MINNEAPOLIS, Nov. 1 /PRNewswire-FirstCall/ -- Health Fitness Corporation
(HFC) (OTC Bulletin Board: HFIT) today announced financial results for the
third quarter and nine months ended September 30, 2004.
For the quarter ended September 30, 2004, revenue increased 76.7% to
$13,154,340 from $7,445,094 for the same quarter last year. Gross profit
increased 128.3% to $3,347,083 from $1,465,768 for the same quarter last year.
As a percent of revenue, gross profit increased to 25.4% compared to 19.7% for
the third quarter last year. Net earnings applicable to common shareholders
increased 429.9% to $465,164 from $87,786 for the same quarter last year. Net
earnings per diluted share of $0.03 increased 200% from $0.01 per diluted
share for the same quarter last year.
For the nine months ended September 30, 2004, revenue increased 71.6% to
$38,950,429 from $22,695,925 for the same period last year. Gross profit
increased 110.1% to $9,876,378 from $4,701,309 for the same period last year.
As a percent of revenue, gross profit increased to 25.4% compared to 20.7% for
the same period in 2003. Net earnings applicable to common shareholders
increased 122.1% to $1,272,625 from $573,099 for the same period last year.
Net earnings per diluted share of $0.08 increased 60% from $0.05 per diluted
share for the same quarter last year.
Jerry Noyce, HFC CEO and President said the significant improvement in
financial results compared to 2003 is primarily attributed to HFC's December
2003 acquisition of the Health & Fitness Services Business of Johnson &
Johnson Health Care Systems Inc, growth from HFC's Health Enhancement Program
services and new contract growth outpacing contract attrition.
"Our strong performance for the quarter and nine months is the result of
hard work and dedication by our associates while we integrated and improved
the operations of two companies," Noyce said. "Now that the integration
process is essentially complete, we are very optimistic about our strategic
direction in light of the scrutiny being placed on obesity, heart disease,
diabetes and rising healthcare costs in the workplace. With a large customer
base, an enhanced suite of health assessment, fitness, wellness and lifestyle
management services, and a corporate market that is increasingly focused on
the health of its employees, dependents and retirees, we are optimistic about
the opportunity to continue growing our business."
Health Fitness Corporation is the leading provider of results-oriented
health improvement management services to corporations, hospitals,
universities and communities. Serving clients since 1975, HFC provides
fitness and wellness management 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 .
This press release contains forward-looking statements within the meaning
of federal securities laws. These statements include statements regarding
intent, belief, or current expectations of the Company and its management and
specifically include the statement regarding the Company's optimism regarding
its strategic direction and excitement about growth opportunities. These
forward-looking statements are not guarantees of future performance and
involve a number of risks and uncertainties that may cause the Company's
actual results to differ materially from the results discussed in these
statements. 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, 2003, as well as the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2004. There is no assurance that the Company will be able to capitalize on
any of these forward-looking statements.
HEALTH FITNESS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
REVENUE $13,154,340 $7,445,094 $38,950,429 $22,695,925
COSTS OF REVENUE 9,807,257 5,979,326 29,074,051 17,994,616
GROSS PROFIT 3,347,083 1,465,768 9,876,378 4,701,309
OPERATING EXPENSES
Salaries 1,408,482 834,781 4,180,760 2,407,539
Other selling,
general and
administrative 784,560 393,018 2,438,170 1,223,937
Amortization of
acquired
intangible assets 219,583 - 658,750 -
Total operating
expenses 2,412,625 1,227,799 7,277,680 3,631,476
OPERATING INCOME 934,458 237,969 2,598,698 1,069,833
OTHER INCOME
(EXPENSE)
Interest expense (118,102) (59,031) (380,698) (82,987)
Other, net 908 (32,949) 2,298 (34,808)
EARNINGS BEFORE
INCOME TAXES 817,264 145,989 2,220,298 952,038
INCOME TAX EXPENSE 330,500 58,203 882,873 378,939
NET EARNINGS 486,764 87,786 1,337,425 573,099
Dividend to
preferred
shareholders 21,600 - 64,800 -
NET EARNINGS
APPLICABLE TO COMMON
SHAREHOLDERS $465,164 $87,786 $1,272,625 $573,099
NET EARNINGS PER SHARE:
Basic $0.04 $0.01 $0.10 $0.05
Diluted 0.03 0.01 0.08 0.05
WEIGHTED AVERAGE
COMMON SHARES:
Basic 12,550,679 12,341,284 12,482,060 12,324,292
Diluted 16,122,175 12,743,441 16,078,873 12,542,024
HEALTH FITNESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2004 2003
ASSETS
CURRENT ASSETS
Cash $206,458 $281,294
Trade and other accounts receivable, less
allowances of $154,400 and $131,000 7,913,590 5,218,224
Prepaid expenses and other 244,179 187,347
Deferred taxes 1,294,300 850,300
Total current assets 9,658,527 6,537,165
PROPERTY AND EQUIPMENT, net 161,714 177,217
OTHER ASSETS
Goodwill 9,022,501 8,725,574
Customer contracts, less accumulated
amortization of $673,600 and $67,400 1,056,389 1,662,639
Trademark, less accumulated amortization
of $58,300 and $5,800 291,666 344,166
Other intangible assets, less accumulated
amortization of $26,800 and $4,200 115,990 138,582
Cash held in escrow - 471,999
Deferred taxes 513,382 1,686,301
Other 41,275 64,458
$20,861,444 $19,808,101
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $349,129 $569,730
Accrued salaries, wages, and payroll taxes 2,635,743 1,607,157
Other accrued liabilities 510,655 450,255
Accrued self funded insurance 497,043 228,084
Deferred revenue 1,525,068 1,427,057
Total current liabilities 5,517,638 4,282,283
LONG-TERM OBLIGATIONS 2,666,353 4,350,012
COMMITMENTS AND CONTINGENCIES - -
CUMULATIVE CONVERTIBLE PREFERRED STOCK,
10,000,000 shares authorized, 1,048,874
and 1,003,833 issued and outstanding 1,508,632 1,443,833
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value; 50,000,000
shares authorized; 12,560,976 and
12,357,334 shares issued and outstanding 125,609 123,573
Additional paid-in capital 17,836,886 17,671,536
Accumulated comprehensive income 2,544 5,707
Accumulated deficit (6,796,218) (8,068,843)
11,168,821 9,731,973
$20,861,444 $19,808,101
SOURCE Health Fitness Corporation
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Company News On-Call:
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Related links:
http://www.hfit.com
CONTACT:
Wes Winnekins, CFO of Health Fitness
Corporation, +1-952-897-5275, wes.winnekins@hfit.com ; Dennis B.
McGrath of McGrath Buckley Communications Counseling,
+1-651-646-4115, dennis@mcgrath-buckley.com
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