MINNEAPOLIS, May 9 /PRNewswire-FirstCall/ -- Health Fitness Corporation
(OTC Bulletin Board: HFIT) today reported financial results for its first
quarter ended March 31, 2005. Highlights for the first quarter of 2005
compared to the first quarter of 2004 were:
-- Total revenue increased 6.3% to $13.5 million from $12.7 million;
-- Operating income increased 58.0% to $1.1 million from $0.7 million;
-- Net earnings applicable to common shareholders increased 86.5% to
$0.63 million from $0.34 million; and
-- Diluted earnings per share increased 100% to $0.04 per share from
$0.02 per share.
"We are beginning our fiscal year with good momentum," said Jerry Noyce,
President and Chief Executive Officer. "For the remainder of the year, our
primary strategy is squarely focused on growing our customer base and
improving revenue from existing sites in our two business areas: Fitness
Management Services and Health Management Services. To accomplish this, we
intend to begin investing additional resources to improve our sales and
marketing capabilities. Since many companies are being challenged with the
rising cost of employee healthcare, we believe this investment will help us
reach a larger corporate market, as well as reach more employees of the
companies we serve. We look forward to reinforcing our position as a leading
provider of fitness and health management services to large employers."
First Quarter Performance
Revenue was $13,465,101 for the first quarter, up $798,727, or 6.3%,
compared to $12,666,374 for the first quarter last year. Gross profit was
$3,441,802 for the quarter, an increase of $354,865, or 11.5%, compared to
$3,086,937 for the first quarter last year. Earnings before income taxes were
$1,083,857, up $522,650, or 93.1%, compared to $561,207 for the first quarter
of last year. Net earnings applicable to common shareholders were $627,934,
an increase of $291,227, or 86.5%, compared to $336,707 for the same quarter
last year.
Noyce also noted that the Company has made noticeable progress in a number
of other areas during the first quarter:
-- Revenue from staffing services provided at managed sites was
$12,604,167, up $396,068, or 3.2%, compared to $12,208,099 for the
first quarter last year. This increase is due primarily to new
management contracts.
-- Revenue from the Company's Health Improvement Program Services
increased 88.3% to $840,445, from $446,312 for the first quarter of
2004. This increase is due primarily to increased service penetration
at managed sites.
-- Gross profit as a percent of revenue increased to 25.6%, compared to
24.4% for the first quarter of 2004. This increase is due primarily
to an increase of more profitable business, including new management
contracts and Health Improvement Program Services, as well as a lower
cost of medical benefits for full-time staff.
-- Interest expense on long-term obligations decreased $122,329 to
$11,923, compared to $134,252 for the first quarter of 2004, due
primarily to the repayment of the Company's $2 million Senior
Subordinated Note in December 2004.
About The Company
Health Fitness Corporation is a leading provider of results-oriented
health improvement management services to corporations, hospitals,
universities and communities. Serving clients since 1975, the Company
provides fitness and health improvement services at more than 400 sites across
the U.S. and Canada. For more information about Health Fitness Corporation,
go to http://www.hfit.com .
Forward-Looking Statements
Certain statements in this release, including, without limitation, those
relating to management's belief that the investment in additional sales and
marketing resources will help the Company reach a larger number of companies
and their employees, are forward-looking statements. Any statements that are
not based upon historical facts, including the outcome of events that have not
yet occurred and our expectations for future performance, are forward-looking
statements. The words "believe," "estimate," "expect," "intend," "may,"
"could," "will," "plan," "anticipate," and similar words and expressions are
intended to identify forward-looking statements. Such statements are based
upon the current beliefs and expectations of our management. Actual results
may vary materially from those contained in forward-looking statements based
on a number of factors including, without limitation, our inability to meet
the growing demands of major corporations and other factors disclosed from
time to time in our filings with the U.S. Securities and Exchange Commission.
You should take such factors into account when making investment decisions and
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date on which they are made. We undertake no
obligation to update any forward-looking statements.
Financial tables follow ...
HEALTH FITNESS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
March 31,
2005 2004
REVENUE $13,465,101 $12,666,374
COSTS OF REVENUE 10,023,299 9,579,437
GROSS PROFIT 3,441,802 3,086,937
OPERATING EXPENSES
Salaries 1,387,923 1,342,709
Selling, general and administrative 736,866 830,106
Amortization on intangible assets 219,583 219,584
Total operating expenses 2,344,372 2,392,399
OPERATING INCOME 1,097,430 694,538
OTHER INCOME (EXPENSE)
Interest expense (11,923) (134,252)
Other, net (1,650) 921
EARNINGS BEFORE INCOME TAX EXPENSE 1,083,857 561,207
INCOME TAX EXPENSE 434,323 209,500
NET EARNINGS 649,534 351,707
Dividend to preferred shareholders 21,600 15,000
NET EARNINGS APPLICABLE TO COMMON SHAREHOLDERS $627,934 $336,707
NET EARNINGS PER COMMON SHARE:
Basic $0.05 $0.03
Diluted 0.04 0.02
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 12,619,603 12,409,619
Diluted 16,614,522 16,038,913
HEALTH FITNESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2005 2004
ASSETS
CURRENT ASSETS
Cash $49,911 $241,302
Trade and other accounts receivable, less
allowances of $212,000 and
$210,700 8,692,559 8,147,430
Prepaid expenses and other 474,263 213,954
Deferred tax assets 1,212,500 1,660,100
Total current assets 10,429,233 10,262,786
PROPERTY AND EQUIPMENT, net 141,042 150,308
OTHER ASSETS
Goodwill 9,022,501 9,022,501
Customer contracts, less accumulated
amortization of $1,077,800 and
$875,700 652,222 854,306
Trademark, less accumulated amortization
of $93,300 and $75,800 256,667 274,167
Other intangible assets, less accumulated
amortization of $86,300 and $81,300 11,777 61,493
Deferred tax assets 263,900 221,400
Other 76,661 87,015
$20,854,003 $20,933,976
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $484,691 $840,155
Accrued salaries, wages, and payroll taxes 2,564,924 2,768,734
Other accrued liabilities 413,031 495,770
Accrued self funded insurance 218,065 225,500
Deferred revenue 1,906,602 1,977,093
Total current liabilities 5,587,313 6,307,252
LONG-TERM OBLIGATIONS 1,573,788 1,612,759
COMMITMENTS AND CONTINGENCIES - -
PREFERRED STOCK, $0.01 par value; 5,000,000
shares authorized, 1,078,740 and 1,063,945
issued and outstanding 1,521,296 1,530,232
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value; 25,000,000
shares authorized; 12,652,370 and
12,582,170 shares issued and outstanding 126,524 125,822
Additional paid-in capital 17,895,457 17,836,675
Accumulated comprehensive income 2,914 2,459
Accumulated deficit (5,853,289) (6,481,223)
12,171,606 11,483,733
$20,854,003 $20,933,976
SOURCE Health Fitness Corporation
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Company News On-Call:
http://www.prnewswire.com/comp/000921.html
Related links:
http://www.hfit.com
CONTACT:
Wes Winnekins, CFO of Health Fitness
Corporation, +1-952-897-5275, wwinnekins@hfit.com , or, Dennis B.
McGrath, of McGrath Buckley Communications Counseling,
+1-651-646-4115, dennis@mcgrath-buckley.com
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