- Revenue for second quarter 2016 grew 17 percent year over year
- Gross profit increased 9.3 percent compared to 2015 second quarter
- Second quarter 2016 EBITDA improved 44.4 percent year over year
DALLAS, Aug. 18, 2016 (GLOBE NEWSWIRE) -- Ascendant Solutions, Inc. (Pink Sheets:ASDS) (“Ascendant” or the “Company”) today announced its results for the second quarter of fiscal 2016. The Company reported second quarter Consolidated Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $179,000 compared to consolidated EBITDA of $124,000 in 2015. For the six months ended June 30, 2016, the Company reported Consolidated Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $341,000 compared to consolidated EBITDA of $138,000 in 2015.
For the second quarter ended June 30, 2016, the Company reported a consolidated net loss of $323,000, or $0.01 per share, compared to a net loss of $80,000, or less than $0.01 per share, for the same period of 2015. Consolidated net loss for the six months ended June 30, 2016 was $539,000 compared to net loss of $279,000 for the first six months of 2015. The increase in the Company’s net loss for the second quarter 2016 compared to the same quarter in 2015 was attributable to increased interest, depreciation and amortization from the two acquired pharmacies in the third quarter of 2015 and a loss on impairment of assets of $114,000. This impairment was recognized in the second quarter of 2016 in conjunction with the move of Dougherty’s Pharmacy Forest Park to its new location at Preston and Campbell in Dallas, Texas. Lease rates at the new location will result in savings of $150,000 on an annual basis.
Healthcare
The Company’s subsidiary, Dougherty’s Holding, Inc. (“DHI”), which owns and operates multiple Dougherty’s Pharmacies, reported EBITDA of $305,000 for the second quarter ended June 30, 2016, compared to $289,000 in 2015, an increase of 5.5%. EBITDA for the six months ended June 30, 2016, was $626,000 compared to $474,000 in 2015, an increase of 32.1%.
Dougherty’s initial stores reported EBITDA of $575,000 for the second quarter ended June 30, 2016, compared to $561,000 in 2015, an increase of 2.5%. For the six months ended June 30, 2016, EBITDA for the initial stores was $1,112,000 compared to $972,000 in 2015, an increase of 14.4%.
Second quarter revenue from acquisition stores increased $1,682,000 year over year at 21.7 percent margins. Revenue from acquisition stores for the six months ended June 30, 2016 increased $3,567,000 at 21.8 percent margins. Acquisition store EBITDA for the second quarter of 2016 was $4,000 and $60,000 for the six months ended June 30, 2016.
The following chart summaries Dougherty’s Healthcare segment comparing the Company’s two initial pharmacies and the five pharmacies acquired since 2014, along with Dougherty’s corporate overhead.
| Healthcare Segment Financial Summary | ||||||||||||||||
| (000’s omitted, except script count, unaudited) | ||||||||||||||||
| Q2 2016 | Q2 2015 | YTD 2016 | YTD 2015 | |||||||||||||
| Initial Stores: | ||||||||||||||||
| Revenue | $ | 6,875 | $ | 6,950 | $ | 13,337 | $ | 13,498 | ||||||||
| Gross margin percentage | 28.2 | % | 29.1 | % | 29.3 | % | 29.2 | % | ||||||||
| SG&A | 1,364 | 1,465 | 2,799 | 2,970 | ||||||||||||
| EBITDA | 575 | 561 | 1,112 | 972 | ||||||||||||
| Generic dispensing rate | 78.1 | % | 77.2 | % | 78.2 | % | 76.7 | % | ||||||||
| Script count | 54,176 | 51,870 | 105,805 | 101,542 | ||||||||||||
| Acquisitions: | ||||||||||||||||
| Revenue | $ | 4,123 | $ | 2,441 | $ | 8,477 | $ | 4,910 | ||||||||
| Gross margin percentage | 21.7 | % | 24.4 | % | 21.8 | % | 23.1 | % | ||||||||
| SG&A | 891 | 591 | 1,786 | 1,097 | ||||||||||||
| EBITDA | 4 | (2 | ) | 60 | 37 | |||||||||||
| Generic dispensing rate | 86.0 | % | 80.5 | % | 85.8 | % | 80.2 | % | ||||||||
| Script count | 56,278 | 26,905 | 115,720 | 54,810 | ||||||||||||
| Overhead related to Healthcare: | ||||||||||||||||
| SG&A | 274 | 270 | 546 | 535 | ||||||||||||
| Total Healthcare: | ||||||||||||||||
| Revenue | $ | 10,998 | $ | 9,391 | $ | 21,814 | $ | 18,408 | ||||||||
| Gross margin percentage | 25.7 | % | 27.9 | % | 26.3 | % | 27.6 | % | ||||||||
| SG&A | 2,529 | 2,326 | 5,131 | 4,602 | ||||||||||||
| EBITDA | 305 | 289 | 626 | 474 | ||||||||||||
| Generic dispensing rate | 82.4 | % | 77.5 | % | 82.3 | % | 77.9 | % | ||||||||
| Script count | 110,454 | 78,775 | 221,525 | 156,352 | ||||||||||||
Other
The Company’s Other division includes corporate overhead expenses and dividend income from its remaining real estate investments. This division reported negative EBITDA of ($126,000) for the second quarter of 2016 compared to ($165,000) in 2015 and negative EBITDA of ($285,000) for the six months ended June 30, 2016 compared to ($336,000) in 2015.
