American CareSource Holdings (NASDAQ: ANCI), a leading national network of ancillary healthcare providers, today reported 2011 net revenue of $48.9 million compared to $61.2 million for 2010. Net revenue for the fourth quarter was $13.0 million compared to $16.1 million reported for the fourth quarter of 2010. Net loss for 2011 was $7.2 million (including a non-cash goodwill impairment charge of $2.9 million, net of an income tax benefit of $1.5 million, and a non-cash deferred tax valuation allowance of $2.8 million) compared to net income of $486,000 for 2010, while fourth quarter net income was $153,000 compared to $142,000 for the prior-year period.
“In 2011, American CareSource faced many challenges,” said Kenn S. George, CEO and Chairman of the Board. “During the second half of 2011, our executive team has focused on operational efficiencies, as well as on strategies to improve top-line revenue growth. We remain committed to our core business, as demonstrated by our previously announced investment in our sales function. While we continue to make investments to facilitate short-term growth, we are also focused on developing our long-term strategy. We ended 2011 with $11.3 million of cash and no indebtedness.”
Fourth Quarter Highlights
- During the quarter, ACS continued a focused pricing strategy that maintained clients’ savings on their ancillary spend, but generated incremental revenue of approximately $250,000, which also had a positive impact on contribution margin and cash flow.
- ACS began receiving increased claims volume as a result of an expanded provider agreement with a national anatomic pathology laboratory service provider.
- During the quarter, ACS took steps to manage operations and control costs in preparation for 2012.
- As previously announced, ACS engaged JMG Management Group to consult on the process of transforming ACS’ sales function.
- ACS controlled headcount through natural attrition; headcount at December 31, 2011, was 57 employees compared to 61 employees at December 31, 2010.
- ACS moved from a self-funded health plan to a fully insured plan, which will reduce ACS’ associated benefit costs for 2012.
- The company amended its office lease to eliminate unutilized space, which will result in approximately $48,000 of savings in 2012.
- ACS preserved existing cash and cash equivalents, which were $11.3 million at December 31, 2011.
- Continuing from the third quarter of 2011, the company spent a total of $85,000 on external consulting costs to review and analyze various short and long-term strategic initiatives relating to the company’s mix of services, development of new services and programs, and sales and marketing efforts.
Net RevenueNet revenue for the fourth quarter of 2011 was $13.0 million compared to $16.1 million reported during the fourth quarter of 2010. Revenue from ACS’ two key legacy accounts declined by a combined $4.2 million, or 39 percent. Excluding ACS’ two key accounts, revenue from all other accounts was up approximately $827,000, or 14 percent, in the fourth quarter of 2011 compared to the same prior-year period , which was directly related to 13 new clients implemented in 2010. Sequentially, fourth quarter 2011 net revenues increased 13 percent to $13.0 million over $11.5 million in the third quarter of 2011. The increase was the result of seasonally higher collections in the fourth quarter.