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PURCHASE, N.Y.--(Business Wire)--
IntegraMed America, Inc. (NASDAQ: INMD):
Conference Call: Today, Thursday, November 5, 2009 at 10:00 a.m. EST
Dial-in Numbers: 866-395-2657 or 706-902-0717 (international)
Webcast / Replay URL: www.integramed.com or www.earnings.com
Phone Replay: 800-642-1687 or 706-645-9291 through November 6
Conference ID#: 37103590
IntegraMed America, Inc. (NASDAQ: INMD), the nation`s leading manager of
specialty outpatient healthcare facilities in the emerging, technology-focused
medical niches of fertility and vein care, today reported improved overall
operating results for the third quarter and nine months ended September 30,
2009. Please note that results for the 2008 periods have been restated to
reflect a change in revenue recognition methodology for a portion of the
deferred revenue within the Company`s Consumer Services Division. The change did
not impact 2009 results.
Summary Financial Results
(in thousands, except per share data)
Three Three Nine Nine
Months Months Months Months
Ended Ended % Ended Ended %
9/30/09 9/30/08(1) Change 9/30/09 9/30/08(1) Change
Revenue:
Fertility Centers $35,964 $36,505 -1% $109,538 $104,302 +5%
Consumer Services 5,013 5,364 -7% 15,242 14,367 +6%
Vein Clinics 12,621 10,360 +22% 37,288 29,264 +27%
Total Revenue $53,598 $52,229 +3% $162,068 $147,933 +10%
Contribution:
Fertility Centers 2,979 2,743 +9% 8,678 7,617 +14%
Consumer Services 1,068 1,352 -21% 3,741 4,034 -7%
Vein Clinics 995 892 +12% 3,031 1,927 +57%
Total contribution $ 5,042 $4,987 +1% $15,450 $13,578 +14%
G&A Costs $ 2,764 $2,853 -3% $ 9,333 $ 7,951 +17%
Net Interest expense 259 308 -16% 682 884 -23%
Income before Inc Taxes 2,019 1,826 +11% 5,435 4,743 +15%
Income Taxes 791 727 +9% 2,173 1,909 +14%
Net income $ 1,228 $1,099 +12% $ 3,262 $ 2,834 +15%
EPS $0.14 $0.13 +8% $0.37 $0.33 +12%
Diluted shares 8,839 8,714 +1% 8,833 8,685 +2%
(1) As reported on a Form 8-K filed November 3, 2009, IntegraMed`s 2008 results have been restated to reflect an accounting methodology change implemented with respect to the timing of revenue recognition for a portion of Attain IVF Program deferred revenues within the Consumer Services Division.
IntegraMed CEO Jay Higham, commented, "On a company-wide basis, we were able to
achieve a modest improvement in total revenue during the third quarter, and our
operating discipline enabled the Company to deliver an even greater percentage
improvement in net income and EPS. Challenges that began to emerge in the second
quarter in the fertility marketplace were offset by a strong performance in our
Vein Clinics business, validating our strategy to diversify into this specialty
health care niche in 2007.
"New patient visits at our Fertility Centers increased by 7%, and by 37% at our
Vein Clinics, as compared to last year`s third quarter. Applications for our
Attain IVF programs also increased, by 2%, as compared to last year, and by 6%
versus Q2 2009.
"The effects of the lingering recession and a tight consumer credit market
played a more significant role during Q3 2009. We first saw this issue arise
toward the end of the second quarter when Attain IVF Program enrollments trailed
those of the prior year`s period, and those lower enrollments translated into
lower Q3 2009 revenues. The tight credit environment also impacted the revenue
generating capabilities at our Fertility Centers, as patients were increasingly
challenged in meeting the high costs of IVF treatment. For patients without
insurance coverage, financing represents an important source of funds for
fertility treatments. The limited availability of financing at reasonable rates
caused some patients to defer IVF treatment as was reflected in a modest decline
in the number of completed IVF cycles, despite a rise in new patient visits.
