Exhibit 99.1
Matria Healthcare Announces Second Quarter Results;
Company Continues to Report Record Revenues
MARIETTA, Ga.--(BUSINESS WIRE)--July 22, 2003--Matria Healthcare,
Inc. (NASDAQ: MATR) today announced financial results for the second
quarter and six months ended June 30, 2003.
For the quarter ended June 30, 2003, revenues increased 16% to a
record level of $80.3 million, compared with $69.4 million in the
second quarter of 2002. Net earnings available to common shareholders
for the second quarter were $1.7 million, or $0.17 per diluted common
share, as compared with a net loss of $721,000, or $0.08 per diluted
common share, in the prior-year second quarter. Earnings before
interest, taxes, depreciation and amortization (EBITDA) for the second
quarter of 2003 were $8.5 million, compared with $3.9 million for the
same period of 2002. Second quarter of 2002 results included, in
selling and administrative expense, a one-time $2.5 million, non-cash
charge.
Second quarter 2003 revenues for the Company's Health Enhancement
segment increased by 28% to $56.6 million, compared with $44.1 million
in the second quarter of 2002. The Health Enhancement segment is
comprised of the Company's diabetes, respiratory, cardiovascular,
cancer, chronic pain and depression disease management operations and
its diabetes product design, development and assembly operation.
Second quarter 2003 revenues for the Women's Health segment declined
by 6% to $23.7 million, compared with $25.3 million in the second
quarter of 2002.
For the six months ended June 30, 2003, revenues increased 18% to
a record level of $158.5 million, compared with $134.6 million in the
first six months of 2002. Net earnings available to common
shareholders for the first half of 2003 were $2.9 million, or $0.28
per diluted common share, as compared with $897,000, or $0.10 per
diluted common share, in the prior-year six-month period. EBITDA for
the six months ended June 30, 2003, were $16.1 million, compared with
$11.5 million for the same six-month period of 2002.
For the six months ended June 30, 2003, revenues for the Company's
Health Enhancement segment increased by 31% to $111.2 million,
compared with $84.8 million in the first half of 2002. Revenues for
the Women's Health segment for the six months ended June 30, 2003,
decreased by 5% to $47.3 million, compared with $49.8 million in the
first half of 2002.
Covered lives included in the Company's disease management
programs are currently 14.0 million. At the end of the first quarter
of 2003, covered lives were 11.7 million, compared with 7.2 million
covered lives at the end of 2002 and 3.0 million covered lives at the
end of 2001.
In commenting on the second quarter results, Parker H. Petit,
Chairman and Chief Executive Officer, said, "We are pleased with the
revenue growth produced by our Health Enhancement segment, which
exceeded our expectations for the quarter. Most of the disease
management contracts targeted for implementation during the first half
of this year have been successfully implemented. As recently
announced, numerous employers and health plans have selected Matria as
their provider of disease management services. In addition, we
continue to have a very healthy sales pipeline of potential clients
considering Matria's disease management programs and services. We look
forward to further communications related to the selection of our
disease management services by additional employers and health plans."
The Company reaffirmed its outlook for the remainder of 2003.
Management believes that revenues, EBITDA, and earnings per share for
the third quarter of 2003 will be in the low end of the range
previously communicated (revenues of $82.8 million, EBITDA of $10.5
million, and earnings per share of $0.26) as a result of
lower-than-projected revenue and profit in the Women's Health segment.
While the Company has signed a number of new obstetrical disease
management contracts, its Women's Health segment continues to
experience declines in its obstetrical home care services due to
health plans restricting access to healthcare. However, the Health
Enhancement segment is achieving growth in revenues and profits in
excess of projections. By fourth quarter, the Company expects some
significant contract starts, which may move expectations up from the
low range. At this point, however, there is not sufficient visibility
to determine those start dates.
In the Matria 2002 Annual Report, the Company discussed the
initiation of disease management programs by the federal government
and numerous state governments. During the second quarter, the Company
submitted a response to a federal government Request for Proposal in
partnership with a major northeastern health plan to offer congestive
heart failure to a specific group of Medicare recipients. At this
point, the Company has no indication of whether this program will be
accepted by the Centers for Medicare and Medicaid Services (CMS).
Quality Oncology, the Company's cancer disease management subsidiary,
was previously awarded a federal pilot project by the CMS to provide
disease management services to Medicare-eligible newly diagnosed
cancer patients in the south Florida area.
