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| 8-K - CONTINUCARE CORPORATION 8-K - CONTINUCARE CORP | a6710301.htm |
Exhibit 99.01
Continucare Corporation Reports Increased Revenue and Operating Income for Third Quarter of Fiscal 2011
16th Consecutive Quarter of Year-Over-Year Improvement
MIAMI--(BUSINESS WIRE)--May 5, 2011--Continucare Corporation (NYSE: CNU) today reported record financial results for its third quarter of fiscal 2011. Financial highlights for the quarter include:
- Total revenue increased to $85.7 million, compared to $80.3 million for the same period last year;
- Income from operations increased to $10.3 million, compared to $9.7 million for the same period last year;
- Net income increased to $7.3 million, compared to $5.9 million for the same period last year; and
- Earnings per diluted share increased to $0.12, compared to $0.09 per diluted share for the same period last year.
For the nine-months ended March 31, 2011, total revenue increased to $244.9 million compared to $231.5 million for the same period last year. Income from operations during the nine-month period increased to $29.8 million compared to $27.0 million for the same period last year. Net income for the nine-month period increased to $19.2 million, or $0.31 per diluted share, compared to $16.5 million, or $0.27 per diluted share, for the same period last year.
Continucare’s cash and cash equivalents increased to $44.6 million at March 31, 2011 compared to $37.5 million at June 30, 2010, while working capital increased to $59.6 million at March 31, 2011 compared to $49.5 million at June 30, 2010. Total liabilities were $15.7 million at March 31, 2011 compared to $17.8 million at June 30, 2010. Shareholders’ equity was $156.8 million at March 31, 2011 compared to $136.0 million at June 30, 2010.
“Our track record of continued improvement is exemplified by our third quarter results which marked our 16th consecutive quarter of year-over-year improvement,” said Richard C. Pfenniger, Jr., Continucare Corporation’s Chairman and Chief Executive Officer. “During the quarter, we increased revenues, maintained strong operating margins and improved profitability. In addition, at quarter-end, our cash and working capital positions were at new record levels while our balance sheet remained virtually free of long-term debt.”
About Continucare Corporation
Continucare provides primary care physician services on an outpatient basis through a network of medical facilities. Continucare has 18 well appointed medical offices equipped with state-of-the-practice technology and staffed with experienced physicians and a comprehensive support staff. In addition, Continucare provides medical management services to independent primary physician affiliates in South Florida, assisting them with medical utilization, pharmacy management and specialist network development, thereby allowing them more time for patient care. Also, through its subsidiary, Seredor Corporation, Continucare operates or manages more than 70 sleep diagnostic centers in 15 states. For more information please visit www.continucare.com.
Except for historical matters contained herein, statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors and others are cautioned that forward-looking statements are subject to risks and uncertainties that may affect our business and prospects and cause our actual results to differ materially from those set forth in the forward-looking statements including the following: our operations are dependent on three health maintenance organizations; under our most important contracts we are responsible for the cost of medical services to our patients in return for a capitated fee; our revenues will be affected by the Medicare Risk Adjustment program; if we are unable to manage medical benefits expense effectively, our profitability will likely be reduced; a failure to estimate incurred but not reported medical benefits expense accurately will affect our profitability; we compete with many health care providers for patients and HMO affiliations; we may not be able to successfully recruit or retain existing relationships with qualified physicians and medical professionals; our business exposes us to the risk of medical malpractice lawsuits; we primarily operate in Florida; a significant portion of our voting power is concentrated; we are dependent on our executive officers and other key employees; we depend on the management information systems of our affiliated HMOs; we depend on our information processing systems; the volatility of our stock price; a failure to successfully implement our business strategy could materially and adversely affect our operations and growth opportunities; our intangible assets represent a substantial portion of our total assets; competition for acquisition targets and acquisition financing and other factors may impede our ability to acquire other businesses and may inhibit our growth; our acquisitions could result in integration difficulties, unexpected expenses, diversion of management’s attention and other negative consequences; recently enacted health care reform, including The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, could have a material adverse effect on our business; a decrease to our Medicare capitation payments may have a material adverse effect on our results of operations, financial position and cash flows; we are subject to government regulation; the health care industry is subject to continued scrutiny; our insurance coverage may not be adequate, and rising insurance premiums could negatively affect our profitability; deficit spending and economic downturns could negatively impact our results of operations; and many factors that increase health care costs are largely beyond our ability to control. These and other applicable risks, cautionary statements and factors that could cause actual results to differ from our forward-looking statements are included in our most recent annual report on Form 10-K and other filings with the SEC and we urge you to read those documents. We undertake no obligation to update or revise these forward-looking statements to reflect events or circumstances after the date hereof except as required by law.
