EXHIBIT 99.2
[LOGO] ProxyMed
Company News Release
FOR IMMEDIATE RELEASE
IMPORTANT NOTE: ProxyMed's live teleconference call to discuss its third quarter
2002 results and outlook for the fourth quarter of 2002 is accessible by calling
1-800-915-4836 beginning at 10:00 a.m. Eastern Daylight Time on Thursday,
October 24, 2002 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. EDT on October 24th.
Contact:
Judson E. Schmid
Chief Financial Officer
(954) 473-1001, ext. 353
investorrelations@proxymed.com
PROXYMED REPORTS THIRD QUARTER 2002 RESULTS INCLUDING REVENUE
OF $12.9 MILLION AND EARNINGS PER SHARE OF $0.11
Fort Lauderdale, Florida (Business Wire) October 23, 2002 - ProxyMed,
Inc. (Nasdaq: PILL), a leading provider of physician healthcare transaction
processing services, today reported operating results for its third quarter of
2002.
ProxyMed reported revenues of $12.9 million for the third quarter, an
increase of 8% compared to revenues of $11.9 million for the same period of
2001. For the nine months ended September 30, 2002, revenues were $37.0 million,
an increase of 21% compared to revenues of $30.5 million for the nine months
ended September 30, 2001.
For the third quarter of 2002, net income applicable to common
shareholders and diluted earnings per share were $0.7 million and $0.11,
respectively, compared to a net loss of $4.3 million and diluted net loss per
share of $1.85 for the third quarter of 2001. Diluted weighted average shares
outstanding for the quarters ended September 30, 2002 and 2001 were 6,785,096
and 2,339,700, respectively.
Included in the results for the third quarter of 2002 is a favorable
settlement of a contract dispute in the Company's Laboratory Communication
Solution segment for $264,500, or $0.04 per diluted share.
For the nine months ended September 30, 2002, net income applicable to
common shareholders and diluted earnings per share were $0.6 million and $0.10,
respectively, compared to a net loss of $14.3 million and diluted net loss per
share of $8.04 for the nine months ended September 30, 2001. Diluted weighted
average shares outstanding for the nine months ended September 30, 2002 and 2001
were 6,282,258 and 1,783,637, respectively.
Additionally, for the third quarter of 2002, the Company's profit
before interest, taxes, depreciation and amortization (EBITDA) increased 42% to
$1.1 million, compared to $0.8 million a year ago. For the nine months ended
September 30, 2002, the Company's EBITDA increased 316% to $2.6 million,
compared to $0.6 million for the same period in 2001.
Judson E. Schmid, ProxyMed's chief financial officer said, "With our
second straight quarter of positive EPS, we remain encouraged with our progress
so far this year. Our focus on driving higher EBITDA margins from our core
business resulted in our best quarter ever, with an overall EBITDA margin of
8.3%. This increase was fueled by a 4% growth rate in core financial
transactions over last quarter (excluding encounters) as well as from
transactions from our acquisitions in the quarter, together driving an 8% growth
in transaction revenues. This operational progress is supported by a strong
balance sheet, with no debt and over $24 million in cash."
Operating Highlights:
Corporate
. Appointed Kevin McNamara, former Chief Financial Officer of Envoy
Corporation, to ProxyMed's Board of Directors.
. Research coverage initiated by Thomas Weisel Partners.
. Added to the Russell 3000 and 2000 Indexes.
Electronic Healthcare Transaction Processing
. Processed 29.2 million total financial and clinical transactions
through ProxyNet(R), ProxyMed's secure, proprietary, national
healthcare information network, representing an increase of 24% over
the same quarter last year.
. Signed a national connectivity services agreement with Aetna on July 1
to provide claims processing and other transaction processing
services.
. Signed a national pharmacy connectivity agreement with Rite Aid to
provide end-to-end electronic prescribing capabilities to Rite Aid's
3,500 locations.
. Added 5 new payers and 17 strategic partners.
. Added 2,900 physicians representing over 6,400 services sold.
Laboratory Communication Solutions
. Added 24 new accounts.
. Enrolled over 330 physician offices for our FleetWatch(SM) monitoring
service.
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Acquisitions:
In addition to these operating events, ProxyMed also made two acquisitions
during the quarter:
.. Acquired substantially all of the assets of MDIP, Inc., a provider of
hospital claims processing services, for $2.4 million cash in August.
.. Acquired over 1,100 customers, contracts and the revenue base from
Claimsnet.com, Inc. for $700,000 cash in September.
These acquisitions were accretive to ProxyMed's Electronic Healthcare
Transaction Processing operating results for the third quarter, adding 1,216,000
transactions, combined revenues of $322,900, and EBITDA of $47,100. Amortization
expense related to intangible assets purchased in these acquisitions was $48,200
for the quarter.
