Ascendant Solutions, Inc. Reports First Quarter 2015 Earnings

May 21, 2015, 16:23 ET from Ascendant Solutions, Inc.

DALLAS, May 21, 2015 /PRNewswire/ -- Ascendant Solutions, Inc. (Pink Sheets: ASDS) ("Ascendant" or the "Company") today announced its results for the first quarter of fiscal 2015.  The Company reported a consolidated net loss of $199,000, or $0.01 per share, for the quarter ended March 31, 2015, compared to net income of $65,000, or less than $0.01 per share, for the same period of 2014.  Common shares outstanding for the quarter ended March 31, 2015 and 2014 were 21,817,596 and 21,571,510, 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, 2014.

For the first quarter ended March 31, 2015, the Company reported Consolidated Earnings (Loss) before Interest, Taxes, Depreciation and Amortization ("EBITDA") of $14,000 compared to consolidated EBITDA of $163,000 in 2014.  The reduction in 2015 first quarter net income and EBITDA was primarily due to increased SG&A costs from the three recent acquisitions in the Company's Healthcare division, as indicated in the table below:

Highlights:

Q1 2015

Q1 2014

Revenue

$            9,017

$            6,445

Recurring SG&A

2,385

1,726

EBITDA & Acq Exp.

94

163

Acquisition Expense

80

-

EBITDA

14

163

Projected 2015

Actual 2014

Revenues

$          39,500

$          28,479

Healthcare

The Company's subsidiary, Dougherty's Holding, Inc. ("DHI"), which owns and operates multiple Dougherty's Pharmacies, reported EBITDA of $185,000 for the first quarter ended March 31, 2015, compared to $306,000 in 2014. First quarter 2015 EBITDA was impacted by the previously mentioned one-time acquisition expenses, which were expected and budgeted for the three recent acquisitions.  These non-recurring acquisition expenses include legal fees, transaction costs, initial inventory for enhanced product offerings (such as durable medical equipment) and remodel expenses as new pharmacies are acquired.

Other

Real estate investments reported EBITDA of $10,000 for the first quarter ended March 31, 2015, compared to $10,000 in 2014.  The Company's corporate overhead division reported negative EBITDA of ($181,000) for the first quarter of 2015 compared to ($153,000) in 2014. 

Management Comments

Jim Leslie, Chairman of Ascendant commented, "We remain focused on building our healthcare division, as we aggressively pursue growth opportunities through our Dougherty's Holding subsidiary.  Our goal is to add annual revenues of $10 million from pharmacy acquisitions for the next several years. Through these investments in strategic acquisitions and organic expansion, we expect to deliver enhanced shareholder value over time through well-planned growth, solid performance and operational excellence."

Mark Heil, President and CFO, added, "Looking at the business today, we are pleased that our growth strategy of acquiring additional independent pharmacies has been successful.  Our three recently acquired pharmacy locations led to a 40 percent improvement in Healthcare revenues in the first quarter, and we expect these new stores to enhance our profitability over time.

"With these initial acquisitions, we have found that the pre-acquisition process can take six to nine months from due diligence through closing.  The integration of a newly acquired location can take a couple of quarters, and one-time acquisition costs could run $60,000 - $100,000 for a new location.  However, these one-time costs are part of the growth process, and within three quarters, we would anticipate that a newly acquired store should become additive to earnings.

"We continue to pursue additional community pharmacy acquisitions and expect to acquire at least two additional pharmacies in 2015," Heil concluded.

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.

Select Balance Sheet Items and Book Value per Share

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

March 31,

December 31,

2015

2014

Total Current Assets

$            5,255

$            4,353

Property and Equipment, net

1,194

1,015

Intangible Assets, net

1,786

529

Equity Method Investments

5,107

5,107

Deferred Tax Asset

3,000

3,000

Total Assets

$        16,342

$        14,004

Total Current Liabilities

$            2,723

$            2,327

Notes Payable, Long-Term

4,898

2,760

Total Liabilities

7,621

5,087

Stockholders' Equity

8,721

8,917

Total Liabilities and Equity

$        16,342

$        14,004

Common Shares Outstanding

21,817,596

21,817,596

Book Value per Share

$              0.40

$              0.41

 

Select Income Statement Items

(000's omitted, unaudited)

Three Months Ended

March 31,

2015

2014

Revenue

$            9,017

$            6,445

Cost of Sales

6,538

4,556

Gross Profit

2,479

1,889

SG&A

2,465

1,726

EBITDA

14

163

Depr & Amort

(135)

(57)

Interest

(62)

(28)

Taxes

(16)

(13)

Net Income

$              (199)

$                 65

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 $42 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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http://www.ascendantsolutions.com