Clear Choice Health Plans Reports Financial Results for 2009 First Quarter

BEND, Ore.--(Business Wire)--
Clear Choice Health Plans, Inc. (OTCBB:CCHN) today reported financial results
for the first quarter ended March 31, 2009.

Revenue for the 2009 first quarter rose 9.3 percent to $57.5 million, including
approximately $1.5 million in revenue from the company`s recently acquired
Trusteed Plans Service Corporation ("TPSC"). First quarter revenue totaled $52.6
million a year ago. Clear Choice Health Plans` ("Clear Choice") revenue
increased 6.5% or $3.4 million quarter over quarter, excluding TPSC revenue. The
company reported net income of $348,000, equal to $0.20 per share, for the 2009
first quarter, versus $845,000, or $0.46 per share, last year. Net income was
impacted by increases in interest expense, depreciation and amortization
compared with the prior year quarter. Clear Choice posted a loss from operations
of $9,000 for the first quarter of 2009, compared with a loss from operations of
$8,000 for the first quarter of 2008. Earnings before taxes for the 2009 first
quarter amounted to $583,000, versus $1.4 million a year ago. Results for 2009
included a one-time $1 million settlement Clear Choice received in connection
with a lawsuit it filed against the State of Oregon in 2003.

"We are pleased with our financial performance amid a challenging economic
environment," said CEO and President Patricia Gibford. "The addition of TPSC has
enhanced our operations and we believe will provide additional diversification
and financial strength to our Company.

"Clear Choice remains financially solid and competitively positioned with a
strong balance sheet, significant capital reserves and a stable, professionally
managed investment portfolio. We believe this strength will continue to benefit
our Company as the external operating environment changes, both economically and
at state and federal government levels," Gibford said.

The medical expense ratio for the 2009 first quarter declined slightly to 88.9%
from 89.0% in last year`s first quarter.

"Historically, the company experiences higher medical costs and utilization in
the first quarter. However, we continue to manage and invest in our medical
management programs that we believe will benefit our members and company,"
Gibford added.

Administrative expenses in the 2009 first quarter were $7.8 million, including
TPSC administrative expenses of $1.4 million, compared with $5.9 million in the
2008 first quarter. Administrative expenses were 13.6% of total revenue in the
2009 first quarter, versus 11.3% in the 2008 first quarter. The company noted
that third party administrators (TPSC) generally carry higher administrative
expenses when compared with total revenue. Excluding TPSC, administrative
expenses were 11.5% of total revenue in the first quarter 2009.

Investment income for the first quarter of 2009 totaled $472,000, compared with
$1.6 million in the first quarter of 2008, which included a one-time gain of
approximately $784,000 as a result of the rebalancing of the company`s
investment portfolio. Total investments return for the first quarter was a
negative 1.04% or a loss of approximately $900,000, compared with a negative
1.79% or a loss of $2.4 million in the prior year quarter.

Balance Sheet Review

Total assets at March 31, 2009 had grown to $110.9 million from $107.6 million
at December 31, 2008. Stockholders` equity at the close of the 2009 first
quarter was $49.2 million, versus $49.3 million at the 2008 year end. Cash and
cash equivalents were sharply higher, advancing to $16.8 million at March 31,
2009 from $8.6 million at December 31, 2008. The increase principally reflects
collections on provider receivables.

At March 31, 2008, total debt was down slightly to $13.8 million from $13.9
million at year end and consisted primarily of long-term mortgage debt
associated with the company`s headquarters building. Property, plant and
equipment decreased to $22.1 million at the close of the 2009 first quarter from
$22.5 million at December 31 2008, due principally to normal operating
depreciation.

About Clear Choice Health Plans

Clear Choice Health Plans, Inc. offers affordable health plans to meet the needs
of employers, providers and consumers. The company provides health insurance,
including Medicare Advantage plans, commercial plans, individual plans and
administrative services to individuals and businesses throughout the West. The
company also offers life, disability, dental, vision and voluntary benefits
programs, as well as employee benefit services to self-funded employers,
associations, Taft-Hartley Trusts, and Chamber of Commerce plans. Clear Choice
is dedicated to the development of community-based employee benefits programs,
health insurance and ancillary plans. For information call 888-863-3637 or visit
www.ClearChoiceHP.com.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this press release are forward-looking in nature
and involve a number of risks and uncertainties. Such forward-looking
statements, including, but not limited to, enhanced operations and financial
strength from the addition of TPSC, benefiting from a strong balance sheet,
significant capital reserves, a stable investment portfolio, as well as managing
and investing in medical management programs that benefit members and the
company, are within the meaning of that term in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as
amended. The words "believe," "estimate," "expect," "intend," "anticipate,"
"plan," "appears," "will," "anticipates``, and similar expressions and
variations thereof identify certain of such forward-looking statements, which
speak only as of the dates on which they were made. The company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise. Readers are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those indicated in the forward-looking statements as a
result of various factors. Readers are cautioned not to place undue reliance on
these forward-looking statements.

Clear Choice Health Plans, Inc.
Condensed Consolidated Income Statement
Quarter Ended
(Dollars in thousands)
(Unaudited) 03/31/09 03/31/08

Premium Revenue $ 55,955 $ 52,456

Other Revenues 1,556 151

Total Revenue 57,511 52,607

Medical Expenses (49,720 ) (46,674 )
Medical Loss Ratio (88.9% ) (89.0% )

Administrative Expenses (7,800 ) (5,941 )
Administrative Expense Ratio (13.6% ) (11.3% )

Loss from Operations (9 ) (8 )

Investment Income 472 1,603
Interest Expense (317 ) 0
Depreciation / Amortization (563 ) (183 )
Settlement Income 1,000 0

Earnings Before Taxes 583 1,412
Income Taxes (235 ) (567 )

Net Income $ 348 $ 845

Basic Earnings per Share $ 0.20 $ 0.46

Weighted Average Shares Outstanding
Basic 1,701,048 1,854,338

Clear Choice Health Plans, Inc.
Condensed Consolidated Balance Sheet
03/31/09 12/31/08
(Dollars in thousands)
(Unaudited)

Assets
Current assets:
Cash & cash equivalents $ 16,763 $ 8,569
Trust funds 3,093 1,988
Investments - Current 7,470 5,661
Accounts and other receivables 16,280 23,077
Other assets 716 405
Deferred income taxes, net 1,098 998
Total current assets 45,420 40,698

Investments, net of current portion 34,635 35,576
Property and equipment, net 22,090 22,524
Restricted security 4,217 4,210
Goodwill & Intangible assets, net 4,500 4,562

Total assets $ 110,862 $ 107,570

Liabilities

Claims and withhold payable $ 35,026 $ 32,038
Accounts payable and accrued liabilities 7,019 8,524
Premiums received in advance 2,430 1,319
Collections for others and reserves 3,123 1,988
Current portion of long-term debt 387 381
Total current liabilities 47,985 44,250

Long-term debt 13,391 13,498
Other long-term liabilities
Deferred tax liability, net 277 543

Total liabilities 61,653 58,291

Equity

Stock 10,712 10,584
Retained earnings and accumulated other 38,497 38,695

Total Stockholders` Equity 49,209 49,279

Total Liabilities and Equity $ 110,862 $ 107,570

Clear Choice Health Plans
Gunnar Hansen, CFO
541-330-8100
ghansen@clearchoicehp.com
or
PondelWilkinson Inc.
Evan Pondel/Roger Pondel
310-279-5980
epondel@pondel.com

Copyright Business Wire 2009