OPT Opticare Health

OptiCare Health Systems, Inc. Reports 3rd Quarter 2003 Financial Results - 3rd Quarter Revenues Grow 43% over Prior Year to $32.9 Million - WATERBURY, Conn., Nov. 17 /PRNewswire-FirstCall/ -- OptiCare Health Systems, Inc. announced today that total revenue increased to $32.9 million for the three months ended September 30, 2003 compared to $23.0 million for the same period in 2002, an increase of $9.9 million or 43%. Total revenue for the nine months ended September 30, 2003 was $97.9 million compared to $70.4 million for the same period in 2002, an increase of $27.5 million or 39%. These revenue increases were primarily attributable to revenue generated by Wise Optical, the Yonkers, New York-based optical products distributor, which OptiCare acquired in February. OptiCare recorded a net loss of $8.5 million for the three months ended September 30, 2003, which includes $7.0 million of non-cash charges. The non-cash charges include $5.0 million of income tax expense, primarily to establish a valuation allowance against OptiCare's deferred tax assets, a $1.3 million write-off of goodwill and $0.7 million of depreciation and amortization. For the nine months ended September 30, 2003, OptiCare recorded a $10.5 million net loss, which includes $9.6 million of non-cash charges. The non-cash charges include $5.0 million of income tax expense, a $1.3 million write-off of goodwill, a $1.8 million loss from early extinguishment of debt and $1.5 million of depreciation and amortization. Dean J. Yimoyines, OptiCare's Chairman and Chief Executive Officer, stated, "We continue to execute on our integration plan for Wise Optical and to develop it into a cornerstone of our distribution business." OptiCare Health Systems, Inc. is an integrated eye care services company focused on vision benefits management (managed vision), the distribution of products and software services to eye care professionals, and consumer vision services, including medical, surgical and optometric services and optical retail. This press release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. OptiCare's actual results could differ materially from those expressed or indicated by any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risk that OptiCare may not be able to improve cash flow, may not be able to successfully integrate its acquisitions, to retain and attract qualified employees, the impact of current and future governmental regulations in existing lines of business, OptiCare's ability to successfully and profitably manage its operations and growth of the operations, if any, the risks related to managed care contracting, and the ability of OptiCare to successfully raise capital on commercially reasonable terms, if at all. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in OptiCare's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ending December 31, 2002. Forward-looking statements speak only as of the date they are made, and OptiCare undertakes no duty or obligation to update any forward-looking statements in light of new information or future events. OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands, except share data) (Unaudited) September 30, December 31, 2003 2002 ASSETS CURRENT ASSETS: Cash and cash equivalents $2,233 $3,086 Accounts receivable, net 11,445 5,273 Inventories 6,405 2,000 Deferred income taxes, current - 1,660 Other current assets 598 885 TOTAL CURRENT ASSETS 20,681 12,904 Property and equipment, net 5,232 3,337 Intangible assets, net 1,222 1,353 Goodwill, net 19,534 20,516 Deferred income taxes, non-current - 3,140 Other assets 3,095 3,855 TOTAL ASSETS $49,764 $45,105 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $8,820 $2,902 Accrued expenses 6,430 5,255 Current portion of long-term debt 426 1,266 Other current liabilities 1,379 1,245 TOTAL CURRENT LIABILITIES 17,055 10,668 Long-term debt-related party - 15,588 Other long-term debt, less current portion 10,284 2,564 Other liabilities 523 615 TOTAL NON-CURRENT LIABILITIES 10,807 18,767 Series B 12.5% voting, mandatorily redeemable, convertible preferred stock-related party ($5,476 aggregate liquidation preference); 5,000,000 shares authorized (with Series C preferred stock); 3,204,959 shares issued and outstanding. 5,476 5,018 STOCKHOLDERS' EQUITY: Series C preferred stock, $0.001 par value ($16,190 aggregate liquidation preference); 406,158 shares issued and outstanding at September 30, 2003; No shares authorized, issued or outstanding at December 31, 2002. 1 - Common stock, $0.001 par value; 150,000,000 shares authorized; 30,353,542 and 28,913,990 shares outstanding at September 30, 2003 and December 31, 2002, respectively. 30 29 Additional paid-in-capital 79,853 63,589 Accumulated deficit (63,458) (52,966) TOTAL STOCKHOLDERS' EQUITY 16,426 10,652 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $49,764 $45,105 OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Amounts in thousands, except share data) (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, 2003 2002 2003 2002 NET REVENUES: Managed vision $7,118 $7,217 $22,006 $21,970 Product sales 20,038 9,920 56,961 31,675 Other services 5,438 5,182 16,222 15,486 Other income 352 671 2,720 1,317 Total net revenues 32,946 22,990 97,909 70,448 OPERATING EXPENSES: Medical claims expense 5,993 5,009 17,250 16,807 Cost of product sales 15,698 7,992 44,251 25,244 Cost of services 2,233 1,855 6,685 6,137 Selling, general and administrative 10,195 6,571 28,925 19,093 Goodwill impairment loss 1,300 - 1,300 - Depreciation 645 463 1,371 1,402 Amortization 44 45 132 134 Interest 333 769 1,729 2,300 Total operating expenses 36,441 22,704 101,643 71,117 Gain (loss) from early extinguishment of debt - - (1,847) 8,789 Income (loss) from continuing operations before income taxes (3,495) 286 (5,581) 8,120 Income tax expense 4,984 182 4,911 3,275 Income (loss) from continuing operations (8,479) 104 (10,492) 4,845 Income (loss) from discontinued operations, net of tax - 130 - 313 Loss on disposal of discontinued operations - (153) - (4,092) Net income (loss) (8,479) 81 (10,492) 1,066 Preferred stock dividends (159) (143) (459) (388) Net income (loss) available to common stockholders $(8,638) $(62) $(10,951) $678 EARNINGS (LOSS) PER SHARE: Income (loss) per common share from continuing operations: Basic $(0.29) $(0.01) $(0.37) $0.35 Diluted $(0.29) $(0.01) $(0.37) $0.10 Income (loss) per common share from discontinued operations: Basic - $(0.00) - $(0.30) Diluted - $(0.00) - $(0.08) Net income (loss) per common share: Basic $(0.29) $(0.01) $(0.37) $0.05 Diluted $(0.29) $(0.01) $(0.37) $0.02 DATASOURCE: OptiCare Health Systems, Inc. CONTACT: Christopher J. Walls, General Counsel, OptiCare Health Systems, Inc., +1-203-596-2236

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