John W. Hlywak, Jr. (Investors) Scott Soifer (Media/Physicians)
Senior Vice President Vice President, Marketing
& CFO and Development
IntegraMed America, Inc. IntegraMed America, Inc.
(914) 251-4143 (914) 251-4186
email: jhlywak@integramed.com email: scott.soifer@integramed.com
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Web Address: http://www.integramed.com
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INTEGRAMED AMERICA REPORTS FOURTH QUARTER AND ANNUAL RESULTS
Purchase, NY, February 15, 2006 -- IntegraMed America, Inc. (Nasdaq: INMD) today
announced financial results for the fourth quarter and year ended December 31,
2005.
Reported Results
Revenues for the fourth quarter of 2005 were approximately $30.7 million,
compared to $28.1 million for the same period in 2004. On a pro forma basis,
assuming the October 1, 2005 contract amendment, as discussed below, was in
effect for the fourth quarter of 2004 and changed the basis of revenue reporting
then, revenues for the fourth quarter of 2004 would have been $24.3 million,
making 2005 a 26% increase over the fourth quarter of 2004. The contribution to
earnings from operations was approximately $3.9 million in the fourth quarter of
2005, compared to $3.4 million for the fourth quarter of 2004. Net income for
the fourth quarter of 2005 was $464,000, or $0.09 per diluted share, compared to
net income of $339,000, or $0.07 per diluted share for the fourth quarter of
2004. All earnings per share and weighted average share numbers reflect the 30%
stock split effected in the form of a stock dividend issued on June 22, 2005.
Revenues for the full year of 2005 were approximately $128.9 million, a 19.7%
increase from the $107.7 million in the comparable period in 2004. On a pro
forma basis, assuming the October 1, 2005 contract amendment, as discussed
below, was in effect for the fourth quarter of 2004 and changed the basis of
revenue reporting then, revenues for the full year of 2004 would have been
$103.8 million, making 2005 a 24% increase over 2004. For the full year of 2005,
the contribution to earnings from operations was approximately $14.8 million,
compared to $11.8 million for the full year of 2004. Net income for 2005, was
$1.7 million, or $0.34 per diluted share, compared to net income for 2004 of
$1.2 million, or $0.25 per diluted share.
Change in Reporting Format
In the fourth quarter the Company changed its presentation of certain items on
its balance sheet and statement of operations. There is no impact on current or
previously reported net income as a result of these reclassifications.
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On the balance sheet, patient deposits received by the medical practices, which
cash is swept to corporate accounts, are now reflected as a liability to the
medical practices rather than as patient deposits.
On the statement of operations, the Company now reports two sources of revenue:
Provider Services, comprised of fees paid by both Affiliates and Partner medical
practices to access Company services; and Consumer Services, comprised of Shared
Risk and pharmaceutical services fees paid directly by consumers.
Effective October 1, 2005 the Company also entered into an amended service
agreement with ivpcare, inc, its strategic partner in the pharmaceutical
services business (part of the consumer services segment), whereby the Company
no longer records sales of pharmaceutical products as revenue and costs of
pharmaceutical products as a cost of service, but rather net marketing fees
associated with those sales. As a result of these changes, revenues for the
fourth quarter of 2005 are not directly comparable to data for prior periods,
but these changes will not affect comparisons on contribution. Reported revenues
and pro forma revenues are presented below (in thousands):
- ------------------------------------------------------------ ---------------------- -------------------
Fourth Quarter Full Year of
Of 2004 2004
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- ------------------------------------------------------------ ---------------------- -------------------
Total revenues , as reported $28,150 $107,653
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- ------------------------------------------------------------ ---------------------- -------------------
Less pharmaceutical revenue related to basis of
accounting change 3,857 3,857
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Pro forma total revenues $24,293 $103,796
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Management Discussion
"IntegraMed continues to be the only national provider of comprehensive services
to physicians and patients in the fertility field," said Jay Higham, CEO &
President of IntegraMed America, Inc. "For patients, that means help with
gaining access to highly specialized fertility services through our credentialed
provider network and innovative treatment financing programs. For physicians,
that means cost-effective access to resources that improve practice
performance."
"We continue to execute our plan and it is resulting in strong revenue,
contribution and net income growth across all segments of our business",
continued Mr. Higham. "In comparing 2005 with 2004, the Provider Services
segment of our business, comprising our Partner and Affiliate practices, had
21.7% revenue growth. This growth was driven by 12% same store revenue growth,
plus the addition of four new practices to our expanding national network. The
Consumer Services segment contains the Shared Risk Refund Program, which had
revenue growth of 84.5% and contribution growth of 166%. We also report
pharmaceutical services in this consumer segment and contribution from this
program grew by over 34% in 2005."
"The newer, higher margined segments of our business, particularly the Shared
Risk Refund and Affiliate Programs, are producing contribution to earnings from
operations at levels that have improved overall contribution rates to 11.5% for
2005, a 4.5% increase over the 11.0% reported for the same period in 2004,"
added Mr. Higham.
