Exhibit 99.01
Continucare Corporation Reports Financial Results for First Quarter of Fiscal
2006
MIAMI--(BUSINESS WIRE)--Nov. 11, 2005--
- Revenue Increases 14% to $29.9 million -
- Income From Operations Increases 65% to $2.2 million -
- - EPS Increases to $0.03 per share vs. $0.02 per share in prior year -
Continucare Corporation (AMEX:CNU) today reported financial
results for the three months ended September 30, 2005.
Results of Operations
For the first quarter of fiscal 2006, total revenue increased 14%
to $29.9 million compared to $26.2 million for the first quarter of
fiscal 2005. Income from operations during the first quarter of fiscal
2006 increased 65% to $2.2 million compared to $1.4 million for the
same period one year ago. Income before income taxes in the first
quarter of fiscal 2006 increased 107% to $2.3 million compared to $1.1
million in the year-ago period. Net income for the first quarter of
fiscal 2006 increased 30% to $1.4 million, or $0.03 per diluted share,
compared to net income of $1.1 million, or $0.02 per diluted share,
one year ago.
The results for the first quarter of fiscal 2006 include a
provision for income taxes of $0.9 million. The first quarter of
fiscal 2005 did not reflect a provision for income tax expense
because, in the first quarter of fiscal 2005, Continucare reduced its
valuation allowance for deferred tax assets to offset income tax
liabilities generated from operations. As previously announced,
Continucare eliminated its valuation allowance for its deferred tax
assets during the fourth quarter of fiscal 2005. In accordance with
new accounting guidance relating to stock options effective for the
first quarter of fiscal 2006, Continucare's results for the first
quarter of fiscal 2006 also include $0.2 million of expense related to
stock options. The first quarter of fiscal 2005 contains no such
expense.
Balance Sheet
Continucare's cash and cash equivalents were $5.3 million at
September 30, 2005 compared to $5.8 million at June 30, 2005 while
working capital increased to $9.1 million at quarter-end from $6.9
million at June 30, 2005 and total liabilities were reduced to $2.9
million at September 30, 2005 from $3.8 million at June 30, 2005. The
long-term portion of debt at September 30, 2005 was $26,000.
Shareholders' equity increased to $31.7 million at quarter-end from
$30.3 million at June 30, 2005.
Commenting on the financial results, Richard C. Pfenniger, Jr.,
Continucare's Chief Executive Officer, said, "We are extremely pleased
with our operating performance during the first quarter of our new
fiscal year. The year over year comparisons, all of which are
favorable, clearly demonstrate that our business continued to improve.
Revenues increased 14%, income from operations increased 65%, net
income increased 30% and our balance sheet continued to strengthen. Of
note, the profit improvement occurred despite approximately $1.1
million of expenses in the current quarter relating to income taxes
and stock options that were not present in the first quarter of our
prior fiscal year and the balance sheet improvement occurred while we
pursued our stock repurchase program."
Share Repurchase Plan
Continucare also announced that to date it has repurchased
1,157,467 shares of its common stock at a total cost of approximately
$3.0 million under a previously announced 2,500,000 share stock
repurchase program. An aggregate of 1,342,533 shares remain available
for purchase under the plan. The plan authorizes management, in its
discretion, to repurchase shares from time to time on the open market
or in privately negotiated transactions subject to market conditions
and other factors.
Continucare Corporation - http://www.continucare.com -
headquartered in Miami, Florida, is a holding company with
subsidiaries engaged in the business of providing outpatient physician
care services through managed care, Medicare direct and fee for
service arrangements.
Except for historical matters contained herein, statements made in
this press release are forward-looking and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors and others are cautioned that forward-looking
statements are subject to risks and uncertainties that may affect our
business and prospects and cause our actual results to differ
materially from those set forth in the forward-looking statements.
These factors include, without limitation, the risk that the current
trend in revenue or income growth may not continue or may be less than
anticipated, risks and uncertainties relating to our ability to
implement our growth strategy and to manage future growth, including
our ability to achieve expected levels of patient volumes and control
the costs of providing services, risks relating to pricing and other
pressures exerted on us by managed care organizations, the risk that
the impact of the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 and the Medicare Risk Adjustment on payments
we receive for our managed care operations may not continue to be
positive for us, the risk that future legislation, changes in
governmental regulations, including possible changes in Medicare
programs, could adversely impact our operations or reduce
reimbursements to health care providers and insurers, risks and
uncertainties relating to our current dependence on two HMOs for
substantially all of our revenues, including our ability to work
together effectively with our HMO affiliates, uncertainties relating
to technological and pharmaceutical improvements that increase the
cost of providing, or reduce the demand for, health care, the risk
that we may not conduct repurchases of our common stock in the full
amount authorized under our repurchase program, the risk that any
repurchases of our common stock that we effect may adversely impact
our future liquidity or capital resources, and general economic
conditions and uncertainties generally associated with the health care
business. These and other applicable risks, cautionary statements and
factors that could cause actual results to differ from our
forward-looking statements are included in our annual report on Form
10-K for the fiscal year ended June 30, 2005 and other filings with
the SEC. We undertake no obligation to update or revise these
forward-looking statements to reflect events or circumstances after
the date hereof except as required by law.
