INDIANAPOLIS, May 23 /PRNewswire-FirstCall/ -- Standard Management
Corporation ("Standard Management" or the "Company")
(OTC:SMANOTC:SMANP), an Indianapolis-based company, provides
through Universal Healthcare Company, LLC ("Universal" or "UHCC")
pharmaceuticals to long-term care and infusion therapy patients,
today reported a net loss from continuing operations for the three
months ended March 31, 2007 of $0.12 per diluted share, or $2.627
million; an improvement of 20% over first quarter 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20010416/STANDARDLOGO )
Continuing Operations: Net revenues Quarterly analysis: -- Sales
for the first quarter of 2007 increased $.3 million or 12% to $2.4
million compared to the first quarter of 2006 due to increased
volume. Gross profit -- Gross profit for the first quarter of 2007
increased by $.2 million or 15% to $.7 million compared to the
first quarter of 2006, primarily due to increased sales volume.
Depreciation and amortization -- Depreciation and amortization was
$.1 million and $.2 million in the first quarters of 2007 and 2006,
respectively. The decrease was due to the sale of furniture and
equipment. Selling, general and administrative expenses -- Selling,
general and administrative expenses for the first quarter of 2007
decreased by $.8 million or 28% to $2.0 million compared to the
first quarter of 2006, primarily due to a $.4 million decrease in
professional fees, a $.1 million decrease in compensation expense
(a $.3 million decrease in salaries partially offset by a $.2
million increase in stock option expense), a $.2 million general
corporate overhead decrease, and $.1 million in decreased operating
expenses at Precision Healthcare. Other income -- Other income for
the first quarter of 2007 of $.1 million is rental income from
leasing space at the Company's corporate headquarters. Other income
for the first quarter of 2006 of $.2 million is primarily due to
the dividends received from preferred stock the Company owned
through 2006, as well as rental income from leasing space at the
Company's corporate headquarters. Interest expense -- Interest
expense for the first quarter of 2007 decreased by $.2 million or
16% to $.8 million compared to the first quarter of 2006, primarily
due to the exchange of certain debt into equity in June 2006.
Federal income tax expense -- Provision for federal income tax
remained zero due to a 100% valuation allowance on the net losses
in the first quarters of 2007 and 2006. Discontinued Operations: --
Net loss from discontinued operations for the first quarter of 2007
was $.3 million compared to net loss of $1.1 million for the first
quarter of 2006. The reduction was primarily due to the cessation
of operations of a base of business during 2006. Earnings: For the
quarters ended March 31, 2007 and 2006, net loss from continuing
operations was $2.6 million or $0.12 per diluted share and a loss
of $3.2 million or $0.35 loss per diluted share, respectively.
Chairman's Comments: Ronald D. Hunter, Chairman, President and
Chief Executive Officer stated, "By remaining committed to the
transformation of Standard Management through the development of
Universal Healthcare Company, LLC, we have attracted properly
priced capital and are scheduled to close on our previously
announced acquisition of In-House Pharmacies, Inc. d/b/a Community
Medical Pharmacy in San Diego, California. Mr. Hunter commented,
"With a robust pipeline complimented by available capital,
management is confident that long-term shareholder value will be
accessible in the pharmaceutical sector of healthcare." This press
release contains "forward-looking statements" within the meaning of
section 27 A of the Securities Act of 1933. The use of the words
"believe," "expect," "anticipate," "intend," "may," "estimate,"
"could," "plans," and other similar expressions, or the negations
thereof, generally identify forward-looking statements.
