HTRN Htetf (MM)

HealthTronics, Inc. (NASDAQ:HTRN), a leading provider of Urology services and products, today announced its financial results for the second quarter ended June 30, 2008. Second Quarter 2008 Revenue from continuing operations for the second quarter 2008 totaled $42.6 million, up from $35.6 million in the second quarter of 2007. The Company's net income from continuing operations for the second quarter of 2008, in accordance with generally accepted accounting principles ("GAAP"), totaled $710,000 or $0.02 per diluted share, which compares to $317,000 or $0.01 per diluted share in the second quarter of 2007. The Company�s non-GAAP net income for the second quarter 2008 totaled $0.04 per diluted share, which excludes non-cash stock-based compensation expense and was up from the $0.02 per diluted share for the second quarter of 2007. The Company's adjusted EBITDA from continuing operations for the second quarter 2008 was $5.8 million, which compares to $4.2 million in the second quarter of 2007, an increase of 38 percent. The increase was due primarily to revenue growth from the Urology Services division and cost reductions implemented during 2007. Urology Services Urology Services division revenue for the second quarter of 2008 was $37.9 million, up 23 percent from the $30.8 million recorded in the second quarter of 2007. Urology Services division growth was driven by the acquisition of Advanced Medical Partners, Inc. Same store partnership revenue in the second quarter 2008 was consistent with the second quarter 2007. Divisional adjusted EBITDA was $5.4 million compared to $5.0 million in the second quarter of 2007. Medical Products Medical Products division revenue for the second quarter of 2008 was $4.6 million which was consistent with the second quarter of 2007. The ClariPath pathology laboratory�s revenue increased 30 percent and service maintenance gross revenue, before intercompany eliminations, grew 27 percent from the second quarter of 2007. Manufacturing revenue decreased compared to the second quarter of 2007 due to a lower number of devices sold in the second quarter of 2008. Divisional adjusted EBITDA was $2 million in the second quarter of 2008, which compared to $437,000 in the second quarter of 2007. Medical Products division earnings growth resulted from revenue increases at both the ClariPath laboratory, the service and maintenance business, and cost reductions implemented during 2007. Business Outlook James Whittenburg, President and Chief Executive Officer commented, �We are pleased with our financial results in the second quarter as we continue to experience growth in all aspects of the business. We strive to be the premier company in the urology market and as part of that we have been active on many fronts this year. The past few quarters were particularly busy as we cultivated our business through internal initiatives and opportunistic acquisitions. Simultaneous with our efforts to grow the business through acquisitions, our historical businesses remain strong and our quarterly results continue to be sequentially positive.� Mr. Whittenburg continued, �We have demonstrated positive quarter over quarter revenue and adjusted EBITDA growth for six consecutive quarters. This trend should continue with further enhancement of our services and successful execution our business development and M&A strategies.� Conference Call and Webcast: Management of HealthTronics will host a conference call the afternoon of Thursday, August 7, 2008 at 5:00 pm EDT. Interested parties may participate in the call by dialing 1-877-879-6209 (International callers dial 1-719-325-4842) and ask for the "HealthTronics Q2 2008 Earnings Call" (confirmation code: 8061433). Please call in 10 minutes before the call is scheduled to begin. The conference call will also be web cast live via the Investors section of HealthTronics' web site at www.healthtronics.com. To listen to the live web cast, go to the web site at least 10 minutes early to register, download and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the HealthTronics web site. About HealthTronics, Inc. HealthTronics is a premier urology company providing an exclusive suite of healthcare services and technology including urologist partnership opportunities, surgical and capital equipment, maintenance services offerings, and anatomical pathology services. For more information, visit www.healthtronics.com. HealthTronics� use of Non GAAP Financial Measures: This press release includes financial measures for net income (loss), net income (loss) from continuing operations, and related per share amounts that exclude certain charges and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP). These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding certain charges, these non-GAAP financial measures facilitate management�s internal comparisons to the Company�s historical operating results, to competitors� operating results, and to estimates made by securities analysts. Management uses these non-GAAP financial measures internally to evaluate its performance. The Company believes these non-GAAP financial measures are useful to decision-making. In addition, the Company has historically reported similar non-GAAP financial measures to its investors and believes that the inclusion of comparative numbers provides consistency in it financial reporting. