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First Choice Healthcare Solutions Reports Continued Profitability and Revenue Growth in Second Quarter 2016

Three Month Revenues Increased 77% to $7.65 Million, up From $4.32 Million; Six Month Revenues Rose 118% to $14.90 Million From $6.83 Million

Q216 Adjusted EBITDA* Increased to $838,000 From $124,000; Adjusted EBITDA* for the First Half of 2016 Rose to $2.06 Million From $772,000


/EINPresswire.com/ -- MELBOURNE, FL -- (Marketwired) -- 08/16/16 -- 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 second quarter results for the three and six months ended June 30, 2016.

Chris Romandetti, Chairman, President and CEO of First Choice, stated, "During the second quarter, our Company continued to benefit from high levels of execution at each of the Centers of Medical Excellence comprising our Melbourne, Florida platform. Our success in recruiting first rate Orthopaedic and Spine surgeons to our Melbourne practices, along with the addition of The B.A.C.K. Center and Crane Creek Surgery Center to our Melbourne platform, is helping to drive strong growth across several key metrics, including revenue, adjusted EBITDA and net income. Moreover, our strong cash position and operating leverage have begun to yield greater cost efficiencies and compelling expansion opportunities that should collectively serve to unlock strategic and financial benefits for our Company in coming quarters. We look forward to providing detailed insight into our results and growth initiatives on this morning's call."

Financial Highlights for Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015:

  • Total revenues rose 77% to a record $7,653,100 -- up from $4,324,315. 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, effective May 1, 2015 and October 1, 2015, respectively; as well as the addition of two new Board Certified Orthopaedic surgeons to the clinical staff at First Choice Medical Group -- Dr. Kenneth Sands and Dr. Raymond DeLorenzi -- late in the second quarter of this year.
    • Net patient service revenues rose 85% to $7.02 million from $3.80 million.

  • On a non-GAAP basis, adjusted EBITDA* rose 578% to $838,268 from $123,671.

  • Net income increased to $153,137, or $0.01 earnings per basic and diluted share, from a net loss of $496,729, or $0.03 loss per basic and diluted share.

Financial Highlights for Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015:

  • Total revenues increased 118% to $14,894,853 from $6,829,482.
    • Net patient service revenues climbed 126% to $13,638,403 from $6,044,103.

  • On a non-GAAP basis, adjusted EBITDA* totaled $2,055,475, representing a 166% increase over $772,173 reported for the first half of 2015. With the sale of Marina Towers factored, adjusted EBITDA* rose to $11,267,821.

  • With the one-time gain from the sale of Marina Towers, net income climbed to $9,720,078, or $0.42 earnings per basic share and $0.36 earnings per diluted share, compared to a net loss of $466,040, or $0.03 loss per basic and fully diluted share. Notwithstanding the one-time gain from the building sale, net income totaled $507,732, or $0.02 earnings per basic and diluted share.

Balance Sheet Highlights as of June 30, 2016 Compared to December 31, 2015

  • Cash totaled $7,785,602, up from cash and restricted cash of $1,954,412.
  • Accounts receivable increased to $8,369,428 from $6,623,894.
  • Total liabilities dropped 46% to $10,558,074 from $19,585,255.
  • Total stockholders' equity climbed 360% to $13,969,630 from $3,038,733.

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 and access the conference call by dialing 866-682-6100 (U.S. and Canada dial-in) or 862-255-5401 (for international dial-in). 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 "Second 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."

Restatement of First Quarter 2016 Adjusted EBITDA
In the press release dated May 17, 2016 relating to the Company's first quarter 2016 financial results, the Company provided Non-GAAP Financial Measures relating to its Adjusted EBITDA results. However, it was discovered that the Adjusted EBITDA results failed to add back net interest expenses in its reported calculations. The corrected Adjusted EBITDA calculations for the first quarter 2016 periods are provided in the charts below.

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.