"We made two significant steps during the quarter to expand our products
and services and to increase the number of services used by our physician and
payer customers. With Aetna now in national production, we send over 95% of our
physician volume directly to one of our direct connected payers, providing a
high quality end-to-end experience. And for our payer customers, the acquisition
of MDIP in August added the capability for hospital and dental processing
services, allowing us to provide "one-stop shopping" for provider connectivity,"
said Michael K. Hoover, ProxyMed's chairman and chief executive officer. "In
addition, we strengthened our corporate leadership by welcoming Kevin McNamara
to our Board of Directors. Kevin brings to our company industry experience that
will be invaluable in helping us achieve our future success."
Quarterly Statistics:
In order to increase transparency to the marketplace, ProxyMed will now
provide on a quarterly basis the following additional transaction and
operational information:
----------------------------------------------------------------------------------------------------
Description Q/E 9/30/02 Q/E 6/30/02 Q/E 9/30/01
----------------------------------------------------------------------------------------------------
Core transactions (excluding encounters) 21,995,800 21,156,000 16,724,200
Acquired transactions (from 2002 acquisitions) 1,216,000 N/A N/A
Encounters 5,977,400 7,297,600 6,870,700
---------- ---------- ----------
Total transactions 29,189,200 28,453,600 23,594,900
========== ========== ==========
Number of direct physicians 70,000 63,800 60,000
Number of indirect physicians 56,250 46,750 40,000
Number of services utilized per physician 2.05 2.04 1.30
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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 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 identify suitable
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.
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PROXYMED, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Revenues $ 12,858,100 $ 11,851,000 $ 36,988,200 $ 30,457,100
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 5,896,900 5,863,300 17,060,700 13,910,700
Selling, general and administrative expenses 5,893,100 5,233,400 17,327,300 15,921,100
Operating depreciation and amortization (1) 505,300 427,100 1,458,700 1,304,200
------------ ------------ ------------ ------------
Total operating costs and expenses (1) 12,295,300 11,523,800 35,846,700 31,136,000
------------ ------------ ------------ ------------
Operating income (loss), as adjusted (1) 562,800 327,200 1,141,500 (678,900)
Acquisition-related amortization charges (239,200) (992,800) (438,300) (5,417,900)
Litigation settlement, net 264,500 - 264,500 -
Interest income (expense), net 136,000 (90,700) 250,800 (20,100)
------------ ------------ ------------ ------------
Net income (loss) 724,100 (756,300) 1,218,500 (6,116,900)
Deemed dividends and other charges - 3,563,000 611,700 8,219,400
------------ ------------ ------------ ------------
Net income (loss) applicable to common shareholders $ 724,100 $ (4,319,300) $ 606,800 $(14,336,300)
============ ============ ============ ============
Diluted earnings (loss) per share: $ 0.11 $ (1.85) $ 0.10 $ (8.04)
============ ============ ============ ============
Diluted weighted average shares outstanding 6,785,096 2,339,700 6,282,258 1,783,637
============ ============ ============ ============
EBITDA (2) $ 1,068,100 $ 754,300 $ 2,600,200 $ 625,300
============ ============ ============ ============
(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.
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PROXYMED, INC. AND SUBSIDIARIES
Segment Information (unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2002 2001 2002 2001
-------------- -------------- ------------- --------------
Revenues:
Electronic healthcare transaction processing $ 5,735,400 $ 4,726,200 $ 16,345,000 $ 11,533,600
Laboratory communication solutions 7,122,700 7,124,800 20,643,200 18,923,500
-------------- -------------- ------------- --------------
$ 12,858,100 $ 11,851,000 $ 36,988,200 $ 30,457,100
============== ============== ============= ==============
Cost of sales:
Electronic healthcare transaction processing $ 2,250,000 $ 1,964,000 $ 6,449,200 $ 4,249,900
Laboratory communication solutions 3,646,900 3,899,300 10,611,500 9,660,800
-------------- -------------- ------------- --------------
$ 5,896,900 $ 5,863,300 $ 17,060,700 $ 13,910,700
============== ============== ============= ==============
Selling, general and administrative expenses:
Electronic healthcare transaction processing $ 2,864,800 $ 2,555,500 $ 8,498,600 $ 7,440,000
Laboratory communication solutions 2,400,400 2,067,900 6,915,000 5,959,700
Corporate 627,900 610,000 1,913,700 2,521,400
-------------- -------------- ------------- --------------
$ 5,893,100 $ 5,233,400 $ 17,327,300 $ 15,921,100
============== ============== ============= ==============
