HealthTronics, Inc. Announces Third Quarter Results, Positive Contribution From Endocare;...

HealthTronics, Inc. Announces Third Quarter Results, Positive Contribution From
Endocare; Richard Rusk Appointed Chief Financial Officer

AUSTIN, Texas, Nov. 5, 2009 (GLOBE NEWSWIRE) -- HealthTronics, Inc.
(Nasdaq:HTRN), a leading provider of Urology services and products, today
announced its financial results for the quarter ended September 30, 2009.

Third Quarter 2009

Revenue from continuing operations for the third quarter of 2009 totaled $47.3
million, up from $44.8 million in the third quarter of 2008. The Company's net
loss for the third quarter of 2009, in accordance with generally accepted
accounting principles ("GAAP"), totaled $2.3 million or $0.06 per diluted share.
The Company's non-GAAP net income, which excludes stock based compensation and
costs related to the Endocare transaction, totaled $0.05 per share in the
quarter. This compares to non-GAAP net income of $0.04 per share in the third
quarter of 2008.

The Company's Adjusted EBITDA from continuing operations for the third quarter
of 2009 was $7.1 million, which compares to $6.2 million in the third quarter of
2008. In addition, After Tax Cash Flow (cash flow from operations less
distributions to non-controlling interests) excluding acquisition related costs
was $4.1 million.

Endocare Results

After excluding one-time transaction costs, the acquisition of Endocare
contributed $0.9 million in EBITDA in the third quarter. Revenue contributed by
Endocare after intercompany eliminations totaled $2.7 million and, before
eliminating intercompany sales, totaled $4.6 million for the quarter.

Executive Commentary

James Whittenburg, President and Chief Executive Officer, commented, "Our
diversified business is performing well, thanks in large part to our recent
acquisitions. The integration has been a smooth process resulting in business
synergies far ahead of our preliminary projections. The Endocare and laboratory
businesses, in particular, are both creating additional financial value as we
introduce innovative technologies and services throughout our platform and
physician partnerships."

Appointment of Richard Rusk to Chief Financial Officer

"I am also very pleased to announce that today the Board of Directors has
appointed Richard Rusk Chief Financial Officer. Richard joined HealthTronics in
August 2000 as Corporate Controller and has been serving as Interim Chief
Financial Officer since September 2008. The Board and I are fortunate to have
Richard assume the full duties of CFO," Mr. James Whittenburg stated.

R. Steven Hicks, Chairman of the Board, added, "We expect Richard to do
exceptionally well as Chief Financial Officer. Richard's understanding of
HealthTronics is very deep, and we believe his skills and leadership will
continue to create additional value for our shareholders."

Conference Call and Webcast: Management of HealthTronics will host a conference
call the afternoon of Thursday, November 5, 2009 at 5:00 pm EST. Interested
parties may participate in the call by dialing 1-888-437-9364 (International
callers dial 1-719-457-2647) and ask for the "HealthTronics Q3 2009 Earnings
Call" (confirmation code: 2141758). Please call in 10 minutes before the call is
scheduled to begin. The conference call will also be web cast live via the
Investors section of HealthTronics' web site at www.healthtronics.com. To listen
to the live web cast, go to the web site at least 10 minutes early to register,
download and install any necessary audio software. If you are unable to listen
live, the conference call will be archived on the HealthTronics web site.

About HealthTronics, Inc.: HealthTronics is a premier urology company providing
an exclusive suite of healthcare services and technology, including urologist
partnership opportunities, surgical and capital equipment, maintenance services
offerings, and anatomical pathology services. For more information, visit
www.healthtronics.com.

