OKLAHOMA CITY, Aug. 21, 2009 (GLOBE NEWSWIRE) -- Graymark Healthcare Inc. (Nasdaq:GRMH) today announced results for the second quarter ended June 30, 2009.
Net revenue for the second quarter of 2009 increased nine percent to $25.3 million, compared to $23.3 million in the second quarter of 2008. Due principally to a change in accounting estimate, net loss attributable to Graymark was ($2.8) million, or ($0.10) per diluted share, for the second quarter of 2009, compared to net income of $368,000, or $0.01 per diluted share for the second quarter of 2008. Without the change in accounting estimate, net loss attributable to Graymark would have been ($0.2) million or ($0.1) per diluted share for the second quarter of 2009 compared to net income of $0.01 per diluted share for the second quarter of 2008.
Net revenue for the company's ApothecaryRx segment, which owns and operates independent retail pharmacies, increased 15 percent to $22.3 million for the second quarter of 2009 compared to last year's second quarter. The increased net revenue was due to contributions from acquisitions made during the first two quarters of 2008 and disciplined execution of our business model by management. This performance is impressive given the difficult national economic conditions in the quarter and the increasing shift to generic drugs.
Our sleep diagnostic business comprised of SDC Holdings and Nocturna Sleep Therapy (NST), generated combined net revenue of $3.0 million, a decrease of 18 percent compared to last year's second quarter. The decrease in revenues is due to a combination of lower net realizable revenue per sleep study in 2009, which is believed to be a short term issue related to the mix of both payors and patients, and lower sleep volumes at existing sleep centers compared to 2008.
During management's second quarter review of the collectability estimates related to accounts receivable in our SDC business unit, it was determined that a change in that estimate was required. This change was based on newly available information and resulted in an increase in the reserve for doubtful accounts and operating expenses of approximately $2.6 million in the second quarter of 2009. In addition, management has initiated a series of operational improvements which we are confident will address the identified process improvement opportunities and result in improved collections going forward.
"Throughout the second quarter and first six months of 2009 we have seen consistent revenue growth and continued profitability from the pharmacy side of the business, which is a testament to our team's ability to work efficiently while providing our customers with the friendly and personal experience they have come to expect," stated Stanton Nelson, Chief Executive Officer. "On the sleep side, SDC Holdings, we saw a slight increase in the number of sleep studies performed in the second quarter compared to the first quarter of 2009. While our volumes continue to be soft compared to the same period in 2008, we anticipate the increasing volume trend to continue through the remainder of 2009. Additionally, we believe the drop in net realizable revenue per sleep in the second quarter to be short term in nature and expect our realized revenue per sleep to also improve over the balance of the year. We believe these improvements, coupled with ongoing operational initiatives, will result in improved performance in the second half of 2009. Finally, we continue to pursue accretive acquisition opportunities for the SDC business, and have maintained a robust pipeline of opportunities for continued growth through strategic acquisitions."
"Our durable medical equipment business has seen healthy growth which should continue as we are in the process of developing new marketing channels so our DME equipment and supplies are more readily available for the people who depend on them," Mr. Nelson continued. "In this area, we are experiencing continued momentum in our supply replenishment program, and we have recently launched an E-commerce site which provides a new sales channel throughout the country. To further enhance this new initiative we are pursuing strategic alliances that have strong demographics for sleep care needs, such as our recent alliance with a national trucking trade publication. Overall, we are excited and optimistic about the second half of 2009 and expect to grow the business across the board."
Graymark Healthcare, Inc. is a diversified medical holding company that owns and operates diagnostic sleep centers that treat a wide range of sleep disorders; independent pharmacies that serve the needs of local markets; and a medical equipment company that provides both disposable and durable medical equipment. Graymark plans to continue its growth both internally and through strategic acquisitions within the medical industry.
Conference Call
A conference call and webcast will be held Monday, August 24, 2009, at 2:00 p.m. Central Time (3:00 p.m. Eastern Time) to discuss Graymark Healthcare's consolidated financial results for the second quarter of 2009 and its outlook for the future.
To participate in the call, interested parties may dial 1-800-860-2442 and reference the Graymark Healthcare Earnings Conference Call. Alternatively, interested parties may access the call in listen-only mode via the investor relations section of the company's Web site, www.graymarkhealthcare.com.
This press release may contain forward-looking statements which are based on the Company's current expectations, forecasts and assumptions. Forward-looking statements involve risks and uncertainties which 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 www.sec.gov. 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.