Continucare Corporation Reports 116% Increase in Operating Profit for First Quarter of Fiscal 2010
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MIAMI--(Business Wire)--
Continucare Corporation (NYSE Amex: CNU) today reported financial results for
its first quarter of fiscal 2010. Financial highlights for the quarter and other
recent events include:
* Total revenue of $76.0 million, a 17% increase compared to $65.1 million for
the same period last year;
* Income from operations of $8.6 million, a 116% increase compared to $4.0
million for the same period last year;
* Net income of $5.3 million, or $0.09 per diluted share, as compared to $2.5
million, or $0.04 per diluted share, for the same period last year; and
* Expansion of service offerings through the launch of Seredor Corporation, a
new sleep diagnostic center subsidiary.
Continucare`s cash and cash equivalents increased to $22.8 million at September
30, 2009 from $13.9 million at June 30, 2009, while working capital increased to
$29.8 million at September 30, 2009 from $25.5 million at June 30, 2009. Total
liabilities declined to $13.6 million at September 30, 2009 compared to $14.1
million at June 30, 2009. Shareholders` equity was $116.9 million at September
30, 2009 compared to $111.2 million at June 30, 2009.
"We are extremely pleased with our first quarter results," said Richard C.
Pfenniger, Jr., Continucare`s Chairman and Chief Executive Officer. "Record
revenues, improved utilization outcomes and operating efficiencies resulted in a
113% increase in net income. During the quarter we also continued to strengthen
our financial position as evidenced by higher quarter-ending cash and working
capital balances. Also, during the quarter we added an important new dimension
to our business with the launch of Seredor Corporation and the acquisition of
our first sleep diagnostic centers."
About Seredor Corporation
Seredor is a wholly-owned subsidiary of Continucare that operates and manages
sleep diagnostic centers at 15 locations in Florida, South Carolina, North
Carolina, West Virginia, Virginia, Colorado and Ohio. The centers conduct sleep
studies to determine whether patients suffer from sleep disorders and, if so,
the severity of the condition. Seredor clinical staff is expertly trained in
sleep disorders and works in partnership with physicians, neurologists,
respiratory therapists, and other clinicians utilizing state-of-the-art
equipment to effectively diagnose and treat patients. The most common sleep
disorder, obstructive sleep apnea or OSA, is a serious health condition that
afflicts more than 18 million adults in the United States. For more information
please visit www.seredor.com.
About Continucare Corporation
Continucare provides primary care physician services on an outpatient basis
through a network of medical facilities and independent physician affiliates
(IPAs) in the State of Florida. Continucare has 18 medical offices equipped with
state-of-the-practice technology and staffed with experienced physicians and a
comprehensive support staff. In addition, Continucare provides health practice
management services to IPAs who practice primary care medicine in South Florida.
Continucare assists these physicians with medical utilization and pharmacy
management and specialist network development, freeing them to devote more time
to patient care. Also, through its subsidiary, Seredor Corporation, Continucare
operates 15 sleep diagnostic centers in seven 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; health care
reform initiatives, particularly changes to the Medicare system, could adversely
affect our operations; 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.
