Exhibit 99.01
Continucare Corporation Reports 54% Increase in Operating Income for Second Quarter of Fiscal 2009
MIAMI--(BUSINESS WIRE)--February 5, 2009--Continucare Corporation (NYSE Alternext US:CNU) today reported financial results for its second quarter of fiscal 2009. Financial highlights for the quarter include:
- Total revenue of $65.5 million, a 7% increase compared to $61.5 million for the same period last year;
- Income from operations of $5.9 million, a 54% increase compared to $3.9 million for the same period last year;
- Net income of $3.7 million, a 46% increase compared to $2.5 million for the same period a year ago; and
- Earnings per diluted share increased to $0.06 compared to $0.04 per diluted share for the same period last year.
For the six-months ended December 31, 2008, total revenue increased 7% to $130.6 million compared to $122.4 million for the same period one year ago. Income from operations during the six-month period increased 46% to $9.9 million compared to $6.8 million for the same period one year ago. Net income for the six-month period increased 39% to $6.2 million, or $0.10 per diluted share, compared to $4.4 million, or $0.06 per diluted share, for the prior year period.
Continucare’s cash and cash equivalents were $8.0 million at December 31, 2008 compared to $9.9 million at June 30, 2008, while working capital was $19.0 million at December 31, 2008 compared to $20.3 million at June 30, 2008. Total liabilities were $10.9 million at December 31, 2008 compared to $13.3 million at June 30, 2008. Shareholders’ equity was $104.0 million at December 31, 2008 compared to $105.2 million at June 30, 2008.
“Our business continues to perform exceptionally well,” said Richard C. Pfenniger, Jr., Continucare’s Chairman and Chief Executive Officer. “Increased revenue during our second fiscal quarter combined with a lower medical expense ratio resulted in a 54% increase in operating profit and a 46% increase in net income. Also, during the quarter we generated approximately $2.0 million of cash flow from operations which was used to repurchase shares under our stock repurchase program. At the same time, we continued to maintain a strong balance sheet that remains virtually free of long-term indebtedness.”
Stock Repurchase Program
During the period from October 1, 2008 through January 30, 2009 Continucare repurchased 3,307,272 shares of its common stock at a cost of approximately $6.1 million and since the inception of the program in 2005, Continucare has repurchased 11,482,072 shares of its common stock at a total cost of approximately $24.3 million. The Company has the authority to repurchase an additional 1,017,928 shares under its current repurchase plan. The plan authorizes management, at its discretion, to repurchase shares from time to time in the open market or in privately negotiated transactions subject to market conditions and other factors. As of January 30, 2009, Continucare had 59,808,481 shares of common stock outstanding.
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. 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. These factors include, without limitation, the risk that the current trend in revenue or income growth may not continue or may be less than anticipated, risks and uncertainties relating to our ability to implement our growth strategy and to manage future growth, including our ability to achieve expected levels of patient volumes and control the costs of providing services, risks relating to our ability to effectively maintain or improve our medical management capabilities and control costs, risks relating to pricing and other pressures exerted on us by managed care organizations, the risk that the impact of the Medicare Risk Adjustment on payments we receive for our managed care operations may not continue to be positive for us and that risk corridor adjustment charges in future periods may be greater than in the past, the risk that future legislation, changes in governmental regulations, including possible changes in Medicare programs, could adversely impact our operations or reduce reimbursements to health care providers and insurers, risks and uncertainties relating to our current dependence on three HMOs for substantially all of our revenues, including the loss of our managed care agreements with any of these HMOs and our ability to work together effectively with our HMO affiliates, uncertainties relating to technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand for, health care, inflationary trends in health care costs, and 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 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 | December 31, 2008 | June 30, 2008 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 7,982,960 | $ | 9,905,740 | ||||
| Due from HMOs, net of a liability for incurred but not reported medical claims of approximately $20,678,000 and $23,900,000 at December 31, 2008 and June 30, 2008, respectively |
13,045,227 | 15,325,783 | ||||||
| Prepaid expenses and other current assets | 1,226,717 | 708,841 | ||||||
| Deferred income tax assets | 381,774 | 413,932 | ||||||
| Total current assets | 22,636,678 | 26,354,296 | ||||||
| Certificates of deposit, restricted | 1,287,542 | 1,274,147 | ||||||
| Property and equipment, net | 8,965,893 | 8,363,427 | ||||||
| Goodwill | 73,204,582 | 73,204,582 | ||||||
| Intangible assets, net of accumulated amortization of approximately $2,787,000 and $2,168,000 at December 31, 2008 and June 30, 2008, respectively | 5,873,000 | 6,492,333 | ||||||
| Deferred income tax assets | 2,647,794 | 2,574,472 | ||||||
| Other assets, net | 285,114 | 227,047 | ||||||
| Total assets | $ | 114,900,603 | $ | 118,490,304 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 442,030 | $ | 402,718 | ||||
