EXHIBIT 99.1
[MEDAVANT LOGO]
INVESTOR RELATIONS CONTACT: MEDIA CONTACTS:
EMILY PIETRZAK TERESA STUBBS
MEDAVANT HEALTHCARE SOLUTIONS MEDAVANT HEALTHCARE SOLUTIONS
925-765-4410 812-206-4332
EPIETRZAK@MEDAVANTHEALTH.COM TSTUBBS@MEDAVANTHEALTH.COM
MEDAVANT ANNOUNCES SECOND QUARTER 2006 RESULTS
ATLANTA (August 8, 2006) -- MedAvant Healthcare Solutions (NASDAQ: PILL), a
leader in healthcare technology and transaction services, today announced
results for the second quarter ended June 30, 2006.
FINANCIAL HIGHLIGHTS
Second Quarter of 2006 compared with Second Quarter of 2005
Net revenue for the second quarter ended June 30, 2006 was $15,557,000 compared
with net revenue of $20,781,000 for the second quarter ended June 30, 2005.
Operating loss for the second quarter was $1,043,000 compared with an operating
loss for the prior-year period of $2,466,000. EBITDA for the second quarter
increased 690.3% to $814,000 compared with $103,000 for the prior-year period
(see reconciliation of EBITDA to net loss in the Consolidated Income Statement
below). This improvement in the operating margin of the business reflects
management's technology improvement initiatives and cost reduction measures over
the past year including the elimination of low margin business, vendor
recontracting, and a work force reduction. Net loss for the second quarter of
2006 was $1,839,000, compared with a net loss of $2,886,000 for the prior-year
period. Results for the second quarter of 2006 include the impact of Statement
of Financial Accounting Standards ("SFAS") No. 123R, Share-Based Payments, of
$310,000 and a bonus accrual as discussed below.
First Six Months of 2006 compared with First Six Months of 2005
Net revenue for the six months ended June 30, 2006, was $33,632,000 compared
with net revenue of $42,495,000 for the six months ended June 30, 2005.
Operating loss for the six months was $1,929,000 compared with $3,656,000 in the
prior-year period. EBITDA for the six months was $1,590,000 compared with
$1,510,000 in the prior-year period. Net loss for the six months was $3,412,000
compared with $4,677,000 in the prior-year period.
Second Quarter of 2006 compared with First Quarter of 2006
Net revenue for the second quarter ended June 30, 2006, was $15,557,000 compared
with net revenue of $18,075,000 for the first quarter ended March 31, 2006.
Operating loss for the second quarter was $1,043,000 compared with an operating
loss for the first quarter of $887,000. EBITDA for the second quarter increased
5.0% to $814,000 compared with $775,000 for the first quarter. Net loss for the
second quarter was $1,839,000 compared with a net loss of $1,573,000 for the
first quarter. The Company recorded $550,000 of bonus accrual during the second
quarter of 2006
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PILL Reports Second Quarter Results
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August 8, 2006
compared with $890,000 in the first quarter of 2006. This bonus accrual is
directly related to the Company's move towards a pay-for-performance structure
for all of its employees and would be paid after the end of the year depending
on the attainment of the Company's annual goals.
NEW BUSINESS ACTIVITY IN SECOND QUARTER
o Expanded NPPN, MedAvant's PPO network with the addition of Adventist
Health System, providing NPPN member access to 32 acute care hospitals
and hundreds of ancillary facilities
o Announced its National Provider Identifier (NPI) Solution, special
client services and website to facilitate client compliance in
submitting claims with valid NPI
SUBSEQUENT BUSINESS ACTIVITY ANNOUNCED IN THIRD QUARTER
o Announced three-year processing agreement with MD On-Line for claims
and real-time transaction processing. Based on the expected transaction
volume associated with the agreement, MD On-Line is expected to become
one of MedAvant's top 5 transaction processing customers. MD On-Line
switched from Emdeon for MedAvant's superior technology including the
Phoenix(SM) real-time processing platform and MedAvant's provider
portal.
o Released next generation provider portal that provides users with a
complete real-time view into the lifecycle of an electronic claim. The
new portal is already cited by customers as greatly enhancing
visibility and cash flow efficiency.
o Began work on redundant Tier 1 data center in Richardson, Texas, that
is expected to be completed in the fourth quarter 2006.
