NORCROSS, Ga.--(BUSINESS WIRE)--May 21, 1999--Pediatric Services of America, Inc. (Nasdaq SmallCap:PSAI) today announced results for the second quarter of the fiscal year 1999. Net revenues for the quarter decreased 3.1% to $76,999,000 compared to $79,479,000 in 1998. The Company reported a net loss for the quarter ended March 31, 1999 of $28,800,000 compared to net income of $2,135,000 for the second quarter of 1998. In the second quarter of 1999, the Company recorded a net loss per share of $4.33 on 6,652,000 weighted average shares outstanding compared to earnings per share of $0.30 on 7,234,000 weighted average shares outstanding in the second quarter of 1998. The net loss includes a $20,984,000 impairment of intangible assets related to a strategic refocus of the Company upon its core service lines. Net revenues for the six months ended March 31, 1999, increased 10.9% to $156,373,000 compared to $141,038,000 recorded in the six months ended March 31, 1998. For the six months ended March 31, 1999, the Company recorded a net loss of $28,692,000 compared to net income of $4,256,000 for six months ended March 31, 1998. The net loss per share for the six months ended March 31, 1999, was $4.31 on 6,652,000 weighted average shares outstanding, compared to $0.61 earnings per share on 6,971,000 weighted average shares outstanding for the six months ended March 31, 1998. PSAI Chairman, President and CEO, Joseph D. Sansone commented, "The Company's strategic plan is to refocus our resources on our core competencies in pediatric nursing, pharmacy, and respiratory services. We will exit service lines and geographic markets where the market fundamentals do not match our strengths, and we will reshape management to execute our strategies." Mr. Sansone further stated, "The intent of the plan is to allow the Company to bring its organizational resources and expertise into sharper focus. We believe this will result in achieving the operating improvements necessary to return the Company to consistent profitability under the demanding conditions that exist in the healthcare industry. I believe that by shedding non-core assets the Company will be able to regain the financial foundation necessary to deliver value to our shareholders and noteholders over the long term." PSAI provides comprehensive pediatric home health care services through a network of 113 branch offices in 27 states and the District of Columbia and provides medical testing services through over 200 offices nationwide. Forward looking statements made in this release involve a number of risks and uncertainties, including, but not limited to changes in government regulation and health care reforms, ability to improve accounts receivable collections, ability to focus on core businesses, changing economic and market conditions, and other risk factors detailed in the Company's Securities and Exchange Commission filing. PEDIATRIC SERVICES OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) Three Months Ended Six Months Ended March 31 March 31 1999 1998 1999 1998 (Unaudited)(Unaudited(Unaudited(Unaudited) ------------------- ------------------ Net revenue $ 76,999 $ 79,479 $156,373 $141,038 Operating salaries, wages & employee benefits 29,265 31,017 58,950 57,098 Other operating costs 36,054 32,524 70,880 55,467 Corporate, general & administrative 6,359 6,070 12,398 9,907 Provision for doubtful accounts 7,346 2,095 10,510 3,928 Depreciation & amortization 2,657 2,297 5,099 4,144 Impairment of intangible assets 20,984 - 20,984 - -------- -------- -------- -------- Operating income (loss) (25,666) 5,476 (22,448) 10,494 Interest expense 3,870 1,926 6,964 3,392 -------- -------- -------- -------- Income (loss) before minority interest and income taxes (29,536) 3,550 (29,412) 7,102 Minority interest in loss of subsidiary 124 26 167 27 -------- -------- -------- -------- Income (loss) before income taxes (29,412) 3,576 (29,245) 7,129 Income tax expense (benefit) (612) 1,441 (553) 2,873 -------- -------- -------- -------- Net income (loss) $(28,800) $ 2,135 $(28,692) $4,256 ======== ======== ======== ======== Net income (loss) attributable to common and common equivalent shares $(28,800) $ 2,135 $(28,692) $ 4,256 ======== ======== ======== ======== Basic Per-Share data: Net income (loss) attributable to common and common equivalent shares $ (4.33) $ 0.30 $ (4.31) $ 0.63 ======== ======== ======== ======== Weighted average shares outstanding 6,652 7,075 6,652 6,789 ======== ======== ======== ======== Diluted Per-Share data: Net income (loss) attributable to common and common equivalent shares $(4.33) $ 0.30 $(4.31) $ 0.61 ======== ======== ======== ======== Weighted average shares outstanding 6,652 7,234 6,652 6,971 ======== ======== ======== ======== Consolidated Balance Sheet Information (Unaudited)(Audited) March September 31 30 1999 1998 -------- -------- Total Current Assets $ 116,374 $ 113,846 Total Assets 213,078 234,561 Total Current Liabilities 39,966 38,465 Total Stockholder's Equity 33,316 63,683  