Management Comments
Jim Leslie, Chairman of Ascendant, commented, “We are pleased to report that our 2016 second quarter revenues increased 17 percent year over year to $10.9 million, and our acquired pharmacies contributed $4.1 million to this revenue improvement. Script count for the quarter increased 40 percent, primarily due to more than 100 percent growth in script count at our acquired stores. We continue to project a 2016 revenue run rate of approximately $48 million for our pharmacy business, with an ongoing focus on operational improvement at our acquired stores to build stronger EBITDA growth, as well as net income, over time.”
Mark Heil, President and CEO, added, “Despite industry-wide pressure from lower pharmacy reimbursement rates and the challenging retail sales environment, we posted second quarter EBITDA of $305,000 for our pharmacy business, an improvement of nearly 6 percent year over year. Our long-term focus continues to be on growing our healthcare business through the opportunistic acquisition of well-run community pharmacies. In addition, we are working to reduce costs and establish more efficient operational practices at our acquired locations to enhance their financial performance. We remain committed to our strategic growth plan and are confident that this strategy will produce solid shareholder returns over time.”
| Select Balance Sheet Items and Book Value per Share | ||||||||
| (000's omitted, except per share amounts, unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| Total Current Assets | $ | 6,663 | $ | 6,416 | ||||
| Property and Equipment, net | 1,573 | 1,406 | ||||||
| Intangible Assets, net | 4,029 | 4,377 | ||||||
| Equity Method Investments | 5,107 | 5,107 | ||||||
| Deferred Tax Asset | 3,000 | 3,000 | ||||||
| Total Assets | $ | 20,372 | $ | 20,306 | ||||
| Total Current Liabilities | $ | 4,288 | $ | 3,347 | ||||
| Notes Payable, Long-Term | 8,073 | 8,418 | ||||||
| Total Liabilities | 12,361 | 11,765 | ||||||
| Stockholders' Equity | 8,011 | 8,541 | ||||||
| Total Liabilities and Equity | $ | 20,372 | $ | 20,306 | ||||
| Common Shares Outstanding | 22,165,131 | 22,096,756 | ||||||
| Book Value per Share | $ | 0.36 | $ | 0.39 | ||||
| Select Income Statement Items | |||||||||||||||||
| (000's omitted, unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Revenue | $ | 10,998 | $ | 9,391 | $ | 21,814 | $ | 18,408 | |||||||||
| Cost of Sales | 8,163 | 6,797 | 16,057 | 13,335 | |||||||||||||
| Gross Profit | 2,835 | 2,594 | 5,757 | 5,073 | |||||||||||||
| SG&A | 2,656 | 2,470 | 5,416 | 4,935 | |||||||||||||
| EBITDA | 179 | 124 | 341 | 138 | |||||||||||||
| Depr, Amort & Impairment Loss | (381 | ) | (137 | ) | (642 | ) | (272 | ) | |||||||||
| Interest | (111 | ) | (58 | ) | (218 | ) | (120 | ) | |||||||||
| Taxes | (10 | ) | (9 | ) | (20 | ) | (25 | ) | |||||||||
| Net Income | $ | (323 | ) | $ | (80 | ) | $ | (539 | ) | $ | (279 | ) | |||||
EBITDA is calculated as net income (loss) before deducting interest, taxes, depreciation and amortization. Although EBITDA is not a measure of actual cash flow because it does not consider changes in assets and liabilities that may impact cash balances, the Company’s management reviews these non-GAAP financial measures internally to evaluate the Company’s performance and manage the operations. Additionally, the Company believes it is a useful metric to evaluate operating performance and has therefore included such measures in the reporting of operating results.
About Ascendant Solutions, Inc.
Ascendant Solutions, Inc. is a value-oriented investment firm focused on successfully acquiring, managing and growing community-based pharmacies in the Southwest Region. Ascendant currently has approximately $43 million in net operating loss carryforwards which can be used to shelter future income, thus enhancing free cash flow or debt service capabilities. Interested investors can access financials and stock trading information for Ascendant at OTCMarkets.com or at www.ascendantsolutions.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations, projections, estimates and assumptions. These forward-looking statements may be identified by words such as "expects," "believes," "anticipates" and similar expressions. Forward-looking statements involve risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.