Arcadia Resources Announces Fiscal 2010 Fourth Quarter and Year End Results
INDIANAPOLIS, June 11 /PRNewswire-FirstCall/ -- Arcadia Resources, Inc. (NYSE Amex: KAD), a leading provider of innovative consumer health care services under the Arcadia HealthCare(SM) brand, today announced fourth quarter revenues of $25.5 million and a net loss of $19.2 million, or $0.11 per share, which compares to revenue of $25.9 million and a net loss of $36.7 million, or $0.27 per share for the same period in the fiscal 2009. For the fiscal year ended March 31, 2010, the Company reported revenues of $103.6 million and a net loss of $31.1 million, or $0.19 per share, which compares to revenues of $106.1 million and a net loss of $46.5 million, or $0.35 per share for fiscal 2009.
(Logo: http://photos.prnewswire.com/prnh/20100129/CG46351LOGO)
"We achieved a number of important milestones this year, which set the foundation for continued growth for both our businesses and enhanced profitability in our DailyMed business," said Marvin R. Richardson, President and Chief Executive Officer of Arcadia. "We sold off non-strategic business units to improve our focus, grew our DailyMed business by over 150% annually to 15% of total Company revenues and maintained consistent year-over-year profitability in the Services segment despite a decline in medical staffing revenue of over $10 million for the fiscal year."
Fourth-Quarter and Recent Highlights
- Pharmacy revenues increased 103.5% over prior year quarter and 7.7% over the third quarter
- DailyMed launched by Alliance Healthcare Partners to Medicare Advantage and high risk commercial members in Illinois and Iowa
- New prime vendor agreement and $5 million line of credit established with H.D. Smith
For the fourth quarter of fiscal 2010, Arcadia reported revenues of $25.5 million, compared with revenues of $25.9 million for the same period last year. In its Pharmacy segment, Arcadia reported revenues of $4.4 million, or a 103.5% increase for its DailyMed medication management system for the fiscal 2010 fourth quarter, compared with the same period a year ago. Revenue in the Services segment was $20.7 million, a decrease of $2.5 million, or 10.9%, compared to the same quarter last year due primarily to a decline in medical staffing revenue.
Arcadia reported a net loss from continuing operations of $19.4 million, or $0.11 per share, in the fourth quarter of fiscal 2010, compared to a net loss from continuing operations of $32.7 million, or $0.24 per share, in the same period in fiscal 2009. The consolidated net loss, including discontinued operations, was $19.2 million, or $0.11 per share, in the fiscal fourth quarter in 2010 compared to a net loss of $36.7 million, or $0.27 per share, in the fiscal fourth quarter in 2009. In the fourth quarter of fiscal 2010, Arcadia reported a one-time impairment charge to goodwill of $14.6 million related to the Company's Services segment which compares to a one-time impairment charge of $23.5 million in the fourth quarter of fiscal 2009 related to the Company's Pharmacy and Catalog segments.
Commenting further on important achievements Richardson continued. "In our Pharmacy operations, we established a new prime vendor agreement with H.D. Smith which has already resulted in significant reductions in our branded and generic drug costs as well as the opportunity to participate in group purchase programs which also lowers our costs. We moved into our new headquarters in May and will move our Indianapolis pharmacy operations into this same facility this month which will allow for greater capacity and efficiency for our pharmacy operations. Finally, we have undertaken a number of new enrollment programs designed to streamline our new member acquisition capabilities."
Fiscal 2010 Fourth Quarter Results
Arcadia reported $25.5 million in revenue from continuing operations during the quarter, down slightly from $25.9 million during the same period a year ago. The Company's gross margin from continuing operations was 27.1% during the fourth quarter, a decline of 2.0% from the same period a year ago. The reduction in gross margin was driven by a shift in mix towards Pharmacy revenue, which has lower margins than the Company's Services segment.
Pharmacy: Pharmacy segment revenues increased 103.5% to $4.4 million for the fourth quarter of fiscal 2010, compared to $2.2 million in revenues for the fourth quarter of fiscal 2009. This growth was driven by the Company's DailyMed program and the continued roll-out of the program to high-risk Medicaid members. The program was launched in Virginia in August 2009 and was rolled out to California members late in fiscal fourth quarter 2010.
Pharmacy gross margin decreased to 12.3% in the fourth quarter of fiscal 2010 from 17.1% in the fourth quarter of fiscal 2009. Gross margins were negatively affected by changes in payer, member and product mix.