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IntegraMed America, based in Purchase, NY, is focused on the $2.5 billion
infertility industry, and offers products and services to patients and
providers. Specifically, the Company provides Business Services to a network of
Fertility Centers; distributes pharmaceutical products and financing programs
directly to patients and operates www.integramed.com, an award-winning
infertility Web site.
Jay Higham, President and Chief Executive Officer, and John Hlywak, Senior Vice
President and Chief Financial Officer, will host an investment-community
conference call beginning Thursday, February 16, 2006 at 10:00 a.m. Eastern Time
to discuss the above-mentioned results and to answer questions.
To participate in the live call via telephone, please call (800) 374.0146
(domestic) or (706) 634.1307 (international). A telephone replay will be
available through 12:00 p.m. Eastern Time, February 23 by dialing (800) 642.1687
(domestic) or (706) 645.9291 (international) and entering reservation number
5237880.
Individuals interested in listening to the conference call via the Internet may
do so by visiting the Company's web site at www.integramed.com. A replay will be
available on the web site for 14 days. For further information regarding
IntegraMed, this press release or the conference call, please go to IntegraMed's
homepage at www.integramed.com and to IntegraMed's Investor Relations website
page at www.corporate-ir.net/ireye/ir_site.zhtml?ticker=INMD&script=400.
Statements contained in this press release that are not based on historical
fact, including statements concerning future results, performance, expectations
and expansion of IntegraMed America 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 the Company's ability to finance
future growth; the loss of significant business service contract(s);
profitability at Reproductive Science Centers serviced by IntegraMed America;
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 the Company
with the U.S. Securities and Exchange Commission. All information in this press
release is as of February 15, 2006 and IntegraMed undertakes no duty to update
this information.
-table follows-
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INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(all amounts in thousands, except per share amounts)
For the three-months For the year ended
ended December 31, ended December 31,
-------------------- --------------------
2005 2004 2005 2004
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(unaudited)
Revenues, net
Provider Services .............................. $ 27,926 $ 22,848 $ 106,310 $ 87,367
Consumer Services .............................. 2,788 5,302 22,580 20,286
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Total revenues ................................. 30,714 28,150 128,890 107,653
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Costs of services
Provider Services .............................. 25,005 19,831 94,849 77,099
Consumer Services .............................. 1,776 4,890 19,240 18,746
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Total costs of services ........................ 26,781 24,721 114,089 95,845
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Contribution
Provider Services .............................. 2,921 3,017 11,461 10,268
Consumer Services .............................. 1,012 412 3,340 1,540
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Total contribution ............................. 3,933 3,429 14,801 11,808
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General and administrative expenses ................. 3,302 2,861 12,205 9,789
Interest income ..................................... (168) (74) (520) (259)
Interest expense .................................... 40 66 328 295
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Total other expenses ........................... 3,174 2,853 12,013 9,825
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Income before income taxes .......................... 759 576 2,788 1,983
Income tax provision ................................ 295 237 1,065 797
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Net income .......................................... $ 464 $ 339 $ 1,723 $ 1,186
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Basic and diluted earnings per share of Common Stock:
Basic earnings per share ....................... $ 0.09 $ 0.07 $ 0.36 $ 0.26
Diluted earnings per share ..................... $ 0.09 $ 0.07 $ 0.34 $ 0.25
Weighted average shares - basic ..................... 4,986 4,611 4,839 4,620
Weighted average shares - diluted ................... 5,167 4,832 5,003 4,831
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INTEGRAMED AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(all amounts in thousands, except share amounts)
December
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2005 2004
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ASSETS
Current assets:
Cash and cash equivalents ...................................... $ 22,521 $ 11,300
Pharmaceutical and other accounts receivable, net .............. 490 1,346
Deferred taxes ................................................. 1,080 1,950
Prepaids and other current assets .............................. 2,768 2,043
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Total current assets ....................................... 26,859 16,639
Fixed assets, net ................................................. 14,877 14,868
Intangible Assets, net ............................................ 22,434 20,519
Deferred taxes .................................................... 815 1,366
Other assets ...................................................... 590 410
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Total assets ............................................... $ 65,575 $ 53,802
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................... $ 917 $ 519
Accrued liabilities ............................................ 8,023 7,451
Current portion of long-term notes payable and other obligations 1,500 2,218
Due to Medical Practices, net .................................. 4,949 3,378
Shared Risk Patient deposits ................................... 4,739 2,772
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Total current liabilities .................................. 20,128 16,338
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Long-term notes payable and other obligations ..................... 8,647 3,021
Commitments and Contingencies
Shareholders' equity:
Common Stock ................................................... 51 47
Capital in excess of par ....................................... 49,747 48,467
Deferred compensation .......................................... (354) (293)
Treasury Stock ................................................. (937) (337)
Accumulated deficit ............................................ (11,707) (13,441)
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Total shareholders' equity ................................. 36,800 34,443
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Total liabilities and shareholders' equity ................. $ 65,575 $ 53,802
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