-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I7nKVySsrPwIvcphW1ilF/wB90jP7Zash/DG/fzQA4G0yWevZXbrdrYBcfUArs7i 95E/JexWsZo2DLtlaTiLkA== 0001019687-07-004007.txt : 20071116 0001019687-07-004007.hdr.sgml : 20071116 20071116142224 ACCESSION NUMBER: 0001019687-07-004007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071116 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071116 DATE AS OF CHANGE: 20071116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Integrated Healthcare Holdings Inc CENTRAL INDEX KEY: 0001051488 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 870412182 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23511 FILM NUMBER: 071252688 BUSINESS ADDRESS: STREET 1: 1301 N. TUSTIN AVENUE CITY: SANTA ANA STATE: CA ZIP: 92705 BUSINESS PHONE: 714-434-9191 MAIL ADDRESS: STREET 1: 1301 N. TUSTIN AVENUE CITY: SANTA ANA STATE: CA ZIP: 92705 FORMER COMPANY: FORMER CONFORMED NAME: Integrated Healthcare Holdings DATE OF NAME CHANGE: 20040816 FORMER COMPANY: FORMER CONFORMED NAME: FIRST DELTAVISION INC DATE OF NAME CHANGE: 19971216 8-K 1 ihh_8k-111507.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): NOVEMBER 16, 2007 INTEGRATED HEALTHCARE HOLDINGS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) NEVADA 0-23511 87-0573331 (STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER OF INCORPORATION) IDENTIFICATION NO.) 1301 NORTH TUSTIN AVENUE, SANTA ANA, CALIFORNIA 92705 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Registrant's telephone number, including area code: (714) 953-3503 -------------------------------------------------------------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02. Results of Operations and Financial Condition. On November 16, 2007, Integrated Healthcare Holdings, Inc. (IHHI), an operator of four hospitals in Orange County, California, announced its earnings for the quarter ended September 30, 2007. A copy of this release is furnished as Exhibit 99.1 to this report. The information in this Current Report on Form 8-K is being is provided under Item 2.02 of Form 8-K and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. 2 ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. EXHIBIT NUMBER DESCRIPTION - -------------- ----------- 99.1 Press Release: Integrated Healthcare Holdings, Inc. announces second quarter earnings 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: November 16, 2007 INTEGRATED HEALTHCARE HOLDINGS, INC. By: /s/ Steven R. Blake -------------------------------- Steven R. Blake Chief Financial Officer 4 EX-99.1 2 ihh_8k-ex9901.txt EXHIBIT 99.1 PRESS RELEASE: INTEGRATED HEALTHCARE HOLDINGS, INC. ANNOUNCES SECOND QUARTER EARNINGS IHHI ANNOUNCES SECOND QUARTER EARNINGS - -------------------------------------- FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: LARRY ANDERSON (714) 953-3659 OR (949) 322-9245 SANTA ANA, CA - November 16, 2007 - Integrated Healthcare Holdings, Inc. ("IHHI") (OTCBB: IHCH), the operator of four Orange County, California hospitals, has reported its financial results for the second quarter ended September 30, 2007. Second Quarter Results IHHI reported consolidated net operating revenues of $95.4 million for the three months ended September 30, 2007, an increase of $10.1 million, or 11.8%, from the comparable period in 2006. Operating income for the three months ended September 30, 2007 was $4.1 million compared to an operating loss of $4.6 million for the same period in 2006. The consolidated net income for the three months ended September 30, 2007 was $1.1 million, or $0.01 per share, versus a net loss of $7.0 million, or $0.08 per share, during the same period of 2006. The net loss for the same period in 2006 was $7.8 million before recognition of the change in fair value of derivative (this is a non-GAAP measure). For the six months ended September 30, 2007, IHHI reported consolidated net operating revenues of $182.2 million, an increase of $5.9 million, or 3.3%, from the comparable period in 2006. Operating income for the six months ended September 30, 2007 was $1.3 million compared to an operating loss of $3.6 million for the same period in 2006. The consolidated net loss for the six months ended September 30, 2007 was $4.7 million, or $0.04 per share, versus $4.8 million, or $0.06 per share, during the same period of 2006. The net loss for the same period in 2006 was $9.9 million before recognition of the change in fair value of derivative, representing a significant improvement in operating results during 2007 (this is a non-GAAP measure). IHHI management evaluates and makes operating decisions using various performance measures. In addition to GAAP results, we also consider other measures, such as "adjusted" EBITDA (earnings before interest, taxes, depreciation and amortization), which is a non-GAAP term. Please