Plantation, FL, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Health Revenue Assurance Holdings, Inc. (OTCBB: HRAA), a provider of revenue integrity solutions for healthcare organizations, announced its financial results for the third quarter and nine months ended September 30, 2012.
Third Quarter 2012 Financial Highlights:
- Total quarterly revenue of $1,985,516, increased 369% as compared to $423,325 for the prior year's third quarter;
- Adjusted EBITDA of $161,812 compared to adjusted EBITDA of $98,993 in same period in 2011;
- Net loss of $230,149 or $0.01 per basic and diluted share that included a one-time $297,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the three months ended September 30, 2012.
Andrea Clark, HRAA's Chairman, CEO and Founder stated, "This was a record quarter for HRAA. Our strong revenue growth was driven by new customer wins in our healthcare coding business including the addition of 7 new hospitals in one of the nation's leading hospital groups. We are currently providing outsourced coding services to more than 20 hospitals and expect to see continued strong momentum in this business as hospital groups increasingly turn to outsourced providers to address their coding needs."
Clark concluded, "During the quarter we launched our flagship ICD-10 software product, ICD Visualizerä. This product provides hospitals with a powerful application that uncovers the financial and coding impact of the mandated transition from its current coding standard, ICD-9, to the new, more comprehensive ICD-10 standard in October 2014. Having provided auditing, education and consulting services and more recently, outsourced coding services to over 900 hospitals over the years, HRAA was in a unique position to develop and commercialize a business intelligence software solution that improves the healthcare delivery experience for doctors, nurses and patients. We will continue to invest in and develop IP and new technology products that leverage our expertise in healthcare consulting and revenue integrity."
Third Quarter 2012 Financial Results
For the third quarter of 2012, total revenues were $1,985,516, an increase of $1,562,191 or 369%, from revenues of $423,325 for the third quarter of 2011.
Adjusted EBITDA was $161,812 for the quarter ended September 30, 2012 compared to adjusted EBITDA of $98,993 for the same quarter in 2011.
Operating expenses were $1,084,803 for the third quarter of 2012, increasing 123% from operating expenses of $486,733 for the prior year's third quarter, primarily due to the addition of extra staff to support the Company's rapid growth in medical coding. The Company had operating income in the third quarter of 2012 of $142,446, compared to an operating loss of $164,701 for the prior year's third quarter.
The Company recorded a net loss of $230,149, or $0.01 per basic and diluted share, for the third quarter of 2012, as compared to a net loss of $171,167, or $0.01 per basic and diluted share, for the third quarter of 2011. The net loss in the third quarter of 2012 includes an interest expense of $377,954 due to the factoring fees experienced in the quarter along with interest on outstanding debt obligations and a one-time $297,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the three months ended September 30, 2012.
Nine Month Results
For the nine months ended September 30, 2012, total revenues were $3,619,611, an increase of $2,606,333 or 257%, from revenues of $1,013,278 for the first nine months of 2011.
Adjusted EBITDA loss was $794,091 for the nine months ended September 30, 2012 compared to adjusted EBITDA of $189,112 for the same period in 2011.
Operating expenses were $2,726,475 for the first nine months of 2012, increasing 257% from operating expenses of $764,757 for the same period in 2012, primarily due to increased personnel and business development costs. The Company had an operating loss for the nine months ended September 30, 2012 of $840,300, compared to an operating loss of $89,461 for the same period in 2011.
The Company recorded a net loss of $1,223,737, or $0.04 per basic and diluted share, for the nine months ended September 30, 2012 as compared to a net loss of $108,536 or $0.01 per basic and diluted share, for the same period in 2011. The net loss for the first nine months of 2012 includes an interest expense of $377,954 due to the factoring fees experienced in the third quarter along with interest on outstanding debt obligations and a one-time $300,000 non-cash expense related to the amortization of a $300,000 beneficial conversion feature which was expensed during the nine month period ended September 30, 2012.
Conference Call
The Company will be holding a conference call on Thursday, November 15, 2012, at 10:00am ET (7:00am Pacific Time) to review the third quarter of 2012 results. Robert Rubinowitz, President and Chief Operating Officer of Health Revenue Assurance Holdings, Inc., will be on-line to discuss these results.
To listen in, please call one of the following teleconferencing numbers at least 5 minutes before the conference call commences.
Toll-Free: 1-800-343-0821
Toll: 1-785-830-1978
Passcode: 4280626
A telephone replay of the call will be available by contacting HRAA's office at 1-954-472-2340.
About HRAA
HRAA is a trusted source of critical resources, technology and information that supports the performance of revenue integrity in assuring the existence of healthcare organizations. HRAA's products and services include business intelligence technology solutions, contract coding, billing, coding and compliance audits, education, revenue cycle consulting, physician services and ICD-10 transition services.
