American Healthways Achieves Fourth-Quarter Earnings Per Diluted Share of $0.27 Compared with $0.15 for Fiscal 2003.NASHVILLE Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , Tenn. -- Reports Fiscal 2004 Earnings of $0.75 Per 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. Share; Establishes Fiscal 2005 Earnings Guidance in Range of $1.00 to $1.02 Per Diluted Share Ben R. Leedle, Jr., president and chief executive officer of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Healthways Healthways can mean:
AMHC Aviation Structural Mechanic Hydraulics Chief ), today announced financial results for the fourth quarter and 12 months ended August 31, 2004. Revenues increased 56% for the quarter to $71,855,000 from $46,010,000 for the fourth quarter of fiscal 2003. Net income was $9,293,000, up 83% from $5,081,000. Earnings per diluted share for the fourth quarter grew 80% to $0.27 from $0.15 for the fourth quarter of fiscal 2003. Prior-period results have been adjusted to reflect the two-for-one stock split effected in December December: see month. 2003. Revenues for fiscal 2004 increased 48% to $245,410,000 from $165,471,000 for fiscal 2003. Net income for fiscal 2004 rose to $26,058,000 from $18,474,000 for fiscal 2003, while earnings per diluted share for fiscal 2004 were $0.75, up from $0.56 for fiscal 2003. Excluding the impact of incentive bonus revenues reported during both periods, revenues, net income and earnings per diluted share for fiscal 2004 increased 52%, 60% and 45%, respectively, over fiscal 2003 results. See page 7 for a reconciliation of reported results to non-GAAP results, which exclude incentive bonus revenues. "We are very pleased to report that our strong fourth-quarter earnings were right on-target with the guidance we provided throughout the fiscal year," Leedle remarked. "These earnings contributed to our delivering a fourth consecutive fiscal year of substantial profitable growth and were achieved by a rapid expansion in actual lives under management, outstanding clinical and financial performance under our health plan contracts, increased operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. and the impact of the StatusOne acquisition in September September: see month. 2003. These trends reflect the increasing recognition by health plans, employers and government that disease management is one of the health care industry's most important strategic imperatives, as well as American Healthways' expanding leadership position in the disease management industry. "Consistent with our core growth strategies, our fourth-quarter results included increased business with existing health plan customers, contracts with new health plans and accelerating business with self-insured self-insured Self fund Health insurance adjective Referring to the practice of carrying an individual health insurance policy for oneself; self insurance is usually more expensive than group insurance employers on behalf of our health plan customers. As anticipated throughout fiscal 2004, our fourth-quarter results also benefited from our having sufficient data to determine results on certain performance-based contracts initiated earlier in the fiscal year and to record those revenues from the billings-in-excess-of-earnings account ("BIE") as contractual targets were met." The highlights of American Healthways' performance for the fourth quarter include: --Strong Growth in Actual Lives Under Management - Actual lives under management increased to 1,335,000 at the end of fiscal 2004, up 57% from 852,000 at the end of fiscal 2003 and 10% from 1,211,000 at the end of the third quarter of fiscal 2004. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues in 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 the end of fiscal 2004 for contracts signed but not yet implemented totaled $15,200,000. --Increasing Penetration The successful unauthorized breach of a security perimeter. See penetration test. of Self-Insured Employer Market on Behalf of Health Plan Customers - Exceeding the growth rate in actual lives under management on both a comparable and sequential One after the other in some consecutive order such as by name or number. quarter basis, our ASO ASO arteriosclerosis obliterans. ASO 1 Administrative services organization, see there 2 Allele-specific–oligonucleotide hybridization 3 Anti-streptolysin O, see there lives under management grew 173% to 361,000 at the end of fiscal 2004 from 132,000 at the end of fiscal 2003, and 15% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen from 315,000 at the end of the third quarter of fiscal 2004. We completed fiscal 2004 with contracts to provide disease management services for 193 employers on behalf of our health plan customers, an increase of more than three times our 60 employers at the end of fiscal 2003, and 19% from 162 employers at the end of the third quarter of fiscal 2004. --Two New, Renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. or Expanded Health Plan Contracts in the Fourth Quarter; 20 for Fiscal 2004 - The Company added two health plan contracts during the fourth quarter giving it a record 20 new, expanded or renewed health plan contracts for the fiscal year. Expanding an already unprecedented 10-year, comprehensive strategic partnership, the Company and Blue Cross and Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. of Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces ("Blue Cross") initiated American Healthways' programs for oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. , chronic kidney disease Chronic kidney disease (CKD), also know as chronic renal disease, is a progressive loss of renal function over a period of months or years through five stages. Each stage is a progression through an abnormally low and progressively worse glomerular filtration rate, which is and high-risk high-risk adjective Referring to an ↑ risk of suffering from a particular condition Infectious disease Referring to an ↑ risk for exposure to blood-borne pathogens, which occurs with blood bank technicians, dental professionals, dialysis unit health management during the fourth quarter. The programs will be provided for Blue Cross's fully insured The person who obtains or is otherwise covered by insurance on his or her health, life, or property. The insured in a policy is not limited to the insured named in the policy but applies to anyone who is insured under the policy. insured n. members