American Healthways Earns $0.07 Per Share for the First Quarter of Fiscal 2000; Growth of Diabetes and Cardiac Disease Management Lives Continues.Business Editors, Health and Medical Writers 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.--(BUSINESS WIRE)--Dec. 20, 1999 Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs G. Cigarran, Chairman 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 Healthcorp, Inc., dba American Healthways Healthways can mean:
AMHC Aviation Structural Mechanic Hydraulics Chief ), today announced financial results for the first quarter of fiscal 2000. For the first quarter, revenues increased to $13,065,000 from $11,835,000 for the first quarter of fiscal 1999. Net income was $585,000, or $0.07 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 first quarter, compared with $606,000, or $0.07 per diluted share, for the same quarter in fiscal 1999. Mr. Cigarran commented, "We are very pleased with the continued strength of the Company's operating momentum since the beginning of fiscal 2000, as reflected by the substantial growth in disease management lives for which we have signed contracts or letters of intent in this period. Total disease management lives under contract increased from 132,000 at August 31, 1999 to 148,000 as of November November: see month. 30, 1999. In addition, we also are currently finalizing contracts with four new health plan customers covering approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 31,000 additional lives where implementation has already begun. Of these lives, approximately 24,000 are 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 and 7,000 are 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. lives. "A number of factors are responsible for this growth in lives. First, there is increasing awareness of the benefits of disease management programs across the entire healthcare industry. Second, we believe a significant new industry trend is developing that focuses more on improved care management rather than on demand and utilization management Utilization management is the evaluation of the appropriateness, medical need and efficiency of health care services procedures and facilities according to established criteria or guidelines and under the provisions of an applicable health benefits plan. . Finally, our diabetes disease management program outcomes have positioned the Company as a proven provider of disease management services because we have shown that comprehensive disease management not only can yield improved health and lower costs, but also because we have demonstrated our ability to do so successfully on a large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. population basis. "In addition to the success of American Healthways' diabetes programs, the Company's entry into the cardiac disease management market in late fiscal 1999 and its plans to launch a respiratory disease Noun 1. respiratory disease - a disease affecting the respiratory system respiratory disorder, respiratory illness adult respiratory distress syndrome, ARDS, wet lung, white lung - acute lung injury characterized by coughing and rales; inflammation of the management program in calendar 2000 have positioned the Company to provide health plans with a single source vendor for these three chronic diseases. Approximately 20% of the U.S. population has one or more of these diseases and consumes approximately one-half of the nation's annual healthcare expenditures, or more than $500 billion. We believe that many of our existing and potential customers recognize that our growing ability to manage the healthcare of this very significant population through one integrated and comprehensive operations and information technology platform offers them the benefits of substantial operating efficiencies and economies of scale." Mr. Cigarran continued, "For the first quarter of 2000, American Healthways' revenue growth resulted from the expansion of our health plan business, the revenues of which increased 38% from the first quarter of fiscal 1999. This increase resulted from the expansion of the average number of health plan lives under management for the quarter to 120,000 from 76,000 for the first quarter of fiscal 1999. "As we have previously discussed, we were negatively impacted during this quarter by expenses associated with the substantial expansion of our health plan business capacity, primarily the opening of our second call center in Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. . While we are continuing to make significant progress in the development of our health plan business, it has not yet achieved the critical mass needed for us to be able to have the steady quarter-to-quarter earnings growth which we would like. However, with the additional lives we anticipate being added this year from new customers, from existing customers and from our new cardiac program, we anticipate that the Company will make significant progress towards achieving this critical mass and will return to positive earnings comparisons. "Our hospital business during the quarter reflected the impact of negative financial pressures in the hospital industry. With some 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. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. relief for hospitals having been granted during the quarter as the result of recently passed legislation, we believe the overall environment for this business may become somewhat more positive. "During the quarter, in addition to our normal higher working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. for the first fiscal quarter of each year, we also made approximately $2.8 million in capital expenditures, primarily related to the Phoenix call center which opened in November 1999, and the development of PopulationWorks(SM), our new operations and information technology platform which we expect to launch beginning next month. We also spent $1.1 million during the quarter to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately 225,000 shares of common stock under the Company's stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. authorization The right or permission to use a system resource; the process of granting access. See access control. . Despite the cash required for these items, our cash balance remained at approximately $10 million at the end of the quarter. "We believe that our new business growth and our strong new business pipeline are beginning to provide solid evidence of the growth potential of disease management and support our recognized leadership position in that industry. As a result, we remain confident of the future growth prospects for the Company." 