Exhibit 99.1
MATRIA HEALTHCARE REPORTS 53% INCREASE IN NET EARNINGS AND $0.30 EPS FROM
CONTINUING OPERATIONS
MARIETTA, Ga., Oct. 20 /PRNewswire-FirstCall/ -- Matria Healthcare, Inc.
(Nasdaq: MATR) today announced financial results for the third quarter and
nine months ended September 30, 2005.
Revenues for the third quarter of 2005 increased 11% to $84.0 million,
compared with $76.0 million in the third quarter of 2004. Net earnings from
continuing operations increased 53% for the third quarter of 2005 to $6.4
million, or $0.30 per diluted common share, compared with $4.2 million, or $0.24
per diluted common share, in the third quarter of 2004.
Revenues for the Company's Health Enhancement segment increased by 10% to
$57.9 million in the third quarter of 2005, compared with $52.6 million in the
third quarter of 2004. The Health Enhancement segment is comprised of the
Company's disease management, wellness and case management business, with the
exclusion of the portion of that business reported in the Women's and Children's
Health segment; its foreign diabetes service operation; and Facet Technologies,
the Company's diabetes product design, development and assembly operation.
Revenues for the disease management component increased 38% to $20.1 million in
the third quarter of 2005, compared with $14.6 million in the third quarter of
2004. Third quarter 2005 revenues for the foreign diabetes business increased
13% to $17.9 million, compared with $15.8 million in third quarter 2004, and
Facet Technologies' revenues in the third quarter of 2005 decreased to $19.9
million, compared with $22.2 million in the prior year's third quarter.
Revenues for the Women's and Children's Health segment increased 12% to
$26.1 million, compared with revenues of $23.4 million in the third quarter of
2004. The third quarter of 2005 is the fourth consecutive quarter over quarter
of revenue growth for the Women's and Children's Health segment. This business
segment is comprised of the Company's maternity disease management, maternity
and neonatal case management, and obstetrical telemedicine services.
"We are pleased with the enhanced operating profit margin we achieved in the
third quarter," stated Parker H. "Pete" Petit, Chairman and Chief Executive
Officer. "However, third quarter revenues were affected by a drop in Facet
Technologies' customer orders during the quarter. We expect the customer orders
for Facet to rebound to previous levels in the fourth quarter. Although disease
management revenues grew by 38%, a few of our disease management accounts
delayed implementation from the third quarter into the fourth quarter. Our third
quarter revenues were also slightly affected by these delays."
"Our disease management sales pipeline is extremely robust and continues to
grow at an accelerated pace. We have already announced awards of 40 new or
expanded accounts so far this year, and we expect to announce additional awards
prior to year end. Awards of new business have increased dramatically this year.
At this point in 2004, we had announced only 16 new awards. Through the first
three quarters of 2005, we have implemented 27 new or expanded accounts. In
addition, we expect to implement 6 new or expanded accounts during the fourth
quarter of 2005. To further illustrate our growth, January 2006 is expected to
be a record month for Matria as we have 13 scheduled implementations during that
month. The continued growth of our disease management business is also
significantly improving our operating margin. As a result of our disease
management growth, we had a two percentage point improvement in our operating
profit margin."
Earlier this month, the Company announced that one of its current clients
had expanded its offering of Matria's health enhancement products and services
by adding the Company's informatics consulting services. Petit stated, "Our
informatics consulting services provide significant value to our clients in
their efforts to improve the health and productivity of their employees and
dependents. While this is the first client that we are billing for these
services, we are capitalizing on the increased demand for these services and
expect to see more clients add this valuable service to their contracts."
Petit continued, "We are extremely pleased with the continuing improvement
in the Women's and Children's Health segment and the market's emerging demand
for our disease management approach to managing complicated and high-risk
pregnancies. The Women's and Children's Health segment has shown impressive
growth, and they have now delivered two consecutive quarters of double digit
growth."
Revenues for the first nine months of 2005 increased 14% to $245.6 million,
compared with $215.2 million in the first nine months of 2004. Earnings from
continuing operations for the first nine months of 2005 increased 116% to $15.8
million, or $0.78 per diluted common share, compared with $7.3 million, or $0.45
per diluted common share, in the same period last year.