immediately and will be made available to the health plan's self-insured employer groups employer group Association of employers Managed care An entity with a current group benefits agreement in effect with a health plan to provide covered health care services to its employee-subscribers and eligible dependents. beginning Jan. 1, 2005. "This partnership continues to set the standard for what's possible through completely integrated and coordinated disease management and care support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services ," added Leedle. American Healthways also announced a new five-year agreement during the quarter with Wellmark Blue Cross and Blue Shield of Iowa ("Wellmark") to offer the Company's total population disease management program to Wellmark's self-insured employer groups, which represent more than 500,000 potential ASO lives. --Health Affairs Publishes Major Study Validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. Effectiveness of Diabetes diabetes or diabetes mellitus (məlī`təs), chronic disorder of glucose (sugar) metabolism caused by inadequate production or use of insulin, a hormone produced in specialized cells (beta cells in the islets of Program with CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) - During the fourth quarter, Health Affairs, a leading health policy journal, published the findings of one of the largest and most extensive outcome studies to date of the effectiveness of the Company's diabetes disease management program. The study examined the quality of care, use of services and costs for over 43,000 CIGNA members enrolled in American Healthways' diabetes disease management program. Among other positive findings, overall medical costs for those members enrolled for at least 10 months declined in the first year by an average of 8.1% and all six key measures of diabetes quality of care improved. Leedle continued, "Adding to the growing body of literature documenting the successful results of our disease management programs, the CIGNA study published in Health Affairs further raises the bar in terms of the standards and processes used to assess disease management programs and, thereby, the integrity of our validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. results." --Submission of Proposals Under Medicare's Chronic Care Improvement Program ("CCIP CCIP Chambre de Commerce et d'Industrie de Paris (Paris Chamber of Commerce, France) CCIP Cisco Certified Internetwork Professional CCIP Centre for Critical Infrastructure Protection (New Zealand) ") - As expected, American Healthways responded to CMS's request for proposals for the CCIP under the Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. Modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, Act of 2003 by filing more than one proposal by the early August deadline. Leedle commented, "CCIP represents an initial step in a tremendous opportunity to improve the quality of health care and lower its costs for millions of senior citizens across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . We believe we have submitted compelling proposals to CMS (1) See content management system and color management system. (2) (Conversational Monitor System) Software that provides interactive communications for IBM's VM operating system. that will be differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: by an array of factors, including our successful, documented results from providing disease management programs to large Medicare populations under our health plan customers' Medicare + Choice programs. Although we have incurred, and will continue to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. , costs both for submitting our proposals and, if selected, implementing them, our financial guidance will not assume any financial results related to a CCIP contract, unless or until such a contract is signed." --Cash Flow from Operations - Cash flow provided by operating activities was $19,882,000 and $53,472,000 for fourth quarter and full-year 2004, respectively. Cash and cash equivalents increased to $52,187,000 at the end of fiscal 2004 compared with $35,956,000 at the end of fiscal 2003 and $44,450,000 at the end of the third quarter of fiscal 2004. Earnings Guidance Established for First-Quarter and Full-Year Fiscal 2005 American Healthways today established its guidance for fiscal 2005 earnings per diluted share in a range of $1.00 to $1.02. The Company expects revenues for fiscal 2005 to be in a range of $319 million to $331 million. The Company's earnings guidance does not include any impact of future incentive bonus revenues. In addition, although the Company's revenue guidance for fiscal 2005 does not include any revenues from any potential contract under CMS's CCIP, the Company will continue to incur and record meaningful costs in the first half of fiscal 2005 to be positioned to implement one or more of its proposals, if selected. Based on this expectation, as well as its current health plan business under management and its backlog at the end of fiscal 2004, the Company also today established guidance for earnings per diluted share for the first quarter of fiscal 2005 in a range of $0.21 to $0.22. Earnings per diluted share for the first quarter of 2004 were $0.12, which included $0.01 of incentive bonus revenues. The Company's earnings guidance does not include any impact of future incentive bonus revenues. Summary Mr. Leedle concluded, "As in fiscal 2004, we are confident that the continuing success of our programs in improving members' health and lowering their health care costs will contribute to expanding disease management opportunities with health plans, employers and the government during fiscal 2005. As the acknowledged leader of the disease management industry - based on actual lives managed, proven scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it , program comprehensiveness and documented program success - we believe we are well positioned to leverage these opportunities to produce further significant profitable growth." Conference Call American Healthways will hold a conference call to discuss this release today at 5:00 p.m. Eastern time. Investors will have the opportunity to listen to the conference call live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by going to www.americanhealthways.com and clicking Investor Relations Investor relations The process by which the corporation communicates with its investors. , or by going to www.streetevents.com or www.fulldisclosure.com, at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719/457-0820, code 802947, and the replay will also be available on the Company's Web site for the next 12 months. Any material information disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). on the quarterly conference call that has not been previously disclosed publicly will be available on the Company's website at www.americanhealthways.