American Medical Alert Corp. (NASDAQ: AMAC) a provider of
healthcare communication services and advanced telehealth
monitoring technologies, today announced operating results for the
quarter and nine months ended September 30, 2008, the highlights of
which are as follows: Company-wide operating income increased
approximately 43% for the nine months ended September 30, 2008 as
compared to same period last year. Company continues to show
financial strength in its balance sheet as of September 30, 2008.
Liquidity and working capital increase, while debt to equity ratio
falls below .2 to 1. Health Safety and Monitoring Services (HSMS)
segment revenues increased by approximately 15% for the nine months
ended September 30, 2008 as compared to same period last year, led
by the Walgreens Ready Response� program. Revenues for the quarter
ended September 30, 2008, consisting primarily of monthly recurring
revenues (MRR), increased 10% to $9,671,087 as compared to
$8,771,670 for the same period in 2007. Net income for the quarter
ended September 30, 2008 increased 9% to $461,534 or $.05 per
diluted share as compared to $422,929 or $.04 per diluted share for
the same period in 2007. Revenues for the nine months ended
September 30, 2008 increased 9% to $28,846,153, as compared to
$26,373,312 for the same period in 2007. Net income for the nine
months ended September 30, 2008 increased 15% to $1,371,917 or
$0.14 per diluted share as compared to a net income of $1,196,897
or $0.12 per diluted share for the previous year. Net Income for
the trailing twelve months ended September 30, 2008 and 2007 was
$1,689,252 and $1,655,462 respectively, representing an increase of
2%. To measure the Company�s financial performance from operations,
a metric which excludes non-operational items should be utilized.
The non-operational items include interest, taxes and other income.
These non-operational items positively impacted the Company�s net
income in 2007 to a much greater extent than in 2008. Operating
income, which excludes these items, for the three months ended
September 30, 2008 increased 127% to $760,941 as compared to
operating income of $335,244 for the previous year. Operating
income for the nine months ended September 30, 2008 increased 43%
to $2,301,636 as compared to operating income of $1,614,157 for the
previous year. Earnings before interest, taxes and depreciation and
amortization (�EBITDA�) for the nine months ended September 30,
2008 increased 3% to $5,780,627 as compared to $5,612,802 for the
same period in 2007. EBITDA for the trailing twelve months ended
September 30, 2008 and 2007 was $7,611,341 and $7,382,981
respectively, a 3% increase. Similar to the discussion above with
respect to net income, the relatively small increase in EBITDA is
reflective of the effect of the non-operational items referred to
above in the 2007 reporting period. The Company continues to
generate positive operating cash flow and ended the quarter with a
cash balance of $1,856,103, as compared to $911,525 at December 31,
2007. The Company also reduced its long-term debt by $1,180,529
during the period from December 31, 2007 to September 30, 2008.
Additionally, the Company had working capital of $4,725,397 as of
September 30, 2008, compared to $3,601,469 at December 31, 2007,
representing a 31% increase. Subject to the discussion below, the
Company affirms its earnings guidance issued on August 5, 2008 that
net income will increase by 25% to $1,900,000 for 2008 while
revenue guidance of $39,200,000 is projected to fall short by
approximately one (1) to two (2) percent. Although we are highly
insulated from most of the market turmoil, certain contracts, which
management anticipated to be executed in early 2008 within the TBCS
division, are now expected to be executed before the end of 2008.
This delay is the primary reason for the projected shortfall. As
previously reported, included on the Company�s balance sheet in
other assets are prepaid licensing fees and other associated costs,
which were paid in 2005 and 2006, relating to a telehealth based
technology initiative to provide the Company with a next generation
telehealth platform. The technology entity fulfilling this project
has experienced a funding shortfall and will likely not complete
the project. The Company�s agreement with the entity provides that
the Company has the right to take control over the project and
complete it, either directly or through a third party entity. While
the Company is confident it can complete the project, it may choose
to forego the�continuation of the project if it determines�that it
has a superior alternative to pursue its telehealth interests based
on competitive and funding criteria. In the event the Company
determines not to proceed, the Company would realize a one-time
non-operational write-down of approximately $815,000. This would
not adversely impact the Company�s core business operation,
including revenue stream, working capital or liquidity. Jack Rhian,
President and Chief Executive Officer, explained, �It is rewarding
to announce the positive third quarter results of operations and
the overall strength of our fundamentals at a time when the general
economy is experiencing such negativity. This year�s performance
within our HSMS division is the result of a collective effort by
both our operations team continuing to extract cost while the
business development team successfully executed on our vision to
position AMAC as the provider of choice for its spectrum of digital
health and wellness solutions. While the TBCS division continues to
significantly contribute to the Company�s overall profitability and
positive cash flow, this division experienced a shortfall in the
expected amount of top line growth. Nonetheless, we have a high
degree of confidence that the projected new work from several
hospital groups as well as an increased pace of project-based
contracts within our PhoneScreen Clinical Trials group will come to
fruition. The outlook for both divisions going into 2009 is
positive. Moreover, the Company maintains a strong balance sheet
and generates positive cash flow from operations to go along with
the long-term business opportunities for further top and bottom
line growth. Our relationship with our bank is solid and we have a
significant credit facility to capitalize on growth opportunities.