Services: The Company's Services segment, which includes Arcadia's home care and medical staffing business, reported revenues of $20.7 million for the 2010 fiscal fourth quarter compared to revenues of $23.2 million for the fourth quarter a year ago. Within the Services segment, home care revenues decreased by $0.8 million, or 4.9%, to $16.5 million from $17.3 million in the same period last year. The primary driver of the decrease in the Services segment was a decline in per diem medical staffing and travel nursing staffing revenue to $4.2 million in the current quarter, compared with $5.9 million during the fourth quarter of fiscal 2009. Gross margins within the Services segment was essentially level with the same period last year.
Fiscal 2010 Annual Results
For the year ended March 31, 2010, revenues decreased to $103.6 million from $106.1 million in the prior year due to a decrease of $10.9 million, or 11.2%, in the Company's Services revenues offset by an increase of $9.1 million, or 151.8%, in the Company's Pharmacy revenues. Gross profits decreased to $29.2 million, or 28.2% of revenue, for fiscal year 2010 from $31.8 million, or 29.9% of revenue, for the fiscal year 2009. The reduction in gross margins was driven by a shift in mix towards Pharmacy revenue, which has lower margins than the Company's Services segment. Gross margins in the Services business were 30.5% for both fiscal 2010 and 2009. While the overall mix of higher margin home care business increased as a percentage of total revenues, this gross margin benefit was offset by several factors, including: a reduction in margins on several state-sponsored home care programs, such as Arizona, North Carolina, Washington and California; a reduction in the percentage of business generated in some of the Company's higher margin offices and markets, including the state of Michigan; and an overall decline in the margins in the medical staffing business due to changes in staffing business mix. Gross profits in the Company's Pharmacy segment increased to $2.1 million for fiscal year 2010, an increase of 107.6% compared to fiscal year 2009. The increase in gross profit was due to higher Pharmacy revenues. Gross margins declined to 14.0% in fiscal 2010 compared to 17.0% in fiscal 2009. Gross margins were negatively affected by changes in payer, patient and product mix. Loss from continuing operations decreased to $30.0 million, or $0.18 per share, in fiscal 2010 from $43.0 million, or $0.32 per share in fiscal 2009. The decrease in the loss was primarily due to the higher impairment charge taken in fiscal 2009 compared with fiscal 2010. Net loss decreased to $31.1 million, or $0.19 per share, in fiscal 2010, from $46.5 million, or $0.35 per share in fiscal 2009.
Capital Resources and Liquidity
At March 31, 2010, the Company had total cash plus line-of-credit availability of $5.8 million. As previously announced on April 26, 2010, the Company secured a $5 million line of credit from H.D. Smith.
Arcadia reported negative cash flow from total operations of $5.9 million during fiscal 2010, compared to positive cash flow of $778,000 for fiscal 2009. The increase in negative cash flow during fiscal 2010 was primarily driven by the loss of cash generated by the businesses that were disposed of during fiscal first quarter 2010.
Conference Call Information
Arcadia will conduct a conference call and simultaneous Internet webcast to review these financial results on Friday, June 11, 2010, at 11:00 a.m. Eastern Time.
To access the webcast, visit the Company's website at www.arcadiahealthcare.com, 5-10 minutes prior to the start time and click on the webcast link. The Company's press release, which contains financial information to be discussed in the presentation, will also be available on Arcadia's website.
To participate in the live conference call, please dial 1-877-407-9205 (for U.S.-based callers) or 1-201-689-8054 (for international callers). The call can also be accessed (listen-only mode) via the Company's web site at www.arcadiahealthcare.com through the "Investors" page.
A replay of the webcast will be available approximately one hour after the completion of the call and will be accessible at www.arcadiahealthcare.com until June 25, 2010. A telephone replay will be available by dialing 1-877-660-6853 (for US-based callers) or 1-201-612-7415 (for international callers). For telephone replay, callers must use Account number 286 and Conference ID number 351716. The telephone replay will be available until June 25, 2010.
About Arcadia HealthCare
Arcadia HealthCare is a service mark of Arcadia Resources, Inc. (NYSE Amex: KAD), and is a leading provider of home care, medical staffing and pharmacy services under its proprietary DailyMed program. The Company, headquartered in Indianapolis, Indiana, has 70 locations in 18 states. Arcadia HealthCare's comprehensive solutions and business strategies support the Company's vision of "Keeping People at Home and Healthier Longer."
