Third Quarter Results: 700.7% revenues increase
Thursday November 11, 4:32 pm Eastern Time
Company Press Release
e-DOCS.net Announces Results for the Third Quarter of 1999
HOUSTON--(BW HealthWire)--Nov. 11, 1999--e-DOCS.net (OTCBB:EDOC - news), a medical transcription services provider, today announced the results of the three and six month periods ended Sept. 30, 1999.
Revenues in the third quarter of 1999 were $1,455,195 versus $100,144 in the third quarter of 1998. Gross margin increased to $350,571 for the third quarter versus $28,162 in the third quarter of 1998. During the prior year, the Company was in the process of transitioning its business model from the sale of speech recognition hardware and software to providing value-added transcription services to the medical industry.
Revenues in the nine months ended Sept. 30, 1999 were $3,806,054 versus $475,303 in the prior year period, representing an increase of 700.7%. Gross margin increased to $1,352,948 for nine months ended Sept. 30, 1999 versus $217,585 in the prior year period, representing an increase of 521.8%. The increase in revenue is primarily the result of the Company, beginning in the first quarter of 1998, transitioning its business model from the sale of speech recognition hardware and software to providing value-added transcription services and completing eight acquisitions of medical transcription companies.
Net loss to common stockholders for the third quarter of 1999 was $2,002,960 or $(.12) per share versus a net loss to common stockholders for the third quarter of 1998 of $2,767,200 or $(.20) per share. The weighted average shares outstanding for the third quarter of 1999 and 1998 were 16.6 million and 14.0 million shares, respectively. Net loss to common stockholders for the first nine months of 1999 was $6,364,095 or $(.39) per share versus a net loss to common stockholders for the corresponding period in 1998 of $6,015,278 or $(.45). The weighted average shares outstanding for the first nine months of 1999 and 1998 were 16.3 million and 13.4 million shares, respectively.
Commenting on the results, Richard A. Cabrera, e-DOCS.net chief financial officer, ``During the third quarter of 1999, the Company experienced sales growth of 28% from the second quarter of this year, which consisted of 10% growth related to having a full quarter revenue of the May acquisition and 18% related to internal growth. Gross margin as a percentage of revenue declined from the second quarter of 1999 to the third quarter of 1999 due to the Company aggressively recruiting and training new transcriptionists.'
Cabrera added, ``The internal growth, along with e-DOCS cost cutting measures has improved our EBITDA (earnings before interest, taxes, depreciation, amortization and other miscellaneous items) which is used to measure the strength of cash flows from operations. While still negative, the EBITDA improved to a negative $1,181,575 for the third quarter of 1999 from a negative $2,326,909 for the second quarter of 1999, representing a 49% decrease in negative EBITDA.'
Eric A. Black, chief executive officer and president, stated that, ``e-DOCS made significant strides forward in developing our transcription capacity and achieving internal sales growth. We are currently evaluating our marketing and growth opportunities for the fourth quarter of 1999 and the year 2000. While we are confident that sufficient opportunities exist, we understand that we will have to raise additional capital to fund our operations in order to sustain our growth. In addition to supporting our existing overhead and sales and marketing efforts, we will need to invest in additional network infrastructure to ensure the adequate flow of transcription work to our transcription capacity, both home and abroad. As we announced in August, we are continuing to work on streamlining our administrative overhead and leveraging the sales and marketing efforts of our district operations.'
Black continued, ``Our recent focus has been on internally developing our transcription capacity by recruiting and training transcriptionists. We currently have over 250 medical transcriptionists and editors in various stages of training, which we hope to graduate in the next several months. While internal development has been our focus, e-DOCS has continued the process of evaluating acquisition candidates, in both our existing and new markets. However, the Company's ability to complete any acquisition is subject to the Company's ability to raise additional capital.'
Cabrera added, ``e-DOCS.net has raised year to date approximately $8.8 million consisting of debt and equity, including the $2.0 million convertible secured promissory note issued on Nov. 5, 1999. In addition to raising these funds, the Company was able to negotiate an extension of $1.5 million of existing debt until February 2000 and has a term sheet from an existing investor to fund up to $2.0 million for acquisitions.' Cabrera emphasized, ``The capital raised to date has been sufficient to fund our acquisitions and internal development to date, however, the Company is still dependent on raising additional funds to maintain its operations. While the aggressive recruitment and training of additional transcriptionists and development of the Company's network is necessary to provide the Company with the capacity to support its sales growth, it continues to use significant amounts of capital resources.'
Cabrera continued, ``The continued funding and development initiatives over the next fiscal year are critical to the continued success of e-DOCS.'
About e-DOCS.net
e-DOCS.net's VoiceCOMMANDER 99 secure medical transcription service utilizes the Internet and proprietary voice recognition technology to pre-process doctor's dictation into written text. It then encrypts and transmits both the doctor's original voice recording and the unedited text via the Internet to the e-DOCS.net server. The editing process is completed and reviewed by e-DOCS.net transcriptionists who return an accurate, re-encrypted, fully edited e-document to the doctor in 24 hours or less. VoiceCOMMANDER 99 will be implemented into e-DOCS.net's growing network of transcription companies to provide a common technology and operations platform, which may result in substantial savings to physicians and the Company. |
