Exhibit 99.01
Continucare Corporation Reports Financial
Results for First Quarter of Fiscal 2007
MIAMI--(BUSINESS WIRE)--Nov. 13, 2006--Continucare Corporation
(AMEX:CNU) today reported financial results for the three months ended
September 30, 2006, the first quarter of Continucare's 2007 fiscal
year. Financial highlights for the quarter and other recent events
include:
-- Completion of the Miami Dade Health Centers acquisition;
-- Total revenue of $35.9 million, a 20% increase from $29.9
million in the first quarter of fiscal 2006;
-- Income from operations of $2.1 million compared to $2.2
million for the same period last year;
-- Income before income taxes remained unchanged at $2.3 million
as compared to the same period last year; and
-- Net income remained unchanged at $1.4 million, or $0.03 per
diluted share, as compared to the same period a year ago.
"We are very pleased with the progress of our business," stated
Richard C. Pfenniger, Jr., Continucare's Chairman and Chief Executive
Officer. "The quarterly results reflect solid revenue growth driven
largely by increases in our risk managed Medicare patient population.
With the acquisition of the Miami Dade Health Centers now completed,
we are working diligently to realize the expected benefits of the
combination while we continue our work to achieve further organic
growth for our entire business."
Balance Sheet
Continucare's cash and cash equivalents were $12.0 million at
September 30, 2006 compared to $10.7 million at June 30, 2006 while
working capital increased to $17.9 million at September 30, 2006 from
$15.6 million at June 30, 2006 and total liabilities were reduced to
$2.0 million at September 30, 2006 from $3.1 million at June 30, 2006.
The long-term portion of debt at September 30, 2006 was $0.1 million.
Shareholders' equity increased to $38.8 million at September 30, 2006
from $37.0 million at June 30, 2006.
Miami Dade Health Centers
Continucare's financial results for its first fiscal quarter of
2007 do not reflect the Miami Dade Health Centers acquisition. The
financial results of the combined company will be reflected in
Continucare's financial statements beginning with its second fiscal
quarter of 2007. Continucare continues to expect that the transaction
will be accretive to earnings during the first full year of combined
operations, but also anticipates incurring between approximately $0.5
million and $0.7 million in charges during its second quarter of
fiscal 2007 relating to the restructuring of the former Miami Dade
Health Centers operations. These restructuring charges are not
expected to recur in future periods.
About Continucare Corporation
Continucare provides primary care physician services on an
outpatient basis through a network of medical facilities and
independent physician affiliates (IPAs) in the State of Florida.
Continucare has 18 medical offices equipped with state-of-the-practice
technology and staffed with experienced physicians and a comprehensive
support staff. In addition, Continucare provides health practice
management services to IPAs who practice primary care medicine in
South Florida. Continucare assists these physicians with medical
utilization and pharmacy management and specialist network
development, freeing them to devote more time to patient care.
Currently, through its network of medical facilities and IPAs,
Continucare provides health care services for approximately 42,000
patients. For more information please visit www.continucare.com.