Commenting on the second quarter results, President and Chief Executive Officer
John Lettko stated, "Our measure of success in 2006 is dependent upon both our
ability to maintain a cost structure that builds margin as we add revenue and on
bringing in quality revenue. Although we are proud of our efforts to increase
our operating margins even as revenue has declined, we are not pleased with the
sequential decline in revenues from the first quarter due primarily to the
departure of two larger PPO clients. With a solid, efficient operational
structure now in place, the primary focus of our management team is growing the
Company through the right mix of revenue, the right partners and the right
businesses. We are well positioned to deliver on that potential with new
business activity underway in each business segment, including direct network
development with NPPN, our PPO business and a new processing agreement with MD
On-Line in our EDI business."
Douglas J. O'Dowd, Chief Financial Officer, added, "The results for the second
quarter continue to reflect our discipline in achieving maximum margin standards
with both new and existing customers. With gross margin reaching 71.0% for the
quarter, we achieved our highest gross margin level in two years and generated a
6.5% improvement from a year ago and a 3.3% improvement from the first quarter.
We demonstrated strong expense controls as we reduced SG&A costs by 18.6% from a
year ago and by 10.8% from the first quarter, resulting in nearly a seven-fold
increase in EBITDA from the prior year. This efficient cost structure positions
us for steadily increasing margins as we add revenue."
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PILL Reports Second Quarter Results
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August 8, 2006
SUMMARY OF FINANCIAL RESULTS
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Statements of Operations (Unaudited)
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THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
----------------------------- -----------------------------
(in $000's except per share data) 2006 2005 2006 2005
------------ ------------ ------------ ------------
Net revenues:
Transaction fees, cost containment services and license fees $ 13,790 $ 17,984 $ 29,364 $ 37,182
Communication devices and other tangible goods 1,767 2,797 4,268 5,313
------------ ------------ ------------ ------------
15,557 20,781 33,632 42,495
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Costs and expenses:
Cost of transaction fees, cost containment services
and license fees, excluding depreciation and
amortization 3,433 5,862 7,766 12,042
Cost of laboratory communication devices,
excluding depreciation and amortization 1,084 1,511 2,587 3,013
Selling, general and administrative expenses 10,226 12,564 21,689 25,189
Depreciation and amortization 1,857 2,569 3,519 5,166
Write-off of impaired assets -- 741 -- 741
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16,600 23,247 35,561 46,151
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Operating loss (1,043) (2,466) (1,929) (3,656)
Interest expense 796 420 1,483 1,021
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Net loss $ (1,839) $ (2,886) $ (3,412) $ (4,677)
============ ============ ============ ============
Basic and diluted loss per share $ (0.14) $ (0.23) $ (0.26) $ (0.37)
============ ============ ============ ============
Basic and diluted weighted average shares outstanding 13,204,842 12,664,516 13,204,275 12,645,455
============ ============ ============ ============
Reconciliation of EBITDA to net loss
Net loss $ (1,839) $ (2,886) $ (3,412) $ (4,677)
Add back interest 796 420 1,483 1,021
============ ============ ============ ============
Operating loss (1,043) (2,466) (1,929) (3,656)
Add back depreciation and amortization 1,857 2,569 3,519 5,166
------------ ------------ ------------ ------------
EBITDA $ 814 $ 103 $ 1,590 $ 1,510
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Summary Balance Sheets (Unaudited)
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PILL Reports Second Quarter Results
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JUNE 30, DECEMBER 31,
(in $000's) 2006 2005
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CURRENT ASSETS $ 18,333 $ 23,717
LONG-TERM ASSETS 49,978 51,924
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TOTAL ASSETS $ 68,311 $ 75,641
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CURRENT LIABILITIES $ 19,815 $ 23,702
LONG-TERM LIABILITIES 18,407 19,035
STOCKHOLDERS' EQUITY 30,089 32,904
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TOTAL LIABILITIES & EQUITY $ 68,311 $ 75,641
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Summary Statements of Cash Flows (Unaudited)
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SIX MONTHS ENDED JUNE 30,
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(in $000's) 2006 2005
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NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES $ (1,810) $ 1,742
NET CASH USED IN INVESTING ACTIVITIES (1,615) (1,445)
NET CASH USED IN FINANCING ACTIVITIES (1,500) (7,674)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (4,925) (7,377)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,546 12,374
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 621 $ 4,997
============ ============
During the six months of 2006, the Company used $1.8 million in cash from
operations. The Company's financing and investing activities have been funded
primarily through borrowings on our line of credit. As of August 7, 2006, the
Company has $3.6 million in available borrowings under its revolving line of
credit. The Company believes that it has sufficient cash and cash equivalents on
hand or available under its credit facility to fund its operations and capital
requirements. As an ongoing practice, the company's management continually
assesses its cost structure against projected revenue to balance and optimize
liquidity and profitability.
