EXHIBIT 99.2
(PROXYMED LOGO)
COMPANY NEWS RELEASE
FOR IMMEDIATE RELEASE
IMPORTANT NOTE: ProxyMed's live teleconference call to discuss its fourth
quarter and annual 2002 results is accessible by calling 1-800-915-4836
beginning at 10:00 a.m. Eastern Time on Thursday, February 20, 2003 and will be
simultaneously broadcast on the Internet at WWW.PROXYMED.COM. Replays of the
teleconference call will be available at WWW.PROXYMED.COM after 1:00 p.m. ET on
February 20th.
CONTACT:
JUDSON E. SCHMID
CHIEF FINANCIAL OFFICER
(954) 473-1001, EXT. 353
INVESTORRELATIONS@PROXYMED.COM
PROXYMED REPORTS RECORD REVENUES FOR THE FOURTH QUARTER AND
ITS FIRST EVER POSITIVE ANNUAL EARNINGS PER SHARE
- PROXYMED ALSO REPORTS ON 2002 ANNUAL RESULTS AND PROVIDES ADDITIONAL
MEDUNITE DETAIL -
FORT LAUDERDALE, FLORIDA (Business Wire) February 20, 2003 - ProxyMed,
Inc. (Nasdaq: PILL), a leading provider of healthcare transaction processing
services, today reported its operating results for the fourth quarter and 2002
year. MedUnite, Inc., which was acquired by ProxyMed on December 31, 2002, is
not included in the 2002 results.
FOURTH QUARTER 2002 RESULTS
ProxyMed reported record revenues of $13.2 million for the fourth
quarter, an increase of over 3% compared to revenues of $12.8 million for the
same period of 2001. Net income applicable to common shareholders and diluted
income per share were $0.7 million and $0.11, respectively, compared to a net
loss of $4.7 million and diluted net loss per share of $1.44 for the fourth
quarter of 2001. Diluted weighted average shares outstanding for the quarters
ended December 31, 2002 and 2001 were 6,762,089 and 3,286,149, respectively.
Additionally, for the fourth quarter of 2002, the Company's EBITDA
profit (a non-GAAP measure defined as earnings before interest, taxes,
depreciation and amortization) increased 52% to a record $1.4 million, compared
to $0.9 million a year ago. Also compared to the prior year, consolidated EBITDA
margins increased to 11% from 7% in 2001.
ANNUAL 2002 RESULTS
For the year ended December 31, 2002, ProxyMed reported record revenues
of $50.2 million, an increase of 16% compared to revenues of $43.2 million for
the 2001 year. Net income applicable to common shareholders and diluted income
per share were $1.3 million and $0.21, respectively, compared to a net loss of
$19.1 million and diluted net loss per share of $8.81 for 2001. Diluted weighted
average shares outstanding for the years ended December 31, 2002 and 2001 were
6,396,893 and 2,162,352, respectively.
Additionally, for the 2002 year the Company's EBITDA profit increased
by 158% to a record $4.0 million, compared to $1.6 million a year ago. Compared
to the prior year, consolidated EBITDA margins more than doubled to 8% from 4%
in 2001.
Cash flow from operations for the year ended December 31, 2002 was $2.7
million versus $1.0 million for the prior year. Total cash at December 31, 2002,
including cash acquired from MedUnite, was approximately $17.2 million and is
currently at approximately $13.0 million. To ensure its cash needs for
operations and capital projects for 2003, the Company has been successful in
negotiating extended payment terms, including installment-based payments, for
many of the larger obligations related to MedUnite in order to improve its cash
flow.
"Achieving a full year of positive earnings per share is a major
milestone for ProxyMed," said Judson E. Schmid, ProxyMed's chief financial
officer. "In addition, throughout the year we continued to make strong progress
in our core operations, which culminated in the fourth quarter with the
achievement of record revenues, EBITDA, and EBITDA margins. Our core transaction
growth (excluding encounters) also continued to increase as a result of success
with our payer partners and we achieved a solid sequential growth rate of 6%
over last quarter, despite there being 2 fewer processing days in the quarter."
SEGMENT PERFORMANCE
ELECTRONIC HEALTHCARE TRANSACTION SERVICES
The Electronic Healthcare Transaction Services segment reported
revenues of $6.1 million for the fourth quarter of 2002, an increase of 13%
compared to revenues of $5.4 million for 2001. EBITDA for the fourth quarters of
2002 and 2001 was flat at $0.7 million. EBITDA margins also remained steady at
12% for both quarters due to the mix in transaction revenues and increased SG&A
costs in the areas of sales, implementation and HIPAA remediation.