                   FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    June 30,    December 31,
                                                      2016          2015
                                                  ------------ -------------
                                                   (unaudited)
                      ASSETS
Current assets
Cash (amounts related to VIE of $1,300,391 and
 $1,556,303)                                      $ 7,785,602  $  1,594,998
Cash-restricted                                             -       359,414
Accounts receivable, net (amounts related to VIE
 of $5,324,747 and $4,544,308)                      8,369,428     6,623,894
Employee loans (amounts related to VIE of
 $1,084,406 and $636,293)                           1,084,406       672,293
Prepaid and other current assets (amounts related
 to VIE of $151,147 and $183,465)                     221,156       316,773
Capitalized financing costs, current portion
 (amounts related to VIE of $-0- and $1,317)                -        39,533
                                                  ------------ -------------
 Total current assets                              17,460,592     9,606,905
                                                  ------------ -------------

Property, plant and equipment, net of accumulated
 depreciation of $1,058,933 and $3,075,648
 (amounts related to VIE of $735,079 and
 $773,808)                                          2,644,783     8,613,502
                                                  ------------ -------------

Other assets
Goodwill (amount relating to VIE of $899,465)         899,465       899,465
Deferred costs, net of amortization of $376,418
 and $215,096                                       2,850,009     3,011,331
Patient list, net of accumulated amortization of
 $85,000 and $75,000                                  215,000       225,000
Patents, net of accumulated amortization of
 $47,750 and $38,200                                  238,750       248,300
Investments (amounts related to VIE of $22,005
 and $16,914)                                          22,005        16,914
Deferred tax asset                                    181,029             -
Deposits                                               16,071         2,571
                                                  ------------ -------------
 Total other assets                                 4,422,329     4,403,581
                                                  ------------ -------------

Total assets                                      $24,527,704  $ 22,623,988
                                                  ============ =============


              LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses (amounts
 related to VIE of $2,278,994 and $2,319,056)     $ 3,305,834  $  3,937,244
Accounts payable, related party (amount related
 to VIE of $251,588)                                  251,588       251,588
Stock based payable                                   601,833     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)                          2,939,524     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 $4,128 and $10,341)                           513,506     7,652,941
Unearned revenue                                       26,354        42,704
Deferred rent, short term portion (amount related
 to VIE of $237,620 and $118,810)                     237,620       118,810
                                                  ------------ -------------
 Total current liabilities                          8,057,288    16,840,802
                                                  ------------ -------------

Long term debt:
Deposits held                                          58,234        67,432
Notes payable, long term portion                      275,125       535,822
Deferred rent, long term portion (amount related
 to VIE of $2,141,198 and $2,141,199)               2,167,427     2,141,199
                                                  ------------ -------------
 Total long term debt                               2,500,786     2,744,453
                                                  ------------ -------------

Total liabilities                                  10,558,074    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, 24,238,613 and 22,867,626
 shares issued and outstanding as of June 30,
 2016 and December 31, 2015, respectively              24,239        22,868
Common stock subscription                                   -       175,000
Additional paid in capital                         22,393,921    21,196,792
Accumulated deficit                                (9,554,839)  (19,274,917)
                                                  ------------ -------------
Total stockholders' equity attributable to First
 Choice Healthcare Solutions, Inc.                 12,863,321     2,119,743
Non-controlling interest (note 15)                  1,106,309       918,990
                                                  ------------ -------------
 Total equity                                      13,969,630     3,038,733
                                                  ------------ -------------

Total liabilities and equity                      $24,527,704  $ 22,623,988
                                                  ============ =============


                   FIRST CHOICE HEALTHCARE SOLUTIONS, INC
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (unaudited)

                       Three months ended June 30, Six months ended June 30,
                            2016          2015         2016         2015
                       ------------- ------------- ------------ ------------
Revenues:
Patient Service
 Revenue               $  7,290,456  $  3,810,299  $14,168,121  $ 6,095,587
Provision for bad
 debts                     (267,194)       (6,260)    (529,718)     (51,484)
                       ------------- ------------- ------------ ------------
Net patient service
 revenue less
 provision for bad
 debts                    7,023,262     3,804,039   13,638,403    6,044,103
Rental Revenue              629,838       520,276    1,256,450      785,379
                       ------------- ------------- ------------ ------------
 Total Revenue            7,653,100     4,324,315   14,894,853    6,829,482

