PRZ
PainCare Holdings, Inc.
November 11th Market: AMEX
Profile Price: $2.40
Buy Opinion: 2.40 - 2.50
Short-term Sell: 3.00 - 3.20
Highlights
PRZ is a global leader in an industry that generated $100 billion in 2002.
In the third quarter PRZ realized revenue growth of 154%
In August PRZ reported second quarter revenue growth of 111.2%
PRZ just recently welcomed their 22nd Med-X rehab partner
Outlook- PainCare Holdings Inc. (PRZ) is a young, innovative, profitable company that is quickly establishing itself as the pioneering leaders in the lucrative Pain Management market – a market segment that collectively generated $100 billion dollars last year. Their revenues are skyrocketing, their distribution base is expanding and they have an aggressive acquisition strategy.
A 1999 report by the investment firm Stifel, Nicolaus & Company, Inc. reported that back pain is the #1 reason for doctor office visits in the United States and the #1 ailment in worker’s compensation claims. About 35% of all orthopedic hospital admissions are spine related and more than 220 spinal conditions, indications, and pathologies afflict patients.
PRZ’s minimally invasive surgery and innovative approach to pain management creates a unique trading opportunity for investors. The minimally invasive surgery is a less traumatic, cost effective alternative for patients; it reduces the cost for insurance companies by up to 40% versus traditional therapies; and it has the potential to significantly increase the net income of participating physicians.
In their report, Stifel, Nicolaus & Company, Inc. state, "Clearly the market is moving towards minimally invasive procedures and technologies... We believe that in order to be successful in the future, companies will have to employ minimally invasive concepts..."
A company with excellent long-term growth potential,
PRZ is uniquely positioned to succeed.
Business Profile - PRZ is a high-tech healthcare services company that owns, manages and operates a network of pain management, rehabilitation centers across North America.
The company has developed a "Three Pillar" business approach to provide an integrated combination of products and services to patients seeking pain relief. These "Three Pillars" include, Pain Management, Minimally Invasive Spine Surgery (MIS) and, Orthopedic Rehabilitation.
MIS or "band-aid" surgery is a specialized surgical technique based on currently available endoscopic technologies, which allows physicians to provide the most technically advanced treatment of back and neck pain in an outpatient environment.
Orthopedic Rehabilitation is a comprehensive program that advances functional restoration of the musculoskeletal system utilizing the company’s proprietary, state of the art computerized Med-X medical exercise machines.
To date, PRZ has deployed or is in the process of deploying nearly two-dozen Med-X Direct Programs throughout North America. Moreover, PRZ is in active discussions and negotiations with nearly 100 additional practices that have expressed interest in integrating the Med-X Direct Rehabilitation Program into their practices.
Fundamental Analysis - On Tuesday, November 11, 2003 PRZ announced their fiscal results for the third quarter ended September 30, 2003. Revenues for the third quarter increased 154% to $4,376,417 from $1,720,419 reported in the same period last year. The company's gross profits nearly doubled (177%) to $3,010,754 from $1,086,939; this was due in large part to increases in gross profit margins which rose to 69% from 63%.
Randy Lubinsky, CEO of PRZ, stated, "PainCare continues to successfully build upon the framework we established three years ago when we founded the Company. We believe that our ability to consistently demonstrate successive quarter-over-quarter growth in all operational areas is a direct reflection of our strict adherence to set business principles and the consistent execution of our business plan."
And back in August the company announced their fiscal results for the second quarter ended June 30, 2003. Revenues for the quarter increased 111.2% to $3,774,487 over the comparable period in 2002, while the company’s gross profits increased 131% to $2,727,671. This increase was primarily due to the acquisitions of Pain and Rehabilitation Network and Medical Rehabilitation Specialists, along with the opening of new Med-X Direct rehabilitation centers.
Based on the financial performance of the company to date and the successful execution of its growth plan, management believes that PRZ could achieve annual revenues of $62 million and net income of $13 million by the end of fiscal year 2005.
Recent News - On November 6 the company announced that Orthopedics & Sports Medicine, LLC, based in Bedford, Indiana, has contracted with PRZ to offer the company’s proprietary MedX-Direct on-site orthopedic rehabilitation program to patients in Southern Indiana.
The founder of the practice, Harlen C. Hunter, D.O., is industry renowned for his pioneering work in orthopedic surgery and is one of a limited number of surgeons trained and certified to perform cartilage regeneration surgery and a special, new alternative to total knee replacement.
Ronald Riewold, President of PRZ, stated, "We are very pleased to welcome Dr. Hunter to our growing network of MedX-Direct partners, one who many in the Midwest refer to as 'the Father of Sports Medicine.' In consideration of Dr. Hunter's noted reputation as a leader in orthopedic and sports medicine, his decision to deploy MedX-Direct onsite at his private practice reinforces that medical specialists recognize that MedX is indeed the gold standard in muscular-skeletal rehabilitation."
On September 22 PRZ announced that in response to strong and growing demand from its national network of pain management practices and MedX-Direct rehabilitation program partners, the company has formed PainCare Surgical Centers, Inc., a wholly-owned subsidiary established for the purpose of acquiring, developing and operating high-tech, outpatient surgical centers dedicated to performing minimally invasive spine surgery and associated pain management procedures.
Randy Lubinsky, CEO of PRZ, stated, "The prospect of adding outpatient surgery centers to our business mix is being driven by unrelenting demand from our physicians, the tens of thousands of patients that we serve directly or indirectly through our MedX-Direct programs…We fully expect that this business expansion will result in notable revenue and earnings growth for PainCare as we deploy each new center."
And on September 15, PRZ welcomed Vero Beach, Florida’s ProSports, the 22nd medical practice in the country to partner with PRZ to directly avail comprehensive musculoskeletal rehabilitation to its patients.
Conclusion - PRZ is a young, innovative, profitable company that is rapidly becoming established as the pioneering leaders in the lucrative Pain Management market. Their revenues are skyrocketing, their distribution base is expanding and they have an aggressive acquisition strategy.
PRX also has enviable assets: a highly regarded brand name in MedX-Direct; a hard-earned reputation for integrity and reliability; a growing North American network of well-established, highly profitable medical practices; and a dedicated team of knowledgeable, experienced medical, financial and business professionals.
To ensure continued growth PRZ will persist in acquiring targeted Pain Medicine and Orthopedic practices; introduce a comprehensive selection of MIS and other techniques through affiliated health centers; and integrate and capitalize on the demographics of the target market.
PRZ remains committed to implementing a business strategy that will position the company as the world leader in pain management, minimally invasive spine surgery and orthopedic rehabilitation. A company with excellent long-term growth potential, PRZ is uniquely positioned to produce superior returns to their shareholders.
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