Exhibit 99.01
Continucare Corporation Reports 70% Increase in Revenue and 40%
Increase in Operating Profit for First Quarter of Fiscal 2008
MIAMI--(BUSINESS WIRE)--Nov. 7, 2007--Continucare Corporation
(AMEX:CNU) today reported financial results for its first quarter of
fiscal 2008. Financial highlights for the quarter include:
-- Total revenue of $60.9 million, a 70% increase compared to
$35.9 million in the first quarter of fiscal 2007;
-- Income from operations of $2.9 million, a 40% increase
compared to $2.1 million for the same period last year; and
-- Net income of $1.9 million, or $0.03 per diluted share, as
compared to $1.4 million, or $0.03 per diluted share, for the
same period a year ago.
Continucare's cash and cash equivalents increased to $14.2 million
at September 30, 2007 from $7.3 million at June 30, 2007, while
working capital increased to $20.0 million at September 30, 2007 from
$17.5 million at June 30, 2007. Total liabilities were $12.9 million
at September 30, 2007 and at June 30, 2007. Shareholders' equity
increased to $105.8 million at September 30, 2007 from $104.1 million
at June 30, 2007.
"Our first fiscal quarter results represent a strong start to our
new fiscal year," said Richard C. Pfenniger, Jr., Continucare's
Chairman and Chief Executive Officer. "Both revenues and profits were
significantly higher than the first quarter of our prior fiscal year,
and with $7.7 million of cash flow from operations during the quarter,
our financial position continued to improve while our balance sheet
remained virtually free of long-term indebtedness."
"As we continue to prepare for the launch of Continucare
ValuClinic(TM), our new line of retail-based convenient care clinics,
we are actively working to complete construction of our initial
locations and obtain necessary licenses. We look forward to opening
our first ValuClinic locations later this Fall."
Stock Repurchase Program
Continucare also announced that to date it has repurchased
1,339,967 shares of its common stock at a total cost of approximately
$3.4 million under a previously announced 2,500,000 share stock
repurchase program, including 182,500 shares purchased during the
quarter at a cost of approximately $500,000. An aggregate of 1,160,033
shares remain available for purchase under the plan. The plan
authorizes management, at its discretion, to repurchase shares from
time to time in the open market or in privately negotiated
transactions subject to market conditions and other factors.
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. 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, 2007 and other filings
with the SEC and we urge you to read those documents. 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)
ASSETS September 30, June 30,
2007 2007
------------- -------------
Current assets:
Cash and cash equivalents $ 14,207,823 $ 7,262,247
Other receivables, net 282,221 308,111
Due from HMOs, net of a liability for
incurred but not reported medical claims
of approximately $22,675,000 and
$23,618,000 at September 30, 2007 and
June 30, 2007, respectively 9,759,638 13,525,092
Prepaid expenses and other current assets 736,501 1,273,593
Deferred tax assets, net 625,995 740,264
------------- -------------
Total current assets 25,612,178 23,109,307
Certificates of deposit, restricted 1,253,300 1,176,635
Property and equipment, net 8,504,257 8,509,454
Goodwill, net of accumulated amortization
of approximately $7,610,000 73,204,582 73,670,225
Intangible assets, net of accumulated
amortization of approximately $1,239,000
and $929,000 at September 30, 2007 and
June 30, 2007, respectively 7,421,333 7,731,000
Managed care contracts, net of accumulated
amortization of approximately $3,214,000
and $3,126,000 at September 30, 2007 and
June 30, 2007, respectively 296,219 384,422
Deferred tax assets, net 2,351,191 2,289,811
Other assets, net 122,089 66,694
------------- -------------
Total assets $118,765,149 $116,937,548
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 737,796 $ 1,007,869
Accrued expenses and other current
liabilities 3,499,753 4,542,097
Income taxes payable 1,351,688 67,398
------------- -------------
Total current liabilities 5,589,237 5,617,364
Capital lease obligations, less current
portion 174,401 165,191
Deferred tax liabilities 6,332,542 6,215,483
