EXHIBIT 99.1
[PROXYMED LOGO]
COMPANY NEWS RELEASE
FOR IMMEDIATE RELEASE
IMPORTANT NOTE: ProxyMed's live teleconference call to discuss its first quarter
2003 results is accessible by calling 1-800-915-4836 beginning at 10:00 a.m.
Eastern Time on Thursday, May 1, 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. Eastern Time on May 1st.
CONTACT:
JUDSON E. SCHMID
CHIEF FINANCIAL OFFICER
(954) 473-1001, EXT. 353
investorrelations@proxymed.com
PROXYMED REPORTS FIRST QUARTER 2003 RESULTS
- OPERATIONS OF MEDUNITE ACQUISITION RESULT IN REVENUES
OF $17.4 MILLION
AND LOSS PER SHARE OF $0.36 -
FORT LAUDERDALE, FLORIDA (Business Wire) April 30, 2003 - ProxyMed,
Inc. (Nasdaq: PILL), a leading provider of healthcare transaction processing
services and the nation's second largest processor of physician-based healthcare
transactions, today reported its operating results for the first quarter of
2003. The operations of MedUnite, Inc., which was acquired by ProxyMed on
December 31, 2002, are included in the 2003 quarterly results.
FIRST QUARTER 2003 RESULTS
ProxyMed reported revenues of $17.4 million for the first quarter of
2003, an increase of 52% compared to revenues of $11.5 million for the same
period of 2002. For the first quarter of 2003, net loss applicable to common
shareholders and net loss per share were $2.5 million and $0.36, respectively,
compared to a net loss of $0.6 million and net loss per share of $0.11 for the
first quarter of 2002. Diluted weighted average shares outstanding for the
quarters ended March 31, 2003 and 2002 were 6,782,938 and 5,114,596,
respectively.
Additionally, for the first quarter of 2003, the Company reported an
EBITDA loss (a non-GAAP measure defined as earnings before interest, taxes,
depreciation and amortization) of $0.9 million, compared to an EBITDA profit of
$0.6 million a year ago. The management of ProxyMed believes that EBITDA is a
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meaningful measurement of operating performance as it allows for comparison of
performance between other competitors in the healthcare IT industry and serves
as one of the factors in determining its management performance compensation.
Cash flow used in operations for the quarter ended March 31, 2003 was
$0.5 million versus cash flow provided from operations of $0.1 million for the
prior year. Total cash at March 31, 2003, including restricted cash, was
approximately $11.5 million.
"As we had expected and discussed in our conference calls earlier in
the year, the EBITDA and net losses at MedUnite outweighed the positive EBITDA
and net income at ProxyMed, resulting in losses on a consolidated basis.
However, during the quarter we made tremendous strides both operationally and
financially in this business, reducing the MedUnite monthly EBITDA loss to
$300,000 exiting the quarter compared to $1.6 million in the months prior to our
acquisition," said Michael K. Hoover, ProxyMed's chairman and chief executive
officer. "With this progress, we are confident that we will be able to achieve
consolidated EBITDA profitability in the second quarter while seeing EBITDA
profitability in the MedUnite business by the end of the third quarter of the
year."
SEGMENT PERFORMANCE
ELECTRONIC HEALTHCARE TRANSACTION SERVICES
As noted above, the operations of MedUnite are not included in the 2002
results reported as the acquisition was consummated on December 31, 2002. Where
indicated, ProxyMed has provided comparative information with and without the
operations of MedUnite in the discussion of its Electronic healthcare
transaction services segment for 2003. The results of operations of MedUnite for
the quarter ended March 31, 2003 used to compute such comparative information is
contained in the "Segment and Other Information" tables after the text of this
press release.
The Electronic healthcare transaction services segment reported
revenues of $11.3 million for the first quarter of 2003 (including $4.6 million
from MedUnite), an increase of 114% compared to revenues of $5.3 million for the
2002 period. Excluding MedUnite, revenue growth between the periods was 26%. On
a sequential basis, revenue, excluding MedUnite, increased by 9% over the fourth
quarter of 2002 and was fueled by an increase in electronic claims processed due
largely to strong new sales and implementations and growth from existing
customers.
