CONTINUCARE CORPORATION REPORTS
FINANCIAL RESULTS FOR THIRD QUARTER
OF FISCAL 2004 Miami, FL, May 14, 2004 — Continucare Corporation (AMEX: CNU) today reported financial results for its third quarter of fiscal 2004. Third Quarter Results For the three months ended March 31, 2004, total revenue was $25.9 million, compared to $24.2 million for the three months ended March 31, 2003. Income from operations during the third fiscal quarter of 2004 was $2.2 million compared to income of $0.5 million in the same period one year ago. Income from continuing operations in the third quarter of fiscal 2004 was $1.9 million compared to income of $0.4 million in the year-ago period. Loss from discontinued operations during the third fiscal quarter was $0.4 million compared to a loss of $0.1 million in the year-ago period. Net income for the third quarter of fiscal 2004 was $1.5 million, or $.03 per diluted share, compared to a net income of $0.3 million, or $0.01 per diluted share, one year ago. Nine-Month Result For the nine months ended March 31, 2004, total revenue was $75.3 million compared to $71.7 million for the nine months ended March 31, 2003. Income from operations during the nine-month period was $3.8 million compared to $1.3 million in the same period one year ago. Income from continuing operations during the nine-month period was $5.3 million compared to $0.6 million in the year-ago period. Loss from discontinued operations during the nine-month period was $1.6 million compared to a loss of $1.4 million in the same period one year ago. Net income for the nine-month period was $3.7 million, or $.08 per diluted share, compared to a net loss of $0.8 million, or $0.02 per diluted share, one year ago. Income from continuing operations during the nine months ended March 31, 2004 includes other income of $2.2 million relating to the settlement of an alleged Medicare obligation. The alleged obligation related to rehabilitation clinics that were previously operated by a former Continucare subsidiary and were sold in 1999. The Centers for Medicare & Medicaid Services (“CMS”) had alleged that Medicare overpayments were made relating to services rendered by these clinics and other related clinics during a period in which they were operated by entities other than Continucare. In an effort to resolve the matter with CMS and avoid aggressive collection efforts that could have disrupted Continucare’s business, in 2002 Continucare entered into a memorandum of understanding pursuant to which it agreed to begin making payments to resolve the alleged liability while also retaining the right to dispute the alleged overpayments. Continucare requested that the alleged liability be reconsidered and, in October 2003, it was notified that the liability had been reduced from the originally asserted amount of $2.4 million to approximately $200,000. The discontinued operations reflected in Continucare’s financial results relate to its former home health operations which were disposed of in a series of transactions completed in the third fiscal quarter of fiscal 2004 and a group of independent physician contracts terminated effective January 1, 2003.
Commenting on the financial results, Richard C. Pfenniger, Jr., Continucare’s Chief Executive Officer, said, “We are making good progress with our business as evidenced by the increases in revenues, income from continuing operations and net income during our third fiscal quarter. This improvement reflects higher per member premiums associated with our Medicare Advantage (formerly known as Medicare + Choice) patients resulting from the adoption of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 and the increased phase-in of the Medicare risk adjustment program. Also, during the quarter we meaningfully streamlined our business through the disposition of our home health agencies. Although accounting for only a small portion of our revenues, those agencies had historically significantly reduced our overall operating results. In addition, subsequent to quarter-end, as previously announced, we increased our shareholders’ equity by approximately $8.2 million to over $15.0 million through the conversion of outstanding convertible promissory notes and a private placement of our common stock.” Continucare Corporation (www.continucare.com), headquartered in Miami, Florida, is a holding company with subsidiaries engaged in the business of providing outpatient physician care services through managed care, Medicare direct and fee for service arrangements. 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 include risks and uncertainties, which may affect our business and prospects and cause actual results to differ materially from those set forth in the forward-looking statements. These factors include, without limitation, our ability to service our indebtedness and respond to capital needs, the ability to achieve expected levels of patient volumes and control the costs of providing services, pricing pressures exerted on us by managed care organizations, the level of payment we receive from governmental programs and third party payors, the ability to attract and retain qualified medical professionals, future legislation changes in governmental regulations, including possible changes in Medicare programs that may impact reimbursements to health care providers and insurers, the impact of the Medicare Risk Adjustment on payments we receive for our managed care operations , technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand for, health care, changes in revenue mix and the ability to enter into and renew managed care provider arrangements on acceptable terms, the loss of significant contracts, our current dependence on two HMOs for substantially all of our revenues, delays in receiving payments, the collectibility of uninsured accounts and deductible and co-pay amounts, Federal and state investigations, changes in estimates and judgments associated with our critical accounting policies, impairment charges that could be required in future periods, general economic conditions and uncertainties generally associated with the health care business. 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 annual report on Form 10-K for the fiscal year ended June 30, 2003 and other filings with the SEC. We undertake no obligation to update or revise these forward-looking statements to reflect events or circumstances after the date hereof. Contact:
Richard C. Pfenniger, Jr.
Chief Executive Officer
Continucare Corporation
80 Southwest 8th Street
Miami, Florida 33130
(305) 350-7557 |
