EXHIBIT 99.01
Continucare Corporation Reports 81% Increase in Revenues and 185%
Increase in Operating Profit for Fourth Quarter of Fiscal 2007
MIAMI--(BUSINESS WIRE)--Sept. 12, 2007--Continucare Corporation
(AMEX:CNU) today reported financial results for its fourth quarter of
fiscal 2007 and the fiscal year ended June 30, 2007. Financial
highlights for the quarter include:
-- Total revenue of $65.4 million, an 81% increase compared to
$36.2 million in the fourth quarter of fiscal 2006;
-- Income from operations of $3.7 million, a 185% increase
compared to $1.3 million for the same period last year; and
-- Net income of $2.4 million, or $0.03 per diluted share, as
compared to $1.1 million, or $0.02 per diluted share, for the same
period a year ago.
Full Year Results
For the fiscal year ended June 30, 2007, total revenue increased
63% to $217.1 million compared to $133.0 million in the prior fiscal
year. Income from operations during fiscal 2007 increased 24% to $9.9
million compared to $7.9 million for fiscal 2006. Net income for
fiscal 2007 was $6.3 million, or $0.10 per diluted share, compared to
$5.3 million, or $0.10 per diluted share, for fiscal 2006.
Balance Sheet
Continucare's cash and cash equivalents were $7.3 million at June
30, 2007 compared to $10.7 million at June 30, 2006, while working
capital was $16.6 million at June 30, 2007 compared to $15.6 million
at June 30, 2006. Total liabilities were $12.9 million at June 30,
2007 as compared to $5.0 million at June 30, 2006. Shareholders'
equity increased to $104.1 million at June 30, 2007 from $37.0 million
at June 30, 2006.
"We are very pleased with the financial results for both our
fourth fiscal quarter and our full fiscal year," said Richard C.
Pfenniger, Jr., Continucare's Chairman and Chief Executive Officer.
"Our revenues, profits and cash flow from operations increased
significantly, and at fiscal year-end our balance sheet remained
virtually free of long-term indebtedness. We are also pleased that
while achieving these results we took actions to support future
growth. These actions include the acquisition of the Miami Dade Health
Centers, which significantly expanded the breadth and scope of our
operations. In addition, during fiscal 2007 we conceived of and began
the effort to launch Continucare ValuClinic(TM), a new line of
retail-based convenient care clinics. We currently expect to open our
first ValuClinic locations this Fall. Overall, this is a very exciting
period for Continucare and we are optimistic about our prospects."
Stock Repurchase Program
Under our previously announced stock repurchase program, our Board
authorized the buy back of up to 2.5 million shares of our common
stock. Approximately 1.34 million shares remain available for
repurchase under this program and management intends to repurchase
shares under the program based on its assessment of market conditions
from time to time. Purchases will be reported on a quarterly basis in
Continucare's periodic reports filed with the SEC.
About Continucare ValuClinic(TM)
Continucare ValuClinic(TM) is a new line of consumer-oriented,
retail-based health centers which will offer treatment for common
illnesses such as the flu, bronchitis, strep throat, pink eye, skin
infections and seasonal allergies, in a quick, convenient, and
patient-friendly health care setting. Continucare ValuClinic(TM) will
also offer other high demand health care services such as common
vaccinations, physical examinations and diagnostic screenings. The
clinics will be staffed primarily by certified nurse practitioners and
physician assistants and will be open seven days a week with extended
hours on weekdays. No appointment will be necessary and fees for
services will represent a meaningful discount to care provided in more
traditional health care settings. For more information please visit
www.valuclinic.net.
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 40,000
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 and that the acquisition may not
ultimately be accretive to earnings, the risk that we may be unable to
successfully complete the integration of 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 the timely
opening of Continucare ValuClinic health centers as currently
scheduled, 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 and
that risk corridor adjustment charges in future periods may be greater
than in the past, 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 three HMOs for
substantially all of our revenues, including the loss of our managed
care agreements with any of these HMOs and 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
June 30,
ASSETS 2007 2006
------------- -------------
Current assets:
Cash and cash equivalents $ 7,262,247 $ 10,681,685
Other receivables, net 308,111 231,832
Due from HMOs, net of a liability for
incurred but not reported medical claims
expense of approximately $23,618,000 and
$14,207,000 at June 30, 2007 and 2006,
respectively 13,525,092 6,339,526
Prepaid expenses and other current assets 1,273,593 689,096
Deferred tax assets 740,264 658,768
------------- -------------
Total current assets 23,109,307 18,600,907
Certificates of deposit, restricted 1,176,635 1,126,987
Property and equipment, net 8,509,454 824,220
Goodwill, net of accumulated amortization
of approximately $7,610,000 73,670,225 14,342,510
Intangible assets, net of accumulated
amortization of $929,000 7,731,000 -
Managed care contracts, net of accumulated
amortization of approximately $3,126,000
and $2,773,000 at June 30, 2007 and 2006,
respectively 384,422 737,234
Deferred tax assets 2,289,811 5,810,562
Other assets, net 66,694 551,927
------------- -------------
Total assets $116,937,548 $ 41,994,347
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,007,869 $ 575,925
Accrued expenses and other current
liabilities 4,542,097 2,377,505
Income taxes payable 910,739 24,428
------------- -------------
Total current liabilities 6,460,705 2,977,858
Capital lease obligations, less current
portion 165,191 112,068
Deferred tax liabilities 6,215,483 1,929,501
Other liability 37,784 -
------------- -------------
Total liabilities 12,879,163 5,019,427
Commitments and contingencies
Shareholders' equity:
Common stock, $0.0001 par value:
100,000,000 shares authorized;