Other liabilities 843,341 881,125
------------- -------------
Total liabilities 12,939,521 12,879,163
Commitments and contingencies
Shareholders' equity:
Common stock, $0.0001 par value:
100,000,000 shares authorized;
70,118,086 shares issued and 69,935,586
shares outstanding at September 30, 2007
and 70,043,086 shares issued and
outstanding at June 30, 2007 7,012 7,004
Additional paid-in capital 124,461,826 124,616,091
Accumulated deficit (18,643,210) (20,564,710)
------------- -------------
Total shareholders' equity 105,825,628 104,058,385
------------- -------------
Total liabilities and shareholders'
equity $118,765,149 $116,937,548
============= =============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
September 30,
-------------------------
2007 2006
------------ ------------
Revenue $60,922,664 $35,933,599
Operating expenses:
Medical services:
Medical claims 44,877,196 27,061,040
Other direct costs 6,593,078 3,311,195
------------ ------------
Total medical services 51,470,274 30,372,235
------------ ------------
Administrative payroll and employee
benefits 2,733,233 1,625,235
General and administrative 3,774,330 1,836,359
------------ ------------
Total operating expenses 57,977,837 33,833,829
------------ ------------
Income from operations 2,944,827 2,099,770
Other income (expense):
Interest income 159,113 154,122
Interest expense (7,418) (2,934)
------------ ------------
Income before income tax provision 3,096,522 2,250,958
Income tax provision 1,175,022 853,839
------------ ------------
Net income $ 1,921,500 $ 1,397,119
============ ============
Net income per common share:
Basic $ .03 $ .03
============ ============
Diluted $ .03 $ .03
============ ============
Weighted average common shares outstanding:
Basic 70,041,548 50,247,936
============ ============
Diluted 71,234,950 51,521,917
============ ============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
September 30,
-------------------------
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,921,500 $ 1,397,119
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 615,311 170,834
Loss on disposal of fixed assets - 35,924
Provision for bad debts 63,579 50,225
Compensation expense related to issuance
of stock options 310,461 320,784
Excess tax benefits related to exercise of
stock options - (125,419)
Deferred tax expense (109,268) 674,715
Changes in operating assets and liabilities:
Other receivables, net (37,689) (136,335)
Due from HMOs, net 4,314,488 73,655
Prepaid expenses and other current assets 522,092 141,258
Other assets, net (55,395) 94,321
Accounts payable (270,073) 85,296
Accrued expenses and other current
liabilities (826,890) (1,236,068)
Income taxes payable 1,284,290 155,030
------------ ------------
Net cash provided by operating activities 7,732,406 1,701,339
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of certificates of deposit (76,665) (18,143)
Proceeds from sales of fixed assets - 25,000
Purchase of property and equipment (218,280) (319,326)
Acquisition costs related to MDHC Companies - (183,581)
------------ ------------
Net cash used in investing activities (294,945) (496,050)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment on long-term debt (6,083) -
Excess tax benefits related to exercise of
stock options - 125,419
Principal repayments under capital lease
obligations (21,083) (21,617)
Proceeds from exercise of stock options 49,500 14,875
Payment of fees related to issuance of stock (45,000) -
Repurchase of common stock (469,219) -
------------ ------------
Net cash provided by (used in) financing
activities (491,885) 118,677
------------ ------------
Net increase in cash and cash equivalents 6,945,576 1,323,966
Cash and cash equivalents at beginning of
period 7,262,247 10,681,685
------------ ------------
Cash and cash equivalents at end of period $ 14,207,823 $ 12,005,651
============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Purchase of property and equipment with
proceeds of capital lease obligations $ 30,610 $ 57,031
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for taxes $ - $ 30,000
============ ============
Cash paid for interest $ 7,418 $ 2,934
============ ============
CONTACT: Continucare Corporation, Miami
Fernando L. Fernandez, Senior Vice President - Finance
305-500-2105