"Although we expect the consumer to face continuing economic uncertainties into
2010, we believe IntegraMed has the right leadership team and staff, the right
strategies in place and a value proposition that resonates particularly well
within the healthcare field at this time. Our performance continues to outstrip
that of our competitors, a dynamic we believe offers a unique opportunity to
expand our Fertility Centers business via new or expanded contracts with leading
fertility practices across the country."
John Hlywak, CFO of IntegraMed, added, "Our financial and operational focus
enabled IntegraMed to once again deliver solid operational performance despite
the top-line impact of lingering consumer economic headwinds. Managing operating
expenses in this environment remains a central focus of everyone at IntegraMed.
As we work to drive margins at the operating divisions, a similar focus is
occurring at the corporate level where we reduced Q3 2009 G&A to just 55% of
total contribution, compared to 57% in the third quarter of 2008."
Fertility Centers
Q3 2009 Q3 2008 Change % Change
Revenue: $36.0M $36.5M -0.5M -1%
Operating Income: $3.0M $2.7M +$0.3M +9%
New Patient Visits: 7,063 6,602 +461 +7%
IVF Cycles: 3,424 3,566 -142 -4%
Fertility Centers revenue declined on a year-over-year basis due to the impact
of the previously reported loss of a third-party payer contract at one of our
larger fertility centers at the beginning of the year. That contract loss
amounted to approximately $2.0 million in lost revenue. Despite this factor,
IntegraMed was able to achieve a 9% improvement in Q3 2009 divisional operating
income. The improvement reflected an increase in operating margin to 8.3%,
compared to 7.5% in the same period of 2008.
IntegraMed is also noting a shift in case mix, with a slightly lower overall
proportion of patient revenue coming from IVF treatment, as some patients are
choosing alternative, lower cost treatments that are covered by insurance. This
shift contributed to a small decline in IVF cycles performed.
IntegraMed remains committed to extending its position as a leading operator of
fertility centers in the U.S. and continues to target the acquisition of one or
two mid-sized fertility center contracts each year. Management is in dialogue
with several prospective centers and remains confident in its ability to achieve
or expand on this goal. Importantly, IntegraMed`s track record of improving the
growth, margins and profitability of contracted fertility centers, despite the
economic challenges, is gaining widespread notice within the fertility
marketplace.
Consumer Services (Attain IVF Program)
Q3 2009 Q3 2008 (1) Change % Change
Revenue: $5.0M $5.4M -$0.4M -7%
Operating Income: $1.1M $1.4M -$0.3M -21%
Applications: 552 542 +10 +2%
Enrollments: 288 307 -19 -6%
(1) Q3 2008 resultshave been restated to reflect changes in the accounting methodology with respect to the timing of certain revenue recognition for the Attain IVF program within the Consumer Services Division.
While still within the normal range, a decrease in pregnancy rates in Q3 2009
versus the year-ago period was a principal factor in the year-over-year decrease
in Consumer Services segment revenue. Additionally, Consumer Services new
patient enrollments declined 6% during Q3 2009 primarily as a result of the
impact of a transition in the third-party consumer lender for the Attain IVF
Program, as well as from general economic factors and a difficult consumer
credit environment. IntegraMed announced yesterday that it has secured a new
third-party finance partner to replace CapitalOne, its long-time partner which
exited all health care financing earlier in the year. The management team at
IntegraMed`s new partner, Springstone Patient Financing, has substantial
experience in lending within the fertility marketplace. Accordingly, they have
developed a much more attractive package of financial solutions at more
competitive rates and have committed to supporting us with the highest level of
customer service. The benefits of this new source of patient funding should be
fully reflected starting in the first quarter of 2010.
As of September 30, 2009, IntegraMed provided its Attain IVF Programs through 36
fertility centers across the United States. The Company continues to target the
addition of four new fertility center provider groups to its network on an
annual basis, having already added three new providers to its network in 2009.