Revenues for the Company's Health Enhancement segment increased by 15% to
$169.1 million in the first nine months of 2005, compared with $146.5 million in
the first nine months of 2004. Revenues for the disease management component,
other than Women's and Children's Health, increased 42% to $54.1 million in the
first nine months of 2005, compared with $38.0 million in the same period of
2004. Nine month 2005 revenues for the foreign diabetes business increased 15%
to $52.7 million, compared with $45.7 million in the first nine months of 2004,
and Facet Technologies' revenues in the first nine months of 2005 were $62.2
million, compared with $62.8 million in the prior year's period. Revenues for
the Women's and Children's Health segment grew by 11% to $76.5 million, compared
with revenues of $68.7 million in the first nine months of 2004.
Matria reported that the covered lives included in its disease management
programs were 31.1 million at September 30, 2005. The Company reported 29.8
million covered lives in its disease management programs at the end of 2004,
14.2 million covered lives at the end of 2003, and 7.2 million covered lives at
the end of 2002.
FOURTH QUARTER GUIDANCE
The Company announced its expectations for fourth quarter of 2005 revenues
to be between $88 million and $90 million, and earnings per diluted common share
from continuing operations to be in the range of $0.28 to $0.31. On December 16,
2004, the Company provided guidance for earnings per share from continuing
operations to be in the range of $1.03 and $1.13. The Company reaffirmed its
July 20, 2005 expectations for earnings per share from continuing operations to
exceed the low end of the range. In light of its fourth quarter revenue
guidance, the Company expects full year 2005 revenues to be in the range of $334
to $336 million.
Petit added, "In preparation for the 13 new accounts targeted for
implementation in January and the fourth quarter implementation schedule, we
expect a slight increase in operating expenses to be incurred during the fourth
quarter."
A listen-only simulcast and replay of Matria Healthcare's second quarter
conference call will be available on-line at the Company's website at
http://www.matria.com or at http://www.fulldisclosure.com on October 20, 2005,
beginning at 9:00 a.m. Eastern time.
ABOUT MATRIA HEALTHCARE
Matria Healthcare is a leading provider of comprehensive health enhancement
programs for health plans and employers. Matria manages major chronic diseases
and episodic conditions including diabetes, congestive heart failure, coronary
artery disease, asthma, chronic obstructive pulmonary disease, high-risk
obstetrics, cancer, chronic pain, depression, end-stage renal disease, and
obesity; delivers programs that address wellness, healthy living, productivity
improvement, and patient advocacy; and provides case management of acute and
catastrophic conditions. Headquartered in Marietta, Georgia, Matria has more
than 40 offices in the United States and internationally. More information about
Matria can be found on line at http://www.matria.com.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements. Such statements
include, but are not limited to, the Company's financial expectations for the
fourth quarter and full year of 2005, a rebound in customer orders for Facet in
the fourth quarter and beyond, the announcement of new and expanded awards later
in the year, prospects for growth in the Women's and Children's Health business,
the continuation of the rapid growth of the Company's disease management
business and the effect on the Company's operating margins, the number of
disease management accounts to be implemented in the fourth quarter of 2005 and
January 2006, and increased demand for the Company's informatics consulting
services. These statements are based on current information and belief and are
not guarantees of future performance. Among the important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements include the Company's inability to achieve its
financial expectations for the fourth quarter and full year of 2005, the
possibility that demand for the Company's disease management-related programs,
including, without limitation, health and wellness services and informatics
consulting services, will diminish or not continue to grow, failure of growth in
the Company's disease management business to have a positive effect on the
Company's operating margins, inability of the Company to continue to demonstrate
significant cost savings and compelling outcomes for its disease management
clients, failure to achieve the revenue expectations for the Company's newly
awarded business, delays or problems in implementation or management of new
disease management contracts, failure to sustain the recent growth in the
Women's and Children's Health business, failure of customer orders for Facet to
increase in the further quarter, developments in the healthcare industry,
third-party actions over which Matria does not have control, regulatory
requirements applicable to Matria's business, the Company's inability to grow
profitably through acquisitions and the risk factors detailed from time to time
in Matria's periodic reports and registration statements filed with the
Securities and Exchange Commission, including Matria's Annual Report on Form
10-K for the year ended December 31, 2004. By making these forward-looking
statements, Matria does not undertake to update them in any manner except as may
be required by Matria's disclosure obligations in filings it makes with the
Securities and Exchange Commission under the federal securities laws.
