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CARECENTRIC, INC.
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News Release
FOR IMMEDIATE RELEASE CONTACT: John R. Festa
President and CEO
(678) 264-4400
CARECENTRIC REPORTS
2ND QUARTER 2003 FINANCIAL RESULTS
ATLANTA, GA (AUGUST 7, 2003) - CARECENTRIC, INC. (OTC BULLETIN BOARD: CURA), a
leading provider of management information systems to the home health care
community, reports today its financial results for the calendar quarter ended
June 30, 2003. Net Income for the three months ended June 30, 2003 was $0.2
million, which represented an increase of $0.2 million over the nominal Net Loss
reported for the three months ended June 30, 2002. The Company reported a slight
decrease in revenues of 3.8 % for the three months ended June 30, 2003 to $5.6
million against revenues of $5.8 million for the three months ended June 30,
2002. The Net Cash provided from Operating Activities during the three months
ended June 30, 2003 of $0.4 million represented a $1.1 million improvement when
compared against the Use of Net Cash from Operating Activities of $0.7 million
reported for the 2nd quarter of 2002.
"Our second quarter results for 2003 represents the fourth consecutive quarter
of profitability," stated John R. Festa, President and CEO of CareCentric. "We
are pleased to report that during the second quarter, the Company funded both
its new product development efforts and $0.8 million of bank debt payments from
operating cash flow. These objectives were met while second quarter sales of new
systems remained somewhat soft and six-month revenues of $11.1 million are
unchanged from six-month revenues reported in 2002. We have found," continued
Mr. Festa, "that the combination of changing HIPAA regulations and the 15%
reduction in reimbursement rates has caused delays in many of our customers'
decisions to upgrade their IT systems."
Mr. Festa added, " We continue to work diligently on improving our customer
service levels and collaborating with our customers to ensure our new product
development efforts deliver a family of products which will strongly facilitate
our customers' profitable management of their home care agencies and medical
equipment provider businesses. We remain confident that our continuing
enhancements to existing products and our expenditures for development of
products leveraging new technology platforms will help grow our future revenues
as regulatory cost reductions stabilize and the economy strengthens."
"The Board remains very pleased with the continuing financial performance of the
Company," said John Reed, Chairman of the Board of Directors. "The investment of
operating cash into new products and the repayment of bank debt is consistent
with the best interests of both our customers and shareholders."
CareCentric provides information technology systems and services to over 1,500
customers. CareCentric provides freestanding, hospital-based and multi-office
home health care providers (including skilled nursing, private duty, home
medical equipment and supplies, IV pharmacy and hospice) complete information
solutions that enable these home care operations to generate and utilize
comprehensive and integrated financial, operational and clinical information.
With offices nationwide, CareCentric is headquartered in Atlanta, Georgia.
Note regarding Private Securities Litigation Reform Act: Statements made in this
press release which are not historical facts, including projections, statements
of plans, objectives, expectations, or future economic performance, are forward
looking statements that involve risks and uncertainties and are subject to the
safe harbor created by the Private Securities Litigation Reform Act of 1995.
CareCentric's future financial performance could differ significantly from that
set forth herein, and from the expectations of management. Important factors
that could cause CareCentric's financial performance to differ materially from
past results and from those expressed in any forward looking statements include,
without limitation, the inability to obtain additional capital resources,
variability in quarterly operating results, customer concentration, product
performance and acceptance, long sales cycles, long and varying delivery cycles,
CareCentric's dependence on business partners, emerging technological standards,
risks associated with acquisitions and the risk factors detailed in
CareCentric's Registration Statement on Form S-4 (File No. 333-96529) and from
time to time in CareCentric's periodic reports filed with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates.
CARECENTRIC, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
JUNE 30, DECEMBER 31,
2003 2002
---------------- ----------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,000 $ 826
Accounts receivable, net of allowance for doubtful
accounts of $969 and $1,307 respectively 4,042 4,632
Prepaid expenses and other current assets 733 696
Notes receivable 128 215
---------------- ----------------
Total current assets 5,903 6,369
Purchased software, furniture and equipment, net 819 1,036
Intangible assets, net 3,743 4,308
Long term notes receivable 380 194
---------------- ----------------
Total assets $ 10,845 $ 11,907
================ ================
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Line of credit $ 3,325 $ 4,525
Accounts payable 1,487 1,584
Accrued compensation expense 477 556
Accrued liabilities 6,074 6,113
Customer deposits 1,235 1,495
Unearned revenues 4,464 4,223
---------------- ----------------
Total current liabilities 17,062 18,496
Accrued liabilities, less current portion - 150
Note payable long-term 8,776 8,520
Commitments and contingencies
Shareholders' deficit
Preferred Stock: 10,000,000 shares authorized
Series B Preferred, $.001 par value;
5,600,000 issued and outstanding; liquidation value $1.39 6 6
Series D Preferred, $.001 par value;
398,000 issued and outstanding; liquidation value $3.20 - -
Series E Preferred, $.001 par value;
210,000 issued and outstanding; liquidation value $1.04 - -