| Accrued expenses and other current liabilities | 3,134,475 | 4,458,119 | ||||||
| Income taxes payable | 97,095 | 1,198,722 | ||||||
| Total current liabilities | 3,673,600 | 6,059,559 | ||||||
| Deferred income tax liabilities | 6,224,588 | 6,256,205 | ||||||
| Other liabilities | 964,586 | 948,263 | ||||||
| Total liabilities | 10,862,774 | 13,264,027 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity: | ||||||||
| Common stock, $0.0001 par value: 100,000,000 shares authorized; 60,945,781 shares issued and outstanding at December 31, 2008 and 64,796,303 shares issued and outstanding at June 30, 2008 |
6,095 |
6,480 | ||||||
| Additional paid-in capital | 107,170,845 | 114,514,853 | ||||||
| Accumulated deficit | (3,139,111 | ) | (9,295,056 | ) | ||||
| Total shareholders’ equity | 104,037,829 | 105,226,277 | ||||||
| Total liabilities and shareholders’ equity | $ | 114,900,603 | $ | 118,490,304 | ||||
CONTINUCARE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||
| Three Months Ended December 31, | ||||||||
| 2008 | 2007 | |||||||
| Revenue | $ | 65,539,894 | $ | 61,485,447 | ||||
| Operating expenses: | ||||||||
| Medical services: | ||||||||
| Medical claims | 45,148,703 | 43,847,320 | ||||||
| Other direct costs | 7,144,073 | 6,940,714 | ||||||
| Total medical services | 52,292,776 | 50,788,034 | ||||||
| Administrative payroll and employee benefits | 3,120,450 | 2,689,879 | ||||||
| General and administrative | 4,193,438 | 4,156,778 | ||||||
| Total operating expenses | 59,606,664 | 57,634,691 | ||||||
| Income from operations | 5,933,230 | 3,850,756 | ||||||
| Other income (expense): | ||||||||
| Interest income | 47,688 | 201,390 | ||||||
| Interest expense | (5,055 | ) | (4,536 | ) | ||||
| Income before income tax provision | 5,975,863 | 4,047,610 | ||||||
| Income tax provision | 2,316,053 | 1,535,925 | ||||||
| Net income | $ | 3,659,810 | $ | 2,511,685 | ||||
| Net income per common share: | ||||||||
| Basic | $ | .06 | $ | .04 | ||||
| Diluted | $ | .06 | $ | .04 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 61,813,969 | 69,816,147 | ||||||
| Diluted | 62,912,031 | 70,970,949 | ||||||
CONTINUCARE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||
| Six Months Ended December 31, | ||||||||
| 2008 | 2007 | |||||||
| Revenue | $ | 130,604,529 | $ | 122,408,109 | ||||
| Operating expenses: | ||||||||
| Medical services: | ||||||||
| Medical claims | 92,465,994 | 88,724,515 | ||||||
| Other direct costs | 14,301,926 | 13,533,793 | ||||||
| Total medical services | 106,767,920 | 102,258,308 | ||||||
| Administrative payroll and employee benefits | 5,854,007 | 5,423,114 | ||||||
| General and administrative | 8,046,759 | 7,931,108 | ||||||
| Total operating expenses | 120,668,686 | 115,612,530 | ||||||
| Income from operations | 9,935,843 | 6,795,579 | ||||||
| Other income (expense): | ||||||||
| Interest income | 123,791 | 360,503 | ||||||
| Interest expense | (8,097 | ) | (11,954 | ) | ||||
| Income before income tax provision | 10,051,537 | 7,144,128 | ||||||
| Income tax provision | 3,895,592 | 2,710,947 | ||||||
| Net income | $ | 6,155,945 | $ | 4,433,181 | ||||
| Net income per common share: | ||||||||
| Basic | $ | .10 | $ | .06 | ||||
| Diluted | $ | .10 | $ | .06 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 63,136,805 | 69,928,201 | ||||||
| Diluted | 64,255,154 | 71,102,303 | ||||||
CONTINUCARE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| Six Months Ended December 31, | ||||||||
| 2008 | 2007 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 6,155,945 | $ | 4,433,181 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,085,838 | 1,239,607 | ||||||
| Loss on disposal of fixed assets | 22,434 | - | ||||||
| Provision for bad debts | - | 181,081 | ||||||
| Compensation expense related to issuance of stock options | 578,337 | 637,303 | ||||||
| Deferred tax expense | (72,781 | ) | (212,891 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Due from HMOs, net | 2,280,556 | 4,599,115 | ||||||
| Prepaid expenses and other current assets | (517,876 | ) | 101,846 | |||||
| Other assets, net | (89,677 | ) | (19,002 | ) | ||||
| Accounts payable | 39,312 | (327,033 | ) | |||||
| Accrued expenses and other current liabilities | (1,359,200 | ) | (981,567 | ) | ||||
| Income taxes payable | (1,101,627 | ) | 523,837 | |||||
| Net cash provided by operating activities | 7,021,261 | 10,175,477 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of certificates of deposit | (13,395 | ) | (90,219 | ) | ||||
| Purchase of property and equipment | (956,128 | ) | (603,965 | ) | ||||
| Net cash used in investing activities | (969,523 | ) | (694,184 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayment on long-term debt | - | (6,083 | ) | |||||
| Principal repayments under capital lease obligations | (51,788 | ) | (17,522 | ) | ||||
| Proceeds from exercise of stock options | 10,625 | 64,375 | ||||||
| Payment of fees related to issuance of stock | - | (45,000 | ) | |||||
| Repurchase and retirement of common stock | (7,933,355 | ) | (1,459,157 | ) | ||||
| Net cash used in financing activities | (7,974,518 | ) | (1,463,387 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (1,922,780 | ) | 8,017,906 | |||||
| Cash and cash equivalents at beginning of period | 9,905,740 | 7,262,247 | ||||||
| Cash and cash equivalents at end of period | $ | 7,982,960 | $ | 15,280,153 | ||||
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Purchase of property and equipment with proceeds of capital lease obligations | $ | 103,667 | $ | 38,922 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for taxes | $ | 5,070,000 | $ | 2,400,000 | ||||
| Cash paid for interest | $ | 8,097 | $ | 11,954 | ||||
CONTACT:
Continucare Corporation, Miami
Fernando L. Fernandez, Senior Vice President – Finance, 305-500-2105