The HealthTronics, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5894

HealthTronics' use of Non GAAP Financial Measures:

This press release includes financial measures for net income (loss), net income
(loss) from continuing operations, and related per share amounts that exclude
certain charges and therefore have not been calculated in accordance with U.S.
generally accepted accounting principles (GAAP). These non-GAAP financial
measures may be different from non-GAAP financial measures used by other
companies. Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in accordance
with GAAP. By excluding certain charges, these non-GAAP financial measures
facilitate management's internal comparisons to the Company's historical
operating results, to competitors' operating results, and to estimates made by
securities analysts. Management uses these non-GAAP financial measures
internally to evaluate its performance. The Company believes these non-GAAP
financial measures are useful to decision-making. In addition, the Company has
historically reported similar non-GAAP financial measures to its investors and
believes that the inclusion of comparative numbers provides consistency in its
financial reporting. Investors are encouraged to review the reconciliation of
the non-GAAP financial measures used in this press release to their most
directly comparable GAAP financial measure as provided in the financial
statements attached to this press release.

After Tax Cash Flow: HealthTronics has presented After Tax Cash Flow, a non-GAAP
financial measure. HealthTronics believes its presentation of After Tax Cash
Flow is an important supplemental measure of its operating performance to its
investors.

After Tax Cash Flow is intended to give investors a clear picture of the cash
being generated by HealthTronics at the corporate level. After Tax Cash Flow is
calculated using Net Cash Provided by Operating Activities and subtracting
Distributions to Non-controlling Interests. HealthTronics believes that After
Tax Cash Flow highlights the value of the Company's tax assets as well as other
benefits beyond those reflected in the Company's GAAP Net Income. For example,
After Tax Cash Flow includes the impact of changes in working capital and
thereby provides better insight into the Company's ability to manage payables,
receivables and inventory.

To convert from After Tax Cash Flow to what is typically referred to as Free
Cash Flow, one would subtract capital expenditures made at the corporate level.
It is important to note that the "Purchases of equipment and leasehold
improvements" reflected on the Company's cash flow statements includes capital
expenditures at both the corporate and partnership level and a significant
portion of expenditures are made in equipment at the partnerships. Thus, a break
out of capital expenditures at the corporate and physician partnership level is
included herein.

Prior to 2009, distributions to our partners were made on an irregular quarterly
basis that was based on the tax calendar. We now make distributions on a monthly
basis. At the time we made the switch, we anticipated the investor community
would benefit from the increased transparency into operating cash flows. Thus,
by highlighting After Tax Cash Flow in our quarterly releases, HealthTronics
will be leveraging this increased transparency. However, it is important to note
that given the irregular distribution schedule in prior years, HealthTronics
will not be able to make year-over-year comparisons until the second quarter of
2010.

EBITDA and Adjusted EBITDA: HealthTronics has presented EBITDA and Adjusted
EBITDA amounts, which are non-GAAP financial measures. In the financial
statements attached to this press release, HealthTronics has reconciled such
amounts to their most directly comparable financial measure calculated in
accordance with GAAP, which is HealthTronics' net income. HealthTronics believes
that its presentations of EBITDA and Adjusted EBITDA are useful supplemental
measures of operating performance to its investors.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a
commonly used measure of performance which HealthTronics believes, when
considered with measures calculated in accordance with GAAP, gives investors a
more complete understanding of HealthTronics' operating results before the
impact of investing and financing transactions and income taxes. HealthTronics
does not subtract minority interest expense when calculating EBITDA; however,
HealthTronics does adjust for minority interest expense and refers to this
measure as "Adjusted EBITDA." "Adjusted EBITDA" also excludes stock-based
compensation expense. Minority interest is a GAAP measure intended to reflect
our partner's share of our consolidated net income and not our partner's share
of our consolidated EBITDA. For example, calculation of minority interest
expense does not include adjustments for depreciation, amortization, taxes or
interest. As a result, our partners' share of consolidated EBITDA may not, in a
given reporting period, equal the deduction for minority interest expense used
in arriving at Adjusted EBITDA. HealthTronics has historically reported Adjusted
EBITDA to its investors and believes that the continued inclusion of Adjusted
EBITDA provides consistency in its financial reporting. Adjusted EBITDA is used
in management's internal evaluation of total company performance. Adjusted
EBITDA is also used by HealthTronics management in the annual budgeting process.
HealthTronics believes these measures continue to be used by investors and
creditors in their assessment of HealthTronics' operational performance and the
valuation of the company.