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CONTINUCARE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
| ASSETS |
March 31,
2011 |
June 30,
2010 |
||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 44,623,706 | $ | 37,542,445 | ||
| Certificate of deposit |
- |
668,755 | ||||
| Due from HMOs, net of a liability for incurred but not reported medical claims expense of approximately $22,566,000 and $23,394,000 at March 31, 2011 and June 30, 2010, respectively |
18,152,979 |
18,920,388 |
||||
| Prepaid expenses and other current assets | 4,719,198 | 2,631,136 | ||||
| Deferred income tax assets | 226,420 | 140,057 | ||||
| Total current assets | 67,722,303 | 59,902,781 | ||||
| Property and equipment, net | 15,172,276 | 12,728,184 | ||||
| Goodwill | 79,579,182 | 73,994,444 | ||||
| Intangible assets, net of accumulated amortization of approximately $6,084,000 and $4,705,000 at March 31, 2011 and June 30, 2010, respectively |
6,826,196 |
4,296,507 | ||||
| Deferred income tax assets | 3,102,460 | 2,830,929 | ||||
| Other assets, net | 130,490 | 112,747 | ||||
| Total assets | $ | 172,532,907 | $ | 153,865,592 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,123,114 | $ | 810,376 | ||
| Accrued expenses and other current liabilities | 6,601,118 | 9,041,162 | ||||
| Income taxes payable | 409,383 | 590,673 | ||||
| Total current liabilities | 8,133,615 | 10,442,211 | ||||
| Deferred income tax liabilities | 7,517,372 | 7,145,507 | ||||
| Other liabilities | 71,872 | 249,248 | ||||
| Total liabilities | 15,722,859 | 17,836,966 | ||||
| Commitments and contingencies | ||||||
| Shareholders’ equity: | ||||||
| Common stock, $0.0001 par value: 100,000,000 shares authorized; 60,619,516 shares issued and outstanding at March 31, 2011 and 60,504,012 shares issued and outstanding at June 30, 2010 |
6,062 |
6,050 |
||||
| Additional paid-in capital | 109,393,341 | 107,860,204 | ||||
| Accumulated earnings | 47,410,645 | 28,162,372 | ||||
| Total shareholders’ equity | 156,810,048 | 136,028,626 | ||||
| Total liabilities and shareholders’ equity | $ | 172,532,907 | $ | 153,865,592 | ||
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CONTINUCARE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
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Three Months Ended
March 31, |
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| 2011 | 2010 | ||||||
| Revenue | $ | 85,651,548 | $ | 80,274,545 | |||
| Operating expenses: | |||||||
| Medical services: | |||||||
| Medical claims | 54,827,436 | 52,081,382 | |||||
| Other direct costs | 10,215,020 | 8,052,068 | |||||
| Total medical services | 65,042,456 | 60,133,450 | |||||
| Administrative payroll and employee benefits | 4,720,727 | 5,208,903 | |||||
| General and administrative | 5,632,261 | 5,194,384 | |||||
| Total operating expenses | 75,395,444 | 70,536,737 | |||||
| Income from operations | 10,256,104 | 9,737,808 | |||||
| Interest income (expense), net | 160,813 | (91,105 | ) | ||||
| Income before income tax provision | 10,416,917 | 9,646,703 | |||||
| Income tax provision | 3,159,571 | 3,746,092 | |||||
| Net income | $ | 7,257,346 | $ | 5,900,611 | |||
| Net income per common share: | |||||||
| Basic | $ | .12 | $ | .10 | |||
| Diluted | $ | .12 | $ | .09 | |||
| Weighted average common shares outstanding: | |||||||
| Basic | 60,588,236 | 59,984,393 | |||||
| Diluted | 62,591,863 | 62,186,634 | |||||
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CONTINUCARE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
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Nine Months Ended
March 31, |
|||||||
| 2011 | 2010 | ||||||
| Revenue | $ | 244,908,392 | $ | 231,503,010 | |||
| Operating expenses: | |||||||
| Medical services: | |||||||
| Medical claims | 157,891,846 | 155,062,089 | |||||
