Exhibit 99.1
AMERIGROUP Corporation Earns Record $0.72 Per Share in First Quarter
on 35 Percent Increase in Net Income
VIRGINIA BEACH, Va., April 29 /PRNewswire-FirstCall/ -- AMERIGROUP
Corporation (NYSE: AGP) today announced that net income for the first quarter
of 2004 increased 35 percent to $18,438,000 or $0.72 per diluted share,
compared with $13,694,000, or $0.63 per diluted share for the first quarter of
2003.
Total revenues for the first quarter of 2004 increased 8.4 percent to
$424,295,000, compared with $391,250,000 for the first quarter of 2003.
Membership increased 8.5 percent to 867,000 at March 31, 2004, as compared
with 799,000 at March 31, 2003.
Highlights for the first quarter include:
* Revenues of $424,295,000, an 8.4 percent increase over the first quarter
of 2003;
* Health benefits ratio of 81.0 percent of premium revenues;
* Selling, general and administrative expenses of 10.7 percent of total
revenues;
* Days in claims payable within the expected range at 64;
* Unregulated cash of $212,948,000; and
* Return on average equity of 19.4 percent.
"Our first quarter operating results are in line with our expectations and
reflect our ability to achieve predictable and sustained success despite
short-term challenges," said Jeffrey L. McWaters, chairman and chief executive
officer. "The Company continues to control medical and administrative costs to
meet the realities faced by our state partners as we work together in solving
our nation's toughest healthcare challenges by improving quality and access."
Health Benefits
Health benefits were 81.0 percent of premium revenues for the first
quarter of 2004. "We believe that our Early Case Finding programs contribute
to stable and predictable costs and lead to better health access for our
members," McWaters added.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were 10.7 percent of
total revenues for the first quarter of 2004, showing continued efficiencies
related to technology and scale.
Balance Sheet and Cash Flow Highlights
Cash and investments at March 31, 2004, totaled approximately
$566,024,000, a portion of which is regulated by state regulatory
requirements. The unregulated portion at March 31, 2004, was approximately
$212,948,000. Operating cash flow totaled $79,000 for the quarter ended March
31, 2004, compared to $39,108,000 in the prior year. The year-over-year
variance is primarily due to normal versus early receipt of premium as well as
consistent claim liability in the first quarter compared to significant growth
in the prior year due to the PHP acquisition. The number of days in claims
payable at the end of the first quarter was 64, consistent with AMERIGROUP's
targeted range of 60 to 65.
Outlook
Reiterated 2004 full-year expectations are as follows:
* Same-store premium revenue growth of 10 to 12 percent, which includes
weighted-average rate increases of approximately 3 to 5 percent;
* Health benefits ratio less than or equal to 81.0 percent of premium
revenues;
* Selling, general and administrative expenses of 10.5 to 11.0 percent of
total revenues; and
* Fully diluted shares outstanding of approximately 26.0 million.
AMERIGROUP senior management will discuss the Company's first quarter
results on a conference call, Friday, April 30th, at 8:00 a.m. Eastern Time.
The conference can be accessed by dialing 1-800-838-4403. A recording of this
conference call will be available from 12:00 p.m. Eastern Time on Friday,
April 30th, until 11:59 p.m. Eastern Time on Friday, May 7. To access the
recording, dial 1-800-428-6051 and enter passcode 348677. A live webcast of
the call also will be available through the investor relations page on the
AMERIGROUP Web site at www.amerigroupcorp.com, or through CCBN at
www.companyboardroom.com. A 30-day replay of this webcast will be available
on these Web sites approximately two hours following the conclusion of the
live broadcast.
AMERIGROUP Corporation, headquartered in Virginia Beach, Virginia, is a
multi-state managed health care company focused on serving people who receive
healthcare benefits through publicly sponsored programs including Medicaid,
State Children's Health Insurance Program, or SCHIP, and FamilyCare. The
Company operates in Texas, New Jersey, Maryland, Illinois, Florida and the
District of Columbia. For more information about AMERIGROUP Corporation,
please visit the Company's Web site at www.amerigroupcorp.com.
This release is intended to be disclosure through methods reasonably
designed to provide broad, non-exclusionary distribution to the public in
compliance with the Securities and Exchange Commission's Fair Disclosure
Regulation. This release contains certain "forward-looking" statements,
including statements related to expected 2004 performance such as membership,
revenues, same-store revenues, operating cash flows, health benefits expenses,
seasonality of health benefits expenses, selling, general and administrative
expenses, days in claims payable, income tax rates, earnings per share, and
net income growth, as well as expectations on the effective date and
successful integration of acquisitions and debt levels, made pursuant to the
Safe Harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements involve known and unknown risks and
uncertainties that may cause the Company's actual results in future periods to
differ materially from those projected or contemplated in the forward-looking
statements. These risks and uncertainties include, but are not limited to,
national, state and local economic conditions, including their effect on the
rate-setting process, timing of payments, as well as the availability and cost
of labor, utilities and materials; the effect of government regulations and
changes in regulations governing the healthcare industry, including our
compliance with such regulations and their effect on our ability to manage our
medical costs; changes in Medicaid payment levels, membership eligibility and
methodologies and the application of such methodologies by the government;
liabilities and other claims asserted against the company; our ability to
attract and retain qualified personnel; our ability to maintain compliance
with all minimum capital requirements; the availability and terms of capital
to fund acquisitions and capital improvements; the competitive environment in
which we operate; our ability to maintain and increase membership levels; and
demographic changes.
Investors should also refer to our Form 10-K filed with the Securities and
Exchange Commission on March 9, 2004, for a discussion of risk factors. Given
these risks and uncertainties, we can give no assurances that any forward-
looking statements will, in fact, transpire and, therefore, caution investors
not to place undue reliance on them. We specifically disclaim any obligation
to update or revise any forward-looking statements, whether as a result of new
information, future developments or otherwise.