Depreciation and amortization:
Electronic healthcare transaction processing $ 416,500 $ 1,221,300 $ 1,144,200 $ 6,052,100
Laboratory communication solutions 277,400 136,800 601,100 402,700
Corporate 50,600 61,800 151,700 267,300
-------------- -------------- ------------- --------------
$ 744,500 $ 1,419,900 $ 1,897,000 $ 6,722,100
============== ============== ============= ==============
Operating income (loss):
Electronic healthcare transaction processing $ 204,100 $ (1,014,600) $ 253,000 $ (6,208,400)
Laboratory communication solutions 798,000 1,020,800 2,515,600 2,900,300
Corporate (678,500) (671,800) (2,065,400) (2,788,700)
-------------- -------------- ------------- --------------
$ 323,600 $ (665,600) $ 703,200 $ (6,096,800)
============== ============== ============= ==============
EBITDA:
Electronic healthcare transaction processing $ 620,600 $ 206,700 $ 1,397,200 $ (156,300)
Laboratory communication solutions 1,075,400 1,157,600 3,116,700 3,303,000
Corporate (627,900) (610,000) (1,913,700) (2,521,400)
-------------- -------------- ------------- --------------
$ 1,068,100 $ 754,300 $ 2,600,200 $ 625,300
============== ============== ============= ==============
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PROXYMED, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (unaudited)
September 30, December 31,
Assets 2002 2001
------ ---- ----
Current assets:
Cash and cash equivalents 24,052,300 12,601,000
Accounts receivable - trade, net 7,675,200 5,588,800
Notes and other receivables 193,900 88,800
Inventory 2,979,400 3,351,100
Other current assets 514,700 330,600
------------- -------------
Total current assets 35,415,500 21,960,300
Property and equipment, net 4,247,100 3,831,700
Goodwill, net 10,480,000 7,960,400
Purchased technology, capitalized software and other intangibles, net 5,741,900 2,075,800
Other assets 252,100 53,300
------------- -------------
Total assets $ 56,136,600 $ 35,881,500
============= =============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Note payable $ - $ 7,000,000
Accounts payable and accrued expenses 5,870,400 5,344,600
Deferred revenue and other current liabilities 405,800 222,300
------------- -------------
Total current liabilities 6,276,200 12,566,900
Long-term deferred revenue and other long-term liabilities 307,400 442,100
------------- -------------
Total liabilities 6,583,600 13,009,000
------------- -------------
Stockholders' equity:
Series C 7% Convertible preferred stock - 300
Common stock 6,700 4,900
Additional paid-in capital 145,737,000 120,276,500
Accumulated deficit (96,004,800) (97,223,300)
Note receivable from stockholder (185,900) (185,900)
------------- -------------
Total stockholders' equity 49,553,000 22,872,500
------------- -------------
Total liabilities and stockholders' equity $ 56,136,600 $ 35,881,500
============= =============
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PROXYMED, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows (unaudited)
Nine Months Ended September 30,
-------------------------------
2002 2001
----- ----
Cash flows from operating activities:
Net income (loss) $ 1,218,500 $ (6,116,900)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 1,897,000 6,722,100
Provision for doubtful accounts 6,800 54,000
Provision for obsolete inventory 112,500 24,200
Compensatory stock options and warrants - 433,300
Changes in assets and liabilities, net of
effect of acquisitions and dispositions:
Accounts and other receivables (1,880,100) (807,800)
Inventory 413,200 (1,119,200)
Prepaid expenses (168,400) (166,900)
Accounts payable and accrued expenses (235,900) 1,689,400
Deferred revenue 83,800 (129,800)
Other, net (47,700) (52,100)
------------ ------------
Net cash provided by operating activities 1,399,700 530,300
------------ ------------
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired (5,270,600) (3,000,000)
Acquisition of assets (700,000) -
Short term investments (15,000,000) (3,000,000)
Redemption of short term investments 15,000,000 3,000,000
Capital expenditures (1,395,400) (783,800)
Capitalized software (276,600) -
Payments for acquisition-related costs (23,000) (42,400)
------------ ------------
Net cash used in investing activities (7,665,600) (3,826,200)
------------ ------------
Cash flows from financing activities:
Proceeds from stock offering, net 24,886,100 -
Payment of note payable related to acquisition of business (7,000,000) -
Dividends on preferred stock - (4,900)
Collections on notes receivable 18,300 34,200
Payment of notes payable, capital leases and long-term debt (187,200) (126,200)
------------ ------------
Net cash provided by (used in) financing activities 17,717,200 (96,900)
------------ ------------
Net increase (decrease) in cash and cash equivalents 11,451,300 (3,392,800)
Cash and cash equivalents at beginning of period 12,601,000 8,841,100
------------ ------------
Cash and cash equivalents at end of period $ 24,052,300 $ 5,448,300
============ ============
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