see "Use of Non-GAAP Financial Information" below. Our adjusted EBITDA for the three months ended September 30, 2007 was $4.9 million, an increase of $8.8 million from adjusted EBITDA of ($3.9) million for the same period in 2006. Our adjusted EBITDA for the six months ended September 30, 2007 was $2.9 million, an increase of $5.2 million from adjusted EBITDA of ($2.3) million for the same period in 2006. Bruce Mogel, IHHI CEO, stated, "We are gratified to report the result of considerable progress moving these operations to a fiscally sound basis. This was the result of concerted efforts by our facility personnel and increasingly supportive medical staff and community." Management attributes the improved operating results to a series of cost control and revenue enhancement initiatives which it monitors with each affiliate hospital on a weekly basis. During the three months ended September 30, 2007 and 2006, IHHI received $3.0 million and $0, respectively, in supplemental funding for indigent care, and $3.0 million and $3.5 million during the six months ended September 30, 2007 and 2006, respectively. Such supplemental fundings may or may not occur in future periods. Management commented further that the improved operating results do not yet reflect the reduced borrowing costs resulting from its refinancing efforts which took effect on October 9, 2007. The results of the refinancing are expected to be displayed in the Company's future results. Use of Non-GAAP Financial Information To supplement our financial results presented in accordance with GAAP, we use a non-GAAP financial measure we call adjusted EBITDA and define as net income (loss) excluding depreciation and amortization, share-based compensation expense, interest expense, change in fair value of derivative, minority interest in variable interest entity, and income taxes. We present this non-GAAP financial measure as a supplement to our GAAP financial results to provide our investors with additional information to evaluate our operating results. This non-GAAP financial measure should be read in conjunction with our condensed consolidated financial statements included in our filing of Form 10-Q with the Securities and Exchange Commission on November 14, 2007. A reconciliation of net income (loss) to adjusted EBITDA for the three and six months ended September 30, 2007 and 2006 follows: INTEGRATED HEALTHCARE HOLDINGS, INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA (A NON-GAAP MEASURE) (amounts in 000's) THREE MONTHS ENDED SEPTEMBER 30, SIX MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------ 2007 2006 2007 2006 ----------- ----------- ----------- ----------- (restated) (restated) Net income (loss), as reported $ 1,126 $ (7,004) $ (4,649) $ (4,816) ----------- ----------- ----------- ----------- Adjustments to net income (loss): Depreciation and amortization 800 655 1,593 1,325 Share-based compensation expense 58 -- 58 -- Interest expense 3,081 3,407 6,168 6,653 Change in fair value of derivative -- (779) -- (5,104) Minority interest in variable interest entity (117) (187) (236) (329) Income taxes -- -- -- -- ----------- ----------- ----------- ----------- 3,822 3,096 7,583 2,545 ----------- ----------- ----------- ----------- Adjusted EBITDA (non-GAAP) $ 4,948 $ (3,908) $ 2,934 $ (2,271) =========== =========== =========== =========== Forward Looking Statements Statements in this press release regarding the business of IHHI which are not historical in nature are "forward-looking statements." Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed or projected. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Actual results may differ materially from those anticipated, estimated, or projected in the forward-looking statements due to various risks and uncertainties, including those discussed in our Annual Report on Form 10-K for the year ended March 31, 2007 under the caption "Risk Factors." Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of their dates. IHHI assumes no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release. -2- INTEGRATED HEALTHCARE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in 000's, except per share amounts) (unaudited) THREE MONTHS ENDED SEPTEMBER 30, SIX MONTHS ENDED SEPTEMBER 30, -------------------------------- ------------------------------ 2007 2006 2007 2006 --------- --------- --------- --------- (restated) (restated) Net operating revenues $ 95,376 $ 85,343 $ 182,168 $ 176,335 --------- --------- --------- --------- Operating expenses: Salaries and benefits 51,122 48,467 99,951 95,427 Supplies 12,277 12,325 24,580 24,353 Provision for doubtful accounts 7,353 9,167 15,584 18,840 Other operating expenses 17,323 16,662 34,180 35,017 Loss on sale of accounts receivable 2,411 2,630 4,997 4,969 Depreciation and amortization 800 