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measure as provided in the financial statements attached to this press release. EBITDA and Adjusted EBITDA: HealthTronics has presented EBITDA and Adjusted EBITDA amounts, which are non-GAAP financial measures. In the SEC filings, HealthTronics has reconciled such amounts to their most directly comparable financial measure calculated in accordance with GAAP, which is HealthTronics� net income. HealthTronics believes that its presentations of EBITDA and Adjusted EBITDA are important supplemental measures of operating performance to its investors. Earnings before interest, taxes, depreciation and amortization (�EBITDA�) is a commonly used measure of performance which HealthTronics believes, when considered with measures calculated in accordance with GAAP, gives investors a more complete understanding of HealthTronics� operating results before the impact of investing and financing transactions and income taxes. HealthTronics does not subtract minority interest expense when calculating EBITDA; however, HealthTronics does adjust for minority interest expense and refers to this measure as �Adjusted EBITDA�. Minority interest is a GAAP measure intended to reflect our partner�s share of our consolidated net income and not our partner�s share of our consolidated EBITDA. For example, calculation of minority interest expense does not include adjustments for depreciation, amortization, taxes or interest. As a result, our partners� share of consolidated EBITDA may not, in a given reporting period, equal the deduction for minority interest expense used in arriving at Adjusted EBITDA. HealthTronics has historically reported Adjusted EBITDA to its investors and believes that the continued inclusion of Adjusted EBITDA provides consistency in its financial reporting. Adjusted EBITDA is among the more significant factors in management�s internal evaluation of total company performance. Adjusted EBITDA is also widely used by HealthTronics management in the annual budgeting process. HealthTronics believes these measures continue to be used by investors and creditors in their assessment of HealthTronics� operational performance and the valuation of the company. EBITDA and Adjusted EBITDA are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA and Adjusted EBITDA should not be considered as an alternative to net income, operating income, a liquidity measure, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA and Adjusted EBITDA reflect additional ways of viewing HealthTronics� operations that HealthTronics believes, when viewed with its GAAP results and the reconciliations to the corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting HealthTronics� business than could be obtained absent this disclosure. Cautionary Language: Statements by the Company�s management made in this press release that are not strictly historical, including statements regarding plans, objective and future financial performance, are �forward-looking� statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although HealthTronics believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that the expectations will prove to be correct. Factors that could cause actual results to differ materially from HealthTronics� expectations include, among others, the existence of demand for and acceptance of HealthTronics� services, regulatory approvals, economic conditions, the impact of competition and pricing, financing efforts and other factors described from time to time in HealthTronics� periodic filings with the Securities and Exchange Commission. HEALTHTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) � � � ($ in thousands, except per share data) � Three Months Ended June 30, Six Months Ended June 30, 2008 2007 2008 2007 Revenue: Urology Services $ 37,865 $ 30,836 $ 67,415 $ 59,221 Medical Products 4,584 4,586 8,831 8,825 Other � 131 � � 141 � � 288 � � 268 � Total revenue � 42,580 � � 35,563 � � 76,534 � � 68,314 � � Cost of services and general and administrative expenses: