Ascendant Solutions, Inc. Reports Fourth Quarter and Year End 2015 Earnings

- Revenue for 2015 grew 44 percent year over year

- Fourth quarter 2015 EBITDA improved 26 percent

- Three additional pharmacies were acquired in 2015

- Stores acquired in 2014 and 2015 contributed $12.2 million in additional 2015 revenues at 24.7 percent margins

Mar 07, 2016, 11:35 ET from Ascendant Solutions, Inc.

DALLAS, March 7, 2016 /PRNewswire/ -- Ascendant Solutions, Inc. (Pink Sheets: ASDS) ("Ascendant" or the "Company") today announced its results for the fourth quarter and year ended December 31, 2015.   The Company reported fourth quarter Consolidated Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") of $299,000 compared to consolidated EBITDA of $238,000 in 2014.  For the year ended December 31, 2015, the Company reported consolidated EBITDA of $763,000 compared to consolidated EBITDA of $887,000 in 2014.

For the fourth quarter ended December 31, 2015, the Company reported a consolidated net loss of $90,000, or less than $0.01 per share, compared to net income of $105,000, or less than $0.01 per share, for the same period of 2015.  Consolidated net loss for the year ended December 31, 2015 was $396,000 compared to net income of $452,000 for the year ended 2014. The decline in net income for the fourth quarter and year ended 2015 compared to 2014 is due mainly to increases in interest, depreciation and amortization related to acquisitions.

Common shares outstanding as of December 31, 2015 and 2014 were 22,096,756 and 21,817,596, respectively.  The increase in shares outstanding for the 2015 period is the result of Ascendant's 1 percent stock dividend to shareholders on December 10, 2015.

Healthcare

The Company's subsidiary, Dougherty's Holding, Inc. ("DHI"), which owns and operates multiple Dougherty's Pharmacies, reported EBITDA of $432,000 for the fourth quarter ended December 31, 2015, compared to $428,000 in 2014, and EBITDA of $1,370,000 for the year ended December 31, 2015, compared to $1,546,000 in 2014.

Dougherty's initial stores reported sales growth of 1 percent for the year ended 2015 when compared to 2014.   Year end gross margin percentages declined by 100 basis points to 29 percent, and SG&A increased by 1.8 percent.

Acquisition stores contributed $12,221,000 in additional revenues in 2015 at 24.7 percent margins.  Margins should continue to increase as acquired inventory is sold through, and these stores benefit from higher volume discounts on Dougherty's purchasing contract.  Total Healthcare gross margins should continue to be impacted positively as acquisition store gross margins increase.

Acquisition store EBITDA for the fourth quarter 2015 was $134,000 and $359,000 for the year ended 2015.  Year-to-date EBITDA was impacted by non-recurring acquisition expenses of $223,000. These non-recurring acquisition expenses include legal fees, transaction costs, system infrastructure upgrades and retail store design updates. Management is focused on integrating these stores into Dougherty's systems in order to achieve the EBITDA underwritten at the time of the acquisition.  In 2016, management expects continued improvement in EBITDA from these stores with the elimination of the nonrecurring acquisition expense, the improvement of gross margins with our purchasing power, and the integration of SG&A costs with our systems.

Overhead was impacted by non-recurring SG&A expenses of approximately $34,000 for the year ended December 31, 2015. Additions to recurring SG&A to handle the expected growth from acquisitions were approximately $22,000 for the fourth quarter of 2015 and $214,000 for the year ended December 31, 2015.  After analyzing the impact of these additions on EBITDA, changes were enacted to reduce recurring SG&A from an average of $64,000 for the first three quarters of 2015 to $22,000 for the fourth quarter of 2015.

Healthcare Segment Financial Summary

(000's omitted, except script count, unaudited)




Q4 2015


Q4 2014


YTD 2015


YTD 2014

Initial Stores:









Revenue

$   7,093


$ 7,154


$ 27,360


$ 27,108


Gross margin percentage

28.8%


30.7%


29.0%


30.0%


SG&A

1,533


1,570


5,940


5,833


EBITDA

512


626


2,006


2,299


Generic dispensing rate

75.6%


73.2%


76.6%


73.3%


Script count

53,016


54,807


205,472


201,171










Acquisitions:









Revenue

$   4,665


$     864


$ 13,592


$   1,371


Gross margin percentage

25.5%


25.7%


24.7%


23.7%


SG&A

1,056


226


2,997


331


EBITDA

134


(4)


359


(6)


Generic dispensing rate

84.3%


83.2%


83.0%


83.4%


Script count

62,073


12,300


170,033


19,965










Overhead:









