INDIANAPOLIS, Feb. 5 /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 net revenues of $26.1 million and a net loss of $3.2
million, or $0.02 per share for the fiscal third quarter ended
December 31, 2009. Third-Quarter Highlights -- Pharmacy revenues
increased 169.0% over prior year quarter and 20.5% sequentially --
Pharmacy gross margins increase to 17.3%, or 226 bps over second
quarter and 59 bps, over prior year quarter -- DailyMed(TM) and
WellPoint's affiliated health plan launched a public awareness
campaign in California For the third quarter of fiscal 2010,
Arcadia reported net revenues of $26.1 million, compared with net
revenues of $26.7 million for the same period last year. In its
Pharmacy segment, Arcadia reported net revenues of $4.1 million, or
a 169.0% increase for its DailyMed medication management system for
the current quarter compared with the same period a year ago.
Additionally, Pharmacy gross margins increased to 17.3% during the
third quarter compared to 16.8% in the third quarter of fiscal
2009. Net revenue in the Services segment was $21.6 million, a
decrease of $2.9 million, or 12.0%, 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 $3.0
million, or $0.02 per share, in the current quarter, compared to a
net loss from continuing operations of $2.9 million, or $0.02 per
share, in the same period in fiscal 2009. The consolidated net
loss, including discontinued operations, was $3.2 million, or
$0.02, for both fiscal third quarters in 2010 and 2009. "We
continued to make solid progress in our Pharmacy business as an
organization and in tandem with our customers. As an example, just
yesterday, we jointly launched a much anticipated state-wide public
awareness campaign in Sacramento, California on the value of the
DailyMed Pharmacy Program with WellPoint's affiliated health plan
for its high-risk Medi-Cal members. The event emphasized our
interest in improving care while simultaneously reducing costs, and
was aimed at lawmakers, regulators, providers and an initial 50,000
Medi-Cal members most likely to benefit from the program," said
Marvin R. Richardson, President and Chief Executive Officer of
Arcadia. Richardson continued, "This event follows on the
successful launch of the DailyMed program in Virginia, where we are
on track to achieve our enrollment goal of 15%-20% of the targeted
members in WellPoint's affiliated health plans in the state. In
short, we are beginning to see quantifiable results, where our
DailyMed program lowers health care costs through a reduction in
unnecessary hospitalizations, emergency room visits and nursing
home admissions, leading to a higher quality of life for our
customers. The committed outreach, growing enrollment and the
results to date underscore the depth of this opportunity and
further our commitment to achieve similar success in California and
beyond." "We continue to focus on narrowing our operating losses
through both enhanced profitability of our Pharmacy business as
well as a disciplined approach to our overall spending. Through
these efforts we reduced our operating losses by approximately
$825,000 over the prior quarter," concluded Richardson. Fiscal 2010
Third Quarter Results Arcadia reported $26.1 million in revenue
from continuing operations during the quarter, down slightly from
$26.7 million during the same period a year ago. The Company's
gross margin from continuing operations was 28.6% during the third
quarter, a 90 bps decline 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
169.0% to $4.1 million for the third quarter of fiscal 2010,
compared to $1.5 million in revenues for the third quarter of
fiscal 2009. On a sequential quarter basis, third quarter
prescription volumes grew by 20.5% over the fiscal 2010 second
quarter. Gross margins increased to 17.3% in the third quarter of
fiscal 2010 from 15.1% in the second quarter of fiscal 2010 and
16.8% in the year ago quarter. The gross margin improvement within
the Pharmacy segment was due to improved generic pricing from its
primary vendor, improved pricing and additional manufacturer and
wholesaler rebates obtained through a new agreement with a pharmacy
group purchasing organization, and improvements in inventory
management and billing procedures. Additionally, the increased use
of generic drugs improved margins as generics have a higher margin
percentage. -- Services: The Company's Services segment, which
includes Arcadia's home healthcare and medical staffing business,
reported net revenues of $21.6 million for the quarter compared to
net revenues of $24.5 million for the third quarter a year ago.