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provisions This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are based upon current expectations and involve a number of risks and uncertainties. In order for the Company to utilize the "safe harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, investors are hereby cautioned that these statements may be affected by the important factors, among others, set forth below, and consequently, actual operations and results may differ materially from those expressed in these forward-looking statements. The important factors include: the timing and costs of implementation, and the effect, of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. rules and interpretations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Medicare Prescription Drug, Improvement, and Modernization Act The Medicare Prescription Drug, Improvement, and Modernization Act (Pub.L. 108-173, 117 Stat. 2066, also called Medicare Modernization Act or MMA) is a law of the United States which was enacted in 2003. of 2003; the Company's ability to sign and implement new contracts for disease management services and care enhancement services; the risks associated with a significant concentration of the Company's revenues with a limited number of customers; the Company's ability to effect cost savings and clinical outcomes improvements under disease management and care enhancement contracts and reach mutual agreement with customers with respect to cost savings, or to effect such savings and improvements within the time frames contemplated by the Company; the Company's ability to accurately forecast performance and the timing of revenue recognition under the terms of its contracts ahead of data collection and reconciliation in order to provide forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. guidance; the ability of the Company to collect contractually con·trac·tu·al adj. Of, relating to, or having the nature of a contract. con·trac  tu·al·ly adv.Adv. 1. earned performance incentive bonuses; the ability of the Company's customers to provide timely and accurate data that is essential to the operation and measurement of the Company's performance under the terms of its health plan contracts; the Company's ability to resolve favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. contract billing and interpretation issues with its customers; the Company's ability to integrate the operations of StatusOne and other acquired businesses or technologies into the Company's business; the Company's ability to service its debt and make principal and interest payments as those payments become due; the ability of the Company to develop new products and deliver outcomes on those products; the ability of the Company to effectively integrate new technologies and approaches, such as those encompassed in its care enhancement initiatives or otherwise licensed or acquired by the Company, into the Company's care enhancement platform; the Company's ability to renew and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. maintain contracts with its customers under existing terms or restructure these contracts on terms that would not have a material negative impact on the Company's results of operations; the ability of the Company to implement its care enhancement strategy within expected cost estimates; the ability of the Company to obtain adequate financing to provide the capital that may be needed to support the growth of the Company's operations and to support or guarantee the Company's performance under new contracts; unusual and unforeseen patterns of health care utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be by individuals with diabetes, cardiac cardiac /car·di·ac/ (-ak) 1. pertaining to the heart. 2. pertaining to the cardia. car·di·ac adj. 1. Of, near, or relating to the heart. 2. , respiratory respiratory /res·pi·ra·to·ry/ (res´pi-rah-tor?e) pertaining to respiration. res·pi·ra·to·ry adj. Of, relating to, used in, or affecting respiration. and/or other diseases or conditions for which the Company provides services, in the health plans with which the Company has executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. a disease management contract; the ability of the health plans to maintain the number of covered lives enrolled in the plans during the terms of the agreements between the health plans and the Company; the Company's ability to attract and/or retain and effectively manage the employees required to implement its agreements; the impact of 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. involving the Company; the impact of future state and federal health care and other applicable legislation and regulations on the ability of the Company to deliver its services and on the financial health of the Company's customers and their willingness to purchase the Company's services; current geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. turmoil and the continuing threat of domestic or international terrorism Noun 1. international terrorism - terrorism practiced in a foreign country by terrorists who are not native to that country act of terrorism, terrorism, terrorist act - the calculated use of violence (or the threat of violence) against civilians in order to attain ; general worldwide and domestic economic conditions and stock market volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the ; and other risks detailed in the Company's annual, quarterly, or other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements. Company Profile American Healthways, Inc. is the nation's leading and largest provider of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. , comprehensive disease management, care enhancement and high-risk health management services proven to improve the quality of health care and lower costs. As of August 31, 2004, the Company had 1,335,000 actual lives under management nationwide. For more information visit www.americanhealthways.com.
