American Healthways Announces Third-Quarter Earnings of $0.24 Per Diluted Share; Lives Under Management Increase 35% to over 1.6 Million; Backlog Increases to $45.2 Million.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. -- 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:
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 :AMHC AMHC Association of Mental Health Clergy AMHC Aviation Structural Mechanic Hydraulics Chief ), today announced financial results for the third quarter of fiscal 2005. Revenues increased 20% to $78,357,000 for the third quarter, which ended May 31, 2005, from $65,354,000 for the third quarter of fiscal 2004. Net income was $8,536,000, or $0.24 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, for the third quarter of fiscal 2005, up from $7,484,000, or $0.22 per diluted share, which included incentive bonus revenues of $0.03, for the third quarter of fiscal 2004. "We are pleased with American Healthways' strong performance for the third quarter of fiscal 2005," remarked Leedle. "As a result of this performance, we continued to meet our quarterly operating and financial objectives, including ongoing expansion of our fully insured and 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 lives under management, margin enhancement and substantial profitable growth in our core commercial business, and an improving financial position. "We also continued to build our foundation for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitable growth. The accelerating momentum in our core commercial business was evident in the new, expanded or extended health plan contracts signed during the third quarter, as well as substantial growth in our agreements with self-insured employers on behalf of our health plan customers. In addition, by finalizing our cooperative agreement with the Centers for Medicare and Medicaid Services The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and ("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. ") for our 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. Health Support ("MHS (1) (Message Handling Service) An earlier messaging system from Novell that supported multiple operating systems and other messaging protocols, including SMTP, SNADS and X.400. It used the SMF-71 messaging format. ", formerly 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) ) pilot in Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , we made further tangible progress toward a large new potential market. "Through these and other accomplishments, American Healthways continues to differentiate itself as the country's leading provider of disease management and care enhancement services. We are expanding our ability to improve the health of more people and lower their health care costs. We are also expanding our potential for sustained growth in earnings and shareholder value." The highlights of the Company's performance for the third quarter of fiscal 2005 include: --35% Increase in Actual Lives Under Management - Actual lives under management increased to 1,633,000 at the end of the third quarter of fiscal 2005, an increase of 35% from 1,211,000 at the same time in fiscal 2004 and 10% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen from 1,487,000 at the end of the second quarter of the current fiscal year. --Substantial Expansion 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. - The Company's 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 more than tripled to $45,191,000 at the third quarter's end from $13,507,000 at the end of the third quarter of fiscal 2004 and $14,360,000 at the end of the second quarter of fiscal 2005. Approximately $20 million of the increase related to the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of the cooperative agreement with CMS regarding the Company's MHS pilot in Maryland and the District of Columbia. --Continued Strong Demand from Self-Insured Employers - A significant portion of the growth in actual lives under management was driven by the Company's ongoing successful penetration of the self-insured employer market on behalf of its health plan customers. Self-insured lives under management increased to 562,000 at the third quarter's end, up 78% from 315,000 at the comparable time in fiscal 2004 and 15% from 488,000 on a sequential-quarter basis. --21 New, Extended or Expanded Contracts for Fiscal 2005 to Date - American Healthways has announced 21 new, extended or expanded contracts during fiscal 2005 to date, including 11 contracts in the third quarter and one contract in the fourth quarter to date. Third-quarter contracts: Five of the third-quarter contracts were discussed in the Company's second-quarter news release issued on March 17, 2005, including with Harvard Harvard, town (1990 pop. 12,329), Worcester co., E central Mass.; inc. 1732. A Shaker house and cemetery, a Native American museum, and a Harvard observatory are there. Pilgrim Health Care; NewQuest, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ; WellChoice WellChoice, Incorporated is the parent company of Empire Blue Cross-Blue Shield of New York, created when Empire became a publicly traded company in 2003. WellChoice is listed on the Fortune 500 with revenues of over US$5,000,000,000. , Inc.; HealthPlus of Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). ; and Health Plan of Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). . During the third quarter, American Healthways also finalized See finalization. its cooperative agreement with CMS regarding the MHS pilot in Maryland and the District of Columbia and extended or expanded its relationships with the following five additional health plans: Arnett Arnett as a personal name can refer to:
Tufts Health Plan, which was also an existing StatusOne customer, through a new five-year contract, which adds American Healthways' full care enhancement services for the health plan's fully insured members and is effective July 1, 2005; Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. of New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , a subsidiary of Health Care Services Corporation, which extended and expanded its relationship with American Healthways through the addition of its fully insured members to the full care enhancement program being provided to its self-insured members, effective June June: see month. 1, 2005; Blue Cross Blue Shield of Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. , which extended its program