SECOND QUARTER 2006 CONFERENCE CALL
MedAvant will host a conference call on August 9, 2006, at 11:00 a.m. EDT. To
join this teleconference in the U.S. or Canada, please dial (800) 289-0496.
Please initiate the call a few minutes before 11:00 a.m. to ensure you are in
the queue as the conference begins. The live broadcast of MedAvant's quarterly
conference call will be available online at http://www.medavanthealth.com and
http://www.earnings.com on August 9, 2006, beginning at 11:00 a.m. EDT. The
online replay will follow shortly after the call and continue for 30 days.
A replay of the conference call will be available through August 16, 2006, by
dialing (888) 203-1112 and entering the confirmation number, 1589415.
ABOUT MEDAVANT HEALTHCARE SOLUTIONS
MedAvant, a leader in healthcare technology services, provides healthcare
transaction processing, medical cost containment services with NPPN, business
process outsourcing solutions and related value-added products to physicians,
payers, pharmacies, medical laboratories, and other healthcare suppliers. To
facilitate these services, MedAvant operates Phoenix(SM), a highly scalable and
secure national information platform, which supports real-time direct
connectivity and transaction processing between healthcare clients. For more
information about MedAvant, please visit the Company's website at
www.medavanthealth.com. MedAvant is a trade name of ProxyMed, Inc.
NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES
Certain of the information set forth herein, including EBITDA, are considered
non-GAAP financial measures. MedAvant believes this information is useful to
investors because it provides a basis for measuring our available capital
resources, our operating performance and our cash flow, excluding non-cash items
that would normally be included in the most directly comparable measures
calculated and presented in accordance with generally accepted accounting
principles.
Our management uses these non-GAAP financial measures along with the most
directly comparable GAAP financial measures in evaluating our operating
performance and capital
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August 8, 2006
resources and cash flow. Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information presented in
compliance with GAAP, and non-financial measures as reported by us may not be
comparable to similarly titled amounts reported by other companies.
FORWARD LOOKING STATEMENT
Statements in this release that are "forward-looking statements" are based on
current expectations and assumptions that are subject to risks and
uncertainties. In some cases, forward-looking statements can be identified by
terminology such as "may," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates," and similar
expressions. Actual results could differ materially from projected results
because of factors such as: the soundness of our business strategies relative to
the perceived market opportunities; MedAvant's ability to successfully develop,
market, sell, cross-sell, install and upgrade its clinical and financial
transaction services and applications to current and new physicians, payers,
medical laboratories and pharmacies; the ability to compete effectively on price
and support services; MedAvant's ability and that of its business associates to
perform satisfactorily under the terms of its contractual obligations, and to
comply with various government rules regarding healthcare and patient privacy;
entry into markets with vigorous competition, market acceptance of existing
products and services, changes in licensing programs, product price discounts,
delays in product development and related product release schedules, any of
which may cause revenues and income to fall short of anticipated levels; the
availability of competitive products or services; the continued ability to
protect the company's intellectual property rights, implementation of operating
cost structures that align with revenue growth; uninsured losses; adverse
results in legal disputes resulting in liabilities; unanticipated tax
liabilities; the effects of a natural disaster or other catastrophic event
beyond our control that results in the destruction or disruption of any of our
critical business or information technology systems. Any of these factors could
cause the actual results to differ materially from the guidance given at this
time. For further cautions about the risks of investing in MedAvant, we refer
you to the documents MedAvant files from time to time with the Securities and
Exchange Commission, including, without limitation, its most recently filed
Annual Report on Form 10-K/A.
MedAvant does not assume, and expressly disclaims, any obligation to update
information contained in this document. Although this release may remain
available on our website or elsewhere, its continued availability does not
indicate that we are reaffirming or confirming any of the information contained
herein.
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