First Choice Healthcare Solutions Reports Second Quarter 2017 Results

Strategic Partnerships Under Evaluation as Company Expands Operational Presence

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| Source: First Choice Healthcare Solutions

MELBOURNE, Fla., Aug. 15, 2017 (GLOBE NEWSWIRE) -- 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 financial results for the three months ended June 30, 2017. 

Second Quarter Highlights:

  • Total revenues increased 7.3% in the second quarter of 2017 to $8,214,691 from $7,653,100 in the same period of 2016
  • 2017 second quarter net patient service revenue rose 8.7% to a record $7,630,917 from $7,023,262 in the same period of 2016
  • Net loss attributable to First Choice for the second quarter totaled $131,575 or $0.00 loss per share, compared to a net income of $153,137, or $0.01 earnings per share for the second quarter of 2016 
  • Non-GAAP adjusted EBITDA*, after deducting certain non-cash and one-time cash gains and expenses, totaled $593,008 in the second quarter of 2017, compared to $861,646 for the same period in 2016
  • As of June 30, 2017, cash on the balance sheet totaled $3,242,006
  • During the second quarter of 2017 the Company repurchased 32,388 shares of common stock under the share buyback program and has continued purchasing shares.  The total shares purchased through August 11, 2017 is 98,426 shares.  In addition to the repurchased shares, an unearned  service agreement returned an additional 142,500 shares to treasury.  The total shares returned to treasury is 240,926, representing approximately 1% of the outstanding shares at December 31, 2016.
  • In the first half of 2017, First Choice has successfully completed opening three of its five planned physical therapy facilities. The Company is on track to open the two additional facilities before year end.

“We made great progress during the second quarter as we position the Company to benefit from a 16% increase over the number of completed surgeries in the first quarter.  We continue to position the company to capitalize on market trends by moving high cost surgeries into our outpatient surgery center.  Further, we are exploring strategic relationships which would enhance our ability to expand our operations and drive shareholder value creation,” stated Chris Romandetti, President and CEO of First Choice. 

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 11:30 AM Eastern Time to discuss the results and recent corporate developments. Participants can register and access the conference call by dialing toll-free 1-866-682-6100 (for U.S. and Canada dial-in) or 1-862-255-5401 (for international dial-in). The conference call will also be webcasted, which will be accessible through First Choice's investor relations website by navigating to http://ir.myfchs.com/ and clicking on "Second Quarter 2017 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 Second Quarter 2017 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.

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.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
  June 30, December 31,
  2017 2016
  (unaudited)  
ASSETS    
Current assets    
Cash (amounts related to VIE of $921,972 and $708,858) $3,242,006  $4,593,638 
Accounts receivable, net (amounts related to VIE of $6,082,888 and $6,010,961)  10,855,735   9,536,830 
Employee loans (amounts related to VIE of $491,550 and $491,850)  1,031,044   820,341 
Prepaid and other current assets (amounts related to VIE of $453,420 and $329,427)  655,687   422,512 
Total current assets  15,784,472   15,373,321 
         
Property, plant and equipment, net of accumulated depreciation of $1,367,489 and $1,165,219 (amounts related to VIE of $653,892 and $693,629)  2,540,364   2,544,816 
         
Other assets (amounts related to VIE of $921,470)  4,047,085   4,227,957 
         
Total assets $22,371,921  $22,146,094 
         
LIABILITIES AND EQUITY        
Current liabilities        
Accounts payable and accrued expenses (amounts related to VIE of $1,622,119 and $1,366,143) $2,221,316  $2,083,231 
Accounts payable, related party (amount related to VIE of $251,588)  251,588   251,588 
AMT tax payable  181,029   181,029 
Line of credit, short term (amount related to VIE of $439,524)  1,539,524   1,539,524 
Notes payable, current portion  277,855   519,452 
Unearned revenue  44,037   26,936 
Deferred rent, short term portion (amount related to VIE of $237,923)  237,923   237,923 
Total current liabilities  4,753,272   4,839,683 
         
Long term liabilities        
Deposits held  41,930   41,930 
Notes payable, long term portion  15,695   14,531 
Deferred rent, long term portion (amount related to VIE of $2,266,195 and $2,214,909)  2,397,337   2,293,594 
Total long term liabilities  2,454,962   2,350,055 
         
Total liabilities  7,208,234   7,189,738 
         
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, 26,971,038 and 24,631,327 shares issued; 26,938,650 and 24,631,327 shares outstanding as of June 30, 2017 and December 31, 2016, respectively  26,971   24,631 
Additional paid in capital  24,343,291   24,020,610 
Treasury stock, 32,388 and 0 common shares, at cost, respectively  (49,954)   
Accumulated deficit  (10,029,590)  (10,100,534)
Total stockholders’ equity attributable to First Choice Healthcare Solutions, Inc.  14,290,718   13,944,707 
Non-controlling interest (note 10)  872,969   1,011,649 
Total equity  15,163,687   14,956,356 
         