Notwithstanding our strong financial position, the Company is
carefully considering other steps designed to take advantage of our
relatively strong financial and operating position including
acquisitions of additional accretive account bases that could
integrate into our existing infrastructure in either our HSMS or
TBCS divisions and a plan to step up our IR/PR activities to
attract greater attention from the investor community. In addition,
it is unfortunate that our stock price has been affected by the
current economic turmoil and unstable financial markets. However,
it presents an excellent buying opportunity that I and certain
executives and board members intend to take advantage of after the
blackout period following this release is over.� The Company
invites investors and others to listen to the conference call live
over the Internet or by dialing in to 877-407-0782 at 10:30 a.m.
ET. What: � American Medical Alert Corp. Third Quarter 2008 Results
� When: Wednesday November 5, 2008, 10:30 a.m. ET � Where:
http://www.investorcalendar.com/IC/CEPage.asp?ID=136490 � How: Log
on to the web at the address above, andclick on the audio link or
dial in 877-407-0782 to participate. About American Medical Alert
Corp. AMAC is a healthcare communications company dedicated to the
provision of support services to the healthcare community. AMAC's
product and service portfolio includes Personal Emergency Response
Systems (PERS) and emergency response monitoring, electronic
medication reminder devices, disease management monitoring
appliances and healthcare communication solutions services. AMAC
operates nine communication centers under local trade names: H-LINK
OnCall, Long Island City, NY and Clovis NM, North Shore TAS, Port
Jefferson, NY, Live Message America, Audubon, NJ, ACT Teleservice,
Newington, CT and Springfield, MA, MD OnCall, Cranston RI and
Capitol Medical Bureau Rockville, MD, American MediConnect and
PhoneScreen Chicago, IL to support the delivery of high quality,
healthcare communications. Use of Non-GAAP Financial Information In
addition to the results reported in accordance with accounting
principles generally accepted in the United States (�GAAP�)
included in this press release, the Company has provided
information regarding certain non-GAAP financial measures. These
measures are �earnings before interest, taxes and depreciation and
amortization (�EBITDA�)� and �operating income�. Such information
is reconciled to its closest GAAP measure in accordance with the
Securities and Exchange Commission rules and is included in the
attached supplemental data. Management believes that the non-GAAP
financial measures used in this press release are useful to both
management and investors in their analysis of the Company�s
financial position and results of operations. Management believes
that EBITDA is a useful measure of the Company's financial
performance as it is an indicator of the Company's ability to
generate cash flow to make acquisitions, reinvest in�new telehealth
products and liquidate liabilities. Management also uses EBITDA for
planning purposes to determine appropriate levels of operating and
capital investments. Management also believes operating income is a
useful measure as it more accurately reflects the performance of
the Company�s core operations and excludes any non-operational or
one-time events which may skew the analysis of management or
outside investors in evaluating the Company. EBITDA and operating
income are non-GAAP financial measures and although management and
some members of the investment community utilize it to measure
financial performance, EBITDA and operating income should not be
viewed as a substitute for financial data prepared in accordance
with GAAP or as measures of profitability. Additionally, the
non-GAAP financial measure as presented by AMAC may not be
comparable to similarly titled measures reported by other
companies. Forward Looking Statements This press release contains