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 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 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, you are hereby cautioned that these statements may be affected by the important factors as described in the Company's reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and 10-Q on file with the Securities and Exchange Commission, as well as by, among other factors, 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 Company's ability to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution contracts for new health plan diabetes and cardiac disease management services and for hospital-based diabetes services; the Company's ability to effect estimated cost savings and clinical outcome improvements under health plan contracts or to effect such savings and improvements within the time frames contemplated by the Company; the ability of the Company's health plan customers 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 implement its 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. of contracted lives within anticipated time frames contemplated by the Company; the Company's ability to successfully implement its cardiac disease population management program; and the Company's ability to develop a respiratory disease management program or find a suitable acquisition candidate and close an acquisition on terms satisfactory to the Company. The Company undertakes no obligation to update or revise any such forward-looking statements. American Healthways, Inc. is the nation's leading 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 services designed to improve the quality and lower the cost of healthcare for people with one or more chronic diseases, such as diabetes, cardiac disease and respiratory disease. The Company provides these services through comprehensive disease management programs under contract with health plans and other at-risk at-risk adj. Being endangered, as from exposure to disease or from a lack of parental or familial guidance and proper health care: efforts to make the vaccine available to at-risk groups of children. healthcare organizations and through 71 hospital-based treatment centers. At the end of the first quarter of fiscal 2000, it had contracts to provide disease management services to health plans with approximately 6.8 million enrollees, including approximately 148,000 individuals with diabetes and/or cardiac disease who will be managed by the Company.
AMERICAN HEALTHWAYS, INC.
Unaudited Financial Highlights
(In thousands, except per share data)
Three Months Ended
November 30,
Operating Data: 1999 1998
----------- -----------
Revenues $ 13,065 $ 11,835
Net income $ 585 $ 606
Basic income share $ 0.07 $ 0.07
Diluted per share $ 0.07 $ 0.07
Weighted average common shares
and equivalents:
Basic 8,371 8,148
Diluted 8,782 8,684
AMERICAN HEALTHWAYS, INC.
Unaudited Financial Highlights
(In thousands, except per share data)
Three Months Ended
November 30,
Consolidated Statements of Operations: 1999 1998
----------- -----------
Revenues $ 13,065 $ 11,835
----------- -----------
Expenses:
Salaries and benefits 8,526 7,487
Other operating expenses 2,869 2,889
Depreciation and amortization 666 405
----------- -----------
Total expenses 12,061 10,781
----------- -----------
Income before income taxes 1,004 1,054
Income tax expense 419 448
----------- -----------
Net income $ 585 $ 606
=========== ===========
Basic income per share $ 0.07 $ 0.07
=========== ===========
Diluted income per share $ 0.07 $ 0.07
=========== ===========
Weighted average common shares and equivalents:
Basic 8,371 8,148
Diluted 8,782 8,684
November 30, August 31,
Financial Position: 1999 1999
----------- -----------
Cash and cash equivalents $ 9,969 $ 13,501
Current assets 17,954 21,254
Property and equipment (net) 8,334 6,011
Total assets 40,094 41,014
Current liabilities 6,962 7,240
Long-term liabilities 2,713 2,820
Stockholders' equity 30,419 30,954
AMERICAN HEALTHWAYS, INC.
Unaudited Financial Highlights
(In thousands, except per share data)
Three Months Ended
November 30,
1999 1998
----------- -----------
Segment Operating Information:
Revenues:
Health plan contracts $ 7,976 $ 5,771
Hospital contracts 4,939 5,915
Other revenue 150 149
----------- -----------
$ 13,065 $ 11,835
=========== ===========
Income before income taxes:
Health plan contracts $ 1,625 $ 1,413
Hospital contracts 1,349 1,674
Shared support services (1,517) (1,461)
----------- -----------
Total segments 1,457 1,626
General corporate (453) (572)
----------- -----------
$ 1,004 $ 1,054
=========== ===========
Operating Statistics:
Health Plan Segment
Health plan lives under management
at end of period 128,548 79,014
Health plan lives in backlog at end
of period 19,000 28,000
Total health plan lives at end of
period 147,548 107,014
New health plan contract lives added
during the period 19,075 17,160
Average number health plan lives under
management during period 120,312 76,007
Hospital Segment
Contracts at end of period 57 57
Hospital sites at end of period 71 74
New contracts signed during period 2 1
Contracts discontinued during period 3 1
Contracts renewed during period 3 3
Average number of contracts in
operation during period 57.0 56.8
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