for congestive heart failure congestive heart failure, inability of the heart to expel sufficient blood to keep pace with the metabolic demands of the body. In the healthy individual the heart can tolerate large increases of workload for a considerable length of time. ; andVytra Health Plans, which extended its diabetes and cardiac programs. Since the end of the third quarter, the Company completed the early renewal of its contract with Memorial Medical Center, which was originally signed in July 1999, extending the Company's provision of diabetes services to Memorial's health plan members for three additional years. --Finalization of Medicare Health Support Agreement with CMS - During the third quarter, the Company finalized its cooperative agreement with CMS for its MHS pilot in Maryland and the District of Columbia, through which it will provide diabetes and congestive heart failure programs to approximately 20,000 Medicare fee-for-service fee-for-ser·vice adj. Charging a fee for each service performed. beneficiaries. Under the cooperative agreement, the three-year pilot is scheduled to begin August 1, 2005, and, to date, both CMS and the Company are progressing as scheduled through tasks that are preliminary to the pilot launch. The Company also continues to expect to be a sub-contractor to CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) in its provision of similar services to approximately 20,000 beneficiaries in Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , under a separate agreement. --Acquisition of Health IQ Diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler - In June 2005, American Healthways completed the acquisition of Health IQ Diagnostics ("Health IQ"), a unique health support company that uses a proprietary model to provide employees and dependents with a personal health risk score, supplemented by the information and support they need to maintain or improve their health status. Consistent with trends to put more health care decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from responsibility in the hands of informed consumers, Health IQ has helped lower participants' health-care costs by enabling them to better identify, understand and address their health risks. Health IQ provides the Company an opportunity to further extend its reach beyond its current programs through additional programs and services for 100% of a given population. --Strengthened Financial Position - American Healthways' financial position continued to strengthen during the third quarter, reflecting strong cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the period of $27,239,000. As of the end of the third quarter, the Company had repaid all its bank debt, had cash and cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $43,630,000 and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $192,434,000. Financial Guidance American Healthways today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its established earnings guidance for fiscal 2005 in a range of $0.90 to $0.92 per diluted share. This guidance includes costs of $0.02 per diluted share for the third quarter and $0.08 per diluted share for the fourth quarter associated with the preparation and initial operation of the CMS MHS pilots, which is consistent with the Company's expectations. Excluding these costs, American Healthways continues to expect its core commercial business to produce earnings per diluted share in a range of $1.00 to $1.02 for fiscal 2005. The Company expects the MHS pilots will be accretive to its earnings per share for fiscal 2006, both for the 12 months comprising fiscal 2006 and, cumulatively, including the pilot costs incurred in the second half of fiscal 2005. In addition, due primarily to customer requests to delay signed contract starts and the likelihood that the Company's largest customer will achieve a volume incentive, the Company has revised its guidance for revenues for fiscal 2005, reducing the range by 1% to 2% from the lower end of the previous range. As a result, the Company's guidance for revenues for fiscal 2005 is in a range of $312 million to $316 million. Consistent with its guidance for fiscal 2005, the Company today established its guidance for earnings per diluted share for the fourth quarter of fiscal 2005 in a range of $0.20 to $0.22, including costs of $0.08 related to the MHS pilots discussed above. Excluding the impact of MHS, the Company expects its core commercial business to produce earnings per diluted share in a range of $0.28 to $0.30 for the fourth quarter of fiscal 2005. Summary Leedle concluded, "Our results for the third quarter and first nine months of fiscal 2005 demonstrate two compelling aspects of American Healthways' growth prospects. First, we continue to expand our core business successfully, driving substantial profitable growth as the leading provider in an expanding, under-penetrated market. Second, through this successful growth, we also continue to push the boundaries of the possible in the disease management and care enhancement industry, creating new value and outstanding potential for further 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.earnings.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 1743889, and the replay will also be available on the Company's Web site for the next 12 months. Any material information disclosed 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 regulations 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 accurately forecast performance and the timing of revenue recognition under the terms of its health plan contracts and its cooperative agreement with CMS 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 Company's ability to sign and implement new contracts for disease management 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 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. CMS with respect to cost savings, or to effect such savings and improvements within the time frames contemplated by the Company; the ability of the Company to collect contractually earned performance incentive bonuses; the ability of the Company's customers and/or CMS 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 Health IQ Diagnostics into the Company's business; the Company's ability to achieve the level of savings per participant and participation rates historically experienced by Health IQ Diagnostics; the Company's ability to implement health risk assessments within the Company's new and existing customer base; the Company's ability to integrate acquired businesses or technologies into the Company's business; 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 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 necessary 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 by individuals with diabetes, cardiac, respiratory and/or other diseases or conditions for which the Company provides services, in the health plans with which the Company has executed 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 and/or its subsidiaries; 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; the Company's ability to have its internal controls positively attested at·test v. at·test·ed, at·test·ing, at·tests v.tr. 1. To affirm to be correct, true, or genuine: The date of the painting was attested by the appraiser. 2. to by its independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. as required by Section 404 of the Sarbanes-Oxley Act See SOX. of 2002; 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; 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 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 services proven to improve the quality of health care and lower costs. As of May 31, 2005, the Company had 1,633,000 actual lives under management nationwide. For more information visit www.americanhealthways.com.