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
September 30,
-------------------------
2005 2004
------------ ------------
Revenue:
Medical services revenue, net $29,729,636 $26,027,422
Management fee revenue and other income 141,514 180,595
------------ ------------
Total revenue 29,871,150 26,208,017
Operating expenses:
Medical services:
Medical claims 21,406,178 19,016,175
Other direct costs 3,132,425 3,151,253
------------ ------------
Total medical services 24,538,603 22,167,428
------------ ------------
Administrative payroll and employee benefits 1,395,347 1,090,961
General and administrative 1,702,206 1,595,303
------------ ------------
Total operating expenses 27,636,156 24,853,692
------------ ------------
Income from operations 2,234,994 1,354,325
Other income (expense):
Interest income 59,141 3,120
Interest expense (2,969) (248,416)
------------ ------------
Income before income tax provision 2,291,166 1,109,029
Income tax provision 852,414 -
------------ ------------
Net income $1,438,752 $1,109,029
============ ============
Net income per common share:
Basic $.03 $.02
============ ============
Diluted $.03 $.02
============ ============
Weighted average common shares outstanding:
Basic 49,859,938 50,300,186
============ ============
Diluted 51,642,853 51,685,339
============ ============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
Sept. 30, June 30,
ASSETS 2005 2005
------------ ------------
Current assets:
Cash and cash equivalents $5,260,594 $5,780,544
Other receivables, net 182,506 144,973
Due from HMOs, net of a liability for
incurred but not reported medical claims
expense of approximately $11,583,000 and
$11,700,000 at September 30, 2005 and June
30, 2005, respectively 5,469,479 3,485,530
Prepaid expenses and other current assets 501,493 719,577
Deferred tax assets, net 585,571 585,571
------------ ------------
Total current assets 11,999,643 10,716,195
Certificates of deposit, restricted 539,792 530,350
Equipment, furniture and leasehold
improvements, net 629,571 670,665
Goodwill, net of accumulated amortization of
approximately $7,608,000 14,342,510 14,342,510
Managed care contracts, net of accumulated
amortization of approximately $2,510,000 and
$2,422,000 at September 30, 2005 and June
30, 2005, respectively 1,001,843 1,090,046
Deferred tax assets, net 5,961,097 6,721,353
Other assets, net 66,816 66,816
------------ ------------
Total assets $34,541,272 $34,137,935
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $511,849 $660,139
Accrued expenses and other current
liabilities 1,869,699 2,489,439
Note payable 260,000 520,000
Income taxes payable 223,521 131,363
------------ ------------
Total current liabilities 2,865,069 3,800,941
Capital lease obligations, less current
portion 25,890 38,361
------------ ------------
Total liabilities 2,890,959 3,839,302
Commitments and contingencies
Shareholders' equity:
Common stock, $0.0001 par value: 100,000,000
shares authorized; 52,676,795 shares issued
and 49,680,602 shares outstanding at
September 30, 2005 and 52,591,895 shares
issued and 49,595,702 shares outstanding at
June 30, 2005 4,968 4,960
Additional paid-in capital 67,836,988 67,924,068
Accumulated deficit (30,766,942) (32,205,694)
Treasury stock, 2,996,193 shares at
September 30, 2005 and June 30, 2005 (5,424,701) (5,424,701)
------------ ------------
Total shareholders' equity 31,650,313 30,298,633
------------ ------------
Total liabilities and shareholders'
equity $34,541,272 $34,137,935
============ ============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
September 30,
-------------------------
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,438,752 $1,109,029
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization, including
amortization of deferred financing costs 157,382 356,898
Provision for bad debts 12,463 -
Stock-based compensation expense 250,394 -
Deferred tax expense 760,256 -
Changes in operating assets and liabilities,
excluding the effect of disposals:
Other receivables (49,996) 105,094
Due from HMOs, net (1,983,949) 295,728
Prepaid expenses and other current assets 218,084 413,362
Other assets - 12,276
Accounts payable (148,290) (110,288)
Accrued expenses and other current
liabilities (582,750) (166,266)
Income taxes payable 92,158 -
------------ ------------
Net cash provided by continuing operations 164,504 2,015,833
Net cash used in discontinued operations (30,972) (20,033)
------------ ------------
Net cash provided by operating activities 133,532 1,995,800
CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase of) proceeds from maturities of
certificates of deposit (9,442) 30,293
Purchase of property and equipment (28,085) (111,248)
------------ ------------
Net cash used in investing activities (37,527) (80,955)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on note payable (260,000) -
Payment of fees related to private placement
transaction - (45,000)
Principal repayments under capital lease
obligations (18,489) (17,549)
Proceeds from exercise of stock options 358,668 -
Repurchase and retirement of common stock (696,134) -
------------ ------------
Net cash used in financing activities (615,955) (62,549)
------------ ------------
Net (decrease) increase in cash and cash
equivalents (519,950) 1,852,296
Cash and cash equivalents at beginning of
period 5,780,544 720,360
------------ ------------
Cash and cash equivalents at end of period $5,260,594 $2,572,656
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CONTACT: Continucare Corporation, Miami
Fernando L. Fernandez, 305-500-2105