Northstar Healthcare Reports 2011 Third Quarter Results

HOUSTON, TX, Nov. 10, 2011 /PRNewswire/ - Northstar Healthcare Inc. (TSX:NHC) today announced its financial results for the third quarter and nine months ended September 30, 2011. All dollar amounts are in United States currency unless otherwise stated; percentage calculations are based on the numbers in the financial statements and may not correspond to rounded figures presented in this release.

Detailed information relating to the third quarter and nine months ended September 30, 2011 is available in Management's Discussion and Analysis (MD&A) and Interim Consolidated Financial Statements, which are available on the company's web site at: www.northstar-healthcare.com and at www.sedar.com. This information is not intended to provide a comprehensive comparison of financial results.

"The Company continued to assess opportunities for revenue diversification as well as growth for our existing operating centers during this quarter," said Dr. Donald Kramer, Chief Executive Officer of Northstar. "The initiatives that we have in place for podiatry programs at our Houston and Dallas location have already produced some positive results. Based on our continuing efforts to recruit and bring in new doctors, as well as our focus on our new specialty programs for our existing centers, we are optimistic that the company will see growth and a return to profitability. Additionally, active discussions continue between Northstar and a number of strategic partners with the aim of diversifying the Company's service lines. Public disclosures will be made at such time as there are definitive agreements."

Third Quarter Results

In the third quarter ended September 30, 2011, Northstar generated net patient service revenue of $2.8 million compared with $2.6 million in the corresponding period of 2010.

The year-over-year increase in Q3 net patient service revenues was primarily due to a 19.1% increase in case volume which was slightly mitigated by a 7.7% decrease in the net patient service revenues per case.

Northstar recorded a third quarter 2011 loss from operations of $0.2 million compared with a $0.5 million loss in the 2010 period. The net loss in the 2011 period was $0.9 million, or $0.03 per share, compared with a net profit of $0.3 million, or $0.02 per share in the 2010 period. The 2010 net profit figure included a $2.0 million gain on derecognition of Class B Units upon completion of a private placement of common shares.

Cash flow used for operating activities in the third quarter of 2011 was $0.2 million, compared with cash flow used for operating activities of $2.4 million in the corresponding period in 2010.

Nine Months Results

In the nine months ended September 30, 2011, Northstar generated net patient service revenue of $10.2 million compared with $10.1 million in the corresponding period of 2010.

Northstar had income from operations for the nine months ended September 30, 2011 of $0.7 million compared to $1.1 million in the comparable 2010 period. Northstar reported a net loss in the 2011 nine month period of $2.2 million, or $0.07 per share, compared with a net loss of $3.1 million, or $0.23 per share in the corresponding 2010 period. The 2010 net loss figure included a $2.0 million gain on derecognition of Class B Units upon completion of a private placement of common shares.

Cash flow provided by operating activities in the nine months ended September 30, 2011 was $0.1 million, compared with cash flow used for operating activities of $3.8 million in the corresponding period in 2010.

At September 30, 2011, Northstar had consolidated working capital of $3.3 million, including cash of $2.9 million. This compares with $5.3 million and $4.2 million, respectively, at year-end 2010.

Management

Northstar's Board of Directors announced today that Donna Alexander, Northstar's Chief Operating Officer, has left Northstar to explore other opportunities.  "The Company deeply appreciates Donna's service over the last twelve months and wishes Donna the best of luck in her new endeavors," said Dr. Kramer. For the time being, Donna's responsibilities are being handled by others in Management.

About Northstar Healthcare Inc.

Northstar owns and manages ambulatory surgery centers in the United States, focusing initially on metropolitan areas in Texas. The Company holds interests in three ambulatory surgery centers, two in Houston and the third in Dallas.

Forward-looking statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

SOURCE Northstar Healthcare Inc.