Exhibit 99.1
Healthaxis Announces Second Quarter 2003 Financial Results; Net Loss
of $0.02 Per Share Compared to a Loss of $0.13 a Year Ago
IRVING, Texas--(BUSINESS WIRE)--July 29, 2003--
Revenues up 20 Percent from Second Quarter of 2002
Healthaxis Inc. (Nasdaq:HAXS), an innovative provider of claims
and benefit administration applications, web-enabled software
solutions and outsourced claims services for commercial and government
health benefit administrators and payers, reported financial results
today for the three and the six months ended June 30, 2003.
Second Quarter 2003 and Six Months Highlights(a)
-- Revenues of $5.5 million were up 20 percent from second
quarter 2002 revenues of $4.6 million and up 5 percent from
the first quarter of 2003. For the first six months of 2003,
revenues increased to $10.7 million, or 8 percent over the
first six months of 2002. Revenues were up in both of our
business segments from a year ago - 22 percent in the
Technology and Operations segment, our combined TPA oriented
claims and admin systems and web connectivity solutions
business, and 12 percent in our outsourced imaging and data
capture segment, which we now call our BPO services business.
-- Cash operating expenses (defined as operating expenses
excluding taxes, depreciation, amortization, severance, stock
based compensation, asset dispositions and restructuring and
impairment charges) declined 10 percent from the second
quarter of last year, and 2 percent from the first quarter of
2003. Cash operating expenses were down 14 percent for the
first six months of 2003 from the same period a year ago.
-- GAAP operating expenses totaled $6.4 million, down 21 percent
from the same period last year, and down 3 percent from the
first quarter of 2003. General and administrative expenses
dropped 37 percent from the second quarter of 2002 and 8
percent from the first quarter of this year. For the first six
months of 2003, operating expenses were down 13 percent from
the same period last year. Operating expenses continued to
decline as a result of the company's restructuring undertaken
in November 2002 and lower depreciation and amortization
charges in 2003 compared to the same periods last year.
-- The EBITDA loss (defined as revenue less cash operating
expenses) was $69,000 for the second quarter of 2003, compared
to an EBITDA loss of $1.6 million for the same quarter of 2002
and a loss of $437,000 for the first quarter of 2003. The
EBITDA loss for the first six months of 2003 was $506,000,
down from a $3.2 million loss for the same period last year.
Higher revenues and lower expenses in 2003 combined to provide
the improved results in both the three-month and six- month
comparative periods.
-- The GAAP operating loss for the quarter improved to $936,000
from a loss of $3.6 million in the second quarter of 2002 and
a $1.4 million loss in the first quarter of 2003.
-- The net loss for the quarter was $933,000, or ($0.02) per
share, compared to a $7.2 million loss, or ($0.13) per share
in the second quarter of 2002. The net loss for six months,
$2.3 million, improved from a loss of $14.9 million for the
same period last year.
-- Cash balances at June 30, 2003 totaled $10.3 million, up from
$9.9 million at the end of the first quarter. Days sales
outstanding in accounts receivable dropped from 75 days to 49
days.
-- The company's board of directors has called for a
shareholders' meeting to vote on a proposal to authorize a
reverse split of the company's common stock. The board has
asked for shareholder approval to effect a reverse stock split
in the range of 5-for-1 to 15-for-1. The shareholders' meeting
is set for August 19, 2003. A definitive proxy statement for
approval of the proposal was mailed to all shareholders on
July 28, 2003.
Commenting on the results for the second quarter and the first six
months of 2003, James McLane, the company's chairman and CEO, said:
"We are pleased with the results of the first half of the year. Our
operational performance was much better than the previous year. Our
revenue growth and our continued improvement in productivity are
indicative of our progress both operationally and financially.
Furthermore, our cash position continues to support our operational
and investment needs and contributes to an overall strong capital
position for the company."
Continuing, McLane said: "Our customers continue to look to
Healthaxis for assistance in improving their own business operations.
We have responded by adding to our service capabilities, either
through our own investment or through best-of-breed partners. One
example is the expansion of our capabilities from simply imaging and
data capture into claims pre-adjudication services for one customer.
Another is our recently developed and released consumer directed
health care product. Consumer defined benefits administration, a
growing trend in the healthcare industry, is now a basic requirement
for anyone offering a full suite of healthcare products and services.
