Center For Wound Healing, Inc. (fka CFWH)

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The Center for Wound Healing, Inc. Announces Financial Results for Third Quarter and Nine Months of Fiscal Year 2009
Conference Call Begins at 4:30 p.m. EDT Today
May 13, 2009 4:05:00 PM
Copyright Business Wire 2009


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View Additional ProfilesTARRYTOWN, N.Y.--(BUSINESS WIRE)-- The Center for Wound Healing, Inc. (OTCBB:CFWH) (CFWH), a leading manager of comprehensive wound care treatment centers that offer wound care and hyperbaric oxygen therapy (HBO), today announced financial results for the third quarter and nine months of fiscal 2009 ended March 31, 2009.

Financial highlights for the third quarter of fiscal 2009 include the following:

-- Total revenue of $6.9 million, up 6 percent
-- Gross margin of 47.1 percent
-- HBO treatments per center per day increased 23 percent
-- EBITDA of $1.8 million
-- Cash flow from operations of $1.2 million

Other highlights of the third quarter and to date include:

-- The opening of two Centers for Wound Healing, each of which was
designed, built and financed by CFWH:
o A 2,900 square foot facility at The Jameson Hospital Center for Wound
Healing in New Castle, Pennsylvania in February, which contains three
wound treatment rooms and two hyperbaric oxygen chambers; and
o A 1,724 square foot facility at the University Medical Center at
Princeton in Princeton, New Jersey in April, which contains two
treatment rooms and two hyperbaric oxygen chambers.
-- Maintaining a high rate of treatment success, as better than 80 percent
of the patients treated in CFWH hyperbaric chambers have healed.
-- Attendance at the Symposium on Advanced Wound Care in Dallas in April;
this is one the largest conferences dedicated solely to wound care,
attended by more than 2,500 clinicians. During the event, CFWH chairman
and medical director John V. Capotorto was elected Secretary of the
American Association for Wound Care Management.
-- The rollout of WoundDocs, the company's web-based Electronic Medical
Records (EMR) application, throughout the company's portfolio of 35
centers.

"Our revenue continued to grow in the third quarter as we increased utilization rates across the entire portfolio, while ramping up operations at two recently opened centers in Pennsylvania and closing three underperforming centers prior to the end of the quarter (the company had 34 centers in operation as of March 31). Our performance demonstrates the quality and consistency of our staffing, marketing and education efforts in the hospital markets we serve," commented Andrew G. Barnett, The Center for Wound Healing's Chief Executive Officer. "In addition, by generating cash flow from operations of $1.2 million in the quarter and $3.6 million in the first nine months of the fiscal year, we are well positioned to continue our expansion with current capital resources.

"The company's operating results reflect our intense focus on improving center performance and prudently investing in people and systems to support the expansion of our services and partnerships with hospitals. I am pleased to report that we have completed the rollout of our state-of-the-art web-based electronic medical record application called 'WoundDocs,' which will contribute to our ability to improve patient service, utilization and control costs for ourselves and our hospital partners," continued Barnett. "We also have made significant progress on our objective of increasing the company's visibility and name awareness in the healthcare community. For example, we recently added clinical liaison associates who are building strong referral relationships among key physician groups, including podiatrists and vascular surgeons. We also recently attended one of the most important events for wound care clinicians and professionals, the Symposium on Advanced Wound Care, where our presentation booth received significant attention and traffic. I am also proud that during the symposium the Center for Wound Healing's chairman and medical officer, John Capotorto, was elected secretary of the American Association for Wound Care Management.

"Looking forward, we believe our demonstrated patient treatment success and increased market development efforts will continue to drive the number of wound care treatments at our centers, delivering higher revenue and contribution per center. We have also reignited our business development efforts and we are evaluating a number of opportunities to expand our operations through new center development and other means, including acquiring existing wound center operations," Barnett said.