SG&A

214


194


995


747










Total Healthcare:









Revenue

$ 11,758


$ 8,018


$ 40,952


$ 28,479


Gross margin percentage

27.5%


30.2%


27.6%


29.7%


SG&A

2,803


1,990


9,932


6,911


EBITDA

432


428


1,370


1,546


Generic dispensing rate

80.5%


75.0%


79.6%


74.3%


Script count

115,089


67,107


375,505


221,136

 

Other

The Company's remaining two investments in real estate reported EBITDA of $32,000 for the fourth quarter ended December 31, 2015, compared to $18,000 in 2014 and EBITDA of $88,000 for the year ended December 31, 2015, compared to $65,000 in 2014.  The Company's corporate overhead division reported negative EBITDA of ($165,000) for the fourth quarter of 2015 compared to ($208,000) in 2014 and negative EBITDA of ($695,000) for the year ended December 31, 2015 compared to ($724,000) in 2014. 

Management Comments

Jim Leslie, Chairman of Ascendant, commented, "At our 2014 Annual Shareholders' Meeting, we stated that our goal was to acquire independent pharmacies going forward and eliminate all other investments.  Since that time, we have acquired five pharmacies.  The annual revenue of these five acquisitions approximates $22 million, which pushes our estimated revenue for our Healthcare segment to $48 million on an annualized basis.  Our job now is to be sure the EBITDA from these stores is properly managed and recognized.  We intend to continue to build our healthcare division through the acquisition of well-run community pharmacies, which will enhance our EBITDA and net income over time."

Mark Heil, President and CFO, added, "We are pleased to report a 44 percent improvement in revenues over 2014 results and expect our enhanced revenue stream to ultimately bolster bottom line results, as well, as we continue to integrate new pharmacy locations into the Dougherty's system.  We are convinced our growth strategy will produce solid shareholder returns over time and anticipate improved EBITDA for 2016. We continue to pursue additional strategic pharmacy acquisitions and could potentially acquire one to two additional pharmacies in 2016."  

Select Balance Sheet Items and Book Value per Share

(000's omitted, except per share amounts, unaudited)



December 31,


2015


2014





Total Current Assets

$         6,416


$         4,353

Property and Equipment, net

1,406


1,015

Intangible Assets, net

4,377


529

Equity Method Investments

5,107


5,107

Deferred Tax Asset

3,000


3,000

Total Assets

$       20,306


$       14,004





Total Current Liabilities

$         3,347


$         2,327

Notes Payable, Long-Term

8,418


2,760

Total Liabilities

11,765


5,087

Stockholders' Equity

8,541


8,917

Total Liabilities and Equity

$       20,306


$       14,004





Common Shares Outstanding

22,096,756


21,817,596

Book Value per Share

$           0.39


$           0.41

 

Select Income Statement Items

(000's omitted, unaudited)



Three Months Ended


Year Ended


December 31,


December 31,


2015


2014


2015


2014

Revenue

$ 11,758


$  8,018


$  40,952


$      28,479

Cost of Sales

8,523


5,599


29,654


20,026

Gross Profit

3,235


2,419


11,298


8,453

SG&A

2,936


2,181


10,535


7,566

EBITDA

299


238


763


887

Depr & Amort

(265)


(86)


(771)


(262)

Interest

(112)


(35)


(336)


(122)

Taxes

(12)


(12)


(52)


(51)

Net Income

$       (90)


$     105


$      (396)


$           452

 

EBITDA is calculated as net income (loss) before deducting interest, taxes, depreciation and amortization.  Although EBITDA is not a measure of actual cash flow because it does not consider changes in assets and liabilities that may impact cash balances, the Company's management reviews these non-GAAP financial measures internally to evaluate the Company's performance and manage the operations.  Additionally, the Company believes it is a useful metric to evaluate operating performance and has therefore included such measures in the reporting of operating results.

About Ascendant Solutions, Inc.

Ascendant Solutions, Inc. is a value-oriented investment firm focused on successfully acquiring, managing and growing community-based pharmacies in the Southwest Region. Ascendant currently has approximately $43 million in net operating loss carryforwards which can be used to shelter future income, thus enhancing free cash flow or debt service capabilities. Interested investors can access financials and stock trading information for Ascendant at OTCMarkets.com or at www.ascendantsolutions.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations, projections, estimates and assumptions. These forward-looking statements may be identified by words such as "expects," "believes," "anticipates" and similar expressions.  Forward-looking statements involve risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements.  The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

 

SOURCE Ascendant Solutions, Inc.



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