AMERICAN HEALTHWAYS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, except for fiscal 2003)
(In thousands, except per share data)
Three Months
Ended Twelve Months Ended
August 31, August 31,
----------------- -------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Revenues $71,855 $46,010 $245,410 $165,471
Cost of services 43,885 29,971 156,462 106,130
-------- -------- --------- ---------
Gross margin 27,970 16,039 88,948 59,341
Selling, general &
administrative expenses 6,680 4,270 23,686 16,511
Depreciation and amortization 5,096 3,027 18,450 10,950
Interest 833 131 3,509 569
-------- -------- --------- ---------
Income before income taxes 15,361 8,611 43,303 31,311
Income tax expense 6,068 3,530 17,245 12,837
-------- -------- --------- ---------
Net income $9,293 $5,081 $26,058 $18,474
======== ======== ========= =========
Basic income per share: $0.28 $0.16 $0.81 $0.60
======== ======== ========= =========
Diluted income per share: $0.27 $0.15 $0.75 $0.56
======== ======== ========= =========
Weighted average common shares
and equivalents:
Basic 32,776 31,420 32,264 31,048
Diluted 34,943 33,688 34,632 33,010
American Healthways, Inc.
Statistical Information
(Dollars in thousands)
(Unaudited)
August 31, August 31,
2004 2003
---------- ----------
Operating Statistics
Actual lives under
management at end of period 1,335,146 851,725(1)
Annualized revenue in backlog $15,200 $12,200
(1) Restated to include the Company's hospital-based diabetes
program patients.
Reconciliation of Revenues Excluding Incentive Bonus Revenues to
Revenues, GAAP Basis (in thousands)
Twelve Months Ended
August 31,
-------------------
2004 2003
--------- ---------
Revenues excluding incentive bonus revenues(2) $242,958 $160,157
Incentive bonus revenues 2,452 5,314
--------- ---------
Revenues, GAAP basis $245,410 $165,471
========= =========
Reconciliation of Net Income Excluding Incentive Bonus Revenues to
Net Income, GAAP Basis (in thousands)
Twelve Months Ended
August 31,
----------------------------
2004 2003
------------- --------------
Net income excluding incentive
bonus revenues(2) $24,582 $15,339
Incentive bonuses, after tax 1,476 3,135
------------- --------------
Net income, GAAP basis $26,058 $18,474
============= ==============
Reconciliation of Diluted Earnings Per Share Excluding
Incentive Bonus Revenues to
Diluted Earnings Per Share (EPS), GAAP Basis
Twelve Months
Ended
August 31,
-------------
2004 2003
------ ------
EPS excluding incentive bonus revenues(2) $0.71 $0.49
EPS attributable to incentive bonus revenues 0.04 0.07
------ ------
EPS, GAAP basis $0.75 $0.56
====== ======
(2) Revenues excluding incentive bonus revenues, net income
excluding incentive bonus revenues, and EPS excluding
incentive bonus revenues are non-GAAP financial measures. The
Company excludes incentive bonuses from these measures
primarily because of their unpredictability and relies on
revenues excluding incentive bonus revenues, net income
excluding incentive bonus revenues, and EPS excluding
incentive bonus revenues as primary measures to review and
assess the ongoing operating performance of contracts. The
Company believes it is useful to investors to provide
disclosures of its operating results on the same basis as that
used by management. You should not consider revenues excluding
incentive bonus revenues, net income excluding incentive bonus
revenues, and EPS excluding incentive bonus revenues in
isolation or as a substitute for revenues, net income, and EPS
determined in accordance with accounting principles generally
accepted in the United States.