A listen-only simulcast and replay of Matria Healthcare's second
quarter conference call will be available on-line at the Company's
website at www.matria.com or at www.companyboardroom.com on July 23,
2003, beginning at 10:30 a.m. Eastern time.
Matria Healthcare is the largest corporation offering
comprehensive disease management programs to health plans and
employers. Matria manages the chronic diseases and episodic conditions
representing the greatest cost to the healthcare system...diabetes,
cardiovascular diseases, respiratory disorders, high-risk obstetrics,
cancer, chronic pain and depression. Headquartered in Marietta,
Georgia, Matria has more than 40 offices in the United States and
internationally. More information about Matria can be found online at
www.matria.com.
This press release contains forward-looking statements. Such
statements include, but are not limited to, the Company's financial
expectations for the third quarter and full year 2003, the ability of
the Company to convert its sales pipeline into implemented contracts,
and potential contract implementations in the fourth quarter of 2003.
These statements are based on current information and belief, and are
not guarantees of future performance. Among the important factors that
could cause actual results to differ materially from those indicated
by such forward-looking statements include the Company's inability to
achieve its financial expectations for 2003, failure to sign
additional disease management contracts, delays or problems in
implementation of new disease management contracts, developments in
the healthcare industry, third-party actions over which Matria does
not have control, regulatory requirements applicable to Matria's
business and the risk factors detailed from time to time in Matria's
periodic reports and registration statements filed with the Securities
and Exchange Commission, including Matria's Annual Report on Form 10-K
for the year ended December 31, 2002. By making these forward-looking
statements, Matria does not undertake to update them in any manner
except as may be required by Matria's disclosure obligations in
filings it makes with the Securities and Exchange Commission under the
federal securities laws.
MATRIA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenues $80,299 $69,403 $158,486 $134,591
Cost of revenues 46,828 41,154 93,758 77,810
Selling and
administrative expenses 25,103 23,868 48,894 44,604
Provision for
doubtful accounts 2,069 2,086 4,025 3,928
Amortization of
intangible assets 140 140 280 280
-------- -------- -------- --------
Operating earnings 6,159 2,155 11,529 7,969
Interest expense, net (3,511) (3,274) (7,104) (6,501)
Other income (expense), net 321 (82) 464 29
-------- -------- -------- --------
Earnings (loss) before
income taxes 2,969 (1,201) 4,889 1,497
Income tax expense (benefit) 1,225 (480) 2,025 600
-------- -------- -------- --------
Net earnings (loss) available
to common shareholders $1,744 $(721) $2,864 $897
======== ======== ======== ========
Net earnings (loss) per
common share:
Basic $0.17 $(0.08) $0.28 $0.10
Diluted $0.17 $(0.08) $0.28 $0.10
Weighted average
shares outstanding:
Basic 10,116 9,055 10,098 9,012
Diluted 10,302 9,055 10,198 9,229
Reconciliation of EBITDA to
Net Earnings (Loss) Available
to Common Shareholders
Net earnings (loss) available
to common shareholders $1,744 $(721) $2,864 $897
Income tax expense (benefit) 1,225 (480) 2,025 600
Interest expense, net 3,511 3,274 7,104 6,501
Depreciation and amortization 2,060 1,835 4,120 3,518
-------- -------- -------- --------
$8,540 $3,908 $16,113 $11,516
======== ======== ======== ========
MATRIA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
June 30, Dec. 31,
2003 2002
-------- --------
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $4,084 $5,640
Trade accounts receivable, net 56,178 49,693
Inventories 21,856 26,757
Prepaid expenses and other current assets 16,609 15,147
-------- --------
Total current assets 98,727 97,237
Property and equipment, net 27,227 26,716
Intangible assets, net 138,732 130,571
Deferred income taxes 29,879 30,848
Other assets 8,681 6,035
-------- --------
$303,246 $291,407
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
and obligations under capital leases $1,844 $743
Accounts payable, principally trade 28,947 35,177
Other accrued liabilities 22,819 18,761
-------- --------
Total current liabilities 53,610 54,681
Long-term debt and obligations under capital
leases, excluding current installments 125,359 118,215
Other long-term liabilities 5,908 4,731
-------- --------
Total liabilities 184,877 177,627
Shareholders' equity 118,369 113,780
-------- --------
$303,246 $291,407
======== ========
CONTACT: Matria Healthcare
Steve Mengert, 770-767-4500