  
Amortization of financing costs     15,654       75,833  
Bad debt expense     924,916       654,809  
Gain (loss) on sale of property     (9,212,346 )     1,908  
Common stock issued in connection with loan extension     -       227,000  
Common stock issued in settlement of litigation     -       500,250  
Note payable issued in settlement of litigation     -       50,749  
Stock-based compensation     1,276,681       2,344,927  
Changes in operating assets and liabilities:                
Accounts receivable     (3,837,852 )     (2,587,420 )
Prepaid expenses and other     (105,739 )     149,101  
Restricted funds     359,414       (41,155 )
Employee loans     (148,048 )     (198,661 )
Accounts payable and accrued expenses     (2,498,028 )     922,295  
Settlement payable     (600,000 )     600,000  
Deposits     (25,502 )     (5,469 )
Deferred rent     271,508       137,002  
Unearned income     (15,768 )     3,941  
  Net cash (used in) provided by operating activities     (3,506,359 )     483,930  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash from variable interest entity     -       843,996  
Proceeds from sale of property     15,113,497       11,241  
Payment of acquisition deposit     -       (560,000 )
Purchase of equipment     (254,627 )     (206,325 )
  Net cash provided by investing activities     14,858,870       88,912  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
(Repayments) proceeds from advances     (43,082 )     474,488  
Proceeds from notes payable, related party     -       420,000  
Proceeds from common stock subscription     -       175,000  
Payments on lines of credit     372,636       447,562  
Payment to acquire previously issued warrants     (600,000 )     -  
Net payments on notes payable     (8,083,425 )     (773,981 )
  Net cash (used in) provided by financing activities     (8,353,871 )     743,069  
                 
Net increase in cash and cash equivalents     2,998,640       1,315,911  
Cash and cash equivalents, beginning of period     1,594,998       279,087  
                 
Cash and cash equivalents, end of period   $ 4,593,638     $ 1,594,998  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for interest   $ 339,722     $ 925,045  
Cash paid during the period for taxes   $ -     $ -  
                 
Supplemental Disclosure on non-cash investing and financing activities:                
Common stock issued in settlement of accrued expenses   $ 1,290,900     $ 15,000  
Common stock issuable in settlement of convertible line of credit   $ 1,400,000     $ -  
Common stock issued to acquire previously issued warrant   $ 80,400     $ -  
Common stock issued for future services   $ -     $ 1,153,777  
Common stock issued in settlement of related party advances   $ -     $ 655,407  
Common stock issued in settlement of convertible note and interest   $ -     $ 2,236,907  
Fair value of options issued to acquire management control of variable interest entity   $ -     $ 3,226,427  
Assets acquired from consolidation of variable interest entities   $ -     $ 5,294,412  
Liability incurred from consolidation of variable interest entities   $ -     $ 5,294,680  
                 
                 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.  
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE  
   
    For the 12 Months Ended December 31,  
    2016     2015  
Net income (loss) attributable to First Choice Healthcare Solutions   $ 9,174,383     $ (3,421,841 )
                 
Amortization     15,654       75,833  
Bad Debt     924,916       654,809  
Depreciation     821,709       852,985  
Interest     343,161       1,220,980  
Taxes     -       -  
Stock-based compensation     1,276,681       2,344,927  
Gain on sale of property and equipment     (9,207,846 )     -  
  Adjusted EBITDA   $ 3,348,658     $ 1,727,693  
                 
Net Patient Service Revenue Less 60% non-controlling revenue ($3,046,034 and $674,878, respectively)   $ 24,007,156     $ 17,095,819  
Adjusted EBITDA as a % of Net Patient Service Revenue Less 60% non-controlling revenue)     14 %     10 %
                 
                 

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.

Contact Information

  • INVESTOR CONTACT:
    First Choice Healthcare Solutions, Inc.
    Phone: 321-802-5830
    Email: IR@myfchs.com