Sequentially, revenues increased by 6% to $6.1 million over the third
quarter of 2002, while EBITDA was up 16% to $0.7 million. EBITDA margins also
improved to 12% from the 11% margins achieved last quarter.
For the 2002 year, the transaction segment reported revenues of $22.4
million, an increase of 32% over 2001 revenues of $16.9 million. EBITDA grew
from $0.5 million in 2001 to $2.2 million in 2002 while annual EBITDA margins
increased from 3% to 10%.
2
During the fourth quarter, ProxyMed continued its growth by adding 22
new payers and strategic partners and also adding over 4,000 new physicians
representing over 14,400 services sold, or 3.6 services sold per physician, in
its transaction segment.
"Since the driving force behind ProxyMed's growth is our transaction
business, we are pleased at our continued progress in this segment, as
highlighted by the strong sequential growth of 6% in our core transaction
volume," said Nancy J. Ham, ProxyMed's president and chief operating officer.
"In addition, the number of new physicians and partners that we signed in the
quarter provide a strong foundation for accelerating growth in the first two
quarters of 2003. We are confident that our recent investments in expanding our
implementation throughput have us well positioned to quickly bring these
customers into production."
LABORATORY COMMUNICATIONS SOLUTIONS
The Laboratory Communications Solutions segment reported revenues of
$7.1 million for the fourth quarter of 2002, a decrease of 4% compared to
revenues of $7.4 million for 2001. However, due to proactive cost controls
implemented early in the fourth quarter, EBITDA for the quarter increased 45% to
$1.4 million. EBITDA margins increased from almost 13% to over 19% as a result
of the mix of revenues and cost controls implemented.
Sequentially, revenues were flat compared to the third quarter of 2002
while EBITDA was up 28% from $1.1 million. EBITDA margins also improved from
last quarter's margin of 15%.
For the 2002 year, the lab segment reported revenues of $27.7 million,
an increase of over 5% compared to revenues of $26.3 million for 2001. EBITDA
for the 2002 year was up slightly to $4.4 million while annual EBITDA margins
remained steady at 16%.
During the fourth quarter, ProxyMed introduced two significant new
products. First, ProxyMed announced the general availability of Report Tracker,
an innovative, comprehensive and scalable reporting technology. Report Tracker
technology provides proof of delivery and audit trail capabilities in a design
that can host a variety of access control devices and also take advantage of
Internet connectivity options. This new design allows labs the level of control
and security they need for HIPAA, as well as greater flexibility to take
advantage of evolving connectivity options and protocols. ProxyMed also
introduced Quick-Req, its new modular approach to lab order entry/result
reporting solutions. Initial feedback and interest on both products has been
strong.
"Even with the relative maturity of our lab business, we continue to
maintain strong profitability. We achieved this by focusing on higher margin
products, implementing cost controls, and completing the successful integration
of our KenCom acquisition," added Nancy Ham. "Looking ahead to 2003, we are
well-positioned with new technologies targeted at upselling our existing large
customer base, and with increasing penetration into newer markets such as
anatomical pathology."
3
STATISTICS
Management considers the following metrics important to monitor its
transaction business:
---------------------------------- -------------- ------------ ------------- --------------- -------------
DESCRIPTION ANNUAL ANNUAL Q/E Q/E Q/E
2002 2001 12/31/02 9/30/02 12/31/01
---------------------------------- -------------- ------------ ------------- --------------- -------------
Core transactions (excluding 89,122,600 60,072,800 24,534,800 23,211,800(1) 19,272,600
encounters)
Encounters 25,044,900 27,418,800 5,571,500 5,977,400 7,195,600
----------- ---------- ---------- ---------- ----------
TOTAL TRANSACTIONS 114,167,500 87,941,600 30,106,300 29,189,200 26,468,200
=========== ========== ========== ========== ==========
Number of direct physicians 74,000 70,000 60,000
Number of indirect physicians 63,850 56,250 40,000
Number of services utilized per 2.5 2.05 1.3 (est)
all direct physicians
(1) Includes "acquired transactions" from Q3 2002 acquisitions
ACQUISITION
In addition to these operating events, during the fourth quarter of
2002 ProxyMed also acquired all of the capital stock of MedUnite, Inc., a
leading provider of healthcare claims processing services founded by seven of
the nation's largest health insurance companies, for $10.0 million in cash and
$13.4 million in 4% convertible notes. In addition to the consideration paid,
ProxyMed has also recorded approximately $9.0 million in acquisition-related
expenses including transaction and exit costs. While the year end 2002 audited
balance sheet of MedUnite is still being finalized, the purchase price is
expected to include the following allocation to intangible assets:
o Customer relationships of $6.6 million to be amortized over 10
years
o Legacy technology platform of $1.2 million to be amortized
over 1 year
o New technology platforms of $4.8 million to be amortized over
5 years. Additional development expenditures of $2.0 million
are expected to be spent in relation to these projects in 2003
o Goodwill of approximately $23 million
The acquisition of MedUnite on December 31, 2002 did not have any
significant financial impact on ProxyMed's results of operations in the fourth
quarter of 2002, other than the incurring of $97,000 in acquisition expenses,
which were included in the company's operating expenses.