Third Quarter Fiscal 2009 Financial Results

Revenue for the quarter ended March 31, 2009 was $6.9 million, a 6 percent increase compared with revenue of $6.5 million for fiscal 2008 third quarter. Revenue growth is the result of significant increases in wound care treatments and revenue per treatment plus higher HBO volumes at existing centers.

Gross margin for the quarter ending March 31, 2009 was 47.1 percent compared with gross margin of 48.8 percent for the same period a year ago. The reduced margin reflects investments in personnel, systems and equipment necessary to support future growth.

EBITDA, a critical measure of the Company's financial performance, was $1.8 million, and cash flow from operations was $1.2 million.

For the three months ended March 31, 2009, the Company reported a net loss of $1.0 million or ($0.04) per share, compared to a net loss of $1.1 million or ($0.05) per share for the 2008 three-month period.

Nine Month Financial Results

Revenue for the first nine months of fiscal 2009 was $21.5 million, a 14 percent increase compared with total revenue of $18.9 million for the first nine months of fiscal 2008.

Gross margin for the nine months ending March 31, 2009 was 48.6 percent, compared with gross margin of 48.9 percent for the same period a year ago.

The Company generated nine-month fiscal 2009 EBITDA of $6.3 million compared to $6.5 million in the prior period. The slightly lower EBITDA is due to the reduced gross margin (as stated above) plus increases in the bad debt reserve in response to the more difficult economic environment. The Company's EBITDA margin was 29 percent. The company generated $3.6 million of cash from operations for the nine months ended March 31, 2009 compared to generating $1.2 million of cash from operations for the nine months ended March 31, 2008. For the fiscal year ended June 30, 2008 the company generated $2.0 million from operations.

For the nine months ended March 31, 2009, the Company reduced its net loss by 13 percent, posting a net loss of $3.0 million or ($0.13) per share, compared with a net loss of $3.4 million or ($0.15) per share for the fiscal 2008 nine-month period.

Conference Call

Management will host a conference call to review the Company's financial results, provide an update on its corporate development programs and answer questions on Wednesday, May 13, 2009 at 4:30 p.m. Eastern time. To access the live call, please dial 888-443-9985 at least five minutes prior to the start of the call. The participant pass code is 97300372. For two days following the conclusion of the call, an audio replay can be accessed by dialing 800-642-1687 and using the pass code 97300372.

A live audio webcast of the call will be available on the Company's website at www.centerwh.com. The call will also be archived for 90 days at www.streetevents.com, www.fulldisclosure.com and www.centerwh.com.

About The Center for Wound Healing, Inc.

The Center for Wound Healing, Inc. is a leading manager of comprehensive wound care treatment centers that offer hyperbaric oxygen therapy (HBO) as well as traditional wound care treatment modalities. The Company manages 35 wound care centers in the eastern United States in partnership with local acute care hospitals. CFWH was founded by physicians in 1997 with a focus on establishing in-hospital centers of excellence to treat the growing incidence of severe grade diabetic wounds of the lower extremities and wounds that are unresponsive to general wound care treatments. The Company's centers have consistently achieved high treatment success rates, resulting in a dramatic increase in patient quality of life and significant cost savings to the healthcare system.

Forward-Looking Statements

Statements contained herein that are not historical facts may be forward-looking statements within the meaning of the Securities Act of 1933, as amended. Forward-looking statements include statements regarding the intent, belief or current expectations of the Company and its management. Such statements are estimates only, as the Company has not completed the preparation of its financial statements for those periods, nor has its auditor completed the audit of those results. Actual revenue may differ materially from those anticipated in this press release. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors. The Center for Wound Healing undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in The Center for Wound Healing's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact The Center for Wound Healing's success are more fully disclosed in The Center for Wound Healing's most recent public filings with the U.S. Securities and Exchange Commission.