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 and uncertainties relating to
our acquisition of Miami Dade Health Centers, Inc. and its affiliated
companies, including the risk that we may not realize the expected
benefits of the acquisition the risk that we may be unable to
successfully integrate the Miami Dade Health Centers companies into
our business and achieve expected synergies, and the risk that further
restructuring or other acquisition-related charges may be required in
future periods, 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, 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, 2006 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 BALANCE SHEETS (UNAUDITED)
September 30, 2006 June 30, 2006
------------------ ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 12,005,651 $ 10,681,685
Other receivables, net 317,942 231,832
Due from HMOs, net 6,265,871 6,339,526
Prepaid expenses and other current
assets 547,838 689,096
Deferred tax assets, net 658,768 658,768
------------------ ----------------
Total current assets 19,796,070 18,600,907
Certificates of deposit, restricted 1,145,130 1,126,987
Equipment, furniture and leasehold
improvements, net 1,057,021 824,220
Goodwill, net 14,342,510 14,342,510
Managed care contracts, net 649,031 737,234
Deferred tax assets, net 3,206,346 3,881,061
Other assets, net 641,187 551,927
------------------ ----------------
Total assets $ 40,837,295 $ 40,064,846
================== ================
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 661,221 $ 575,925
Accrued expenses and other current
liabilities 1,203,683 2,401,933
------------------ ----------------
Total current liabilities 1,864,904 2,977,858
Capital lease obligations, less
current portion 139,274 112,068
------------------ ----------------
Total liabilities 2,004,178 3,089,926
Commitments and contingencies
Shareholders' equity:
Common stock 5,025 5,024
Additional paid-in capital 64,299,128 63,838,051
Accumulated deficit (25,471,036) (26,868,155)
------------------ ----------------
Total shareholders' equity 38,833,117 36,974,920
------------------ ----------------
Total liabilities and
shareholders' equity $ 40,837,295 $ 40,064,846
================== ================
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
September 30,
------------------------
2006 2005
------------------------
Revenue:
Medical services revenue, net $35,881,917 $29,729,636
Management fee revenue and other income 51,682 141,514
------------------------
Total revenue 35,933,599 29,871,150
Operating expenses:
Medical services:
Medical claims 27,061,040 21,406,178
Other direct costs 3,311,195 3,132,425
------------------------
Total medical services 30,372,235 24,538,603
------------------------
Administrative payroll and employee benefits 1,625,235 1,395,347
General and administrative 1,836,359 1,702,206
------------------------
Total operating expenses 33,833,829 27,636,156
------------------------
Income from operations 2,099,770 2,234,994
Other income (expense):
Interest income 154,122 59,141
Interest expense (2,934) (2,969)
------------------------
Income before income tax provision 2,250,958 2,291,166
Income tax provision 853,839 852,414
------------------------
Net income $ 1,397,119 $ 1,438,752
========================
Net income per common share:
Basic $ .03 $ .03
========================
Diluted $ .03 $ .03
========================
Weighted average common shares outstanding:
Basic 50,247,936 49,859,938
========================
Diluted 51,521,917 51,642,853
========================
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
September 30,
-------------------------
2006 2005
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,397,119 $ 1,438,752
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 170,834 157,382
Loss on disposal of fixed assets 35,924 -
Provision for bad debts 50,225 12,463
Recognition of compensation expense
related to issuance of stock options 320,784 250,394
Deferred tax expense 674,715 760,256
Changes in operating assets and liabilities,
excluding the effect of disposals:
Other receivables, net (136,335) (49,996)
Due from HMOs, net 73,655 (1,983,949)
Prepaid expenses and other current assets 141,258 218,084
Other assets, net 94,321 -
Accounts payable 85,296 (148,290)
Accrued expenses and other current
liabilities (1,206,457) (490,592)
------------ ------------
Net cash provided by continuing operations 1,701,339 164,504
Net cash used in discontinued operations - (30,972)
------------ ------------
Net cash provided by operating activities 1,701,339 133,532
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of certificates of deposit (18,143) (9,442)
Proceeds from sales of fixed assets 25,000 -
Purchase of property and equipment (319,326) (28,085)
Acquisition costs related to MDHC Companies (183,581) -
------------ ------------
Net cash used in investing activities (496,050) (37,527)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments on note payable - (260,000)
Excess tax benefit from exercise of stock
options 125,419 -
Principal repayments under capital lease
obligations (21,617) (18,489)
Proceeds from exercise of stock options 14,875 358,668
Repurchase and retirement of common stock - (696,134)
------------ ------------
Net cash provided by (used in) financing
activities 118,677 (615,955)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 1,323,966 (519,950)
Cash and cash equivalents at beginning of
period 10,681,685 5,780,544
------------ ------------
Cash and cash equivalents at end of period $12,005,651 $ 5,260,594
============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING TRANSACTIONS:
Purchase of equipment, furniture and fixtures
with proceeds of capital lease obligations $ 57,031 $ -
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for taxes $ 30,000 $ -
============ ============
Cash paid for interest $ 2,934 $ 2,969
============ ============
CONTACT: Continucare Corporation, Miami
Fernando L. Fernandez, Senior Vice President - Finance
305-500-2105