Vein Clinics (VCA)
Q3 2009 Q3 2008 Change % Change
Revenue: $12.6M $10.4M +$2.2M +22%
Operating Income: $1.0M $0.9M +$0.1M +12%
New Consultations: 3,894 2,849 +1,045 +37%
First Leg Starts: 1,959 1,500 +459 +31%
IntegraMed achieved strong revenue growth in the Vein Clinics segment,
reflecting the benefit of new patient marketing programs, on-going strong
patient demand, improving clinic performance as well as contributions from new
clinic openings over the past year. Contribution margin from the Vein Clinics
segment was 7.9% in Q3, compared to 8.6% in the year ago period. The decline in
contribution margin reflects the impact of higher marketing costs related to new
clinic launches as well as the entry into new markets with lower insurance
reimbursement rates compared to legacy markets. Despite these factors,
IntegraMed continues to expect contribution margins in this segment to trend
higher over time.
IntegraMed has opened two new vein clinics so far in 2009 - both in Ohio - and
targets the opening of one additional VCA location during the balance of the
year. Looking forward, given the performance and financial returns being
achieved in this business, the Company has determined to expand its growth plans
and is now targeting the opening of eight new clinics in 2010.
VCA has more than 25 years of experience specializing in all aspects of vein
disease. VCA uses minimally invasive techniques for diagnosing and treating
patients` chronic vein problems. All procedures are performed in
state-of-the-art facilities, requiring no hospitalization or surgery and
allowing patients to be back on their feet the same day.
Balance Sheet and Cash Flow
The Company`s financial condition strengthened in the first nine months of 2009,
with net cash rising by $6.9 million in the first nine months of 2009 compared
to a $1.3 million decrease in net cash in the same year ago period. Cash and
cash equivalents at September 30, 2009 rose to $35.2 million, compared to $22.4
million a year ago, $31.5 million at June 30, 2009 and $28.3 million at December
31, 2008. IntegraMed expects to continue building cash from operations for the
remainder of 2009.
About IntegraMed America, Inc.
IntegraMed America, Inc. manages highly specialized outpatient facilities in
emerging, technology-based, niche medical markets and is a leading manager of
fertility centers and vein clinics in the United States. IntegraMed supports its
provider networks with clinical and business information systems, marketing and
sales, facilities and operations management, finance and accounting, human
resources, legal, risk management and quality assurance services. IntegraMed
also offers treatment-financing programs for self-pay patients.
IntegraMed`s fertility network is the nation`s largest fertility network,
comprised of 36 contracted centers with over 100 locations in 31 states and the
District of Columbia. Nearly one of every four IVF procedures in the U.S. is
performed in an IntegraMed network fertility practice. The IntegraMed Vein Care
network is the leading provider of varicose vein care services in the US,
operating 34 centers in 13 states, principally in the Midwest and Southeast.
For more information about IntegraMed please visit:
www.integramed.com for investor background,
www.integramedfertility.com for fertility, or
www.veinclinics.com for vein care
Statements contained in this press release that are not based on historical
fact, including statements concerning future results, performance, expectations
and expansion of IntegraMed are forward-looking statements that may involve a
number of risks and uncertainties.Actual results may differ materially from the
statements made as a result of various factors, including, but not limited to,
the risks associated with IntegraMed's ability to identify, consummate and
finance future growth, including larger-scale acquisitions; changes in insurance
coverage, government laws and regulations regarding health care or managed care
contracting; and other risks, including those identified in the company's most
recent Form 10-K and in other documents filed by IntegraMed with the U.S.
Securities and Exchange Commission.All information in this press release is as
of November 5, 2009 and IntegraMed undertakes no duty to update this
information.