As shown in the table below, total healthcare transactions processed
during the first quarter of 2003 quarter were 56.5 million (including 21.9
million from MedUnite), up 114% from the 26.4 million transaction processed in
the first quarter of 2002. Excluding MedUnite, transaction growth between the
periods was 31% and sequential quarterly growth was 15%. ProxyMed now boasts an
annual run rate of almost 226 million total healthcare transactions.
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Management considers the following metrics important to monitor its
transaction business:
- ---------------------------------------- ------------ ------------ ------------
DESCRIPTION Q/E Q/E Q/E
3/31/03 12/31/02 3/31/02
- ---------------------------------------- ------------ ------------ ------------
Core transactions (excluding encounters) 27,739,200 24,534,800 20,219,700
Acquired transactions (from MedUnite) 21,862,200 -- --
Encounters 6,877,900 5,571,500 6,198,400
---------- ---------- ----------
TOTAL TRANSACTIONS 56,479,300 30,106,300 26,418,100
========== ========== ==========
In addition to this strong overall growth, ProxyMed also announced
substantial progress towards two previously announced goals. First, ProxyMed's
direct connection with Aetna has resulted in strong transaction growth and is on
track to exceed previously published estimates of 7.2 million transactions
annually. Second, the Company has seen a significant increase in its real-time
transactions, processing more than 7.4 million real-time transactions in the
first quarter on the real-time network acquired from MedUnite.
SG&A expenses for this segment increased by 196% between periods
primarily due to $4.5 million in SG&A expenses incurred related to MedUnite's
operations. Excluding MedUnite, SG&A expenses increased by 23% due to costs
related to our HIPAA remediation efforts, implementation staffing, and
sales/marketing programs implemented since the first quarter of last year.
EBITDA for the first quarter of 2003 was a loss of $0.9 million
compared to an EBITDA profit of $0.5 million in the first quarter of 2002.
Excluding a $1.6 million EBITDA loss attributable to MedUnite, EBITDA for this
segment was a profit of $0.7 million compared to an EBITDA profit of $0.5
million in the prior period. Included in the EBITDA loss for the first quarter
of 2003 is a loss of $0.1 million on the disposition of certain assets owned and
leased related to MDP which was acquired in 2001.
Depreciation and amortization related to ProxyMed's transaction
business was $1.1 million for the first quarter of 2003, including a total of
$0.7 million for MedUnite. Of the MedUnite amount, $0.5 million is related to
the amortization of intangible assets acquired in the acquisition.
As a result of the $13.4 million in convertible debt issued to the
former owners of MedUnite and the financing of certain liabilities of MedUnite
during the 2003 period, the Company incurred net interest expense of $0.2
million during the quarter in its transaction services segment.
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"Despite our teams being very busy with HIPAA initiatives and the
MedUnite integration, our old and new associates were able to come together
quickly to execute our strategies to sustain and accelerate core transaction
growth," said Judson E. Schmid, ProxyMed's chief financial officer. "Excluding
the results at MedUnite, our transaction segment EBITDA performance actually
increased more than 37% from last year including an increase in healthcare
transactions processed of 31%."
LABORATORY COMMUNICATIONS SOLUTIONS
The Laboratory Communications Solutions segment reported revenues of
$6.1 million for the first quarter of 2003, a decrease of 1% compared to
revenues of $6.2 million for 2002.
SG&A expenses in the lab segment decreased 6% between periods primarily
due to proactive cost controls implemented early in the fourth quarter of 2002.
As a result of these cost savings, EBITDA for the first quarter of 2003
increased by 9% to $0.8 million from $0.7 million in the first quarter of 2002
and EBITDA margins increased slightly to 13% in 2003 from 12% in the 2002
period.
During the first quarter, ProxyMed added 18 new accounts, and 303 new
client locations to our FleetWatch proactive monitoring service. Business with
national and regional clinical reference labs was stable despite on-going
merger-driven consolidation in our customer base. In addition, the Company
initiated a new focus on growing the hospital outreach segment of our customer
base, which today is under-penetrated relative to the market in general.
ProxyMed views the hospital outreach market as our largest new business
opportunity going forward.