MATRIA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues $ 84,024 $ 75,995 $ 245,586 $ 215,171
Cost of revenues 44,982 43,152 133,572 124,334
Selling and administrative
expenses 27,570 24,001 81,674 69,719
Provision for doubtful accounts 965 910 2,735 1,688
Operating earnings from
continuing operations 10,507 7,932 27,605 19,430
Interest income (expense), net 38 (1,261) (1,682) (8,693)
Other income, net 283 111 538 225
Loss on retirement of Senior Notes - - - (22,886)
Earnings (loss) from continuing
operations before income taxes 10,828 6,782 26,461 (11,924)
Income tax benefit (expense) (4,400) (2,572) (10,713) 4,555
Earnings (loss) from continuing
operations 6,428 4,210 15,748 (7,369)
Earnings (loss) from discontinued
operations, net of tax 9 (917) (431) 70
Gain on disposal of discontinued
operations, net of tax - - - 32,799
Earnings (loss) from discontinued
operations 9 (917) (431) 32,869
Net earnings $ 6,437 $ 3,293 $ 15,317 $ 25,500
Net earnings (loss) per common share:
Basic
Continuing operations $ 0.31 $ 0.27 $ 0.87 $ (0.48)
Discontinued operations - (0.06) (0.03) 2.13
$ 0.31 $ 0.21 $ 0.84 $ 1.65
Diluted
Continuing Operations $ 0.30 $ 0.24 $ 0.78 $ (0.48)
Discontinued Operations - (0.05) (0.02) 2.13
$ 0.30 $ 0.19 $ 0.76 $ 1.65
Weighted average shares outstanding:
Basic 20,632 15,534 18,136 15,445
Diluted 21,728 20,657 21,540 15,445
MATRIA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
September 30, December 31,
2005 2004
------------- -------------
ASSETS
Current Assets
Cash, cash equivalents and short-term
investments $ 28,402 $ 41,208
Trade accounts receivable, net 53,602 45,603
Inventories 26,292 25,200
Prepaid expenses and other current assets 13,574 17,531
Total current assets 121,870 129,542
Property and equipment, net 26,126 22,881
Intangible assets, net 139,853 135,309
Deferred income taxes 7,711 11,704
Other assets 4,711 5,046
$ 300,271 $ 304,482
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt and
obligations under capital leases $ 1,385 $ 865
Accounts payable, principally trade 26,787 31,202
Other accrued liabilities 16,492 21,566
Total current liabilities 44,664 53,633
Long-term debt and obligations under capital
leases, excluding current installments 1,957 85,751X
Other long-term liabilities 5,668 5,438
Total liabilities 52,289 144,822
Shareholders' equity 247,982 159,660
$ 300,271 $ 304,482
MATRIA HEALTHCARE, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Reconciliation of Net Earnings to
Earnings from Continuing Operations,
Excluding Unusual Items
Net earnings $ 6,437 $ 3,293 $ 15,317 $ 25,500
Less gain on disposal of discontinued
operations, net of tax - - - (32,799)
Add loss on retirement of Senior
Notes, net of tax - - - 14,144
Add additional interest due to timing of
retirement of Senior Notes, net of tax - - - 371
Add restructuring charges, net of tax - - - 165
Net earnings, excluding unusual items 6,437 3,293 15,317 7,381
Less (earnings) loss from discontinued
operations, net of tax (9) 917 431 (70)
Earnings from continuing operations,
excluding unusual items $ 6,428 $ 4,210 $ 15,748 $ 7,311
Reconciliation of Diluted Earnings
(Loss) per Common Share from Continuing
Operations to Adjusted Diluted Earnings
(Loss) per Common Share from
Continuing Operations
Diluted earnings (loss) per common
shares $ 0.30 $ 0.24 $ 0.78 $ (0.48)
Unusual items, net of tax - - - 0.93
Adjusted diluted earnings per
common share $ 0.30 $ 0.24 $ 0.78 $ 0.45
Shares used in calculating net earnings
per share, excluding unusual items
Weighted average shares outstanding,
basic 20,632 15,534 18,136 15,445
Shares issuable from assumed exercise
of options and conversion of
subordinated notes 1,096 5,123 3,404 2,148
Weighted average shares outstanding,
diluted 21,728 20,657 21,540 17,593
Contact:
Stephen M. Mengert
Chief Financial Officer
770/767-4500
SOURCE Matria Healthcare, Inc.
-0- 10/20/2005
/CONTACT: Stephen M. Mengert, Chief Financial Officer, Matria Healthcare,
Inc., +1-770-767-4500/
/Web site: http://www.matria.com
http://www.fulldisclosure.com /
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