EBITDA and Adjusted EBITDA are used in addition to and in conjunction with
results presented in accordance with GAAP. EBITDA and Adjusted EBITDA should not
be considered as an alternative to net income, operating income, a liquidity
measure, or any other operating performance measure prescribed by GAAP, nor
should these measures be relied upon to the exclusion of GAAP financial
measures. EBITDA and Adjusted EBITDA reflect additional ways of viewing
HealthTronics' operations that HealthTronics believes, when viewed with its GAAP
results and the reconciliations to the corresponding GAAP financial measures,
provide a more complete understanding of factors and trends affecting
HealthTronics' business than could be obtained absent this disclosure.

Cautionary Language: Statements by the Company's management made in this press
release that are not strictly historical, including statements regarding plans,
objective and future financial performance, are "forward-looking" statements
that are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although HealthTronics believes that the
expectations reflected in such forward-looking statements are reasonable, no
assurance can be given that the expectations will prove to be correct. Factors
that could cause actual results to differ materially from HealthTronics'
expectations include, among others, the existence of demand for and acceptance
of HealthTronics' services, regulatory approvals, economic conditions, the
impact of competition and pricing, the availability and terms of financing and
other factors described from time to time in HealthTronics' periodic filings
with the Securities and Exchange Commission.

HEALTHTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

($ in thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------

Revenues $ 47,283 $ 44,771 $135,051 $121,305
Cost of revenues (exclusive of
depreciation and amortization
shown separately below) 22,452 19,954 65,015 54,257
--------- --------- --------- ---------
Gross profit 24,831 24,817 70,036 67,048

Operating expenses

Selling, general and
administrative 7,290 4,600 16,706 14,186
Depreciation and amortization 3,737 3,073 10,613 8,770
--------- --------- --------- ---------
Total operating expenses 11,027 7,673 27,319 22,956
--------- --------- --------- ---------

Operating income 13,804 17,144 42,717 44,092

Other income (expenses):
Interest and dividends 13 806 95 1,098
Interest expense (299) (182) (887) (591)
--------- --------- --------- ---------
(286) 624 (792) 507
--------- --------- --------- ---------
Income from operations before
provision for income taxes 13,518 17,768 41,925 44,599

Provision for income taxes 1,348 889 1,967 1,730
--------- --------- --------- ---------

Consolidated net income 12,170 16,879 39,958 42,869

Less: Net income attributable
to noncontrolling interest (14,472) (15,552) (41,541) (40,380)
--------- --------- --------- ---------

Net income (loss) attributable
to HealthTronics, Inc. $ (2,302) $ 1,327 $ (1,583) $ 2,489
========= ========= ========= =========

Basic earnings per share
attributable to
HealthTronics, Inc.:

Net income (loss)
attributable to
HealthTronics, Inc. $ (0.06) $ 0.04 $ (0.04) $ 0.07
========= ========= ========= =========

Weighted average shares
outstanding 41,043 37,503 37,666 36,666
========= ========= ========= =========

Diluted earnings per share
attributable to
HealthTronics, Inc.:

Net income (loss)
attributable to
HealthTronics, Inc. $ (0.06) $ 0.04 $ (0.04) $ 0.07
========= ========= ========= =========

Weighted average shares
outstanding 41,043 37,604 37,666 36,734
========= ========= ========= =========
HealthTronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

September 30, December 31,
($ in thousands) 2009 2008
------------- -------------

ASSETS

Total current assets $ 60,423 $ 63,689

Property and equipment, net 30,952 32,769

Goodwill 103,000 93,620

Other assets 57,290 44,308
------------- -------------

$ 251,665 $ 234,386
============= =============

LIABILITIES

Total current liabilities $ 65,628(*) $ 18,274

Long-term debt, net of current
portion 2,069 43,897

Other long-term liabilities 8,283 5,120
------------- -------------

Total liabilities 75,980 67,291

Total HealthTronics, Inc.
shareholders' equity 132,310 119,372

Noncontrolling interest 43,375 47,723
------------- -------------

$ 251,665 $ 234,386
============= =============
(*) Includes $44 million outstanding on our credit facility due in
March 2010.
HealthTronics, Inc. and Subsidiaries
Supplemental Financial Information
Continuing Operations
For the Periods Ended September 30, 2009 and 2008
(Unaudited)