We are now delivering a functionally rich capability to our existing
customer base for their upcoming enrollment period."
Finally, Mr. McLane said: "While we are pleased with the financial
results we achieved in the first half of 2003, and we expect to sign
new contracts in the second half, we face significant challenges in
achieving the same growth patterns in the back half of the year that
we experienced in the front half. These challenges relate principally
to the timing of revenue and profit recognition from our large state
government contracts. Revenue and profit recognition from these
contracts is dependent upon project completion. The timing of
implementation and acceptance is dependent upon our customers'
schedules. At the same time, the process for assessing strategic
opportunities for the company to enhance its scale, scope and
profitability in the business process outsourcing segments of the
health benefit administration and claims payer markets continues."
(a) The financial results reported in this release contain both
measures of GAAP and Non-GAAP financial information, as
defined in Regulation G adopted by the Securities and Exchange
Commission. Accordingly, all such non-GAAP financial measures
that are presented are also set forth on the tables attached
to this press release and are both compared to, and reconciled
with, the most directly comparable financial measure
calculated and presented in accordance with GAAP. Management
believes that these non-GAAP financial measures are useful in
monitoring basic cash flow generated and used in the company's
core operating activities, and in monitoring the effects of
changes made by management in the Company's operations across
different time periods. These non-GAAP factors alone are
insufficient to measure all of the company's operating
characteristics and should be used in conjunction with GAAP
measures to evaluate total operating performance.
Healthaxis management will host a conference call on Wednesday,
July 30, 2003 to review these results and answer questions. The
conference call will be held at 2:00 pm CDT (3:00 pm EDT). Investors
wishing to participate should call 888-280-8277 and request the
Healthaxis Second Quarter Earnings Call. Please plan to call in at
least 10 minutes before the scheduled start time.
Beginning approximately two hours after the live call is
completed, a replay of the teleconference will be available until
August 8, 2003 by dialing 877-605-9320 and 416-695-6031 for
international callers. The access code, for the replay only, is 1313.
Investors can also listen to the call online via a Web cast
accessible from the company's Web site at www.healthaxis.com. The Web
cast will be available until August 16, 2003.
About Healthaxis Inc.
Healthaxis (Nasdaq:HAXS) is a technology and business process
services firm committed to providing innovative and configurable
Web-based connectivity and applications solutions for health benefit
distribution and administration. These solutions, which are comprised
of software products and related services, are designed to assist
health insurance payers, government agencies, third party
administrators (TPAs) and health and welfare plans provide enhanced
services to members, employees and providers through the application
of Healthaxis' flexible technology to legacy systems, either on a
fully integrated or on an Application Service Provider (ASP) basis.
These technology solutions are complemented by the company's Business
Process Outsourcing (BPO) services that are offered to its technology
clients and on a stand-alone basis. Healthaxis solutions enable
clients to reduce their administrative costs, enhance their customer
service and improve their profitability. For information on Healthaxis
products and services, call 800-519-0679 or visit www.healthaxis.com.
For investor information, call 972-458-8000.
Forward-looking statements:
Statements that are not purely historical facts, including without
limitation statements about anticipated or expected future revenue and
performance, constitute forward-looking statements within the meaning
of Section 27A of the Securities and Exchange Act of 1934, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements are subject to known and unknown
risks, uncertainties and other factors, which may cause actual results
to be materially different from those contemplated by the
forward-looking statements. Such factors include without limitation
the risks and uncertainties identified in our documents filed with, or
furnished to, the Securities and Exchange Commission, including those
identified under the caption "Business-Risk Factors" in our Form 10-K
for the year ended December 31, 2002. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on forward-looking statements.
