3rd Quarter Net Income Up 24%, EPS Up 25%.LOUISVILLE Louisville (l  `ēvĭl), city (1990 pop. 269,063), seat of Jefferson co., NW Ky., at the Falls of the Ohio; inc. 1780. , Ky.--(BUSINESS WIRE)--Nov. 3, 1998---- 3rd Quarter Revenues Increase 25% -- Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. At $758 Million, Up 18% Over Comparable Quarter -- 1.1 Million New Lives Sold; Total Lives Sold at 39.4 Million Healthcare Recoveries, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : HCRI HCRI Harvard Clinical Research Institute HCRI Health Communication Research Institute, Inc. ) today reported results for the quarter ended September September: see month. 30, 1998. Net income for the quarter increased 24% to $2.3 million from $1.8 million in the year-earlier period. Earnings per share for the quarter increased 25% to $0.20 per share from $0.16 per share in the comparable quarter last year (all per share amounts are on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis). Revenues for the quarter were $12.7 million, up 25% from $10.2 million in the year-earlier period. For the nine months ended September 30, 1998, recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. net income increased 36% to $6.5 million from $4.8 million a year ago. Earnings per share for this period increased 27% to $0.57 per diluted share from $0.45 per diluted share in the comparable period last year. Net income and earnings per share amounts for the prior year period exclude the $2.8 million noncash, nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. compensation charge in the quarter ended June June: see month. 30, 1997. Revenues for the nine months ended September 30, 1998, were $35.9 million, up 26% from $28.4 million in the comparable period last year. As a result of the implementation on January January: see month. 1, 1998, of the Accounting Standards Executive Committee's Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use (SOP 98-1), HRI HRI Horse Racing Ireland HRI High Resolution Instrument HRI Human-Robot Interaction HRI Hellenic Resources Institute (Greece) HRI Human Rights Internet (Ottawa, Canada) capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. $131,000 in the third quarter of 1998, and $400,000 year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , of costs that would otherwise have been recorded as expenses during those respective periods. Had HRI continued with its historical practice of expensing such costs, net income and earnings per share for the quarter would have been, respectively, $2.2 million and $0.19, and year-to-date would have been, respectively, $6.3 million and $0.55. -0-
Quarterly Statement of Income
(Dollars in thousands, except per share results)
3 Months ended 9 Months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
As Reported:
Revenues $12,719 $10,180 $35,940 $28,421
Cost of services 5,667 4,762 16,538 13,447
------- ------- ------- -------
Gross profit 7,052 5,418 19,402 14,974
Support expenses 3,003 2,332 7,767 6,638
Depreciation & amortization 612 317 1,701 799
Non-recurring compensation
charge - - - 2,848
------- ------- ------- -------
Operating income 3,437 2,769 9,934 4,689
Interest income 428 411 1,243 740
------- ------- ------- -------
Income before income taxes 3,865 3,180 11,177 5,429
Provision for income taxes 1,588 1,341 4,636 3,479
======= ======= ======= =======
Net Income $ 2,277 $ 1,839 $ 6,541 $ 1,950
======= ======= ======= =======
Basic weighted average shares 11,497 11,470 11,479 10,511
Diluted weighted
average shares 11,498 11,646 11,573 10,583
Basic earnings per
common share $ 0.20 $ 0.16 $ 0.57 $ 0.19
Diluted earnings
per common share $ 0.20 $ 0.16 $ 0.57 $ 0.18
------- ------- ------- -------
As Adjusted (1):
Subrogation revenues $12,719 $10,180 $35,940 $28,421
Gross profit 7,052 5,418 19,402 14,974
Operating income 3,306 2,769 9,534 7,537
Income before income
taxes 3,734 3,180 10,777 8,277
Net income $ 2,200 $ 1,839 $ 6,307 $ 4,798
Diluted earnings per
common share $ 0.19 $ 0.16 $ 0.55 $ 0.45
(1) Includes the 1998 costs otherwise capitalized in accordance
with SOP 98-1, and excludes the 1997 nonrecurring compensation charge.
The following tables present certain key operating indicators for
the periods indicated.