forward-looking statements that involve a number of risks and
uncertainties. Forward-looking statements may be identified by the
use of forward-looking terminology such as "may," "will," "expect,"
"believe," "estimate," "anticipate," "continue," or similar terms,
variations of those terms or the negative of those terms. Important
factors that could cause actual results to differ materially from
those indicated by such forward-looking statements are set forth in
the Company's filings with the Securities and Exchange Commission
(SEC), including the Company's Annual Report on Form 10-K, the
Company's Quarterly Reports on Forms 10-Q, and other filings and
releases. These include uncertainties relating to government
regulation, technological changes, costs relating to ongoing FCC
remediation efforts, our expansion plans, and product liability
risks. Statements of income for the three and nine months ended
September 30, 2008 and 2007 and balance sheets as of September 30,
2008 and December 31, 2007 are attached. AMAC SELECTED FINANCIAL
DATA � Three Months Ended � Nine Months Ended � 9/30/2008 � � �
9/30/2007 � � 9/30/2008 � � � 9/30/2007 � � Revenues $ 9,671,087 $
8,771,670 $ 28,846,153 $ 26,373,312 � Cost of Goods Sold $
4,519,411 $ 4,367,821 $ 13,774,753 $ 12,953,787 Selling, General
& Administrative Costs $ 4,390,735 $ 4,068,605 $ 12,769,764 $
11,805,368 Other Expenses (Income) $ (20,593 ) $ (404,685 ) $ (
23,281 ) $ (495,740 ) � Income before Provision for Income Taxes $
781,534 $ 739,929 $ 2,324,917 $ 2,109,897 � Net Income $ 461,534 $
422,929 $ 1,371,917 $ 1,196,897 � Net Income per Share Basic $ 0.05
$ 0.05 $ 0.15 $ 0.13 Diluted $ 0.05 $ 0.04 $ 0.14 $ 0.12 � Basic
Weighted Average Shares Outstanding 9,439,592 9,307,412 9,421,121
9.257,776 � Diluted Weighted Average Shares Outstanding 9,689,775
9,854,059 9,702,142 9,708,253 � � CONDENSED BALANCE SHEET Sept 30,
2008 December 31,2007 � (Unaudited) ASSETS � Current Assets $
9,617,037 $ 8,672,362 Fixed Assets � Net 10,783,945 10,799,313
Other Assets 15,145,755 15,481,546 � Total Assets $ 35,546,737 $
34,953,221 � � Current Liabilities $ 4,891,640 $ 5,070,893 Deferred
Income Tax 942,000 947,000 Long-term Debt 3,620,000 4,694,316
Long-term portion of capital lease 673 32,425 Other Liabilities
605,481 537,922 � Total Liabilities $ 10,059,794 $ 11,282,556 �
Stockholders� Equity 25,486,943 23,670,665 Total Liabilities and
Stockholders� Equity $ 35,546,737 $ 34,953,221 Operating Income for
the nine and three months ended September 30, 2008 and 2007. � Nine
MonthsEnded � Six MonthsEnded � Three MonthsEnded 9/30/2008
6/30/2008 9/30/2008 � Net Income 1,371,917 910,383 461,534 Add
Backs: Taxes 953,000 633,000 320,000 Interest Expense 224,073
166,868 57,205 Deductions: Other Income (247,354) (169,556)
(77,798) � � Operating Income 2,301,636 760,941 � Nine MonthsEnded
Six MonthsEnded Three MonthsEnded 9/30/2007 6/30/2007 9/30/2007 �
Net Income 1,196,897 773,968 422,929 Add Backs: Taxes 913,000
596,000 317,000 Interest Expense 375,605 255,136 120,469
Deductions: Other Income (871,345) (346,191) (525,154) � �
Operating Income 1,614,157 335,244 Earnings before interest, taxes
and depreciation and amortization (EBITDA) for the nine months
ended September 30, 2008 and 2007. � � Add: � � Less: � 9/30/08
12/31/2007 Subtotal 9/30/2007 Total � Net Income 1,371,917
1,514,232 2,866,149 1,196,897 1,689,252 Add Backs: Taxes 953,000
1,146,000 2,099,000 913,000 1,186,000 Interest 224,073 481,166
705,239 375,605 329,634 Depreciation & Amort. 3,231,637
4,302,118 7,533,755 3,127,300 4,406,455 � EBITDA 5,780,627
7,611,341 � � Add: Less: 9/30/07 12/31/2006 Subtotal 9/30/2006
Total � Net Income 1,196,897 1,262,529 2,459,426 803,964 1,655,462
Add Backs: Taxes 913,000 869,000 1,782,000 680,000 1,102,000
Interest 375,605 394,613 770,218 262,788 507,430 Depreciation &
Amort. 3,127,300 3,515,262 6,642,562 2,524,473 4,118,089 � EBITDA
5,612,802 7,382,981
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