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
ASSETS September 30, 2009 June 30,
2009
Current assets:
Cash and cash equivalents $ 22,791,701 $ 13,895,823
Due from HMOs, net of a liability for incurred but not reported medical claims of approximately $24,957,000 and $23,719,000 at September 30, 2009 and June 30, 2009, respectively 11,663,865 17,323,599
Prepaid expenses and other current assets 1,197,263 812,970
Deferred income tax assets 142,432 141,420
Total current assets 35,795,261 32,173,812
Certificates of deposit, restricted 1,239,281 1,233,653
Property and equipment, net 11,545,216 10,489,383
Goodwill 73,761,077 73,204,582
Intangible assets, net of accumulated amortization of approximately $3,725,000 and $3,406,000 at September 30, 2009 and June 30, 2009, respectively 5,276,807 5,253,666
Deferred income tax assets 2,826,134 2,795,588
Other assets, net 133,049 152,702
Total assets $ 130,576,825 $ 125,303,386
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 520,184 $ 652,305
Accrued expenses and other current liabilities 2,911,128 4,455,675
Income taxes payable 2,588,198 1,575,511
Total current liabilities 6,019,510 6,683,491
Deferred income tax liabilities 6,475,710 6,435,732
Other liabilities 1,135,476 981,640
Total liabilities 13,630,696 14,100,863
Commitments and contingencies
Shareholders` equity:
Common stock, $0.0001 par value: 100,000,000 shares authorized; 59,471,049 shares issued and outstanding at September 30, 2009 and 59,391,049 shares issued and outstanding at June 30, 2009 5,947 5,939
Additional paid-in capital 105,645,778 105,210,519
Accumulated earnings 11,294,404 5,986,065
Total shareholders` equity 116,946,129 111,202,523
Total liabilities and shareholders` equity $ 130,576,825 $ 125,303,386
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
September 30,
2009 2008
Revenue $ 75,972,366 $ 65,064,634
Operating expenses:
Medical services:
Medical claims 52,624,059 47,317,293
Other direct costs 7,572,219 7,157,852
Total medical services 60,196,278 54,475,145
Administrative payroll and employee benefits 3,259,097 2,733,557
General and administrative 3,878,513 3,853,321
Total operating expenses 67,333,888 61,062,023
Income from operations 8,638,478 4,002,611
Other income (expense):
Interest income 17,510 76,103
Interest expense (3,370 ) (3,043 )
Income before income tax provision 8,652,618 4,075,671
Income tax provision 3,344,279 1,579,539
Net income $ 5,308,339 $ 2,496,132
Net income per common share:
Basic $ .09 $ .04
Diluted $ .09 $ .04
Weighted average common shares outstanding:
Basic 59,416,938 65,114,930
Diluted 61,075,996 66,253,565
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
September 30,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5,308,339 $ 2,496,132
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 620,104 542,177
Compensation expense related to issuance of stock options 296,895 298,137
Excess tax benefits related to exercise of stock options (83,172 ) -
Deferred tax expense 8,420 (29,371 )
Changes in operating assets and liabilities:
Due from HMOs, net 5,659,734 4,110,272
Prepaid expenses and other current assets 194,225 (517,828 )
Other assets, net 31,063 31,792
Accounts payable (132,121 ) 73,298
Accrued expenses and other liabilities (1,754,081 ) (1,846,996 )
Income taxes payable 1,095,859 (141,090 )
Net cash provided by operating activities 11,245,265 5,016,523
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of certificates of deposit (5,628 ) (7,156 )
Acquisition of Professional Sleep Diagnostics, Inc., net of cash acquired (1,348,614 ) -
Purchase of property and equipment (1,094,691 ) (635,817 )
Net cash used in investing activities (2,448,933 ) (642,973 )
CASH FLOWS FROM FINANCING ACTIVITIES
Principal repayments under capital lease obligations (38,826 ) (18,496 )
Proceeds from exercise of stock options 55,200 -
Excess tax benefits related to exercise of stock options 83,172 -
Repurchase of common stock - (3,759,486 )
Net cash provided by (used in) financing activities 99,546 (3,777,982 )
Net increase in cash and cash equivalents 8,895,878 595,568
Cash and cash equivalents at beginning of period 13,895,823 9,905,740
Cash and cash equivalents at end of period $ 22,791,701 $ 10,501,308
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment with proceeds of capital lease obligations $ - $ 36,711
Retirement of treasury stock $ - $ 3,116,187
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for taxes $ 2,240,000 $ 1,750,000
Cash paid for interest $ 3,370 $ 3,043
Continucare Corporation, Miami
Fernando L. Fernandez, Senior Vice President - Finance
305-500-2105
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