| Other direct costs | 28,826,420 | 23,425,011 | |||||
| Total medical services | 186,718,266 | 178,487,100 | |||||
| Administrative payroll and employee benefits | 12,055,232 | 12,260,742 | |||||
| General and administrative | 16,368,515 | 13,771,529 | |||||
| Total operating expenses | 215,142,013 | 204,519,371 | |||||
| Income from operations | 29,766,379 | 26,983,639 | |||||
| Interest income (expense), net | 190,235 | (64,428 | ) | ||||
| Income before income tax provision | 29,956,614 | 26,919,211 | |||||
| Income tax provision | 10,708,341 | 10,421,581 | |||||
| Net income | $ | 19,248,273 | $ | 16,497,630 | |||
| Net income per common share: | |||||||
| Basic | $ | .32 | $ | .28 | |||
| Diluted | $ | .31 | $ | .27 | |||
| Weighted average common shares outstanding: | |||||||
| Basic | 60,568,574 | 59,657,867 | |||||
| Diluted | 62,371,087 | 61,531,035 | |||||
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CONTINUCARE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
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Nine Months Ended
March 31, |
||||||||
| 2011 | 2010 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 19,248,273 | $ | 16,497,630 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 2,979,892 | 2,114,468 | ||||||
| Change in liability for unrecognized tax benefit | (899,357 | ) | - | |||||
| Provision for bad debt | 241,199 | - | ||||||
| Loss on disposal of fixed assets | 11,163 | 10,946 | ||||||
| Loss on impairment of fixed assets | - | 96,000 | ||||||
| Compensation expense related to issuance of stock options | 1,454,589 | 1,125,443 | ||||||
| Excess tax benefits related to exercise of stock options | (104,888 | ) | (336,288 | ) | ||||
| Deferred income tax expense | 13,971 | 206,238 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Due from HMOs, net | 767,409 | 848,984 | ||||||
| Prepaid expenses and other current assets | (964,648 | ) | (253,450 | ) | ||||
| Other assets, net | (277 | ) | 79,498 | |||||
| Accounts payable | 45,017 | 205,799 | ||||||
| Accrued expenses and other current liabilities | (3,527,410 | ) | 1,209,457 | |||||
| Income taxes payable | 966,125 | (154,657 | ) | |||||
| Net cash provided by operating activities | 20,231,058 | 21,650,068 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from maturity of certificates of deposit | 668,755 | 575,603 | ||||||
| Purchase of certificates of deposit | - | (8,368 | ) | |||||
| Acquisition of sleep diagnostic centers, net of cash acquired | (10,804,712 | ) | (1,592,346 | ) | ||||
| Purchase of property and equipment | (2,940,978 | ) | (2,672,866 | ) | ||||
| Net cash used in investing activities | (13,076,935 | ) | (3,697,977 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Principal repayments under capital lease obligations | (151,422 | ) | (250,722 | ) | ||||
| Proceeds from exercise of stock options | 340,163 | 844,913 | ||||||
| Shares withheld in connection with exercise of stock options | (366,491 | ) | - | |||||
| Excess tax benefits related to exercise of stock options | 104,888 | 336,288 | ||||||
| Net cash (used in) provided by financing activities | (72,862 | ) | 930,479 | |||||
| Net increase in cash and cash equivalents | 7,081,261 | 18,882,570 | ||||||
| Cash and cash equivalents at beginning of period | 37,542,445 | 13,895,823 | ||||||
| Cash and cash equivalents at end of period | $ | 44,623,706 | $ | 32,778,393 | ||||
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
|
Purchase of property and equipment with proceeds of capital lease obligations |
$ | - | $ | 222,172 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for taxes | $ | 10,627,602 | $ | 10,370,000 | ||||
| Cash paid for interest | $ | 15,213 | $ | 14,120 | ||||
CONTACT:
Continucare Corporation
Fernando L. Fernandez,
305-500-2105
Senior Vice President – Finance