John W. Hlywak, Jr. (Investors) Scott Soifer (Media)
Executive Vice President & CFO Vice President of Marketing & Development
IntegraMed America, Inc. IntegraMed America, Inc.
(914) 251-4143 (914) 251-4186
email: john.hlywak@integramed.com email: scott.soifer@integramed.com
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Web Address: http://www.integramed.com
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INTEGRAMED REPORTS FOURTH QUARTER AND ANNUAL RESULTS
Purchase, NY, February 20, 2007 -- IntegraMed America, Inc. (Nasdaq: INMD) today
announced financial results for the fourth quarter and the year ended December
31, 2006.
Net income for the fourth quarter of 2006 was $1,633,000, or $0.25 per diluted
share, compared to $464,000, or $0.07 reported for the fourth quarter of 2005.
Net income for the full year 2006 was $3,224,000, or $0.49 per diluted share
compared to net income of $1,723,000 or $0.28 per fully diluted share for the
full year of 2005. Due to one-time tax adjustments, net income and earnings per
share numbers are not comparable between years. (Earnings per share and weighted
average share numbers for all periods reflect the 25% stock split effected in
the form of a dividend and paid on June 21, 2006.)
Net income for the fourth quarter and full year of 2006 benefited from an
$821,000 reduction in the provision for income taxes caused principally by the
elimination of a valuation allowance on deferred tax assets.
Net income after eliminating the effect of the adjustment to reduce the tax
provision in the fourth quarter of 2006 was $812,000 or $0.12 per share, a 77%
increase compared to $464,000 or $0.07 per share in the fourth quarter of 2005.
Net income for the full year of 2006, after eliminating the effect of the
adjustment to the tax provision in the fourth quarter, was $2,403,000 or $0.36
per share, a 39% increase over $1,723,000, or $0.28 per share in the full year
of 2005.
Due to the adjustment to the tax provision, the effective tax rate for the full
year of 2006 was 13.6%. By comparison, the effective tax rate for the full year
of 2005 was 36.4%. We expect our tax rate to return to approximately 36% for
2007.
Total revenues for the fourth quarter of 2006 were $32.3 million, compared to
revenues of $30.7 million for the same period in 2005. Total revenues for the
full year of 2006 were $126.4 million and were $128.8 for the full year of 2005.
As a result of an amended service agreement, revenues for 2006 of $126.4 million
are not directly comparable to reported revenue for 2005 of $128.8 million.
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As previously reported, effective October 1, 2005, the Company 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 on a reported basis and after giving effect to the contract amendment
are presented below (in thousands):
Full Year
Of 2005
---------
Total revenues, as reported............................. $128,809
Less pharmaceutical revenue related to basis
of accounting change.................................... 13,481
--------
Total revenues, adjusted pro forma...................... $115,328
Management Discussion
"In comparing the fourth quarter and full year of 2006 with the fourth quarter
and full year of 2005, four factors standout: solid growth underlying existing
provider contracts; penetration of new markets; strong growth of our Consumer
segment and our ability to leverage general and administrative expenses," said
Jay Higham, President and CEO of IntegraMed.
"New patient visits grew approximately 11% at contracted fertility centers
during 2006. While the fertility market is large, growth has been slowing and
industry statistics indicate low single digit growth across the U.S. Our
results, supported by marketing and sales programs and operational expertise,
have driven increases in market share in our centers and helped to generate
growth throughout the network", commented Mr. Higham.
"As the fertility market has shifted to a more mature stage, competition has
intensified at the provider level. This market dynamic favors our business model
and has helped us to penetrate new markets as providers look for the competitive
advantage that an affiliation with IntegraMed brings. During the year we
reported the addition of new affiliates and in-market mergers within our
network. Our footprint is expanding, providing a solid base for continued growth
in the future," added Mr. Higham.
"The Consumer Segment of our business is anchored by the Shared Risk Refund
program, which continues its growth trajectory. During the year the number of
new patients enrolled in the program increased by almost 31% and contribution
increased by 44%. The contribution from this program now represents 25% of our
total operating margin. This business benefits all of our stakeholders. Patients
obtain a fixed price payment plan and a refund if treatment is unsuccessful.
Providers obtain a powerful marketing program and the opportunity to be the
exclusive provider in their market. And IntegraMed obtains strong cash flow and
margins. We continue to see this segment as one of our key factors in operating
income growth in the future," said Mr. Higham.
"In addition to solid growth in the business, we have also attained the scale
required to effectively leverage general and administrative expenses," continued
Mr. Higham. "During the year we managed aggressively and reduced G&A expenses as
a percentage of contribution by approximately 5%."