AMERIGROUP CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Dollars in thousands, except per share data)
Three months ended
March 31,
2004 2003
Revenues:
Premium $ 422,335 $ 389,562
Investment income 1,960 1,688
Total revenues 424,295 391,250
Expenses:
Health benefits 342,247 317,298
Selling, general and administrative 45,487 44,070
Depreciation and amortization 5,624 5,762
Interest 181 550
Total expenses 393,539 367,680
Income before income taxes 30,756 23,570
Income tax expense 12,318 9,876
Net income $ 18,438 $ 13,694
Weighted average number of common
shares and dilutive potential
common shares outstanding 25,629,465 21,631,779
Diluted net income per share $ 0.72 $ 0.63
The following table sets forth selected operating ratios. All ratios,
with the exception of the health benefits ratio, are shown as a percentage of
total revenues.
Three months ended
March 31,
2004 2003
Premium revenue 99.5 % 99.6 %
Investment income 0.5 0.4
Total revenues 100.0 % 100.0 %
Health benefits(1) 81.0 % 81.4 %
Selling, general and administrative expenses 10.7 % 11.3 %
Income before income taxes 7.2 % 6.0 %
Net income 4.3 % 3.5 %
(1) The health benefits ratio is shown as a percentage of premium revenue
because there is a direct relationship between the premium received
and the health benefits provided.
The following table sets forth the approximate number of members served in
each of our service areas as of March 31, 2004 and 2003.
March 31,
Market 2004 2003
Houston 149,000 138,000
Dallas 89,000 89,000
Fort Worth 102,000 78,000
Maryland 124,000 126,000
District of Columbia 37,000 37,000
New Jersey 101,000 99,000
Chicago 33,000 32,000
Tampa 132,000 114,000
Orlando 42,000 49,000
Miami/Fort Lauderdale 58,000 37,000
Total 867,000 799,000
The following table sets forth the approximate number of members in each
of the products we offer as of March 31, 2004 and 2003.
March 31,
Product 2004 2003
AMERICAID (Medicaid-TANF) 589,000 519,000
AMERIKIDS (SCHIP) 189,000 189,000
AMERIPLUS (Medicaid-SSI) 74,000 67,000
AMERIFAM (FamilyCare) 15,000 24,000
Total 867,000 799,000
AMERIGROUP CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $ 388,112 $ 407,220
Short-term investments 29,499 8,750
Premium receivables 34,416 38,259
Deferred income taxes 8,144 10,164
Prepaid expenses and other current assets 15,873 15,995
Total current assets 476,044 480,388
Property, equipment, and software, net 40,736 42,158
Goodwill and other intangible assets, net 143,192 144,398
Long-term investments, including investments
on deposit for licensure 148,413 154,479
Other long-term assets 5,443 4,598
$ 813,828 $ 826,021
Liabilities and Stockholders' Equity
Current liabilities:
Claims payable $ 240,124 $ 239,532
Unearned revenue 26,749 54,324
Accounts payable 4,174 5,523
Accrued expenses, capital leases
and other current liabilities 45,621 53,431
Total current liabilities 316,668 352,810
Deferred income taxes, capital leases
and other long-term liabilities 10,100 11,497
Total liabilities 326,768 364,307
Stockholders' equity:
Common stock, $.01 par value 247 244
Additional paid-in capital 338,599 331,751
Retained earnings 148,214 129,719
Total stockholders' equity 487,060 461,714
$ 813,828 $ 826,021
AMERIGROUP CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three months ended
March 31,
2004 2003
Cash flows from operating activities:
Net income $ 18,438 $ 13,694
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 5,624 5,762
Loss on disposal or abandonment of
property, equipment and software 1,112 3
Deferred tax expense (benefit) 931 (662)
Amortization of deferred compensation 57 90
Tax benefit related to option exercises 2,397 89
Changes in assets and liabilities
increasing (decreasing) cash flows
from operations:
Premium receivables 3,843 2,455
Prepaid expenses and other
current assets 122 753
Other assets (816) (721)
Claims payable 592 24,682
Unearned revenue (27,575) (783)
Accounts payable, accrued expenses
and other current liabilities (4,984) (7,092)
Other long-term liabilities 338 838
Net cash provided by operating
activities 79 39,108
Cash flows from investing activities:
Proceeds from purchase of investments, net (14,572) (50,172)
Purchase of investments on deposit for
licensure, net (111) (671)
Purchase of property, equipment and software (3,999) (3,307)
Purchase of contract rights and
related assets 48 -
Cash acquired through Florida acquisition - 27,483
Net cash used in investing activities (18,634) (26,667)
Cash flows from financing activities:
Payment of capital lease obligations (1,131) (852)
Repayments of credit facility - (2,000)
Other financing activities, net 578 918
Net cash used in financing
activities (553) (1,934)
Net increase (decrease) in cash and cash
equivalents (19,108) 10,507
Cash and cash equivalents at beginning
of period 407,220 207,996
Cash and cash equivalents at end of period $ 388,112 $ 218,503
CONTACT: Julie Loftus Trudell, Vice President, Investor Relations of
AMERIGROUP Corporation, +1-757-321-3535.
SOURCE AMERIGROUP Corporation
-0- 04/29/2004
/CONTACT: Julie Loftus Trudell, Vice President, Investor Relations of
AMERIGROUP Corporation, +1-757-321-3535/
/Web site: http://www.amerigroupcorp.com/
(AGP)
CO: AMERIGROUP Corporation
ST: Virginia
IN: HEA INS
SU: ERN ERP CCA