Caution Regarding Forward Looking Statements
Certain statements in this news release and such conference call are forward-looking, including (without limitation) expectations or guidance respecting customer contract expansion, growing revenues and profits through organic growth and acquisitions, attracting new business that will increase HRAA's revenues, continuing to maintain costs and consummating any transactions. Undue reliance should not be placed on such forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control. The Company's actual results, performance and trends could differ materially from those indicated or implied by such statements as a result of various factors, including (without limitation) the continued strengthening of HRAA's selling and marketing functions, continued customer satisfaction and contract renewal, new product development, continued availability of capable dedicated personnel, continued cost management, the success and availability of acquisitions, availability of financing and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information regarding certain of those and other risk factors and cautionary statements that could affect future results, performance or trends are discussed in HRAA's most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings made with the Securities and Exchange Commission from time to time. All of the Company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.
-Tables Follow-
| HEALTH REVENUE ASSURANCE HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| September 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Cash | $ | 57,182 | $ | 198,500 | ||||
| Accounts receivable | 348,523 | 143,557 | ||||||
| Due from factor | 127,638 | -- | ||||||
| Prepaid expenses | 6,515 | 24,512 | ||||||
| Other current assets | 9,053 | 5,842 | ||||||
| Total Current Assets | 548,911 | 372,411 | ||||||
| Property and Equipment, net | 377,059 | 352,499 | ||||||
| Software | 92,727 | -- | ||||||
| Other assets | 8,866 | 8,865 | ||||||
| Finance costs, net | 2,558 | 2,803 | ||||||
| Total Other Assets | 104,151 | 11,668 | ||||||
| Total Assets | $ | 1,030,121 | $ | 736,578 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Accounts payable | $ | 161,050 | $ | 195,901 | ||||
| Accounts payable Related Party | 75,000 | -- | ||||||
| Accrued expenses | 41,886 | 23,266 | ||||||
| Accrued payroll | 380,545 | 73,685 | ||||||
| Line of credit | 150,000 | 98,500 | ||||||
| Capital Leases (current obligation) | 16,923 | -- | ||||||
| Current maturities of long term debt | 35,380 | 283,640 | ||||||
| Advances on convertible promissory notes | -- | 170,000 | ||||||
| Settlement Payable | 207,500 | -- | ||||||
| Unearned revenue | -- | 32,988 | ||||||
| Total Current Liabilities | 1,068,284 | 877,980 | ||||||
| Capital Leases (net of current portion) | 28,205 | -- | ||||||
| Long term debt (net of current portion) | 191,197 | 218,417 | ||||||
| Total Liabilities | $ | 1,287,686 | $ | 1,096,397 | ||||
| Stockholders' Deficit: | ||||||||
| Common stock ($0.001 par value, 75,000,000 shares authorized, | ||||||||
| 35,191,080 shares and 16,499,021 issued and outstanding at | ||||||||
| September 30, 2012 and December 31, 2011, respectively) | 35,191 | 16,499 | ||||||
| Additional paid-in capital | 2,058,309 | 751,010 | ||||||
| Accumulated deficit | (2,351,065 | ) | (1,127,328 | ) | ||||
| Total Stockholders' Deficit | (257,565 | ) | (359,819 | ) | ||||
| -- | ||||||||
| Total Liabilities and Stockholders' Deficit | $ | 1,030,121 | $ | 736,578 | ||||
| HEALTH REVENUE ASSURANCE HOLDINGS, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||
| (for the three months ended) | (for the nine months ended) | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues | $ | 1,985,516 | $ | 423,325 | $ | 3,619,611 | $ | 1,013,278 | ||||||||
| Cost of Revenues | 758,267 | 101,293 | 1,642,619 | 252,391 | ||||||||||||
| Gross Profit | 1,227,249 | 322,032 | 1,976,992 | 760,887 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Selling and administrative expenses (includes stock compensation of $0 and $256,284 as of September 30, 2012 and 2011, respectively) | 1,069,870 | 454,685 | 2,726,475 | 764,757 | ||||||||||||
| Research and development | 926 | 24,637 | 54,059 | 63,302 | ||||||||||||
| Depreciation and amortization | 14,007 | 7,410 | 36,758 | 22,289 | ||||||||||||
| Total Operating Expenses | 1,084,803 | 486,733 | 2,817,292 | 850,348 | ||||||||||||
| Operating Income (Loss) | 142,446 | (164,701 | ) | (840,300 | ) | (89,461 | ) | |||||||||
| Other Income (Expense) | ||||||||||||||||
| Other income | 5,359 | -- | 9,451 | -- | ||||||||||||
| Interest expense | (377,954 | ) | (6,466 | ) | (392,888 | ) | (19,075 | ) | ||||||||
| Total Other Income (Expense), net | (372,595 | ) | (6,466 | ) | (383,437 | ) | (19,075 | ) | ||||||||
| -- | ||||||||||||||||
| Income (Loss) before provision for income taxes | (230,149 | ) | (171,167 | ) | (1,223,737 | ) | (108,536 | ) | ||||||||
| Provision for income taxes | -- | -- | -- | -- | ||||||||||||
| Net Loss | $ | (230,149 | ) | $ | (171,167 | ) | $ | (1,223,737 | ) | $ | (108,536 | ) | ||||
| Net Loss Per Share | ||||||||||||||||
| basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.01 | ) | ||||
| Weighted Average Number of Shares Outstanding | ||||||||||||||||
| basic and diluted | 32,843,413 | 14,867,244 | 31,468,471 | 13,757,263 | ||||||||||||
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