Urology Services 17,399 13,281 30,390 26,966 Medical Products 1,736 2,839 3,913 5,243 Selling, general & administrative 5,269 4,593 9,586 8,907 Depreciation and amortization � 3,069 � � 2,776 � � 5,697 � � 5,592 � � 27,473 � � 23,489 � � 49,586 � � 46,708 � � Operating income 15,107 12,074 26,948 21,606 � Other income (expenses): Interest and dividends 101 311 292 588 Interest expense � (246 ) � (212 ) � (409 ) � (448 ) � (145 ) � 99 � � (117 ) � 140 � Income from continuing operations before provision for income taxes and minority interest 14,962 12,173 26,831 21,746 � Minority interest in consolidated income 13,781 11,275 24,828 20,784 � Provision for income taxes � 471 � � 581 � � 841 � � 566 � � Income from continuing operations 710 317 1,162 396 � Loss from discontinued operations, net of tax � - � � (138 ) � - � � (247 ) � Net income $ 710 � $ 179 � $ 1,162 � $ 149 � � Basic earnings per share: Income from continuing operations $ 0.02 $ 0.01 $ 0.03 $ 0.01 Loss from discontinued operations � - � � - � � - � � (0.01 ) Net income $ 0.02 � $ 0.01 � $ 0.03 � $ - � Weighted average shares outstanding � 37,059 � � 35,425 � � 36,242 � � 35,416 � � Diluted earnings per share: Income from continuing operations $ 0.02 $ 0.01 $ 0.03 $ 0.01 Loss from discontinued operations � - � � - � � - � � (0.01 ) Net income $ 0.02 � $ 0.01 � $ 0.03 � $ - � Weighted average shares outstanding � 37,165 � � 35,426 � � 36,295 � � 35,422 � HealthTronics, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) � � June 30, December 31, ($ in thousands) 2008 2007 � ASSETS � Total current assets $ 68,717 $ 74,214 � Property and equipment, net 31,151 33,019 � Goodwill 233,244 217,505 � Other assets � 12,251 � 11,318 � $ 345,363 $ 336,056 � LIABILITIES � Total current liabilities $ 17,779 $ 17,692 � Long-term debt, net of current portion 3,206 4,194 � Other long-term liabilities � 31,423 � 30,099 � Total liabilities 52,408 51,985 � Minority interest 40,831 41,653 � Total stockholders' equity � 252,124 � 242,418 � $ 345,363 $ 336,056 HealthTronics, Inc. and Subsidiaries Supplemental Financial Information Continuing Operations For the Periods Ended June 30, 2008 and 2007 Unaudited In thousands, except per share data � � � � Three Months Ended June 30, Six Months Ended June 30, 2008 2007 2008 2007 � Summary of Results from Operations Revenues $ 42,580 $ 35,563 $ 76,534 $ 68,314 � EBITDA(a) $ 19,622 $ 15,524 $ 34,810 $ 28,537 � Adjusted EBITDA(a) $ 5,841 $ 4,249 $ 9,982 $ 7,753 � Net Income from Continuing Operations $ 710 $ 317 $ 1,162 $ 396 � Net Income $ 710 $ 179 $ 1,162 $ 149 � EPS from Continuing Operations $ 0.02 $ 0.01 $ 0.03 $ 0.01 � EPS $ 0.02 $ 0.01 $ 0.03 $ - � Number of Shares 37,165 35,426 36,295 35,422 � Segment Information � Revenues: Urology Services $ 37,865 $ 30,836 $ 67,415 $ 59,221 � Medical Products $ 4,584 $ 4,586 $ 8,831 $ 8,825 � Adjusted EBITDA(a): Urology Services $ 5,419 $ 5,030 $ 9,610 $ 8,965 � Medical Products $ 2,021 $ 437 $ 3,498 $ 1,136 � Other Information: � Cashflow from Operations $ 18,040 $ 15,716 $ 34,114 $ 27,098 � Net Draws (Payments) on Senior Credit Facility $ - $ - $ - $ - � Net Debt $ (11,115 ) $ (8,969 ) $ (11,115 ) $ (8,969 ) � (a) See accompanying reconciliation of EBITDA and Adjusted EBITDA HealthTronics, Inc. and Subsidiaries Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Continuing Operations For the Periods Ended June 30, 2008 and 2007 Unaudited In thousands � � � � � Three Months Ended June 30, Six Months Ended June 30, Consolidated 2008 2007 2008 2007 � Income from Continuing Operations $ 710 $ 317 $ 1,162 $ 396 � Add Back(deduct): Provision for income taxes 471 581 841 566 Interest expense 246 212 409 448 Depreciation and amortization 3,069 2,776 5,697 5,592 Restructuring costs (142 ) (36 ) Stockbased compensation costs � 1,487 � � 363 � � 1,909 � � 751 � � Adjusted EBITDA 5,841 4,249 9,982 7,753 � Add Back: Minority interest expense � 13,781 � � 11,275 � � 24,828 � � 20,784 � � EBITDA $ 19,622 � $ 15,524 � $ 34,810 � $ 28,537 � � � Urology Services Segment � Revenues $ 37,865 $ 30,836 $ 67,415 $ 59,221 � Expenses: Cost of Services (18,716 ) (14,661 ) (33,132 ) (29,677 ) Other Income (Expenses) � 70 � � 136 � � 184 � � 234 � � EBITDA 19,219 16,311 34,467 29,778 � Minority interest expense � (13,800 ) � (11,281 ) � (24,857 ) � (20,813 ) � Adjusted EBITDA $ 5,419 � $ 5,030 � $ 9,610 � $ 8,965 � � � Medical Products Segment � Revenues $ 4,584 $ 4,586 $ 8,831 $ 8,825 � Expenses: Cost of Services (2,593 ) (4,167 ) (5,384 ) (7,738 ) Other Income (Expenses) � 12 � � 12 � � 23 � � 21 � � EBITDA 2,003 431 3,470 1,108 � Minority interest expense � 18 � � 6 � � 28 � � 28 � � Adjusted EBITDA $ 2,021 � $ 437 � $ 3,498 � $ 1,136 