Operating expenses:
Salaries and benefits     3,139,042     2,125,481    5,919,611    3,071,601
Other operating
 expenses                 1,573,376       563,422    2,760,650    1,014,907
General and
 administrative           2,535,741     1,649,870    4,941,618    2,203,154
Depreciation and
 amortization               136,800       144,417      435,750      284,926
                       ------------- ------------- ------------ ------------
 Total operating
  expenses                7,384,959     4,483,190   14,057,629    6,574,588
                       ------------- ------------- ------------ ------------

Net income (loss) from
 operations                 268,141      (158,875)     837,224      254,894

Other income
 (expense):
Gain on sale of
 property and
 improvements                23,378             -    9,212,346            -
Miscellaneous income
 (expense)                   46,812        40,369      105,669       41,119
Amortization financing
 costs                         (329)      (19,229)     (15,654)     (39,915)
Interest expense, net       (51,053)     (358,994)    (232,188)    (722,138)
                       ------------- ------------- ------------ ------------
 Total other expense         18,807      (337,854)   9,070,173     (720,934)
                       ------------- ------------- ------------ ------------

Net income (loss)
 before provision for
 income taxes               286,949      (496,729)   9,907,397     (466,040)

Income taxes (benefit)            -             -            -            -
                       ------------- ------------- ------------ ------------

Net income (loss)           286,949      (496,729)   9,907,397     (466,040)

Non-controlling
 interest (note 15)        (133,812)            -     (187,319)           -
                       ------------- ------------- ------------ ------------

NET INCOME (LOSS)
 ATTRIBUTABLE TO FIRST
 CHOICE HEALTHCARE
 SOLUTIONS, INC.       $    153,137  $   (496,729) $ 9,720,078  $  (466,040)
                       ============= ============= ============ ============

Net income (loss) per
 common share, basic   $       0.01  $      (0.03) $      0.42  $     (0.03)
                       ============= ============= ============ ============

Net income (loss) per
 common share, diluted $       0.01  $      (0.03) $      0.36  $     (0.03)
                       ============= ============= ============ ============

Weighted average
 number of common
 shares outstanding,
 basic                   23,862,943    18,999,475   23,374,625   18,533,559
                       ============= ============= ============ ============

Weighted average
 number of common
 shares outstanding,
 diluted                 27,196,277    18,999,475   26,707,959   18,533,559
                       ============= ============= ============ ============


                   FIRST CHOICE HEALTHCARE SOLUTIONS, INC
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (unaudited)

                                                   Six Months Ended June 30,
                                                       2016         2015
                                                   ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)                                  $ 9,907,397  $  (466,040)
Adjustments to reconcile net income (loss) to cash
 (used in) provided by operating activities:
Depreciation and amortization                          435,750      338,700
Amortization of financing costs                         15,654       39,915
Bad debt expense                                       529,718       51,484
Gain on sale of property                            (9,212,346)           -
Common stock issued in connection with loan
 extension                                              92,000      227,000
Stock based compensation                               334,433      139,750
Changes in operating assets and liabilities:
Accounts receivable                                 (2,275,252)    (556,635)
Prepaid expenses and other                              95,617      237,431
Restricted funds                                       359,414      (54,563)
Employee loans                                        (412,113)    (103,654)
Accounts payable and accrued expenses                 (650,425)     160,359
Settlement payable                                    (600,000)           -
Deposits                                               (22,698)      (5,469)
Deferred rent                                          145,038       39,603
Unearned income                                        (16,350)      22,113
                                                   ------------ ------------
 Net cash (used in) provided by operating
  activities                                        (1,274,163)      69,994

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash from variable interest entity                           -      679,673
Proceeds from sale of property                      15,113,497            -
Purchase of equipment                                 (149,507)     (40,065)
                                                   ------------ ------------
 Net cash provided by investing activities          14,963,990      639,608

CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) proceeds from advances                    (43,082)     129,000
Proceeds from lines of credit                          372,636      355,656
Net payments on notes payable                       (7,828,777)    (418,780)
                                                   ------------ ------------
 Net cash (used in) provided by financing
  activities                                        (7,499,223)      65,876

Net increase in cash and cash equivalents            6,190,604      775,478
Cash and cash equivalents, beginning of period       1,594,998      279,087
                                                   ------------ ------------