Total liabilities and equity $22,371,921  $22,146,094 


FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
  For the three months ended June 30, For the six months ended June 30,
  2017 2016 2017 2016
Revenues:        
Patient Service Revenue $7,870,271  $7,290,456  $15,277,257  $14,168,121 
Allowance for bad debts  (239,354)  (267,194)  (504,350)  (529,718)
Net patient service revenue less provision for bad debts  7,630,917   7,023,262   14,772,907   13,638,403 
Rental Revenue  583,774   629,838   1,162,137   1,256,450 
Total Revenue  8,214,691   7,653,100   15,935,044   14,894,853 
                 
Operating expenses:                
Salaries and benefits  3,591,451   3,139,042   6,945,827   5,919,611 
Other operating expenses  2,631,823   2,428,310   5,161,006   4,473,885 
General and administrative  2,018,819   1,680,807   3,554,652   3,228,383 
Depreciation and amortization  193,424   136,800   382,912   435,750 
Total operating expenses  8,435,517   7,384,959   16,044,397   14,057,629 
                 
Net (loss) income from operations  (220,826)  268,141   (109,353)  837,224 
                 
Other income (expense):                
Gain on sale of property and improvements     23,378      9,212,346 
Miscellaneous income (expense)  53,696   46,812   103,798   105,669 
Amortization of financing costs     (329)     (15,654)
Interest expense, net  (30,107)  (51,053)  (62,181)  (232,188)
Total other income  23,589   18,808   41,617   9,070,173 
                 
Net (loss) income before provision for income taxes  (197,237)  286,949   (67,736)  9,907,397 
                 
Income taxes (benefit)            
                 
Net (loss) income  (197,237)  286,949   (67,736)  9,907,397 
                 
Non-controlling interest (note 10)  65,662   (133,812)  138,680   (187,319)
                 
NET (LOSS) INCOME ATTRIBUTABLE TO FIRST CHOICE HEALTHCARE SOLUTIONS, INC. $(131,575) $153,137  $70,944  $9,720,078 
                 
Net (loss) income per common share, basic $(0.00) $0.01  $(0.00) $0.42 
                 
Net (loss) income per common share, diluted $(0.00) $0.01  $(0.00) $0.36 
                 
Weighted average number of common shares outstanding, basic  26,843,848   23,862,943   26,549,810   23,374,625 
                 
Weighted average number of common shares outstanding, diluted  26,843,848   27,196,277   27,349,810   26,707,959 


FIRST CHOICE HEALTHCARE SOLUTIONS, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
   
  For the six months ended June 30,
  2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net (loss) income $(67,736) $9,907,397 
Adjustments to reconcile net(loss) income to cash used in operating activities:        
Depreciation and amortization  382,912   435,750 
Amortization of financing costs     15,654 
Bad debt expense  504,350   529,718 
Gain on sale of property     (9,212,346)
Common stock issued in connection with loan extension     92,000 
Stock based compensation  325,021   334,433 
Changes in operating assets and liabilities:        
Accounts receivable  (1,823,255)  (2,275,252)
Prepaid expenses and other current assets  (233,175)  95,617 
Restricted funds     359,414 
Employee loans  (210,703)  (412,113)
Accounts payable and accrued expenses  138,085   (650,425)
Settlement payable     (600,000)
Deposits     (22,698)
Deferred rent  103,743   145,038 
Unearned income  17,101   (16,350)
Net cash used in operating activities  (863,657)  (1,274,163)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Proceeds from sale of property     15,113,497 
Purchase of equipment  (197,588)  (149,507)
Net cash (used in) provided by investing activities  (197,588)  14,963,990 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
(Repayments) of advances     (43,082)
Proceeds from notes payable  22,113    
Proceeds from line of credit     372,636 
Purchase of treasury stock  (49,954)   
Payments on notes payable  (262,546)  (7,828,777)
Net cash used in financing activities  (290,387)  (7,499,223)
         
Net (decrease) increase in cash and cash equivalents  (1,351,632)  6,190,604 
Cash and cash equivalents, beginning of period  4,593,638   1,594,998 
         
Cash and cash equivalents, end of period $3,242,006  $7,785,602 
         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:        
Cash paid during the period for interest $62,181  $237,943 
Cash paid during the period for taxes $  $ 
         
Supplemental disclosure of non-cash investing and financing activities:        
Common stock issued in settlement of accrued expenses $  $597,067 


FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE
 
  For the three months ended
June 30,
  For the six months ended
June 30,
  2017  2016  2017 2016 
              
Net income (loss)  $(131,575) $153,137  $70,944 $9,720,078 
Interest  29,878   51,053   61,952  232,188 
Taxes           
Depreciation and Amortization  193,654   137,129   383,142  451,404 
Bad Debt  239,354   267,194   504,350  529,718 
Stock Issuance- non cash transactions  261,697   253,133   325,021  334,433 
Building          (9,188,968)
Adjusted EBITDA $593,008  $861,646  $1,345,409 $2,078,853 
CONTACT INFORMATION

Investor Relations
Mike Cole
MZ Group
949-259-4988
mike.cole@mzgroup.us