Healthaxis Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except share and per share data) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenue $5,483 $4,588 $10,714 $9,880
Expenses:
Cost of revenues 4,975 5,758 10,072 11,447
Sales and marketing 283 643 538 1,009
General and
administrative 837 1,324 1,746 1,603
Research and
development -- 123 30 240
Amortization of
Intangibles 324 328 648 653
----------- ----------- ----------- -----------
Total operating
expenses 6,419 8,176 13,034 14,952
----------- ----------- ----------- -----------
Operating loss (936) (3,588) (2,320) (5,072)
Interest and other
income (expense), net 3 (342) 14 (406)
----------- ----------- ----------- -----------
Loss from continuing
operations (933) (3,930) (2,306) (5,478)
Loss on disposal of
discontinued
operations -- (3,564) -- (3,564)
Gain from discontinued
operations (b) -- 269 -- 816
----------- ----------- ----------- -----------
Net loss before
cumulative effect of
accounting change (933) (7,225) (2,306) (8,226)
Cumulative effect of
accounting change -- -- -- (6,674)
----------- ----------- ----------- -----------
Net Loss $(933) $(7,225) $(2,306) $(14,900)
=========== =========== =========== ===========
Loss per share of
common stock (basic)
Continuing
operations $(0.02) $(0.07) $(0.05) $(0.10)
Discontinued
operations $-- $(0.06) $-- $(0.05)
Cumulative effect
charge $-- $-- $-- $(0.13)
----------- ----------- ----------- -----------
Net loss per share of
common stock $(0.02) $(0.13) $(0.05) $(0.28)
=========== =========== =========== ===========
Weighted average common
shares used in
computing income
(loss) per share
Basic 53,612,000 53,633,000 53,629,000 53,559,000
=========== =========== =========== ===========
(b) As of the second quarter of 2002, the Company began reporting
its historical results of operations from the terminated UICI
Technical Services Agreement as a net amount in "Gain from
discontinued operations"
Healthaxis Inc. and Subsidiaries
Consolidated Statements of Operations
GAAP / Non-GAAP Comparison and Reconciliation
(In thousands, except share and per share data) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---------- -------- -------- ---------
Revenue $5,483 $4,588 $10,714 $9,880
Expenses:
Cost of revenues 4,456 4,286 8,964 9,214
Sales and marketing 276 600 523 920
General and administrative 820 1,199 1,711 2,749
Research and development -- 102 22 227
---------- -------- -------- ---------
Cash operating expenses 5,552 6,187 11,220 13,110
---------- -------- -------- ---------
Non-cash operating expenses:
Operating depreciation &
amortization 534 781 1,148 1,505
Stock based compensation 9 165 18 314
Amortization of acquisition
intangibles 324 328 648 653
Severance expenses -- -- -- (1,345)
Restructuring and impairment
charges -- 715 -- 715
---------- -------- -------- ---------
Total GAAP operating expenses 6,419 8,176 13,034 14,952
---------- -------- -------- ---------
EBITDA (Revenue less cash
operating expenses) (69) (1,599) (506) (3,230)
---------- -------- -------- ---------
GAAP operating loss (EBITDA less
non-cash operating expenses) (936) (3,588) (2,320) (5,072)
---------- -------- -------- ---------
Interest and other income
(expense), net 3 (342) 14 (406)
---------- -------- -------- ---------
Loss from continuing operations (933) (3,930) (2,306) (5,478)
Loss on disposal of discontinued
operations (3,564) (3,564)
Gain from discontinued
operations -- 269 -- 816
---------- -------- -------- ---------
Net loss before cumulative
effect of accounting change (933) (7,225) (2,306) (8,226)
Cumulative effect of accounting
change -- -- -- (6,674)
---------- -------- -------- ---------
Net Loss $(933) $(7,225) $(2,306) $(14,900)
========== ======== ======== =========
Healthaxis Inc. and Subsidiaries
Unaudited Consolidated Condensed Balance Sheets
(In thousands) (Unaudited)
June 30, December 31,
2003 2002
Assets
Cash and cash equivalents $10,265 $11,380
Accounts receivable, net 3,461 3,346
Other current assets 1,500 862
---------- ------------
15,226 15,588
Property & Equipment, net 1,126 1,462
Goodwill 11,276 11,276
Other assets 4,084 5,048
---------- ------------
Total assets $31,712 $33,374
========== ============
Liabilities and stockholders' equity
Current liabilities $4,314 $3,715
Other long-term liabilities 2,338 2,051
Stockholders' equity 25,060 27,608
---------- ------------
Total liabilities and stockholders' equity $31,712 $33,374
========== ============
CONTACT: Halliburton Investor Relations
Matt Kreps, 972-458-8000
mkreps@halliburtonir.com