Within the Services segment, home health care revenues decreased by
$0.4 million, or 2.5%, to $17.1 million, compared to net revenue of
$17.5 million in the same period last year. The primary driver of
the decrease in the Services segment was a decline in medical
staffing and travel nursing staffing revenue to $4.5 million in the
current quarter, compared with $7.0 million during the third
quarter of fiscal 2009. Gross margins within the Services segment
increased slightly to 30.5% compared with 30.3% for the same period
last year. Capital Resources and Liquidity As previously announced
on November 9, 2009, the Company entered into definitive agreements
in connection with an $11.1 million equity financing. Following the
closing, after fees and debt extinguishment, the Company had an
additional $7.9 million of cash to fund future operations. At
December 31, 2009, the Company had total cash plus line-of-credit
availability of $7.8 million. Arcadia reported negative cash flow
from total operations of $5.5 million for the first nine months of
fiscal 2010, compared to positive cash flow of $38,000 for the same
period a year ago. Negative cash flow from operations for the third
quarter was $2.2 million compared to $1.7 and $1.6 million for the
second and first quarter of the current fiscal year, respectively.
The increase in negative cash flow during the third quarter of
fiscal 2010 was primarily related to additional working capital
investments in the pharmacy business and one additional payroll
period during October 2009. Conference Call Information Arcadia
will conduct a conference call and simultaneous Internet webcast to
review these financial results on Friday, February 5, 2010, at
11:00 a.m. Eastern Time. To access the webcast, visit the Company's
website at http://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 http://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 http://www.arcadiahealthcare.com/ until February 19,
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 343511. The telephone
replay will be available until February 19, 2010. Use of Non-GAAP
Financial Information In addition to reporting financial results in
accordance with generally accepted accounting principles, or GAAP,
Arcadia reports non-GAAP financial results. Arcadia's management
believes these non-GAAP measures are useful to investors because
they provide supplemental information that facilitates comparisons
to prior periods. Management uses these non-GAAP measures to
evaluate its financial results, develop budgets and manage
expenditures. The method Arcadia uses to produce non-GAAP results
is likely to differ from the methods used by other companies and
should not be regarded as a replacement for corresponding GAAP
measures. Investors are encouraged to review the reconciliation of
these non-GAAP financial measures to the comparable GAAP results,
which are attached to this release. 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
65 locations in 20 states. Arcadia HealthCare's comprehensive
solutions and business strategies support the Company's vision of
"Keeping People at Home and Healthier Longer." DailyMed(TM)
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
drug and hospitalization 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
x106 Lisa Wilson / Bill Bunting In-Site Communications, Inc. (212)
759-3929 / (415) 517-7013 / FINANCIAL TABLES FOLLOW ARCADIA
RESOURCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) December 31, March
31, 2009 2009 ---- ---- ASSETS (Unaudited) Current assets: Cash and
cash equivalents $7,308 $1,522 Accounts receivable, net of
allowance of $3,403 and $3,386, respectively 13,478 15,679
Inventories, net 832 863 Prepaid expenses and other current assets
1,408 1,764 Current assets of discontinued operations 0 5,458 ---
----- Total current assets 23,026 25,286 Property and equipment,
net 1,759 2,308 Goodwill 17,099 17,053 Acquired intangible assets,
net 7,829 8,305 Other assets 522 590 Restricted cash 500 - Assets
of discontinued operations 0 5,850 --- ----- Total assets $50,735
$59,392 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Lines of credit, current portion $- $437
Accounts payable 2,504 2,765 Accrued expenses: Compensation and
related taxes 1,906 2,986 Interest 91 89 Health insurance 470 545
Other 1,538 917 Payable to affiliated agencies 749 1,284 Fair value
of warrant liability 2,109 - Long-term obligations, current portion
939 596 Capital lease obligations, current portion 68 59 Current
liabilities of discontinued operations - 2,037 --- ----- Total
current liabilities 10,374 11,715 Lines of credit, less current
portion 9,012 10,889 Long-term obligations, less current portion
