OPT Opticare Health

WATERBURY, Conn., Aug. 15 /PRNewswire-FirstCall/ -- OptiCare Health Systems, Inc. (AMEX:OPT) announced today that second quarter 2005 net income from continuing operations declined slightly to $377,000 from $453,000 in the second quarter 2004. For the first six months of 2005, net income from continuing operations increased to $728,000 from $602,000 in the comparable 2004 period. Net revenue for the second quarter 2005 declined approximately $0.8 million to $14.9 million from $15.7 million in the second quarter 2004. For the first six months of 2005, net revenues declined approximately $1.0 million to $29.3 million from $30.3 million in the comparable 2004 period. The second quarter and six month results of 2004 reflect results from continuing operations and exclude the results of the Company's CC System's Inc. operation, which was sold in September 2004 and the Distribution Segment, which was sold on January 12, 2005. OptiCare attributed its year-over-year earnings improvement to increased profitability from its Managed Vision sector resulting from revenue growth coupled with lower expenses on a company-wide basis and lower interest expense due to a significant pay down in senior debt of approximately $6.7 million. "We are pleased to report another profitable quarter from continuing operations," commented Christopher J. Walls, OptiCare's President and Chief Executive Officer, who also noted "Our core businesses continue to deliver improved results." About OptiCare Health Systems, Inc. OptiCare Health Systems, Inc. is an integrated eye care services company focused on vision benefits management and consumer vision services, including medical, surgical and optometric services and optical retail. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This News Release includes certain statements of the Company that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the financial performance of the Company, as well as plans, objectives, goals, strategies, future events, or performance, and any underlying assumptions and statements that are not statements of historical fact. When used in this News Release, the words "expects," "anticipates," "estimates," "plans," "intends," "projects," "predicts," "believes," "may" or "should," and similar expressions, are intended to identify forward-looking statements. These forward-looking statements based upon the beliefs of management and assumptions made by and information currently available to the Company. These statements reflect the current view of the Company's management with respect to future events. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. Investors are cautioned that all forward-looking statements involve those risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2004. Forward-looking statements speak only as of the date they are made and the Company undertakes no duty or obligation to update any forward-looking statements in light of new information or future events. OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) June 30, December 31, 2005 2004 ASSETS CURRENT ASSETS: Cash and cash equivalents $2,017 $2,228 Accounts receivable, net 1,994 2,164 Inventory 1,717 1,851 Assets held for sale - 7,894 Other current assets 968 681 TOTAL CURRENT ASSETS 6,696 14,818 Property and equipment, net 2,291 2,628 Goodwill 16,813 16,663 Intangible assets, net 1,013 1,068 Assets held for sale, non-current - 1,150 Other assets 3,545 3,487 TOTAL ASSETS $ 30,358 $ 39,814 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $1,072 $2,727 Accrued expenses 6,075 6,514 Current portion of long-term debt 1,594 332 Current portion of capital lease obligations 54 11 Liabilities of held for sale business - 5,683 Other current liabilities 1,058 1,119 TOTAL CURRENT LIABILITIES 9,853 16,386 Long-term debt, less current portion 1,949 10,024 Capital lease obligations, less current portion 133 19 Other liabilities 1,342 1,476 TOTAL NON-CURRENT LIABILITIES 3,424 11,519 Series B 12.5% mandatorily redeemable, convertible preferred stock-related party 6,730 6,344 STOCKHOLDERS' EQUITY: Series C & D preferred stock-related party 1 1 Common stock 31 31 Additional paid-in-capital 83,250 79,192 Accumulated deficit (72,931) (73,659) TOTAL STOCKHOLDERS' EQUITY 10,351 5,565 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $30,358 $39,814 OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Amounts in thousands, except share data) (Unaudited) Three Months Six Months Ended June 30, Ended June 30, 2005 2004 2005 2004 NET REVENUES: Managed vision $6,406 $6,266 $12,786 $ 12,317 Product sales 2,982 3,064 5,966 6,071 Other services 5,091 5,536 9,771 10,500 Other income 455 838 773 1,458 Total net revenues 14,934 15,704 29,296 30,346 OPERATING EXPENSES: Medical claims expense 4,768 4,717 9,437 9,361 Cost of product sales 1,107 1,033 2,086 2,108 Cost of services 1,924 2,445 3,642 4,509 Selling, general and administrative 6,280 6,509 12,424 12,658 Depreciation 254 202 496 413 Amortization 28 28 55 55 Interest 171 271 378 588 Total operating expenses 14,532 15,205 28,518 29,692 Income from continuing operations before income tax 402 499 778 654 Income tax expense 25 46 50 52 Income from continuing operations 377 453 728 602 Discontinued operations: Loss from discontinued operations - (1,409) - (2,522) Income tax benefit - - - - Loss from discontinued operations - (1,409) - (2,522) Net income (loss) 377 (956) 728 (1,920) Preferred stock dividends (197) (177) (386) (351) Net income (loss) available to common stockholders $180 $(1,133) $342 $(2,271) EARNINGS (LOSS) PER SHARE: Earnings Per Share - Basic: Income from continuing operations applicable to common stockholders $0.00 $0.00 $0.00 $0.00 Income from continuing operations applicable to participating securities $0.01 $0.01 $0.01 $0.01 Discontinued operations $0.00 $(0.05) $0.00 $(0.08) Net income (loss) per common share $0.01 $(0.04) $0.01 $(0.07) Earnings Per Share - Diluted: Income from continuing operations $0.00 $0.01 $0.00 $0.01 Discontinued operations $0.00 $(0.05) $0.00 $(0.08) Net income (loss) per common share $0.00 $(0.04) $0.00 $(0.07) DATASOURCE: OptiCare Health Systems, Inc. CONTACT: Vincent S. Miceli, Corporate Controller of OptiCare Health Systems, Inc., +1-203-596-2236

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