($ in thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------

Summary of results from
operations

Revenues $ 47,283 $ 44,771 $135,051 $121,305

EBITDA(a) $ 21,555 $ 21,782 $ 59,625 $ 56,590

Adjusted EBITDA(a) $ 7,083 $ 6,230 $ 18,084 $ 16,210

Net income (loss) $ (2,302) $ 1,327 $ (1,583) $ 2,489

EPS $ (0.06) $ 0.04 $ (0.04) $ 0.07

Number of shares 41,043 $ 37,604 37,666 36,734

Other information:

After Tax Cash Flow(a) $ 4,089 (b) (b) (b)

Net draws (payments) on
senior credit facility $ 9,000 $ 6,000 $ 3,000 $ 6,000

Net debt $ 37,873 $ (6,322) $ 37,873 $ (6,322)

Capital expenditures:

Corporate level $ 568 $ 2,053 $ 1,687 $ 5,900
Partnership level 718 1,094 4,025 2,862
--------- --------- --------- ---------
Total $ 1,286 $ 3,147 $ 5,712 $ 8,762
========= ========= ========= =========
(a) See accompanying reconciliation of EBITDA, Adjusted EBITDA, and
After Tax Cash Flow.

(b) See accompanying discussion of After Tax Cash Flow.
HealthTronics, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Continuing Operations
For the Periods Ended September 30, 2009 and 2008
(Unaudited)

(In thousands)

ADJUSTED EBITDA

Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
Consolidated 2009 2008 2009 2008
--------- --------- --------- ---------

Income (loss) from continuing
operations $ (2,302) $ 1,327 $ (1,583) $ 2,489

Add Back (deduct):

Provision for income taxes 1,348 889 1,967 1,730
Interest expense 299 182 887 591
Depreciation and
amortization 3,737 3,073 10,613 8,770
Restructuring costs 3,196 198 3,886 160
Sharebased compensation
costs 805 561 2,314 2,470
--------- --------- --------- ---------

Adjusted EBITDA 7,083 6,230 18,084 16,210

Add Back:

Noncontrolling interest
expense 14,472 15,552 41,541 40,380
--------- --------- --------- ---------

EBITDA $ 21,555 $ 21,782 $ 59,625 $ 56,590
========= ========= ========= =========
AFTER TAX CASH FLOW

Three Months Ended
September 30, 2009
------------------

Cash provided by operating activities $ 9,884

Add Back (deduct):

Cash paid for acquisition related costs 9,232
Distributions to noncontrolling interests (15,027)
------------------

After Tax Cash Flow $ 4,089
==================
NON GAAP NET INCOME

Three Months Ended
September 30,
----------------------
2009 2008
--------- ---------

Income (loss) from continuing operations $ (2,302) $ 1,327

Add Back (deduct):

Provision for income taxes 1,348 889
Restructuring costs 3,196 198
Sharebased compensation costs 805 561
IRS interest income -- (700)
--------- ---------
3,047 2,275
Provision for income taxes at a
normalized rate of 38.5% (1,173) (876)
--------- ---------

Non - GAAP net income $ 1,874 $ 1,399
========= =========

Non - GAAP net income per share $ 0.05 $ 0.04
========= =========
EBITDA - Endocare

Three Months Ended
September 30, 2009
------------------

Loss from continuing operations - Endocare $ (1,985)

Add Back (deduct):

Depreciation and amortization - Endocare 312
Restructuring costs - Endocare 2,598
------------------

EBITDA - Endocare $ 925
==================
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CONTACT: HealthTronics, Inc.
Richard Rusk, Chief Financial Officer
(512) 314-4508
www.healthtronics.com