"As previously noted in our updated guidance call for 2003 held in
January, revenues for this segment were expected to start on a slow note in the
first quarter and improve throughout the year," said Nancy J. Ham, ProxyMed's
president and chief operating officer. "In recent weeks we've had some exciting
conversations with our lab partners regarding the introduction of new technology
and services solutions and the initial interest has been very encouraging. With
these and other opportunities that we are working on, we expect to meet our
financial goals in this segment for the full year."
CORPORATE
As a result of increased liability insurance premiums, professional
fees and personnel costs, corporate SG&A expenses for the first quarter of 2003
increased 39% compared to the first quarter of 2002. Sequentially, corporate
SG&A costs increased 29% over the fourth quarter of 2002.
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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, INCLUDING
STATEMENTS REGARDING OUR EXPECTATIONS OF FUTURE PROFITABILITY, 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, 2002 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.
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PROXYMED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31,
-------------------------------
2003 2002
------------ ------------
Revenues $ 17,430,000 $ 11,503,000
------------ ------------
Costs and expenses:
Cost of sales 7,493,000 5,379,000
Selling, general and administrative expenses 10,760,000 5,493,000
Depreciation and amortization 1,330,000 569,000
Loss on disposal of assets 125,000 --
------------ ------------
Total operating costs and expenses 19,708,000 11,441,000
------------ ------------
Operating income (loss) (2,278,000) 62,000
Interest expense, net (174,000) (13,000)
------------ ------------
Net income (loss) (2,452,000) 49,000
Deemed dividends and other charges -- 612,000
------------ ------------
Net loss applicable to common shareholders $ (2,452,000) $ (563,000)
============ ============
Basic and diluted loss per share $ (0.36) $ (0.11)
============ ============
Basic and diluted weighted average shares outstanding 6,782,938 5,114,596
============ ============
EBITDA (1) $ (948,000) $ 631,000
============ ============
- --------------
(1) EBITDA is a metric that ProxyMed believes is a meaningful measurement
of operating performance as it allows for comparison of performance
between other competitors in the healthcare IT industry. Additionally,
ProxyMed utilizes EBITDA as one of the factors in determining its
management performance rewards. The calculation of EBITDA has no basis
in Generally Accepted Accounting Principles ("GAAP").
A reconciliation to Operating income (loss), a corresponding measure
under GAAP is as follows:
EBITDA $ (948,000) $ 631,000
Deduct: Depreciation and Amortization 1,330,000 569,000
----------- -----------
Operating income (loss) $(2,278,000) $ 62,000
=========== ===========
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PROXYMED, INC. AND SUBSIDIARIES
SEGMENT AND OTHER INFORMATION (UNAUDITED)
Three Months Ended March 31,
-------------------------------
2003 2002
------------ ------------
Revenues:
Electronic healthcare transaction processing $ 11,291,000 $ 5,278,000
Laboratory communication solutions 6,139,000 6,225,000
------------ ------------
$ 17,430,000 $ 11,503,000
============ ============
Cost of sales:
Electronic healthcare transaction processing $ 4,266,000 $ 2,132,000
Laboratory communication solutions 3,227,000 3,247,000
------------ ------------
$ 7,493,000 $ 5,379,000
============ ============
Selling, general and administrative expenses:
Electronic healthcare transaction processing $ 7,787,000 $ 2,630,000
Laboratory communication solutions 2,093,000 2,230,000
Corporate 880,000 633,000
------------ ------------
$ 10,760,000 $ 5,493,000
============ ============
Depreciation and amortization:
Electronic healthcare transaction processing $ 1,056,000 $ 364,000
Laboratory communication solutions 230,000 155,000
Corporate 44,000 50,000
------------ ------------
$ 1,330,000 $ 569,000
============ ============
Operating income (loss):
Electronic healthcare transaction processing $ (1,941,000) $ 152,000
Laboratory communication solutions 587,000 593,000
Corporate (924,000) (683,000)
------------ ------------
$ (2,278,000) $ 62,000
============ ============
EBITDA:
Electronic healthcare transaction processing $ (885,000) $ 516,000
Laboratory communication solutions 817,000 748,000
Corporate (880,000) (633,000)