Lives Sold and Installed
(In millions)
3 Months ended 9 Months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Cumulative Lives Sold,
Beginning of Period 38.3 34.3 38.5 29.5
Lives From Existing
Client Growth 0.4 0.4 (2.7) 1.3
Lives Added From Contracts
With Existing Clients 0.6 3.1 1.5 5.4
Lives Added From Contracts
With New Clients 0.1 0.0 2.1 1.6
====== ====== ====== ======
Cumulative Lives Sold,
End of Period 39.4 37.8 39.4 37.8
====== ====== ====== ======
Lives Installed, End of Period 37.4 34.3 37.4 34.3
====== ====== ====== ======
HRI ended the third quarter of 1998 with 39.4 million lives sold, an increase of 1.1 million lives from the end of the prior quarter. This increase resulted from the addition of 100,000 lives from contracts with new clients and 600,000 lives from new contracts with existing clients, and 400,000 lives from existing client growth. Compared to last year, lives sold at the end of the current quarter increased 1.6 million, or 4.2%, over the end of the same quarter a year ago. Installed lives grew by 3.1 million over the end of the comparable quarter last year, a 9% increase, and by 1.7 million, or 5%, over the end of the prior quarter. -0-
Key Operating Indicators
(Dollars in millions)
3 Months ended 9 Months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Backlog (1) $758.4 $642.2 $758.4 $642.2
Subrogation Recoveries $ 45.7 $ 37.3 $130.6 $105.1
Subrogation Revenue $ 12.7 $ 10.2 $ 35.9 $ 28.4
Throughput (2) 6.1% 6.0% 18.3% 17.9%
Effective Fee Rate 27.8% 27.3% 27.4% 27.0%
Direct Operation Employees 398 362 398 362
Support Staff Employees 107 82 107 82
======= ======= ======= =======
Total Employees 505 444 505 444
======= ======= ======= =======
(1) Backlog (i.e., gross recoveries in process) is the total
dollar amount of potentially recoverable claims pursued on behalf of
clients at the end of the period.
(2) Equals recoveries for the period divided by the average of
backlog at the beginning and end of the period.
Backlog for the quarter grew 18% over the comparable quarter and 3% over the prior quarter. This growth in backlog was the result of the installation of new lives and the processing of lives already installed. Statements in this release that look forward in time involve risks and uncertainties, including the ability of HRI to successfully implement its operating and acquisition strategies, HRI's ability to manage growth, changes in laws and government regulations applicable to HRI, adverse litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. results, and changes in the historical relationships among such key operating indicators as lives sold, lives installed, backlog and throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. and in the predictive value pre·dic·tive value n. The likelihood that a positive test result indicates disease or that a negative test result excludes disease. predictive value a measure used by clinicians to interpret diagnostic test results. of these indicators with respect to certain aspects of HRI's financial results. HRI is a leading provider of health insurance subrogation The substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that he or she who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or Securities. and related recovery services for private healthcare payors. -0-
HEALTHCARE RECOVERIES, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
(In thousands, except share information)
September 30, December 31,
1998 1997
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $28,003 $24,674
Restricted cash 16,001 14,207
Accounts receivable, less
allowance for doubtful accounts
of $274 - September 30, 1998
and $251 - December 31, 1997 3,129 2,507
Other current assets 1,065 676
------- -------
Total current assets 48,198 42,064
------- -------
Property and equipment, at cost:
Furniture and fixtures 2,462 2,177
Office equipment 1,715 1,471
Computer equipment 7,262 5,066
Leasehold improvements 830 649
------- -------
12,269 9,363
Accumulated depreciation
and amortization (6,412) (4,920)
------- -------
5,857 4,443
------- -------
Other assets 1,753 1,663
------- -------
Total assets $55,808 $48,170
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 885 $ 986
Accrued expenses 4,802 4,770
Funds due clients 12,311 11,643
Income taxes payable 1,840 1,754
------- -------
Total current liabilities 19,838 19,153
Other liabilities 1,192 1,152
------- -------
Total liabilities 21,030 20,305
------- -------
Contingencies
Stockholders' equity:
Preferred stock, $.001
par value, 2,000,000 shares
authorized no shares issued
or outstanding -- --
Common stock, $.001 par value
20,000,000 shares authorized,
11,499,247 - September 30, 1998
and 11,470,000 - December 31,
1997 shares issued and outstanding 11 11
Capital in excess of par value 22,373 22,001
Retained earnings 12,394 5,853
------- -------
Total stockholders' equity 34,778 27,865
------- -------
Total liabilities and
stockholders' equity $55,808 $48,170
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