24,691 26,918 Capital lease obligations, less current portion 36 37
--- --- Total liabilities 44,113 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; 177,771,794
shares and 161,249,529 shares issued, respectively 178 161
Additional paid-in capital 144,564 135,920 Accumulated deficit
(138,120) (126,248) -------- -------- Total stockholders' equity
6,622 9,833 ----- ----- Total liabilities and stockholders' equity
$50,735 $59,392 ======= ======= ARCADIA RESOURCES, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) (UNAUDITED) Three-Month Period Ended Nine-Month
Period Ended December 31, December 31, ------------ ------------
(Unaudited) (Unaudited) 2009 2008 2009 2008 ---- ---- ---- ----
Services $21,563 $24,505 $65,952 $74,335 Pharmacy 4,106 1,527
10,732 3,846 Catalog 437 661 1,447 2,008 --- --- ----- -----
Revenue, net 26,106 26,693 78,131 80,189 Cost of revenues 18,639
18,819 55,811 55,991 ------ ------ ------ ------ Gross profit 7,467
7,874 22,320 24,198 Selling, general and administrative 9,422 9,426
29,170 29,750 Depreciation and amortization 484 564 1,425 1,636 ---
--- ----- ----- Total operating expenses 9,906 9,990 30,595 31,386
Operating loss (2,439) (2,116) (8,275) (7,188) Other expenses:
Interest expense, net 934 1,031 2,618 3,041 Loss on extinguishment
of debt - - - 248 Change in fair value of warrant liability (368) -
(368) - Other - (2) 30 53 --- --- --- --- Total other expenses 566
1,029 2,280 3,342 --- ----- ----- ----- Loss from continuing
operations before income taxes (3,005) (3,145) (10,555) (10,530)
Income tax expense (benefit) 16 (274) 116 120 -- ---- --- --- Loss
from continuing operations (3,021) (2,871) (10,671) (10,650)
Discontinued operations: Income (loss) from discontinued operations
(147) 330 (1,595) 1,587 Net gain (loss) on disposal 15 (696) 394
(696) --- ---- --- ---- (132) (366) (1,201) 891 ---- ---- ------
--- NET LOSS $(3,153) $(3,237) $(11,872) $(9,759) ======= =======
======== ======= Weighted average number of common shares
outstanding 168,788,000 135,949,000 163,412,000 133,559,000 Basic
and diluted net loss per share: Loss from continuing operations
$(0.02) $(0.02) $(0.07) $(0.08) Income from discontinued operations
- - - 0.01 --- --- --- ---- Net loss per share $(0.02) $(0.02)
$(0.07) $(0.07) ====== ====== ====== ====== ARCADIA RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
(UNAUDITED) Nine-Month Period Ended December 31, ------------
(Unaudited) 2009 2008 ---- ---- Operating activities Net loss for
the period $(11,872) $(9,759) Adjustments to reconcile net loss to
net cash provided by (used in) operating activities: Provision for
doubtful accounts 1,432 2,598 Depreciation of property and
equipment 1,241 3,353 Amortization of intangible assets 564 1,403
Gain loss on business disposals (394) 696 Non-cash interest expense
1,789 1,677 Loss on sale of property and equipment - 35
Amortization of deferred financing costs and debt discounts 280 738
Stock-based compensation expense 923 1,030 Change in fair value of
warrant liability (368) - Loss on extinguishment of debt - 248
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 3,088 (1,845) Inventories 648 (788) Other
assets 267 590 Accounts payable (1,252) (30) Accrued expenses
(1,477) (140) Due to affiliated agencies (373) 261 Deferred revenue
- (29) --- --- Net cash provided by (used in) operating activities
(5,504) 38 ------ -- Investing activities Business acquisitions,
net of cash acquired (253) (653) Proceeds from business disposal
9,335 356 Increase in restricted cash (500) - Proceeds from
disposals of property and equipment - 20 Purchases of property and
equipment (329) (892) ---- ---- Net cash provided by (used in)
investing activities 8,253 (1,169) ----- ------ Financing
activities Net payments on lines of credit (113) (4,211) Proceeds
from equity financing, net of fees paid in cash of $839 10,260 -
Proceeds from note payable, net of fees 2,142 - Payments on notes
payable and capital lease obligations (9,252) (707) ------ ---- Net
cash provided by (used in) financing activities 3,037 (4,918) -----
------ Net change in cash and cash equivalents 5,786 (6,049) Cash
and cash equivalents, beginning of period 1,522 6,351 ----- -----
Cash and cash equivalents, end of period $7,308 $302 ====== ====
DATASOURCE: Arcadia Resources, Inc. CONTACT: Matthew Middendorf,
Chief Financial Officer of Arcadia Resources, Inc.,
+1-317-569-8234, ext. 106, ; or Lisa Wilson, +1-212-759-3929, , or
Bill Bunting, +1-415-517-7013, , both of In-Site Communications,
Inc., for Arcadia Resources, Inc. Web Site:
http://www.arcadiaresourcesinc.com/
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