4
"With all of the progress we made in 2002 it was extremely rewarding to
culminate the year with our acquisition of MedUnite. The combined operations of
ProxyMed and MedUnite create the second largest physician claims clearinghouse
in the country," said Michael K. Hoover, ProxyMed's chairman and chief executive
officer. "Our goal for 2003 is clear - integrate MedUnite into our existing
operations to achieve positive cash contribution from MedUnite as soon as
possible and expand our relationship with the seven founding members and
NDCHealth. Achieving both of these goals will provide a solid base to increase
shareholder value."
ABOUT PROXYMED - WHERE HEALTHCARE CONNECTS(TM)
ProxyMed solves the business problems of physician offices every day by
automating their financial, administrative and clinical transactions with
healthcare institutions. To facilitate these services, ProxyMed operates
ProxyNet(R), its secure, proprietary national electronic information network,
which provides physicians and other healthcare providers with direct
connectivity to one of the industry's largest list of payers, the largest list
of chain and independent pharmacies and the largest list of clinical
laboratories. ProxyMed exceeds customer expectations through our expertise,
proven methodologies and dedication to service excellence.
SAFE HARBOR STATEMENT
NOTE: THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT REFLECT OUR
CURRENT ASSUMPTIONS AND EXPECTATIONS REGARDING FUTURE EVENTS. WHILE THESE
STATEMENTS REFLECT OUR CURRENT JUDGMENT, THEY ARE SUBJECT TO RISKS AND
UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM PROJECTED RESULTS
DUE TO A NUMBER OF FACTORS, INCLUDING, THE SOUNDNESS OF OUR BUSINESS STRATEGIES
RELATIVE TO THE PERCEIVED MARKET OPPORTUNITIES; OUR ABILITY TO INTEGRATE
MEDUNITE INTO OUR EXISTING OPERATIONS, OUR ABILITY TO IDENTIFY SUITABLE FUTURE
ACQUISITION CANDIDATES; OUR ABILITY TO SUCCESSFULLY INTEGRATE ANY FUTURE
ACQUISITIONS; OUR ABILITY TO SUCCESSFULLY DEVELOP, MARKET, SELL, CROSS-SELL,
INSTALL AND UPGRADE OUR CLINICAL AND FINANCIAL TRANSACTION SERVICES AND
APPLICATIONS TO CURRENT AND NEW PHYSICIANS, PAYERS, MEDICAL LABORATORIES AND
PHARMACIES; OUR ABILITY TO COMPETE EFFECTIVELY ON PRICE AND SUPPORT SERVICES;
OUR ASSESSMENT OF THE HEALTHCARE INDUSTRY'S NEED, DESIRE AND ABILITY TO BECOME
TECHNOLOGY EFFICIENT; AND OUR ABILITY AND THAT OF OUR BUSINESS ASSOCIATES TO
COMPLY WITH VARIOUS GOVERNMENT RULES REGARDING HEALTHCARE AND PATIENT PRIVACY.
THESE AND OTHER RISK FACTORS ARE MORE FULLY DISCUSSED IN THE RISK FACTORS
DISCLOSURE IN OUR FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001 AND OUR OTHER
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH WE STRONGLY URGE YOU
TO READ. WE EXPRESSLY DISCLAIM ANY INTENT OR OBLIGATION TO UPDATE ANY
FORWARD-LOOKING STATEMENTS. WHEN USED, THE WORDS "BELIEVES," "ESTIMATED,"
"EXPECTS," "ANTICIPATES," "MAY" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS.
MORE INFORMATION ON PROXYMED IS AVAILABLE ON ITS HOME PAGE AT www.proxymed.com.
