Ascendant Solutions, Inc. Reports 2016 Fourth Quarter and Full Year Earnings; Announces Company Initiatives to Enhance Shareholder Value

• 2016 healthcare revenues grew 4.5 percent year over year.
  
• In 2017, Ascendant plans to file with the Securities and Exchange Commission to become a fully reporting company, change the corporate name to Dougherty’s Pharmacy, Inc., and uplist to the OTCQB exchange.
• Ascendant’s remaining investment in non-healthcare real estate assets was revalued in the fourth quarter to $1.3 million based on its selling value in the first quarter of 2017, resulting in a one-time, non-cash loss on impairment of assets of $3.8 million.

DALLAS, March 23, 2017 -- Ascendant Solutions, Inc. (Pink Sheets:ASDS) (“Ascendant” or the “Company”) today announced its results for the fourth quarter and year ended December 31, 2016.   The Company reported fourth quarter Consolidated Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $183,000 compared to consolidated EBITDA of $299,000 in 2015.  For the year ended December 31, 2016, the Company reported consolidated EBITDA of $686,000 compared to consolidated EBITDA of $763,000 in 2015.

For the fourth quarter ended December 31, 2016, the Company reported a consolidated net loss of $4,099,000 or $0.18 per share, compared to net loss of $90,000, or less than $0.01 per share, for the same period of 2015.  Consolidated net loss for the year ended December 31, 2016 was $4,859,000 compared to a net loss of $396,000 for the year ended 2015.

The increase in net loss for the fourth quarter and year ended 2016 compared to 2015 was primarily due to the previously mentioned one-time, non-cash and non-operating adjustment of $3.8 million recorded as a loss on impairment of assets related to the Company’s investment in real estate.  The investment was reduced in the fourth quarter of 2016 from $5.1 million to $1.3 million, which approximates the future proceeds expected from the sale of this investment in the first quarter of 2017. The Company plans to use this infusion of cash to pay down existing debt and for potential acquisitions and acquisition-related expenses.

Common shares outstanding as of December 31, 2016 and 2015 were 22,417,679 and 22,096,756, respectively.  The increase in shares outstanding for the 2016 period is the result of Ascendant’s 1 percent stock dividend to shareholders on December 5, 2016.

Healthcare

The Company’s subsidiary, Dougherty’s Holding, Inc. (“DHI”), which owns and operates multiple Dougherty’s Pharmacies, reported EBITDA of $354,000 for the fourth quarter ended December 31, 2016, compared to $432,000 for the 2015 period. For the year ended December 31, 2016, Healthcare EBITDA was $1,260,000 compared to $1,370,000 in 2015.  

Healthcare revenues for the 2016 fourth quarter were $10,478,000 compared to $11,758,000 for the 2015 period.  For the year ended December 31, 2016, Healthcare revenues were $42,786,000 compared with $40,952,000 for the 2015 year.  2016 Healthcare revenues include a full year of results from both our McAlester and Springtown locations, acquired in the summer of 2015.

The decline in fourth quarter Healthcare revenues is primarily attributable to a decline in the average selling price of prescriptions due to increases in the generic dispensing rate and lower generic pricing in 2016 due to deflation in the generic pharmaceutical market. The independent pharmacy industry experienced sales declines in 2016 from this deflationary environment in retail pharmacy sales and our Company estimates sales declines in our industry of 5 to 8 percent in 2016. Dougherty’s experienced the same trend in its initial and acquisition stores.

Fourth quarter 2016 selling, general and administrative expenses (SG&A) for the Healthcare Division improved 19.6 percent to $2.3 million from $2.8 million in 2015. SG&A for the 2016 full year was $9.8 million compared to $9.9 million for 2015.  The reduction in SG&A is due to cost reduction initiatives implemented in the middle of 2016, including salary and expense reductions.

Other

The Company’s remaining investment in real estate reported EBITDA of zero for the fourth quarter ended December 31, 2016, compared to $32,000 in 2015 and EBITDA of $84,000 for the year ended December 31, 2016, compared to $88,000 in 2015.  As stated previously, the investment was reduced from $5.1 million to $1.3 million, which approximates the proceeds expected from the investment upon the completion of its sale in the first quarter of 2017.

The Company’s corporate overhead division reported negative EBITDA of ($171,000) for the fourth quarter of 2016 compared to ($165,000) in 2015 and negative EBITDA of ($658,000) for the year ended December 31, 2016 compared to ($695,000) in 2015. 

Management Comments

Jim Leslie, Chairman of Ascendant, stated, “We are pleased to report that our Board of Directors has voted on a number of initiatives that we believe will improve our communication with shareholders and enhance the valuation of the company over time.  (1) We plan to change our corporate name to Dougherty’s Pharmacy, Inc., pending approval from shareholders at our Annual Meeting on May 10, 2017. (2) We plan to resume filing with the Securities & Exchange Commission in the second half of 2017.  (3) In addition, we will begin hosting quarterly earnings conference calls, and expect to initiate this process with the filing of our second quarter 2017 financial results, which will be released on or about August 15^th.  (4) We also plan to uplist to the OTCQB Venture Market later this year.  We believe these initiatives will increase our transparency with investors and provide better trading conditions and liquidity for our stock.”  Leslie also stated, “We liquidated our largest non-pharmacy investment in the first quarter of 2017 which will provide approximately $1.3 million in cash to help support our core pharmacy initiatives and to cover extra public company expenses.”

Mark Heil, President and CFO, added, “2016 was a difficult year for the retail pharmacy industry, and Ascendant’s results certainly fell short of our expectations.  We have been focused on reducing expenses and finding ways to improve margins in order to restore the Company’s results to expected levels. We continue to identify areas in which we can enhance the efficiency of our operations and reduce expenses, and we believe we have pinpointed a number of cost-reduction opportunities that should benefit our results in 2017.  Once we feel our current healthcare operations are generating appropriate returns, we will resume our growth strategy of acquiring well-run, independent pharmacies in the Southwest to further enhance our market position.”

EBITDA is calculated as net income (loss) before deducting interest, taxes, depreciation and amortization and losses on asset impairments.  Although EBITDA is not a measure of actual cash flow because it does not consider changes in assets and liabilities that may impact cash balances, the Company’s management reviews these non-GAAP financial measures internally to evaluate the Company’s performance and manage the operations.  Additionally, the Company believes it is a useful metric to evaluate operating performance and has therefore included such measures in the reporting of operating results.

About Ascendant Solutions, Inc.

Ascendant Solutions, Inc. is a value-oriented investment firm focused on successfully acquiring, managing and growing community-based pharmacies in the Southwest Region. Ascendant currently has approximately $43 million in net operating loss carryforwards which can be used to shelter future income, thus enhancing free cash flow or debt service capabilities. Interested investors can access financials and stock trading information for Ascendant at OTCMarkets.com or at www.ascendantsolutions.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations, projections, estimates and assumptions. These forward-looking statements may be identified by words such as "expects," "believes," "anticipates" and similar expressions.  Forward-looking statements involve risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements.  The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

Contacts:		
Mark S. Heil
President and CFO	
972-250-0945

Geralyn DeBusk or Tom Carey
Halliburton Investor Relations
972-458-8000