AMERICAN HEALTHWAYS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
August 31, August 31,
2004 2003(1)
----------- ----------
Assets
Current assets:
Cash and cash equivalents $52,187 $35,956
Restricted cash 1,524 -
Accounts receivable, net
Billed 33,235 18,526
Unbilled 866 7,971
Other current assets 5,976 4,267
Deferred tax asset 2,248 758
----------- ----------
Total current assets 96,036 67,478
Property and equipment
Leasehold improvements 8,730 5,045
Computer equipment and related software 53,379 38,214
Furniture and office equipment 14,514 9,558
----------------------
76,623 52,817
Less accumulated depreciation (36,796) (25,166)
----------- ----------
Net property and equipment 39,827 27,651
Other assets 2,456 182
Intangible assets, net 19,854 264
Goodwill, net 93,574 44,438
----------- ----------
Total assets $251,747 $140,013
----------- ----------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $10,343 $4,067
Accrued salaries and benefits 4,616 9,162
Accrued liabilities 4,688 2,790
Contract billings in excess of earned revenue 4,898 3,272
Income taxes payable 3,294 391
Current portion of long-term debt 12,243 389
Current portion of long-term liabilities 1,018 360
----------- ----------
Total current liabilities 41,100 20,431
Long-term debt 36,562 109
Long-term deferred tax liability 12,658 2,380
Other long-term liabilities 5,992 4,662
Commitments and contingencies
Stockholders' equity
Preferred stock
$.001 par value, 5,000,000 shares
authorized, none outstanding - -
Common stock
$.001 par value, 75,000,000 and 40,000,000
shares authorized, 32,857,041 and
31,593,464 shares outstanding 33 32
Additional paid-in capital 90,980 74,070
Retained earnings 64,387 38,329
Accumulated other comprehensive income 35 -
----------- ----------
Total stockholders' equity 155,435 112,431
----------- ----------
Total liabilities and stockholders' equity $251,747 $140,013
----------- ----------
(1) Certain items have been reclassified to conform to current
classifications.
AMERICAN HEALTHWAYS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twelve Months Ended
August 31,
--------------------
2004 2003(1)
(Unaudited)
Cash flows from operating activities:
Net income $26,058 $18,474
Adjustments to reconcile net income to net
cash provided by operating activities,
net of business acquisitions:
Depreciation and amortization 18,450 10,950
Amortization of deferred loan costs 768 276
Tax benefit of stock option exercises 10,013 3,426
Increase in accounts receivable, net (7,174) (5,808)
Increase in other current assets (899) (918)
Increase (decrease) in accounts payable 5,733 (201)
Decrease in accrued salaries and benefits (4,865) (2,564)
Increase (decrease) in other current
liabilities 3,060 (1,880)
Deferred income taxes (491) 3,877
Other 2,834 1,556
Decrease in other assets 356 132
Payments on other long-term liabilities (371) (385)
----------- --------
Net cash flows provided by operating
activities 53,472 26,935
----------- --------
Cash flows from investing activities:
Acquisition of property and equipment (25,013) (16,169)
Business acquisitions, net of cash acquired (60,223) -
----------- --------
Net cash flows used in investing activities (85,236) (16,169)
----------- --------
Cash flows from financing activities:
Increase in restricted cash (1,524) -
Proceeds from issuance of long-term debt,
net of deferred loan costs 57,685 -
Payments of long-term debt (12,424) (383)
Exercise of stock options 4,258 1,649
----------- --------
Net cash flows provided by financing
activities 47,995 1,266
----------- --------
Net increase in cash and cash equivalents 16,231 12,032
Cash and cash equivalents, beginning of period 35,956 23,924
----------- --------
Cash and cash equivalents, end of period $52,187 $35,956
=========== ========
(1) Certain items have been reclassified to conform to current
classifications.
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