DailyMedâ„¢ Pharmacy dispenses a monthly cycle of a patient's prescriptions, over-the-counter medications and vitamins, and organizes them into pre-sorted packets clearly marked with the date and time the medications should be taken. In the dispensing process, a DailyMed pharmacist reviews each patient's medication profile and utilizes state-of-the-art medication therapy management tools in order to improve the safety and efficacy of the medications being dispensed. A DailyMed pharmacist provides routine communication with the patient, the primary care physician, caregivers and payers in order to maximize the pharmaceutical care administered. The DailyMed program improves patient care and drug utilization while reducing medical costs for private and government payers.
Forward Looking Statements
Any statements contained in this release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21A of the Securities Exchange Act of 1934, as amended and otherwise within the meaning of court opinions construing such forward-looking statements. The Company claims all safe harbor and other legal protections provided to it by law for all of its forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, estimates, uncertainties and other factors, which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized, including our estimates of consumer demand for our services and products, required capital investment, competition, and other factors. Actual events and results may differ materially from those expressed, implied or forecasted in forward-looking statements due to a number of factors. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the Company's filings with the Securities and Exchange Commission from time to time, including the section entitled "Risk Factors" and elsewhere in the Company's most recent Annual Report on Form 10-K and subsequent periodic reports. Among the factors that could cause future results to differ materially from those provided in our press release are: (i) we cannot be certain or our ability to generate sufficient cash flow to meet our obligations on a timely basis; (ii) we may be required to make significant business investments that do not produce offsetting increases in revenue; (iii) we may be unable to execute and implement our growth strategy; (iv) we may be unable to achieve our targeted performance goals for our business segments; and (v) other unforeseen events may impact our business. The forward-looking statements speak only as of the date hereof. The Company disclaims any obligation to update or alter its forward-looking statements, except as may be required by law.
Contact: | |
Matthew Middendorf | |
Chief Financial Officer | |
317.569.8234 | |
Bill Bunting | |
In-Site Communications, Inc. | |
(212) 759-3929 / (415) 517-7013 | |
FINANCIAL TABLES FOLLOW | |
ARCADIA RESOURCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) | |||
March 31, | |||
2010 | 2009 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 5,444 | $ 1,522 | |
Accounts receivable, net of allowance of $2,623 and $3,386, respectively | 12,366 | 15,679 | |
Inventories, net | 934 | 863 | |
Prepaid expenses and other current assets | 1,632 | 1,764 | |
Current assets of discontinued operations | - | 5,458 | |
Total current assets | 20,376 | 25,286 | |
Property and equipment, net | 1,738 | 2,308 | |
Goodwill | 2,500 | 17,053 | |
Acquired intangible assets, net | 7,670 | 8,305 | |
Other assets | 412 | 590 | |
Restricted cash | 500 | - | |
Assets of discontinued operations | - | 5,850 | |
Total assets | $ 33,196 | $ 59,392 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Current liabilities: | |||
Lines of credit, current portion | $ - | $ 437 | |
Accounts payable | 3,159 | 2,765 | |
Accrued expenses: | |||
Compensation and related taxes | 3,191 | 2,986 | |
Interest | 82 | 89 | |
Health insurance | 463 | 545 | |
Other | 1,508 | 917 | |
Payable to affiliated agencies | 1,076 | 1,284 | |
Fair value of warrant liability | 1,499 | - | |
Long-term obligations, current portion | 939 | 596 | |
Capital lease obligations, current portion | 69 | 59 | |
Current liabilities of discontinued operations | - | 2,037 | |
Total current liabilities | 11,986 | 11,715 | |
Lines of credit, less current portion | 7,774 | 10,889 | |
Long-term obligations, less current portion | 25,192 | 26,918 | |
Capital lease obligations, less current portion | 19 | 37 | |
Total liabilities | 44,971 | 49,559 | |
Commitments and contingencies | |||
STOCKHOLDERS’ EQUITY | |||
Preferred stock, $.001 par value, 5,000,000 shares authorized, none outstanding | - | - | |
Common stock, $.001 par value, 300,000,000 shares authorized; 177,918,044 shares and 161,249,529 shares issued, respectively | 178 | 161 | |
Additional paid-in capital | 145,381 | 135,920 | |
Accumulated deficit | (157,334) | (126,248) | |
Total stockholders’ equity | (11,775) | 9,833 | |
Total liabilities and stockholders’ equity | $ 33,196 | $ 59,392 | |
ARCADIA RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||
Three-Month Period Ended | Year Ended | |||||
March 31, | March 31, | |||||
(Unaudited) | ||||||
2010 | 2009 | 2010 | 2009 | |||
Services | $ 20,683 | $ 23,202 |
Comment on "Arcadia Resources Announces Fiscal 2010 Fourth Quarter and Year End Results"
|
|
||
