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Emergent Group Reports Third Quarter Results

"Furthermore," Haber added, "we know that Emergent Group's business model remains attractive in the current economic climate as rentals allow our hospital and physician practice customers to conserve cash and still embrace the latest technologies. Rentals also give equipment manufacturers opportunities to partner with us and thereby extend their distribution channels beyond the typically long sales cycles. Thus, our strategic position and value proposition bode well for the future of Emergent Group."

The company reported the following financial results for the nine months ended September 30, 2010:

  • Revenue decreased 3.9% to $22,214,727 versus $23,105,272 for the prior year period ended September 30, 2009.
  • EBITDA (earnings before interest, taxes, depreciation and amortization) declined 0.4% to $6,030,693 versus $6,055,785 for the prior year period. 
  • Net income decreased 5.1% to $2,276,244, or $0.32 per diluted share, for the first nine months of 2010, versus $2,398,919, or $0.34 per diluted share, in the prior year period.  Diluted weighted-average shares outstanding were slightly lower for the latest nine months at 7,020,315 versus 7,059,774 for the prior year period.

About Emergent Group Inc.

Emergent Group Inc., through its wholly owned subsidiary, PRI Medical Technologies, Inc. ("PRI Medical"), provides mobile medical laser and surgical equipment in 16 states on a per-procedure basis to hospitals, outpatient surgery centers and physicians' offices. Surgical equipment is provided to customers along with technical support personnel to ensure that such equipment is operating correctly. PRI Medical currently offers its services in five states in the western United States and 11 states along the eastern seaboard. Emergent Group Inc. is a member of the Russell Microcap ® Index. For investor and product information, visit Emergent Group's website, www.emergentgroupinc.com.

Forward-Looking Statements

Statements in this news release may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1993 and Section 21E of the Securities Exchange Act of 1934. Such statements may involve various risks and uncertainties, some of which may be discussed in the Company's most recent report on Form 10-K and subsequently filed SEC reports. There is no assurance any forward-looking statements will prove accurate, as actual results and future events could differ materially from those presently anticipated.

Emergent Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
   
  September 30, December 31,
  2010 2009
ASSETS (Unaudited)  
     
Current assets    
Cash  $ 7,283,073  $ 7,427,165
Accounts receivable, net of allowance for doubtful    
accounts of $98,909 and $83,704  3,803,026  4,006,123
Inventory, net  1,130,668  889,526
Prepaid expenses  299,523  380,825
Deferred income taxes  257,630  557,630
Total current assets  12,773,920  13,261,269
     
Property and equipment, net of accumulated depreciation and   
amortization of $10,304,504 and $9,031,136  4,681,577  5,545,492
Goodwill  1,120,058  1,120,058
Deferred income taxes  21,126  21,126
Other intangible assets, net of accumulated amortization of    
$372,373 and $300,672  393,564  455,265
Deposits and other assets  82,671  80,992
Total assets  $ 19,072,916  $ 20,484,202
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities    
Current portion of capital lease obligations  $ 1,834,276  $ 1,901,272
Dividends payable  --   2,710,817
Accounts payable  1,671,098  1,440,122
Accrued expenses and other liabilities  2,010,296  2,456,315
Total current liabilities  5,515,670  8,508,526
Capital lease obligations, net of current portion  1,872,710  2,670,942
Total liabilities  7,388,380  11,179,468
     
Shareholders' equity    
Preferred stock, $0.001 par value, non-voting 10,000,000    
shares authorized, no shares issued and outstanding  --   -- 
Common stock, $0.04 par value, 100,000,000 shares authorized  
6,897,024 and 6,776,118 shares issued and outstanding  275,877  271,042
Additional paid-in capital  16,753,421  16,507,958
Accumulated deficit  (5,786,081)  (8,062,324)
Total Emergent Group equity  11,243,217  8,716,676
Non-controlling interest  441,319  588,058
Total shareholders' equity  11,684,536  9,304,734
 Total liabilities and shareholders' equity  $ 19,072,916  $ 20,484,202
 
Emergent Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2010 2009 2010 2009
Revenue  $ 7,594,715  $ 7,981,464  $ 22,214,727  $ 23,105,272
Cost of goods sold  4,607,609  4,802,495  13,465,898  13,839,056
Gross profit  2,987,106  3,178,969  8,748,829  9,266,216
Selling, general, and administrative expenses  1,566,503  1,490,174  4,522,235  4,442,338
Income from operations  1,420,603  1,688,795  4,226,594  4,823,878
Other income (expense)        
Interest expense, net  (64,410)  (85,692)  (210,496)  (261,681)
Gain on disposal of property and equipment  --  5,500  64,323  8,050
Other income from affiliated entities, net  --  --  190,221  --
Other income, net  978  76  1,923  30,336
Total other income (expense)  (63,432)  (80,116)  45,971  (223,295)
Income before provision for income taxes and      
non-controlling interest  1,357,171  1,608,679  4,272,565  4,600,583
Provision for income taxes  (472,755)  (553,000)  (1,550,044)  (1,604,634)
Income before non-controlling interest  884,416  1,055,679  2,722,521  2,995,949
Non-controlling interests in income of        
consolidated limited liability companies  (174,380)  (225,023)  (446,277)  (597,030)
Net income  $ 710,036  $ 830,656  $ 2,276,244  $ 2,398,919
Basic earnings per share  $ 0.10  $ 0.12  $ 0.33  $ 0.36
Diluted earnings per share  $ 0.10  $ 0.12  $ 0.32  $ 0.34
Basic weighted average shares outstanding  6,875,040  6,745,663  6,841,176  6,710,175
Diluted weighted-average shares outstanding  7,045,049  7,089,598  7,020,315  7,059,774
         
Supplemental Information --
Reconciliation of Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA):
           
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2010 2009 2010 2009
Net income  $ 710,036  $ 830,656  $ 2,276,244  $ 2,398,919
Depreciation and amortization  593,796  568,549  1,773,679  1,620,057
Amortization - stock based compensation  78,044  63,280  220,230  170,494
Interest expense, net  64,410  85,692  210,496  261,681
Provision for income taxes  472,755  553,000  1,550,044  1,604,634
Total    $ 1,919,041  $ 2,101,177  $ 6,030,693  $ 6,055,785
CONTACT:  Emergent Group Inc.
          Bruce J. Haber
          (914) 235-5550, x. 12
          bhaber@primedical.net

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