AMERICAN HEALTHWAYS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
May 31, May 31,
------------------- -------------------
2005 2004 2005 2004
---------- -------- --------- ---------
Revenues $78,357 $65,354 $224,880 $173,555
Cost of services 50,931 41,413 145,035 112,577
---------- -------- --------- ---------
Gross margin 27,426 23,941 79,845 60,978
Selling, general &
administrative expenses 7,136 5,842 20,596 17,006
Depreciation and
amortization 5,890 4,784 16,845 13,354
Interest 289 841 1,402 2,676
---------- -------- --------- ---------
Income before income taxes 14,111 12,474 41,002 27,942
Income tax expense 5,575 4,990 16,262 11,177
---------- -------- --------- ---------
Net income $8,536 $7,484 $24,740 $16,765
========== ======== ========= =========
Basic income per share: $0.26 $0.23 $0.75 $0.52
========== ======== ========= =========
Diluted income per share: $0.24 $0.22 $0.70 $0.48
========== ======== ========= =========
Weighted average common
shares and equivalents:
Basic 33,221 32,442 33,072 32,094
Diluted 35,702 34,803 35,503 34,607
American Healthways, Inc.
Statistical Information
(Dollars in thousands)
(Unaudited)
May 31, May 31,
2005 2004
------------------ --------------------
Operating Statistics
Actual lives under
management at end of period 1,633,000 1,211,000
Annualized revenue in
backlog $45,191 $13,507
Reconciliation of Diluted Earnings Per Share
Excluding Incentive Bonus Revenues to
Diluted Earnings Per Share (EPS), GAAP Basis
Three Months Ended
May 31, 2004
------------------
EPS excluding incentive
bonus revenues(1) $0.19
EPS attributable to
incentive bonus revenues 0.03
------------------
EPS, GAAP basis $0.22
==================
(1) EPS excluding incentive bonus revenues is a non-GAAP financial
measure. The Company excludes incentive bonuses from this measure
primarily because of their unpredictability and relies on EPS
excluding incentive bonus revenues as a primary measure 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 EPS excluding incentive bonus
revenues in isolation or as a substitute for EPS determined in
accordance with accounting principles generally accepted in the
United States.
Reconciliation of Core Commercial Diluted Earnings
Per Share Guidance to
Diluted Earnings Per Share (EPS) Guidance, GAAP Basis
Three Months Ended Twelve Months Ended
August 31, 2005 August 31, 2005
------------------ --------------------
Core commercial EPS
guidance(2) $0.28 - $0.30 $1.00. - $1.02
Less: EPS guidance
attributable to MHS
costs(3) $0.08 $0.10
------------------ --------------------
EPS guidance, GAAP basis $0.20 - $0.22 $0.90 - $0.92
================== ====================
(2) Core commercial EPS guidance excludes guidance related to MHS
costs and is a non-GAAP financial measure. The Company excludes
MHS costs from this measure and relies on core commercial EPS
guidance because of its comparability to the Company's historical
operations. The Company believes it is useful to investors to
provide disclosures of its guidance on the same basis as that used
by management. You should not consider core commercial EPS
guidance in isolation or as a substitute for EPS guidance
determined in accordance with accounting principles generally
accepted in the United States.
