MINNEAPOLIS, March 28 /PRNewswire-FirstCall/ --
Health Fitness Corporation (OTC Bulletin Board: HFIT) today reported net
income of $1,806,001, or $0.15 per diluted share outstanding for the twelve
months ended December 31, 2001, compared with net income of $930,169, or
$0.07 per diluted share outstanding for the same period in 2000. Income
before income taxes increased to $1,099,716 for 2001, from $978,616 for 2000.
Revenue for 2001 decreased 1.1% to $25,909,978 from $26,190,671 for 2000.
Operating income for 2001 decreased to $1,361,849 from $1,648,142 for 2000.
These decreases were due primarily to the sale of the company's IFCN
subsidiary effective January 1, 2001.
The company experienced a $777,300 tax benefit related to a decrease in
its deferred tax asset valuation allowance, which was included in the
computation of net income for 2001. A gain in the amount of $229,000 from the
sale of IFCN was included in income before income taxes and net income for
2001.
For the fourth quarter ended December 31, 2001, the company recorded net
income of $943,489, or $0.08 per diluted share outstanding, compared with net
income of $221,953, or $0.01 per diluted share outstanding for the same period
in 2000. Revenues for the fourth quarter of 2001 were $6,548,317 compared
with $6,670,956 for the same period in 2000. Gross profit decreased to
$1,430,832 in the fourth quarter of 2001 compared with $1,551,265 in the
fourth quarter of 2000. Operating expenses, including other income and
expense, decreased to $1,251,884 for the fourth quarter of 2001 compared with
$1,304,624 for the same period in 2000, primarily due to a decrease in
interest expense related to lower borrowings, as well as expense reductions
from the Company's previous turnaround efforts. The company experienced a net
tax benefit of $764,541 during the fourth quarter of 2001, compared with tax
expense of $24,688 for the same period in 2000.
Jerry Noyce, President and Chief Executive Officer, said, "2001 marks our
second straight year of profitability. With stronger earnings, a balance
sheet strengthened by a substantial reduction in debt, an improved working
capital position and a significant increase in shareholder's equity, we are
truly positioned to be successful in the years to come. The $777,300 benefit
we realized from a decrease in our deferred tax asset valuation allowance
represents the first time we have recognized our deferred tax assets, and
affirms our current financial stability. With an additional $2.5 million of
deferred tax assets yet to be recognized, our bottom line for the future looks
very healthy.
"During 2001, our associates worked very hard to build on the company's
previous turnaround success. We filled key management positions and
reorganized responsibilities to be more proactive to sales and market
opportunities. We developed new health and fitness service offerings that
will be marketed to our existing customers. We also developed a five-year
strategic plan to chart the company's future growth. I'm happy to report that
these changes have begun to bear fruit. During the fourth quarter of 2001, we
won the national management contract for three Fortune 200 companies,
representing 30 new fitness center sites and approximately $2,300,000 in
annual revenues beginning in 2002," Noyce continued.
"After one year," Noyce concluded, "I am very pleased with the progress
our new management team has made in many areas. I am particularly pleased
with the results we have achieved since we implemented our new sales and
marketing strategies. Looking forward, I believe the Company is
well-positioned to improve on these results and solidify its position as the
leading provider of results-oriented health and fitness solutions."
Health Fitness Corporation is a leading provider of fitness and wellness
management services and programs to corporations, hospitals, communities and
universities located in the United States and Canada. The Company has been
serving customers since 1975 and has more than 180 customer sites.
This press release contains forward-looking statements regarding
management's belief that the Company is well-positioned to improve on
historical results and solidify its position as the leading provider of
results-oriented health and fitness solutions. These statements should be
read in conjunction with the various factors affecting the Company's
operations and financial condition discussed in the section titled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained within the Company's Annual Report on Form 10-K for the
year ended December 31, 2001. There is no assurance that the Company will be
able to capitalize on any of its plans regarding future results of the
Company.
HEALTH FITNESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ending Twelve Months Ending
12/31/01 12/31/00 12/31/01 12/31/00
Unaudited Unaudited
REVENUE $6,548,317 $6,670,956 $25,909,978 $26,190,671
COST OF REVENUE 5,117,485 5,119,691 20,105,139 19,804,356
GROSS PROFIT 1,430,832 1,551,265 5,804,839 6,386,315
OPERATING EXPENSES
Salaries 510,976 404,002 2,117,407 1,840,436
Selling, general, and
administrative 617,099 695,156 2,325,583 2,517,634
Re-engineering -- 58,334 -- 380,103
Total operating
expenses 1,128,075 1,157,492 4,442,990 4,738,173
OPERATING INCOME 302,757 393,773 1,361,849 1,648,142
OTHER INCOME (EXPENSE)
Interest expense (109,084) (130,318) (464,039) (681,847)
Gain on sale of
subsidiary -- -- 228,613 --
Other, net (14,725) (16,814) (26,707) 12,321
INCOME BEFORE INCOME
TAXES 178,948 246,641 1,099,716 978,616
INCOME TAXES (764,541) 24,688 (706,285) 48,447
NET INCOME $943,489 $221,953 $1,806,001 $930,169
NET INCOME (LOSS) PER
SHARE
Basic $0.08 $0.01 $0.15 $0.08
Diluted 0.08 0.01 0.15 0.07
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 12,265,250 12,274,857 12,232,283 12,133,085
Diluted 12,429,049 12,419,531 12,433,715 12,451,095
HEALTH FITNESS CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
2001 2000
ASSETS
CURRENT ASSETS
Cash $221,008 $472,930
Trade and other accounts receivable, less
allowance for doubtful accounts of $84,700
and $262,600 at December 31, 2001 and 2000 3,388,856 3,266,277
Prepaid expenses and other 130,090 47,789
Deferred tax asset 777,300 --
Total current assets 4,517,254 3,786,996
PROPERTY AND EQUIPMENT, net 174,912 257,947
OTHER ASSETS
Goodwill, less accumulated amortization
of $2,568,600 and $2,183,400 at December,
2001 and 2000 5,308,761 5,783,550
Intangible assets, less accumulated
amortization of $619,100 and $551,900 at
December 31, 2001 and 2000 186,737 493,947
Trade and other notes receivable -- 73,380
Other 11,410 3,448
$10,199,074 $10,399,268
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $1,442,304 $2,685,802
Current maturities of long-term obligations -- 101,850
Trade accounts payable 141,736 246,550
Accrued salaries, wages, and payroll taxes 915,379 1,037,760
Other accrued liabilities 392,794 736,049
Deferred revenue 1,243,946 1,264,674
Net liabilities of discontinued operations -- 106,734
Total current liabilities 4,136,159 6,179,419
LONG-TERM OBLIGATIONS, less current maturities -- 24,954
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; 5,000,000
shares authorized, none issued or outstanding -- --
Common stock, $0.01 par value; 25,000,000
shares authorized; 12,265,250 and
12,165,250 shares issued and outstanding
at December 31, 2001 and 2000 122,653 121,653
Additional paid-in capital 16,982,522 16,921,503
Accumulated deficit (11,042,260) (12,848,261)
6,062,915 4,194,895
$10,199,074 $10,399,268
SOURCE Health Fitness Corporation
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CONTACT:
Wes Winnekins, CFO of Health Fitness
Corporation, +1-952-897-5275, wwinnekins@hfit.com
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