------------ ------------
$ (948,000) $ 631,000
============ ============
MEDUNITE STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended
March 31, 2003
------------------
Revenues $ 4,628,000
-----------
Costs and expenses:
Cost of sales 1,677,000
Selling, general and administrative expenses 4,545,000
Depreciation and amortization 654,000
-----------
Total operating costs and expenses 6,876,000
-----------
Operating loss (2,248,000)
Interest expense, net (214,000)
-----------
Net loss $(2,462,000)
===========
EBITDA $(1,594,000)
===========
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PROXYMED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
March 31, December 31,
2003 2002
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 10,347,000 $ 16,378,000
Accounts receivable - trade, net 10,970,000 10,060,000
Notes and other receivables 502,000 503,000
Inventory 2,912,000 2,774,000
Other current assets 1,614,000 1,022,000
------------- -------------
Total current assets 26,345,000 30,737,000
Property and equipment, net 5,827,000 5,719,000
Goodwill, net 32,944,000 32,797,000
Purchased technology, capitalized software and other intangibles, net 17,800,000 18,220,000
Restricted cash 1,151,000 825,000
Other assets 400,000 406,000
------------- -------------
Total assets $ 84,467,000 $ 88,704,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term debt $ 1,193,000 $ --
Accounts payable and accrued expenses 16,671,000 21,472,000
Deferred revenue 494,000 516,000
------------- -------------
Total current liabilities 18,358,000 21,988,000
Convertible notes 13,400,000 13,400,000
Other long-term debt 1,938,000 --
Long-term deferred revenue and other long-term liabilities 2,488,000 2,581,000
------------- -------------
Total liabilities 36,184,000 37,969,000
------------- -------------
Stockholders' equity:
Series C 7% Convertible preferred stock -- --
Common stock 7,000 7,000
Additional paid-in capital 146,187,000 146,187,000
Accumulated deficit (97,725,000) (95,273,000)
Note receivable from stockholder (186,000) (186,000)
------------- -------------
Total stockholders' equity 48,283,000 50,735,000
------------- -------------
Total liabilities and stockholders' equity $ 84,467,000 $ 88,704,000
============= =============
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PROXYMED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31,
--------------------------------
2003 2002
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (2,452,000) $ 49,000
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,330,000 569,000
Provision for (recovery of) doubtful accounts 54,000 (34,000)
Provision for obsolete inventory 10,000 60,000
Loss on disposal of fixed assets 125,000 --
Changes in assets and liabilities, net of
effect of acquisitions and dispositions:
Accounts and other receivables (984,000) (91,000)
Inventory (148,000) (164,000)
Other current assets (262,000) (341,000)
Accounts payable and accrued expenses 1,797,000 12,000
Deferred revenue (38,000) 94,000
Other, net 74,000 (21,000)
------------ ------------
Net cash provided by (used in) operating activities (494,000) 133,000
------------ ------------
Cash flows from investing activities:
Capital expenditures (910,000) (413,000)
Capitalized software (276,000) (138,000)
Collections on notes receivable 81,000 14,000
Proceeds from sale of fixed assets 64,000 --
Increase in restricted cash (326,000) --
Payments for acquisition-related costs (3,860,000) --
------------ ------------
Net cash used in investing activities (5,227,000) (537,000)
------------ ------------
Cash flows from financing activities:
Payment of note payable related to acquisition of business -- (7,000,000)
Payment of notes payable, capital leases and long-term debt (310,000) (29,000)
------------ ------------
Net cash used in financing activities (310,000) (7,029,000)
------------ ------------
Net decrease in cash and cash equivalents (6,031,000) (7,433,000)
Cash and cash equivalents at beginning of period 16,378,000 12,601,000
------------ ------------
Cash and cash equivalents at end of period $ 10,347,000 $ 5,168,000
============ ============
During the quarter ended March 31, 2003, the Company financed a total of $2.9
million in previously existing accounts payable and accrued liabilities at
December 31, 2002 for MedUnite through the issuance of notes payable.
Additionally, the Company also entered into a financing arrangement for $0.4
million for certain liability insurance also through the issuance of a note
payable.
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