Forward-looking statements in this press release include, without
limitation, the ability of the Company to address the factors
sighted by our independent auditors as a basis for their qualified
audit opinion, the performance and growth of our business,
potential future acquisitions, and their impact on the Company's
performance. These forward- looking statements are subject to known
and unknown risks, uncertainties and other factors, which could
cause actual results to be materially different from those
contemplated by the forward-looking statements. Such factors
include, but are not limited to the ability of our management team
to successfully operate a health services business with limited
experience in that industry; our ability to expand our health
services business both organically and through acquisitions,
including our ability to identify suitable acquisition candidates,
acquire them at favorable prices and successfully integrate them
into our business; general economic conditions and other factors,
including prevailing interest rate levels and stock market
performance, which may affect our ability to obtain the proposed
capital and additional capital when needed and on favorable terms;
customer response to new products, distribution channels and
marketing initiatives; and increasing competition in the sale of
our products. We caution you that, while forward-looking statements
reflect our good faith beliefs, these statements are not guarantees
of future performance. In addition, we disclaim any obligation to
publicly update or revise any forward- looking statement, whether
as a result of new information, future events or otherwise, except
as required by law. Standard Management is a holding company
headquartered in Indianapolis, IN. Information about the Company
can be obtained by calling the Investor Relations Department at
317.574.6224 or via the Internet at http://www.sman.com/. STANDARD
MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(unaudited, dollars in thousands) March 31 December 31 2007 2006
---------- -------- ASSETS Current assets: Cash and cash
equivalents $403 $565 Accounts receivable, net 928 1,004
Inventories 787 750 Prepaid and other current assets 464 535 Assets
of discontinued operations 317 948 -------- -------- Total current
assets 2,899 3,802 Property and equipment, net 7,963 8,037 Assets
held for sale 927 931 Deferred financing fees, net 1,442 1,263
Officer and other notes receivable, less current portion 776 776
Intangible assets, net 285 304 Goodwill 2,078 2,078 Other
noncurrent assets 1,341 1,302 Total assets -------- --------
$17,711 $18,493 -------- -------- LIABILITIES AND SHAREHOLDERS'
DEFICIT Current liabilities: Accounts payable $1,567 $1,720 Accrued
expenses 2,876 2,101 Current portion of long-term debt 6,049 4,306
Liabilities of discontinued operations 1,031 1,471 --------
-------- Total current liabilities 11,523 9,598 Long-term debt,
less current portion 20,147 22,809 Common stock warrants 486 87
Other long-term liabilities 1,073 1,070 -------- -------- Total
liabilities 33,229 33,564 Shareholders' deficit: Common stock, no
par value, and additional paid in capital, 200,000,000 shares
authorized and 40,861,367 shares and 19,011,367 shares issued in
2007 and 2006, respectively 73,223 70,785 Retained deficit (78,118)
(75,214) Treasury stock, at cost, 2,840,173 shares (10,829)
(10,829) Accumulated other comprehensive income 206 187 --------
-------- Total shareholders' deficit (15,518) (15,071) STANDARD
MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited dollars in thousands, except per share
amounts) Three Months Ended March 31 ------------ ---------- 2007
2006 ------------ ---------- Net revenues $ 2,373 $ 2,114 Cost of
sales 1,686 1,517 ------------ ---------- Gross profit 687 597
Selling, general and administrative expenses 2,004 2,843 Impacts
related to value of warrants and derivatives 569 (63) Depreciation
and amortization 64 181 ------------ ---------- Operating loss
(1,950) (2,427) Other income, net 101 215 Interest expense 778 981
------------ ---------- Loss from continuing operations before
income taxes (2,627) (3,193) Income tax expense (benefit) - -
------------ ---------- Net loss from continuing operations (2,627)
(3,193) Discontinued operations: Loss from discontinued operations
(277) (1,129) ------------ ---------- Net loss $(2,904) $(4,322)
------------ ---------- Loss per share - basic and diluted Loss
from continuing operations $(0.12) $(0.35) Loss from discontinued
operations (0.01) (0.13) ------------ ---------- Net loss $(0.13)
$(0.48) ------------ ---------- Weighted average shares outstanding
21,662,861 9,095,208 ------------ ---------- STANDARD MANAGEMENT
CORPORATION AND SUBSIDIARIES RECONCILIATION STATEMENT AND
DEFINITIONS Non-GAAP Basis (unaudited, dollars in thousands) Three
Months Ended March 31 --------------------------- 2007 2006
------------ ----------- Earnings before interest, income taxes,
depreciation and amortization ("EBITDA"): Operating income (loss)
$(1,950) $(2,427) Other income, net 101 215 Depreciation and
amortization 64 181 Impacts related to value of warrants and
derivatives 569 (63) ------------ ----------- EBITDA $(1,216)
$(2,094) ------------ ----------- Footnotes to Financial
Information: Definitions: GAAP: Amounts that conform with U.S.
Generally Accepted Accounting Principles. Non-GAAP: Amounts that do
not conform with U.S. GAAP. Note 1: Standard Management believes
that the readers' understanding of our performance is enhanced by
the Company's disclosure of certain Non-GAAP financial measures as
presented in this document. The Company's management believes that
the adjusted results provide some additional focus on the ongoing
operations of the Company. Standard Management's method and
calculation of these measures may be different than those used by
other companies and, therefore, they may not be comparable. Note 2:
EBITDA shown in these financial presentations is earnings before
interest expense, other income, income taxes, depreciation and
amortization. Standard Management believes that certain readers
find EBITDA to be a method for measuring a company's ability to
service its debt, which is the primary reason that Standard
Management uses this financial measure. EBITDA does not represent
cash flows from operating activities as defined by GAAP and should
not be used as a measure of liquidity. Standard Management's
calculation of EBITDA may be different from other companies.
http://www.newscom.com/cgi-bin/prnh/20010416/STANDARDLOGO
http://photoarchive.ap.org/ DATASOURCE: Standard Management
Corporation CONTACT: Standard Management Corporation Investor
Relations, +1-317-574- 6224 Web site: http://www.sman.com/
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