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(all amounts in thousands, except per share amounts)
(Unaudited)
For the For the
three-month nine-month
period ended period ended
September 30, September 30,
2009 2008 2009 2008
Revenue
Fertility Centers $ 35,964 $ 36,505 $ 109,538 $ 104,302
Consumer Services 5,013 5,364 15,242 14,367
Vein Clinics 12,621 10,360 37,288 29,264
Total Revenue 53,598 52,229 162,068 147,933
Costs of services and sales
Fertility Centers 32,985 33,762 100,860 96,685
Consumer Services 3,945 4,012 11,501 10,333
Vein Clinics 11,626 9,468 34,257 27,337
Total Cost of Services and Sales 48,556 47,242 146,618 134,355
Contribution
Fertility Centers 2,979 2,743 8,678 7,617
Consumer Services 1,068 1,352 3,741 4,034
Vein Clinics 995 892 3,031 1,927
Total Contribution 5,042 4,987 15,450 13,578
General and administrative expenses 2,764 2,853 9,333 7,951
Interest income (44 ) (95 ) (187 ) (324 )
Interest expense 303 403 869 1,208
Total other expenses 3,023 3,161 10,015 8,835
Income before income taxes 2,019 1,826 5,435 4,743
Income tax provision 791 727 2,173 1,909
Net income $ 1,228 $ 1,099 $ 3,262 $ 2,834
Basic and diluted earnings per share of Common Stock:
Basic earnings per share $ 0.14 $ 0.13 $ 0.37 $ 0.33
Diluted earnings per share $ 0.14 $ 0.13 $ 0.37 $ 0.33
Weighted average shares - basic 8,776 8,648 8,770 8,607
Weighted average shares - diluted 8,839 8,714 8,833 8,685
INTEGRAMED AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(all amounts in thousands)
September 30, December 31,
2009 2008
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 35,186 $ 28,275
Patient and other receivables, net 7,590 6,681
Deferred taxes 4,352 5,744
Other current assets 6,068 6,468
Total current assets 53,196 47,168
Fixed assets, net 16,674 16,618
Intangible assets, Business Service Rights, net 20,984 21,956
Goodwill 29,478 29,478
Trademarks 4,442 4,442
Other assets 3,682 1,781
Total assets $ 128,456 $ 121,443
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,049 $ 2,853
Accrued liabilities 18,823 17,818
Current portion of long-term notes payable and other obligations 11,335 11,351
Due to Fertility Medical Practices, net 10,551 6,354
Attain IVF and other patient deposits 12,996 11,237
Total current liabilities 55,754 49,613
Long-term notes payable and other obligations 15,845 18,868
Deferred tax liabilities 271 696
71,870 69,177
Commitments and Contingencies
Shareholders' equity:
Common stock 88 87
Capital in excess of par 56,011 54,943
Other comprehensive (loss) (222 ) (375 )
Treasury stock (375 ) (211 )
Retained earnings (Accumulated deficit) 1,084 (2,178 )
Total shareholders' equity 56,586 52,266
Total liabilities and shareholders' equity $ 128,456 $ 121,443
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all amounts in thousands)
For the
Nine-month period
ended September 30,
2009 2008
(unaudited)
Cash flows from operating activities:
Net income $ 3,262 $ 2,834
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 5,382 5,459
Deferred income tax provision (836 ) (376 )
Deferred Stock-based compensation 1,038 617
Changes in assets and liabilities
Decrease (increase) in assets:
Patient and other accounts receivable (909 ) (1,235 )
Other current assets 400 433
Other assets (149 ) (323 )
(Decrease) increase in liabilities:
Accounts payable (804 ) 587
Accrued liabilities 841 (1,314 )
Due to medical practices 4,197 (2,025 )
Attain IVF patient deposits 1,759 1,219
Net cash provided by operating activities 14,181 5,876
Cash flows used in investing activities:
Purchase of business service rights - (950 )
Cash paid to purchase VCA, net of cash acquired - (119 )
Other intangibles - (110 )
Purchase of fixed assets and leasehold improvements (4,466 ) (3,896 )
Net cash used in investing activities (4,466 ) (5,075 )
Cash flows used in financing activities:
Proceeds from issuance of debt - 380
Principle repayments on debt (2,835 ) (2,736 )
Common stock transactions 31 261
Net cash used in financing activities (2,804 ) (2,095 )
Net increase in cash and cash equivalents 6,911 (1,294 )
Cash at beginning of period 28,275 23,740
Cash at end of period $ 35,186 $ 22,446
Supplemental Information:
Interest paid 812 1,012
Income taxes paid 3,658 1,483
Investors:
John W. Hlywak, Jr., EVP and CFO
IntegraMed America, Inc.
jhlywak@integramed.com
914-251-4143
or
Media/Investors:
Norberto Aja, David Collins
Jaffoni & Collins Incorporated
inmd@jcir.com
212-835-8500
Copyright Business Wire 2009
