MINNEAPOLIS, March 30 /PRNewswire/ --
Health Fitness Corporation (OTC Bulletin Board: HFIT) today reported a net
loss of $2,827,000, or $(0.23) per diluted share outstanding for the twelve
months ended December 31, 1999, compared to a net loss of $8,109,000, or
$(0.72) per diluted share outstanding, for the same period in 1998.
Revenues for the twelve-month period increased 2.2 percent to $26,195,000
compared to $25,643,000 reported for 1998. Revenues increased in the
company's core business of fitness center management contracts and IFCN sales,
but declined in the company's occupational health and physical therapy network
businesses due to the divestiture of those businesses during 1999.
Operating income for the twelve months of 1999 improved to $28,000
compared to an operating loss of $334,000 during the same period in 1998 due
to decreased operating expenses and lower bad debt write-offs. The company
also incurred $748,000 in expenses related to the company's re-engineering
efforts that occurred in 1999.
Health Fitness Corporation's debt significantly decreased to $2,862,000 at
the end of 1999 compared to $6,940,000 at the end of 1998. This reduction in
debt was largely a result of improved operations and the sale of non-producing
assets.
Charles J.B. Mitchell, Jr., acting Chief Executive Officer, said, "Health
Fitness Corporation's strategy in 1999 was to re-focus efforts and consolidate
assets on its core business of managing corporate and hospital fitness
centers. The company's considerably improved financial results for 1999
demonstrate a strengthened core business, and we believe that this positive
trend in financial performance will continue. With these strong turnaround
trends, Health Fitness is in a strong position to continue growing its core
business and acting on its previously announced strategy to pursue strategic
options for the company. The options include a merger, partnership, or sale
of the company in order to further strengthen its presence in the fitness
market."
For the fourth quarter ended December 31, 1999, Health Fitness recorded a
net loss of $148,000, or $(0.01) per diluted share outstanding, compared to a
net loss of $5,902,000, or $(0.50) per diluted share outstanding, for the same
period a year ago. Losses for the fourth quarter of 1998 included a
$4,492,000 loss from discontinued operations. Revenues for the fourth quarter
were $6,430,000 compared to $6,518,000 for the same period last year. Gross
profit improved to $1,457,000 in the fourth quarter of 1999 compared to
$1,253,000 in the fourth quarter of 1998, and operating expenses decreased to
$1,529,000 compared to $2,267,000.
Health Fitness Corporation of Minneapolis, Minn. manages corporate fitness
centers and hospital-based fitness centers throughout the United States and
provides a wide range of additional health and wellness services to
corporations.
This press release contains forward-looking statements regarding
management's belief that a turnaround trend will continue into the future, and
that the company's core business has been strengthened for future growth.
These statements should be read in conjunction with the various factors
affecting the company's operations and financial condition discussed in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations portion of the company's Annual Report on Form 10-K for the year
ended December 31, 1999. There is no assurance that the company will be able
to implement any of the noted strategic options under consideration.
HEALTH FITNESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ending Twelve Months Ending
12/31/99 12/31/98 12/31/99 12/31/98
Revenues $6,430,000 $6,518,000 $26,195,000 $25,643,000
Costs of revenue 4,973,000 5,265,000 20,151,000 19,609,000
Gross profit 1,457,000 1,253,000 6,044,000 6,034,000
Operating expenses 1,529,000 2,267,000 6,016,000 6,368,000
Operating income (loss) (72,000) (1,014,000) 28,000 (334,000)
Interest expense (310,000) (184,000) (1,090,000) (667,000)
Other income (expense) 314,000 (162,000) (254,000) 110,000
Income (loss) from
continuing operations
before income taxes (68,000) (1,360,000) (1,316,000) (891,000)
Income taxes 80,000 50,000 86,000 50,000
Income (loss) from
continuing operations (148,000) (1,410,000) (1,402,000) (941,000)
Loss from discontinued
operations -- (4,492,000) (1,425,000) (7,168,000)
Net loss $(148,000)$(5,902,000) $(2,827,000) $(8,109,000)
Basic net income (loss)
per share $(0.01) $(0.50) $(0.24) $(0.72)
Diluted net income (loss)
per share $(0.01) $(0.50) $(0.23) $(0.72)
Basic weighted average
common shares
Outstanding 12,112,015 11,884,413 11,982,610 11,319,295
Diluted weighted average
common shares
Outstanding 12,112,015 11,884,413 12,350,341 11,319,295
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
1999 1998
ASSETS
CURRENT ASSETS
Cash $139,852 $29,598
Trade accounts and notes receivable,
less allowance for doubtful accounts
of $187,912 and $1,101,210 at
December 31, 1999 and 1998 3,406,552 3,975,974
Notes receivable, current portion 308,841 396,213
Inventories -- 26,459
Prepaid expenses and other 10,939 33,395
Total current assets 3,866,184 4,461,639
PROPERTY AND EQUIPMENT, net 554,885 1,049,626
OTHER ASSETS-LONG TERM
Goodwill, less accumulated amortization
of $1,777,580 and $1,580,098 at
December 31, 1999 and 1998 6,163,998 7,568,810
Noncompete agreements, less
accumulated amortization of
$288,413 and $374,478 at
December 31, 1999 and 1998 238,437 592,373
Copyrights, less accumulated
amortization of $85,608 at
December 31, 1998 -- 584,391
Trade names, less accumulated
amortization of $7,389 and $20,613 at
December 31, 1999 and 1998 62,611 189,387
Contracts, less accumulated
amortization of $63,334 and $23,334 at
December 31, 1999 and 1998 16,666 56,666
Notes receivable 340,731 922,966
Deferred financing costs, less
accumulated amortization of $836,082 at
December 31, 1998 -- 585,260
Other 80,043 65,983
Net assets of discontinued operations -- 2,558,112
$11,323,555 $18,635,213
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $2,862,128 $6,939,692
Current maturities of long-term
obligations 420,755 478,618
Subordinated notes payable 115,000 --
Trade accounts payable 672,322 992,356
Accrued salaries, wages, and
payroll taxes 924,135 1,017,171
Accrued earn-out 186,425 309,962
Other accrued liabilities 407,997 565,658
Deferred revenue 1,381,752 1,625,659
Net liabilities of discontinued
operations 652,053 --
Total current liabilities 7,622,567 11,929,116
LONG-TERM OBLIGATIONS, less
current maturities 502,860 862,015
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
5,000,000 shares authorized,
none issued or outstanding -- --
Common stock, $.01 par value;
25,000,000 shares authorized;
12,112,015 and 11,884,413 shares
issued and outstanding at
December 31, 1999 and 1998 121,120 118,844
Additional paid-in capital 16,855,438 16,725,126
Accumulated deficit (13,778,430) (10,951,526)
3,198,128 5,892,444
Stockholder note and interest
receivable -- (48,362)
3,198,128 5,844,082
$11,323,555 $18,635,213
SOURCE Health Fitness Corporation
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CONTACT:
Tana DeBoer of Manchester Companies,
612-338-4722, for Health Fitness Corporation
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