655 1,593 1,325 --------- --------- --------- --------- 91,286 89,906 180,885 179,931 --------- --------- --------- --------- Operating income (loss) 4,090 (4,563) 1,283 (3,596) --------- --------- --------- --------- Other income (expense): Interest expense, net (3,081) (3,407) (6,168) (6,653) Change in fair value of derivative -- 779 -- 5,104 --------- --------- --------- --------- (3,081) (2,628) (6,168) (1,549) --------- --------- --------- --------- Income (loss) before provision for income taxes and minority interest 1,009 (7,191) (4,885) (5,145) Provision for income taxes -- -- -- -- Minority interest in variable interest entity 117 187 236 329 --------- --------- --------- --------- Net income (loss) $ 1,126 $ (7,004) $ (4,649) $ (4,816) ========= ========= ========= ========= Per Share Data: Income (loss) per common share Basic $ 0.01 ($ 0.08) ($ 0.04) ($ 0.06) Diluted $ 0.01 ($ 0.08) ($ 0.04) ($ 0.06) Weighted average shares outstanding Basic 136,870 85,013 126,643 84,684 Diluted 190,370 85,013 126,643 84,684 -3- INTEGRATED HEALTHCARE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in 000's, except par value) (unaudited) SEPTEMBER 30, MARCH 31, 2007 2007 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 1,470 $ 7,844 Restricted cash 20 4,968 Accounts receivable, net of allowance for doubtful accounts of $1,822 and $2,355, respectively 21,466 19,370 Security reserve funds 18,332 7,990 Deferred purchase price receivable 12,543 16,975 Inventories of supplies 5,918 5,944 Due from governmental payers 7,557 1,378 Prepaid expenses and other current assets 9,134 8,097 ----------- ----------- Total current assets 76,440 72,566 Property and equipment, net 56,951 58,172 Other assets 325 -- ----------- ----------- Total assets $ 133,716 $ 130,738 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current liabilities: Debt, current $ 72,341 $ 72,341 Accounts payable 47,677 41,443 Accrued compensation and benefits 13,392 12,574 Warrant liability, current 10,700 14,906 Due to governmental payers 1,903 922 Other current liabilities 20,011 20,687 ----------- ----------- Total current liabilities 166,024 162,873 Capital lease obligations, net of current portion of $264 and $251, respectively 5,706 5,834 Minority interest in variable interest entity 1,480 1,716 ----------- ----------- Total liabilities 173,210 170,423 ----------- ----------- Commitments, contingencies and subsequent events Stockholders' deficiency: Common stock, $0.001 par value; 250,000 shares authorized; 137,096 and 116,304 shares ssued and outstanding, respectively 137 116 Additional paid in capital 30,408 25,589 Accumulated deficit (70,039) (65,390) ----------- ----------- Total stockholders' deficiency (39,494) (39,685) ----------- ----------- Total liabilities and stockholders' deficiency $ 133,716 $ 130,738 =========== =========== -4- INTEGRATED HEALTHCARE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in 000's) (unaudited) Six months ended September 30, ------------------------------ 2007 2006 -------- -------- (restated) Cash flows from operating activities: Net loss $ (4,649) $ (4,816) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization of property and equipment 1,593 1,325 Provision for doubtful accounts 15,584 9,673 Amortization of debt issuance costs and intangible assets -- 483 Change in fair value of derivative -- (5,103) Minority interest in net loss of variable interest entity (236) (409) Noncash share-based compensation expense 58 -- Changes in operating assets and liabilities: Accounts receivable (17,680) (11,872) Security reserve funds (10,342) 8,610 Deferred purchase price receivables 4,432 (4,695) Inventories of supplies 26 148 Due from governmental payers (6,179) (1,127) Prepaid expenses, other current assets, and other assets (1,363) 1,446 Accounts payable 6,234 3,409 Accrued compensation and benefits 818 467 Due to governmental payers 981 1,952 Other current liabilities (675) (1,478) -------- -------- Net cash used in operating activities (11,398) (1,987) -------- -------- Cash flows from investing activities: Decrease in restricted cash 4,948 -- Additions to property and equipment (372) (164) -------- -------- Net cash provided by (used in) investing activities 4,576 (164) -------- -------- Cash flows from financing activities: Proceeds from long term debt -- 2,000 Issuance of common stock 576 -- Variable interest entity distribution -- (180) Payments on capital lease obligations (128) (48) -------- -------- Net cash provided by financing activities 448 1,772 -------- -------- Net decrease in cash and cash equivalents (6,374) (379) Cash and cash equivalents, beginning of period 7,844 4,970 -------- -------- Cash and cash equivalents, end of period $ 1,470 $ 4,591 ======== ======== -5-
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