Graymark Healthcare Reports Third Quarter 2011 Financial Results
(firmenpresse) - OKLAHOMA CITY, OK -- (Marketwire) -- 11/15/11 -- Graymark Healthcare, Inc. (NASDAQ: GRMH), the nation's second largest provider of diagnostic sleep services and an innovator in comprehensive care for obstructive sleep apnea (OSA), reported financial results for the third quarter ended September 30, 2011.
Net revenues in the third quarter of 2011 were $4.5 million, decreasing 8% from $4.9 million in the third quarter of 2010 (as adjusted for the discontinued operations of the company's retail pharmacy business and the sale of Nocturna East Sleep Centers). The decrease in revenue was primarily attributable to lower average revenue per sleep study performed primarily due to the company's acquisitions of new hospital-based management agreements which are reimbursed at lower revenues per sleep study, but yield higher margins due to the lack of any significant occupancy costs.
During the third quarter of 2011, the company focused on increasing patient sleep study volumes by centralizing the patient scheduling function thereby increasing operational efficiency, maximizing the use of available capacity and compressing the elapsed time between referral receipt and rendering of service. As a result, sleep study volume increased 6% to 4,245 studies from 4,005 in the previous quarter. Additionally, net revenues increased 2% from $4.4 million in the previous quarter (as adjusted for the sale of Nocturna East Sleep Centers) despite the reduction in the reimbursement per sleep study discussed above.
Net revenues from Graymark's sleep therapy business were $1.2 million, decreasing 11% from $1.3 million in the year-ago quarter. The decrease was due to a reduction in initial CPAP device set-ups along with a decline in reimbursement levels, partially offset by an increase in recurring revenue from the company's re-supply business. Re-supply volume increased 105% to 3,575 packages shipped, compared to 1,745 shipped in the year-ago quarter, and increased 30% from 2,749 packages shipped in the previous quarter.
Selling, general and administrative expenses decreased 11% to $3.3 million, compared to $3.7 million in the year-ago quarter. This decrease was primarily due to staff reductions related to the centralization of billing and scheduling, renegotiations of facility leases and the consolidation of unprofitable facilities.
Loss from continuing operations, net of taxes, was $1.6 million in the third quarter of 2011, compared to a loss from continuing operations of $2.4 million in the year-ago quarter. Net loss attributable to Graymark was $1.6 million or $(0.10) per share in the third quarter of 2011, compared to a net loss of $3.8 million or $(0.52) per share in the year-ago quarter.
EBITDA from continuing operations in the third quarter of 2011 was a loss of $1.0 million, compared to a loss of $1.8 million in the year-ago quarter (see "Reconciliation of Non-GAAP Financial Measures" below for the definition and an important discussion of this non-GAAP financial measure).
At the end of the third quarter of 2011, cash and cash equivalents totaled $5.5 million, compared to $0.6 million at December 31, 2010. The $5.5 million in cash and equivalents is net of $0.7 million of prepaid principle and interest paid through December 31, 2011 related to the company's primary credit facility, reflected on the balance sheet in "Other current assets." Furthermore, the cash balance does not reflect $2.0 million currently held in an escrow account related to the sale of the company's retail pharmacy business, which the company anticipates receiving in two equal installments of $1.0 million in December 2011 and June 2012, subject to offset for any potential indemnity claims.
Signed two new hospital contracts, bringing the net facility count to 100 (77 hospital or rural outreach facilities and 23 standalone diagnostic, treatment and therapy facilities).
Signed a letter of intent to acquire Village Sleep Center of Plano, Texas, adding to the company's strong operations in the Dallas/Fort Worth market.
"We continued to realize volume growth in our sleep centers through proactive steps taken at the beginning of the year to implement new sales incentives and management changes," said Stanton Nelson, Graymark Healthcare's CEO. "We also centralized the majority of our benefits verification and scheduling processes, which drove an improvement in our conversion rate of referrals to sleep studies. We expect to complete the centralization of these processes in the early part of the fourth quarter of 2011, which we anticipate will bring additional volume enhancements. The rightsizing of our cost structure has also been successful as we have realized nearly $2 million in SG&A savings since the beginning of the year."
"With the cost-cutting program and sales strategy in place, our focus for the remainder of the year will be growing the scale of our organization," continued Nelson. "We expect to close the acquisition of Village Sleep Center in the fourth quarter, and our improved working capital position combined with a highly fragmented sleep market has allowed our team to identify additional accretive acquisition targets. This opportunity, united with our goal to add hospital contracts, gives us great confidence that our comprehensive model will allow Graymark to gain significant market share."
The company will host a conference call to discuss its third quarter 2011 financial results today (November 15, 2011) at 11:00 a.m. Eastern time.
Dial-in number: 1-877-941-2321
International: 1-480-629-9714
Conference ID#: 4488490
The conference call will be broadcast live and available for replay via the Investors section of the company's website at
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
A replay of the call will be available on the same day after 2:00 p.m. Eastern time on the same day and until December 15, 2011.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay pin number: 4488490
Headquartered in Oklahoma City, Okla., Graymark Healthcare, Inc. (NASDAQ: GRMH) is the nation's second largest provider of sleep management solutions. In addition to diagnosing and treating over 80 sleep disorders, the company specializes in comprehensive care for Obstructive Sleep Apnea (OSA). Graymark offers its services through sleep laboratories primarily in the Midwest, including standalone or IDTF facilities, therapy facilities, rural outreach hospital sites and urban hospital management agreements. For more information, visit .
Graymark is providing EBITDA from continuing operations information, which is defined as net income from continuing operations plus interest, income taxes, depreciation and amortization expenses, as a complement to GAAP results. EBITDA is commonly used by management and investors as a measure of leverage capacity, debt service ability and liquidity. EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded from EBITDA are significant components in understanding and assessing the company's financial performance. EBITDA should not be considered in isolation or as an alternative to, or superior to, such GAAP measures as net income, cash flows provided by or used in operating, investing or financing activities, or other financial statement data presented in the company's consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in this news release in the accompanying tables. Since EBITDA is not a measure determined in accordance with GAAP and is susceptible to varying calculations, EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.
This press release may contain forward-looking statements that are based on the company's current expectations, forecasts and assumptions. Forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the company's expectations, forecasts and assumptions. These risks and uncertainties include risks and uncertainties not in the control of the company, including, without limitation, the current economic climate and other risks and uncertainties, including those enumerated and described in the company's filings with the Securities and Exchange Commission, which filings are available on the SEC's website at . Unless otherwise required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Graymark Healthcare, Inc.
Stanton Nelson
Chairman and CEO
Tel 1-405-601-5300
Liolios Group, Inc.
Scott Liolios or Cody Slach
Tel 1-949-574-3860
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Datum: 15.11.2011 - 07:30 Uhr
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