OPT Opticare Health

OptiCare Reports Third Quarter 2004 Financial Results WATERBURY, Conn., Nov. 15 /PRNewswire-FirstCall/ -- OptiCare Health Systems, Inc. (AMEX:OPT) announced today that it reported total net revenues for the nine months ended September 30, 2004 of $88.3 million, down from $95.7 million for the nine months ended September 30, 2003 and total net revenues for the three months ended September 30, 2004 of $27.9 million, down from $32.3 million for the three months ended September 30, 2003. The Company also reported a loss from continuing operations for the nine months ended September 30, 2004 of $2.7 million, down from a loss from continuing operations of $10.5 million for the nine months ended September 30, 2003; loss from continuing operations for the three months ended September 30, 2004 of $1.8 million, down from a loss from continuing operations of $8.4 million for the three months ended September 30, 2003; net loss to common stockholders for the nine months ended September 30, 2004 of $4.6 million, down from a net loss to common stockholders of $11.0 million for the nine months ended September 30, 2003; and net loss to common stockholders for the three months ended September 30, 2004 of $2.4 million, down from a net loss to common stockholders of $8.6 million for the three months ended September 30, 2003. About OptiCare Health Systems, Inc. OptiCare Health Systems, Inc. is an integrated eye care services company focused on vision benefits management and the distribution of products to eye care professionals, and consumer vision services, including medical, surgical and optometric services and optical retail. This press release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements containing words such as "plan," "anticipate," "expect," "intend," "believe," "will," or similar expressions. The company's actual results could differ materially from those expressed or indicated by any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the impact of the restatements, the reaction of the company's stockholders, customers, venders and lenders to the reviews and restatements, the risk that the company may not be able to improve cash flow, may not be able to successfully integrate its acquisitions, to retain and attract qualified employees, the impact of current and future governmental regulations in existing lines of business, the company's ability to successfully and profitably manage its operations and growth of the operations, if any, the risks related to managed care contracting, and the ability of the company to successfully raise capital on commercially reasonable terms, if at all. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in the company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K/A for the fiscal year ending December 31, 2003. 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) September December September 30, 2004 31, 2003 30, 2003 ASSETS As Restated CURRENT ASSETS: Cash and cash equivalents $2,950 $1,695 $2,233 Accounts receivable, net 7,989 7,867 10,025 Inventories 5,160 5,770 6,296 Assets held for sale - 1,652 1,535 Other current assets 1,174 565 592 TOTAL CURRENT ASSETS 17,273 17,549 20,681 Property and equipment, net 3,732 4,647 5,180 Goodwill, net 17,917 17,892 18,231 Intangible assets, net 1,096 1,179 1,207 Assets held for sale, non-current - 1,339 1,475 Other assets 3,531 3,249 2,990 TOTAL ASSETS $43,549 $45,855 $49,764 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $8,739 $5,525 $8,705 Accrued expenses 7,050 5,379 6,284 Current portion of long-term debt 10,090 10,828 9,057 Liabilities of held for sale business - 1,241 1,324 Other current liabilities 950 548 421 TOTAL CURRENT LIABILITIES 26,829 23,521 25,791 Long-term debt, less current portion 78 1,775 1,549 Other liabilities 513 512 522 TOTAL NON-CURRENT LIABILITIES 591 2,287 2,071 Series B 12.5% mandatorily redeemable, convertible 6,163 5,635 5,476 preferred stock-related party STOCKHOLDERS' EQUITY: Series C preferred stock- related party 1 1 1 Common stock 31 30 30 Additional paid-in-capital 79,347 79,700 79,853 Accumulated deficit (69,413) (65,319) (63,458) TOTAL STOCKHOLDERS' EQUITY 9,966 14,412 16,426 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $43,549 $45,855 $49,764 OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Amounts in thousands, except share data) (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, 2004 2003 2004 2003 NET REVENUES: Managed vision $6,547 $7,118 $18,864 $22,006 Product sales 16,615 20,023 52,452 56,961 Other services 4,776 4,809 15,236 13,982 Other income - 352 1,718 2,720 Total net revenues 27,938 32,302 88,270 95,669 OPERATING EXPENSES: Medical claims expense 4,914 5,993 14,274 17,250 Cost of product sales 12,937 15,683 40,900 44,251 Cost of services 1,870 2,024 6,338 5,922 Selling, general and administrative 9,231 9,749 27,248 27,488 Goodwill impairment loss - 1,300 - 1,300 Loss from early extinguishment of debt - - - 1,847 Depreciation 432 632 1,243 1,334 Amortization 27 29 83 87 Interest 300 330 896 1,719 Total operating expenses 29,711 35,740 90,982 101,198 Loss from continuing operations before taxes (1,773) (3,438) (2,712) (5,529) Income tax expense (benefit) (20) 5,001 32 4,929 Loss from continuing operations (1,753) (8,439) (2,744) (10,458) Discontinued operations Loss from discontinued operations (including loss on disposal of $1,005 in 2004) (421) (57) (1,350) (52) Income tax benefit - 20 - 18 Loss on discontinued operations (421) (37) (1,350) (34) Net loss (2,174) (8,476) (4,094) (10,492) Preferred stock dividends (177) (159) (528) (459) Net loss to common stockholders $(2,351) (8,635) $(4,622) $(10,951) LOSS PER SHARE- BASIC AND DILUTED: Loss from continuing operations $(0.06) $(0.29) $(0.11) $(0.37) Discontinued operations (0.02) 0.00 (0.04) 0.00 Net loss (0.08) (0.29) (0.15) (0.37) DATASOURCE: OptiCare Health Systems, Inc. CONTACT: Vincent S. Miceli, Director of External Reporting of OptiCare Health Systems, Inc., +1-203-596-2236

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