5
PROXYMED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Revenues $ 13,193,600 $ 12,773,200 $ 50,181,800 $ 43,230,300
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 5,962,800 6,497,300 23,023,500 20,408,000
Selling, general and administrative expenses 5,817,400 5,345,800 23,144,700 21,266,900
Write-of of impaired assets 37,500 91,100 37,500 91,100
Operating depreciation and amortization (1) 510,000 462,500 1,968,700 1,766,700
------------ ------------ ------------ ------------
Total operating costs and expenses (1) 12,327,700 12,396,700 48,174,400 43,532,700
------------ ------------ ------------ ------------
Operating income (loss), as adjusted (1) 865,900 376,500 2,007,400 (302,400)
Acquisition-related amortization charges (229,000) (991,900) (667,300) (6,409,700)
Litigation settlement, net -- 39,800 264,500 39,800
Interest income (expense), net 94,500 (105,300) 345,300 (125,600)
------------ ------------ ------------ ------------
Net income (loss) 731,400 (680,900) 1,949,900 (6,797,900)
Deemed dividends and other charges -- 4,042,600 611,700 12,262,000
------------ ------------ ------------ ------------
Net income (loss) applicable to common shareholders $ 731,400 $ (4,723,500) $ 1,338,200 $(19,059,900)
============ ============ ============ ============
Diluted income (loss) per share: $ 0.11 $ (1.44) $ 0.21 $ (8.81)
============ ============ ============ ============
Diluted weighted average shares outstanding 6,762,089 3,286,149 6,396,893 2,162,352
============ ============ ============ ============
EBITDA (2) $ 1,413,400 $ 930,100 $ 4,013,600 $ 1,555,400
============ ============ ============ ============
(1) Excludes acquisition-related amortization charges related to goodwill and
other intangibles. Amortization of goodwill ceased as of January 1, 2002
under FAS No. 142.
(2) EBITDA is a metric that ProxyMed believes is a meaningful measurement of
operating performance. The calculation of EBITDA has no basis in Generally
Accepted Accounting Principles.
6
PROXYMED, INC. AND SUBSIDIARIES
SEGMENT INFORMATION (UNAUDITED)
Three Months Ended December 31, Year Ended December 31,
--------------------------------- ---------------------------------
2002 2001 2002 2001
-------------- -------------- -------------- --------------
Revenues:
Electronic healthcare transaction processing $ 6,095,400 $ 5,404,800 $ 22,439,100 $ 16,938,400
Laboratory communication solutions 7,098,200 7,368,400 27,742,700 26,291,900
------------ ------------ ------------ ------------
$ 13,193,600 $ 12,773,200 $ 50,181,800 $ 43,230,300
============ ============ ============ ============
Cost of sales:
Electronic healthcare transaction processing $ 2,381,300 $ 2,281,300 $ 8,793,600 $ 6,531,200
Laboratory communication solutions 3,581,500 4,216,000 14,229,900 13,876,800
------------ ------------ ------------ ------------
$ 5,962,800 $ 6,497,300 $ 23,023,500 $ 20,408,000
============ ============ ============ ============
Selling, general and administrative expenses:
Electronic healthcare transaction processing $ 2,992,300 $ 2,465,500 $ 11,429,600 $ 9,905,600
Laboratory communication solutions 2,144,400 2,208,900 9,120,600 8,168,500
Corporate 680,700 671,400 2,594,500 3,192,800
------------ ------------ ------------ ------------
$ 5,817,400 $ 5,345,800 $ 23,144,700 $ 21,266,900
============ ============ ============ ============
Depreciation and amortization:
Electronic healthcare transaction processing $ 437,200 $ 1,233,400 $ 1,581,400 $ 7,285,400
Laboratory communication solutions 255,600 157,900 856,700 560,600
Corporate 46,200 63,100 197,900 330,400
------------ ------------ ------------ ------------
$ 739,000 $ 1,454,400 $ 2,636,000 $ 8,176,400
============ ============ ============ ============
Operating income (loss):
Electronic healthcare transaction processing $ 247,100 $ (650,300) $ 597,000 $ (6,858,700)
Laboratory communication solutions 1,116,700 785,600 3,535,500 3,685,900
Corporate (726,900) (750,700) (2,792,400) (3,539,300)
------------ ------------ ------------ ------------
$ 636,900 $ (615,400) $ 1,340,100 $ (6,712,100)
============ ============ ============ ============
EBITDA:
Electronic healthcare transaction processing $ 721,800 $ 658,000 $ 2,215,900 $ 501,600
Laboratory communication solutions 1,372,300 943,500 4,392,200 4,246,600
Corporate (680,700) (671,400) (2,594,500) (3,192,800)
------------ ------------ ------------ ------------
$ 1,413,400 $ 930,100 $ 4,013,600 $ 1,555,400
============ ============ ============ ============
7