THE CENTER FOR WOUND HEALING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

For The Three Months Ended For The Nine Months Ended

March 31, March 31,

2009 2008 2009 2008

REVENUES

Treatment fees $ 6,884,971 $ 6,498,789 $ 21,489,871 $ 18,911,023

OPERATING
EXPENSES

Cost of services 3,642,684 3,330,333 11,045,076 9,657,058

Sales and 41,116 7,794 133,934 44,888
marketing

General and 2,254,664 2,244,197 7,538,282 6,408,455
administration

Depreciation and 251,388 117,781 732,975 297,632
amortization

Bad debts 240,000 1,902 684,006 216,458

TOTAL OPERATING 6,429,852 5,702,007 20,134,273 16,624,491
EXPENSES

OPERATING INCOME 455,119 796,782 1,355,598 2,286,532

OTHER EXPENSES

Interest expense 1,404,067 1,563,156 4,291,637 5,433,643

Interest Income (5,555 ) - (18,888 ) -

Minority
interest in net
(income) loss of 62,270 275,138 (6,214 ) 181,770
consolidated
subsidiaries

Loss on disposal
of property and - - - 68,880
equipment

Other Expenses - 20,866 - 20,866

TOTAL OTHER 1,460,782 1,859,160 4,266,535 5,705,159
EXPENSES

LOSS BEFORE
PROVISION FOR (1,005,663 ) (1,062,378 ) (2,910,937 ) (3,418,627 )
INCOME TAXES

PROVISION FOR
INCOME TAXES - 17,897 7,140 75,904 18,845
CURRENT

NET LOSS $ (1,023,560 ) $ (1,069,518 ) $ (2,986,841 ) $ (3,437,472 )

NET LOSS PER
COMMON SHARE
BASIC

AND DILUTED $ (0.04 ) $ (0.05 ) $ (0.13 ) $ (0.15 )

WEIGHTED AVERAGE
NUMBER OF COMMON

SHARES - BASIC 23,373,281 22,985,781 23,373,281 22,932,108
AND DILUTED




THE CENTER FOR WOUND HEALING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS AT

ASSETS

March 31, June 30,

2009 2008

(Unaudited)

CURRENT ASSETS

Cash in bank $ 249,846 $ 55,139

Accounts receivable, net of allowance for
doubtful accounts of $2,423,203 and $2,941,917 16,393,988 14,563,325
respectively

Notes Receivable 449,584 460,872

Income tax refunds receivable - 2,090

Prepaid expenses and other current assets 198,317 398,631

Total current assets 17,291,735 15,480,058

Notes Receivable - 134,295

Property and equipment, net 8,240,780 8,886,005

Intangible assets 3,018,017 4,402,495

Goodwill 751,957 751,957

Other assets 2,722,780 2,822,687

TOTAL ASSETS $ 32,025,269 $ 32,477,495

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable and accrued expenses $ 3,199,037 $ 3,844,541

Current maturities of capital leases 182,720 526,107

Short-term borrowings 2,054,989 4,200,000

15% senior secured note payable 2,462,109 939,856

Payable to former Majority Members 268,033 618,033

Due to affiliates 257,950 261,006

Total current liabilities 8,424,838 10,389,542

15% senior secured note payable, net of 17,713,336 15,291,782
current maturities

Notes payable, net of current maturities 1,608,215 782,133

Capital lease obligations, net of current 25,512 131,774
maturities

Minority interest in consolidated subsidiaries 490,839 558,205

TOTAL LIABILITIES 28,262,740 27,153,437

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Preferred stock, $0.001 par value; 10,000,000 - -
shares authorized;

none outstanding

Common stock, $0.001 par value; 290,000,000
shares authorized;

23,373,281 issued and outstanding 23,373 23,373

Additional paid-in capital 27,645,600 26,220,288

Accumulated deficit (23,906,444 ) (20,919,603 )

TOTAL STOCKHOLDERS' EQUITY 3,762,529 5,324,058

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,025,269 $ 32,477,495






Source: The Center for Wound Healing, Inc.


----------------------------------------------
Andrew G. Barnett
Chief Executive Officer
The Center for Wound Healing
Inc.
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or
Lippert/Heilshorn & Associates
Inc.
Don Markley (investors)
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Jules Abraham (media)
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