70,043,086 shares issued and outstanding
at June 30, 2007 and 50,242,478 shares
issued and outstanding at June 30, 2006 7,004 5,024
Additional paid-in capital 124,616,091 63,838,051
Accumulated deficit (20,564,710) (26,868,155)
------------- -------------
Total shareholders' equity 104,058,385 36,974,920
------------- -------------
Total liabilities and shareholders'
equity $116,937,548 $ 41,994,347
============= =============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Year Ended
Three-Months Ended
------------------------ --------------------------
6/30/07 6/30/06 6/30/07 6/30/06
------------------------ --------------------------
Revenue:
Medical services
revenue $65,374,523 $36,192,717 $216,878,488 $132,629,665
Management fee
revenue and other
income 67,403 19,535 267,799 361,247
------------------------ --------------------------
Total revenue 65,441,926 36,212,252 217,146,287 132,990,912
Operating expenses:
Medical services:
Medical claims 48,682,355 28,141,372 161,153,828 97,781,447
Other direct
costs 6,439,063 3,373,086 22,919,746 13,137,396
------------------------ --------------------------
Total medical
services 55,121,418 31,514,458 184,073,574 110,918,843
Administrative
payroll and
employee benefits 2,288,807 1,544,635 9,192,670 6,538,295
General and
administrative 4,285,951 1,837,454 13,990,439 7,584,205
------------------------ --------------------------
Total
operating
expenses 61,696,176 34,896,547 207,256,683 125,041,343
------------------------ --------------------------
Income from
operations 3,745,750 1,315,705 9,889,604 7,949,569
Other income
(expense):
Interest income 87,027 121,778 356,192 331,001
Interest expense (4,808) (2,291) (49,746) (12,870)
------------------------ --------------------------
Income before
income tax
provision 3,827,969 1,435,192 10,196,050 8,267,700
Income tax
provision 1,450,757 327,020 3,892,605 2,930,161
------------------------ --------------------------
Net income $ 2,377,212 $ 1,108,172 $ 6,303,445 $ 5,337,539
======================== ==========================
Net income per
common share:
Basic $ .03 $ .02 $ .10 $ .11
======================== ==========================
Diluted $ .03 $ .02 $ .10 $ .10
======================== ==========================
Weighted average
common shares
outstanding:
Basic 70,043,171 50,197,034 65,044,319 49,907,898
======================== ==========================
Diluted 71,434,846 51,516,141 66,324,613 51,230,435
======================== ==========================
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended June 30,
--------------------------
2007 2006
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 6,303,445 $ 5,337,539
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,013,486 695,095
Loss on disposal of fixed assets 35,924 -
Provision for bad debts 165,181 163,105
Compensation expense related to issuance
of stock options 1,692,190 1,292,234
Excess tax benefits related to exercise
of stock options (523,964) -
Deferred tax expense 2,172,618 2,767,095
Changes in operating assets and
liabilities, excluding the effect of
disposals:
Other receivables (241,460) (249,964)
Due from HMOs, net (1,803,016) (2,853,996)
Prepaid expenses and other current assets (629,497) 30,481
Other assets 151,360 (125,964)
Accounts payable 369,688 (84,214)
Accrued expenses and other current
liabilities (275,196) 8,354
Income taxes payable 1,419,894 (106,934)
------------- ------------
Net cash provided by continuing operations 10,850,653 6,872,831
Net cash used in discontinued operations - (32,512)
------------- ------------
Net cash provided by operating activities 10,850,653 6,840,319
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of certificate of deposit (49,648) (596,637)
Proceeds from sales of fixed assets 70,000 -
Acquisition of MDHC Companies, net of cash
acquired (6,109,980) -
Purchase of property and equipment (894,325) (280,675)
Other assets - (359,147)
------------- ------------
Net cash used in investing activities (6,983,953) (1,236,459)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable 1,813,317 -
Repayments on note payable (1,813,317) (520,000)
Proceeds from long-term debt 6,917,808 -
Repayment on long-term debt (14,690,960) -
Principal repayments under capital lease
obligations (96,248) (127,053)
Proceeds from exercise of stock options 103,700 640,468
Excess tax benefits related to exercise of
stock options 523,964 -
Payment of fees related to issuance of
stock (44,402) -
Repurchase and retirement of common stock - (696,134)
------------- ------------
Net cash used in financing activities (7,286,138) (702,719)
------------- ------------
Net (decrease) increase in cash and cash
equivalents (3,419,438) 4,901,141
Cash and cash equivalents at beginning of
fiscal year 10,681,685 5,780,544
------------- ------------
Cash and cash equivalents at end of fiscal
year $ 7,262,247 $10,681,685
============= ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING TRANSACTIONS:
Purchase of equipment, furniture and
fixtures with proceeds of capital lease
obligations $ 171,135 $ 215,162
==========================
Retirement of treasury stock $ - $ 5,424,701
============= ============
Stock issued upon conversion of related
party notes payable $ - $ 102,180
============= ============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Year Ended June 30,
--------------------------
2007 2006
------------- ------------
Information with respect to MDHC acquisition
accounted for under the purchase method of
accounting is summarized as follows:
Fair value of assets acquired $ 22,244,088 $ -
Liabilities assumed (15,375,217) -
------------- ------------
Net assets acquired 6,868,871 -
------------- ------------
Purchase price:
Cash paid to principal owners of MDHC 5,709,937 -
Acquisition costs 982,081 -
Cash to be paid related to acquisition 1,000,000 -
Fair market value of stock issued 58,504,568 -
------------- ------------
Total 66,196,586 -
------------- ------------
Goodwill $ 59,327,715 $ -
============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for taxes $ 306,000 $ 270,000
============= ============
Cash paid for interest $ 49,746 $ 12,870
============= ============
CONTACT: Continucare Corporation, Miami
Fernando L. Fernandez, Senior Vice President - Finance
305-500-2105