(3) EPS guidance attributable to MHS costs includes costs associated
with the preparation and initial operation of the Centers for
Medicare & Medicaid Services Medicare Health Support (MHS) pilot
in Maryland and the District of Columbia beginning with the
Company's third fiscal quarter.
AMERICAN HEALTHWAYS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
May 31, August 31,
2005 2004 (1)
---------- ----------
Assets
Current assets:
Cash and cash equivalents $40,640 $45,147
Restricted cash 3,789 1,524
Investments 2,990 7,040
Accounts receivable, net
Billed 38,114 33,235
Unbilled 457 866
Other current assets 6,282 5,976
Income taxes receivable 3,184 -
Deferred tax asset 2,568 2,248
---------- ----------
Total current assets 98,024 96,036
Property and equipment
Leasehold improvements 11,289 8,730
Computer equipment and related software 59,538 53,379
Furniture and office equipment 15,265 14,514
---------- ----------
86,092 76,623
Less accumulated depreciation (50,573) (36,796)
---------- ----------
Net property and equipment 35,519 39,827
Other assets 2,319 2,456
Intangible assets, net 17,104 19,854
Goodwill, net 92,398 93,574
---------- ----------
Total assets $245,364 $251,747
---------- ----------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $6,401 $10,343
Accrued salaries and benefits 14,212 4,616
Accrued liabilities 4,362 4,688
Contract billings in excess of earned revenue 7,415 4,898
Income taxes payable - 3,294
Current portion of long-term debt 159 12,243
Current portion of long-term liabilities 1,949 1,018
---------- ----------
Total current liabilities 34,498 41,100
Long-term debt 458 36,562
Long-term deferred tax liability 9,254 12,658
Other long-term liabilities 8,720 5,992
Stockholders' equity
Preferred stock
$.001 par value, 5,000,000 shares
authorized, none outstanding - -
Common stock
$.001 par value, 75,000,000 shares
authorized, 33,589,282 and 32,857,041
shares outstanding 34 33
Additional paid-in capital 103,273 90,980
Retained earnings 89,127 64,387
Accumulated other comprehensive income - 35
---------- ----------
Total stockholders' equity 192,434 155,435
---------- ----------
Total liabilities and stockholders' equity $245,364 $251,747
---------- ----------
(1) Certain items have been reclassified to conform to current
classifications.
AMERICAN HEALTHWAYS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
May 31,
-----------------
2005 2004 (1)
Cash flows from operating activities:
Net income $24,740 $16,765
Adjustments to reconcile net income to net cash
provided by operating activities, net of business
acquisitions:
Depreciation and amortization 16,845 13,354
Amortization of deferred loan costs 380 576
Tax benefit of stock option exercises 8,385 8,159
Increase in accounts receivable, net (4,470) (2,595)
Increase in other current assets (2,706) (1,696)
(Decrease) increase in accounts payable (3,942) 394
Increase (decrease) in accrued salaries
and benefits 9,596 (5,261)
(Decrease) increase in other current liabilities (1,103) 1,987
Deferred income taxes (3,701) 9
Other 1,815 1,994
Decrease in other assets 487 204
Payments on other long-term liabilities (650) (300)
-------- --------
Net cash flows provided by operating activities 45,676 33,590
-------- --------
Cash flows from investing activities:
Acquisition of property and equipment (7,595) (15,734)
Purchases of investments (2,000) (2,000)
Proceeds on sale of investments 6,050 55
Business acquisitions, net of cash acquired 1,176 (60,223)
-------- --------
Net cash flows used in investing activities (2,369) (77,902)
-------- --------
Cash flows from financing activities:
Increase in restricted cash (2,265) (585)
Proceeds from issuance of long-term debt 48,000 60,000
Deferred loan costs (730) (2,315)
Payments of long-term debt (96,188) (9,329)
Exercise of stock options 3,369 3,090
-------- --------
Net cash flows (used in) provided by financing
activities (47,814) 50,861
-------- --------
Net (decrease) increase in cash and cash equivalents (4,507) 6,549
Cash and cash equivalents, beginning of period 45,147 34,846
-------- --------
Cash and cash equivalents, end of period $40,640 $41,395
======== ========
(1) Certain items have been reclassified to conform to current
classifications.
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