Common stock, $.001 par value; 20 shares authorized;
4,371,350 shares issued and outstanding at June 30,
2003 and December 31, 2002 4 4
Unearned compensation (99) (134)
Additional paid-in capital 20,430 20,430
Stock warrants 1,000 1,000
Accumulated deficit (36,334) (36,565)
---------------- ----------------
Total shareholders' deficit (14,993) (15,259)
---------------- ----------------
Total liabilities and shareholders' deficit $ 10,845 $ 11,907
================ ================
CARECENTRIC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------- -------------------------------
2003 2002 2003 2002
--------------- --------------- --------------- ---------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenues $ 5,627 $ 5,848 $ 11,105 $ 11,101
Costs and expenses:
Cost of revenues 1,739 1,785 3,562 3,460
Selling, general and administrative 2,325 2,589 4,541 5,288
Research and development 877 942 1,713 1,889
Amortization and depreciation 394 423 789 848
--------------- --------------- --------------- ---------------
Total costs and expenses 5,335 5,739 10,605 11,485
--------------- --------------- --------------- ---------------
Income (loss) from operations 292 109 500 (384)
Other income (expense):
Interest expense (210) (153) (383) (322)
Interest and other income 106 15 449 13
--------------- --------------- --------------- ---------------
Income (loss) before taxes 188 (29) 566 (693)
--------------- --------------- --------------- ---------------
Income tax benefit (expense) - - (23) -
--------------- --------------- --------------- ---------------
Net Income (loss) 188 (29) 543 (693)
--------------- --------------- --------------- ---------------
Cumulative Preferred Dividends (157) 34 (312) (146)
--------------- --------------- --------------- ---------------
Net Income (loss) available
to common shareholders $ 31 $ 5 $ 231 $ (839)
=============== =============== =============== ===============
Net Income (loss) per share -
basic and diluted $ 0.04 $ (0.01) $ 0.12 $ (0.16)
=============== =============== =============== ===============
Net Income (loss) per share -
basic and diluted available
to common shareholders $ 0.01 $ 0.00 $ 0.05 $ (0.19)
=============== =============== =============== ===============
Weighted average common shares -
basic and diluted 4,371,000 4,371,000 4,371,000 4,371,000
=============== =============== =============== ===============
CARECENTRIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------- ---------------------------
2003 2002 2003 2002
------------ ----------- ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) $ 31 $ 5 $ 231 $ (839)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES:
Provision for doubtful accounts - 87 - 244
Amortization and depreciation 394 423 789 848
Stock based compensation charge to earnings 18 18 35 41
CHANGES IN ASSETS AND LIABILITIES:
Accounts receivable 276 (764) 589 (2,172)
Prepaid expenses and other current assets 79 60 (37) 80
Notes receivable (66) 15 (186) 55
Accounts payable (2) (338) (97) 109
Accrued compensation (3) 39 (79) (11)
Accrued liabilities (50) (248) (189) (415)
Customer deposits (145) (1,010) (260) (984)
Unearned revenues (96) 989 241 1,115
------------ ----------- ------------ ------------
Net cash provided by / (used in) operating
activities 436 (724) 1,037 (1,929)
------------ ----------- ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of software, furniture
and equipment - (13) (6) (34)
------------ ----------- ------------ ------------
Net cash provided by / (used in) investing
activities - (13) (6) (34)
------------ ----------- ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 129 756 256 1,756
Increase (decrease) in line of credit (800) (85) (1,200) 310
Payments on capital lease obligation - 9 - -
Proceeds from Consulting note receivable 52 71 87 167
------------ ----------- ------------ ------------
Net cash provided by / (used in)
financing activities (619) 751 (857) 2,233
------------ ----------- ------------ ------------
Net change in cash and cash equivalents (183) 14 174 270
Cash and cash equivalents, beginning of period 1,183 457 826 201
------------ ----------- ------------ ------------
Cash and cash equivalents, end of period $ 1,000 $ 471 $ 1,000 $ 471
============ =========== ============ ============
Cash paid during period for interest $ 28 $ 74 $ 91 $ 155
1640564
INVESTOR NOTICE
CareCentric has filed with the SEC a proxy statement and other relevant
documents concerning a proposed merger with an investor group led by John E.
Reed that could have the effect of taking CareCentric private. CareCentric has
entered into an Agreement and Plan of Merger dated June 4, 2003 by and among
CareCentric, Borden Associates, Inc., John E. Reed, Stewart B. Reed and James A.
Burk. The merger agreement has been filed with the SEC as an exhibit to the
proxy statement. Investors of CareCentric are urged to read the proxy statement,
the merger agreement, and any other relevant documents filed with the SEC
because they will contain important information. You will be able to obtain the
documents free of charge at the website maintained by the SEC at www.sec.gov. In
addition, you may obtain documents filed with the SEC by CareCentric free of
charge by requesting them in writing from Ana McGary at CareCentric, Inc., 2625
Cumberland Parkway, Suite 310, Atlanta, GA 30339 or by telephone at (678)
264-4400.
CareCentric, its directors and executive officers and certain of their
employees and the investor group described previously may be deemed to be
participants in the solicitation of proxies from the stockholders of CareCentric
in connection with the merger, if consummated. These participants may have
interests in the merger, if consummated, including interests resulting from
holding options or shares of CareCentric common stock. Information about the
interests of directors and executive officers of CareCentric, the investor
group, and their ownership of securities of CareCentric are set forth in the
proxy statement.
Investors should read the proxy statement carefully before making any
voting or investment decisions.