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"Our results in 2006 have come from a focus on executing our strategy. We are
leveraging our investments and our people. We continue to evaluate opportunities
for leverage and look forward to continued success in 2007," concluded Mr.
Higham.
About IntegraMed America, Inc.
IntegraMed, based in Purchase, NY offers products and services to patients,
providers and payers focused on the $3 billion fertility industry. IntegraMed
provides business services to a national network of fertility centers;
distributes pharmaceutical products and treatment financing programs directly to
consumers; and operates http://www.integramed.com, a leading fertility portal.
Investors' Conference Call
Jay Higham, President and Chief Executive Officer and John Hlywak, Executive
Vice President and Chief Financial Officer, will host an investment-community
conference call on February 21, 2007 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 February 28, 2007 by dialing (800) 642-1687 (domestic) or
(706) 645-9291 (international) and entering reservation number 9072603.
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 Partner practices 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 20, 2007 and IntegraMed undertakes no duty to update
this information.
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INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(all amounts in thousands, except per share amounts)
For the For the
three-month period year ended
ended December 31, December 31,
-------------------- -----------------
2006 2005 2006 2005
------- ------- ------ ------
(unaudited) (unaudited)
Revenues, net of Service Rights amortization of $374 and
$374 in the three-month periods of 2006 and 2005 and
$1,495 and $1,495 for the full years of 2006
and 2005, respectively
Provider Services......................................... $28,663 $27,905 $113,958 $106,229
Consumer Services......................................... 3,678 2,788 12,480 22,580
------- ------- -------- --------
Total Revenues............................................ 32,341 30,693 126,438 128,809
------- ------- -------- --------
Costs of services and sales, including depreciation of
$888, $905, $3,596, and $3,538
Provider Services......................................... 25,740 25,004 102,690 94,849
Consumer Services......................................... 2,532 1,777 8,090 19,240
------- ------- -------- --------
Total Cost of Services and Sales.......................... 28,272 26,781 110,780 114,089
------- ------- -------- --------
Contribution
Provider Services......................................... 2,923 2,901 11,268 11,380
Consumer Services......................................... 1,146 1,011 4,390 3,340
------- ------- -------- --------
Total Contribution........................................ 4,069 3,912 15,658 14,720
------- ------- -------- --------
General and administrative expenses, including depreciation
of $167, $135, $614 and $421.............................. 3,084 3,302 12,305 12,205
Interest income................................................ (323) (168) (1,073) (520)
Interest expense............................................... 163 40 695 328
------- ------- -------- --------
Total other expenses...................................... 2,924 3,174 11,927 12,013
------- ------- -------- --------
Income before income taxes..................................... 1,145 738 3,731 2,707
Income tax provision (benefit)................................. (488) 274 507 984
------- ------- -------- --------
Net income .................................................... $ 1,633 $ 464 $ 3,224 $ 1,723
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Basic and diluted earnings per share of Common Stock:
Basic earnings per share.................................. $ 0.25 $ 0.07 $ 0.50 $ 0.28
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Diluted earnings per share................................ $ 0.25 $ 0.07 $ 0.49 $ 0.28
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Weighted average shares - basic................................ 6,489 6,233 6,472 6,049
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Weighted average shares - diluted.............................. 6,576 6,459 6,555 6,254
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INTEGRAMED AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(all amounts in thousands, except share amounts)
December 31, December 31,
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2006 2005
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents............................................. $32,184 $22,521
Pharmaceutical and other receivables.................................. 445 490
Deferred taxes........................................................ 2,472 999
Other current assets.................................................. 2,927 2,768
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Total current assets................................................ 38,028 26,778
Fixed assets, net..................................................... 13,900 14,877
Intangible assets, net................................................ 22,905 24,388
Other assets.......................................................... 689 590
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Total assets........................................................ $75,522 $66,633
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................................... $ 1,507 $ 917
Accrued liabilities................................................... 11,850 8,023
Current portion of long-term notes payable and other obligations...... 1,505 1,500
Due to Medical Practices, net......................................... 4,299 4,949
Shared Risk Refund Program Patient deposits........................... 6,526 4,739
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Total current liabilities......................................... 25,687 20,128
Deferred tax liabilities................................................. 1,732 1,058
Long-term notes payable and other obligations............................ 7,269 8,647
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Total liabilities................................................. 34,688 29,833
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Commitments and Contingencies
Shareholders' equity:
Common stock.......................................................... 65 64
Capital in excess of par.............................................. 50,039 49,734
Other comprehensive income............................................ (9) --
Treasury stock........................................................ -- (937)
Deferred Compensation ................................................ (778) (354)
Accumulated deficit................................................... (8,483) (11,707)
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Total shareholders' equity........................................ 40,834 36,800
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Total liabilities and shareholders' equity........................ $75,522 $66,633
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