Cash and cash equivalents, end of period           $ 7,785,602  $ 1,054,565
                                                   ============ ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest           $   237,943  $   594,211
                                                   ============ ============
Cash paid during the period for taxes              $         -  $         -
                                                   ============ ============

Supplemental Disclosure on non-cash investing and
 financing activities:
Common stock issued in settlement of accrued
 expenses                                          $   597,067  $    15,000
                                                   ============ ============
Common stock issued in settlement of convertible
 note and interest                                 $         -  $   811,200
                                                   ============ ============
Fair value of options issued to acquire management
 control of variable interest entity               $         -  $ 3,226,427
                                                   ============ ============


                   FIRST CHOICE HEATLHCARE SOLUTIONS, INC.
           RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE
                                 (Unaudited)

                                             As Originally Reflected in Q116
                                                  Results Press Release
                                               Three Months Ended March 31,
                                                   2016            2015
                                             -------------------------------
Net Income (Loss) Attributable to FCHS       $    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
Interest expense, net
                                             -------------------------------
Adjusted EBITDA                              $    1,036,072  $       285,358

                                                         Restated
                                               Three Months Ended March 31,
                                                   2016            2015
                                             -------------------------------
Net Income (Loss) Attributable to FCHS       $    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
Interest expense, net                               181,135          363,144
                                             -------------------------------
Adjusted EBITDA                              $    1,217,207  $       648,502


                   Three Months Ended June 30,    Six Months Ended June 30,
                       2016           2015           2016          2015
                  ----------------------------- ----------------------------
Net Income (Loss)
 Attributable to
 FCHS             $     153,137  $    (496,729) $  9,720,078  $    (466,040)
Gain on sale of
 property and
 improvements           (23,378)             -    (9,212,346)             -
Depreciation and
 amortization           136,800        144,417       435,750        284,926
Amortization of
 financing costs            329         19,229        15,654         39,915
Bad debt expense        267,194          6,260       529,718         51,484
Stock-based
 compensation           253,133         91,500       334,433        139,750
Interest expense,
 net                     51,053        358,994       232,188        722,138
                  ----------------------------- ----------------------------
Adjusted EBITDA   $     838,268  $     123,671  $  2,055,475  $     772,173


                   FIRST CHOICE HEATLHCARE SOLUTIONS, INC.
         RECONCILIATION OF NON-GAAP ADJUSTED EBITDA PERFORMANCE WITH
                      GAIN ON SALE OF PROPERTY INCLUDED
                                 (Unaudited)

                                             As Originally Reflected in Q116
                                                  Results Press Release
                                               Three Months Ended March 31,
                                                   2016            2015
                                             -------------------------------
Net Income (Loss) Attributable to FCHS       $     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
Interest expense, net
                                             -------------------------------
Adjusted EBITDA                              $    10,225,040 $       285,358

                                                         Restated
`                                              Three Months Ended March 31,
                                                   2016            2015
                                             -------------------------------
Net Income (Loss) Attributable to FCHS       $     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
Interest expense, net                                181,135         363,144
                                             -------------------------------
Adjusted EBITDA                              $    10,406,175 $       648,502


                    Three Months Ended June 30,   Six Months Ended June 30,
                        2016           2015           2016          2015
                   ----------------------------- ---------------------------
Net Income (Loss)
 Attributable to
 FCHS              $      153,137 $    (496,729) $   9,720,078 $   (466,040)
Depreciation and
 amortization             136,800       144,417        435,750      284,926
Amortization of
 financing costs              329        19,229         15,654       39,915
Bad debt expense          267,194         6,260        529,718       51,484
Stock-based
 compensation             253,133        91,500        334,433      139,750
Interest expense,
 net                       51,053       358,994        232,188      722,138
                   ----------------------------- ---------------------------
Adjusted EBITDA    $      861,646 $     123,671  $  11,267,821 $    772,173

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.

Investor Contact:
Wolfe Axelrod Weinberger Associates
Donald C. Weinberger
don@wolfeaxelrod.com

Stephen D. Axelrod
CFA
steve@wolfeaxelrod.com
Phone: 212-370-4505

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


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