American Healthways Exceeds Earnings Target With $0.16 Per Diluted Share for Third Quarter of Fiscal 2002.Business Editors 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)--June 20, 2002 Raises Fiscal-2002 Earnings Guidance To $0.57 to $0.58 Per Share and Provides Initial Guidance For Fiscal 2003 of $1.00 to $1.04 Per Share 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 Healthways Healthways can mean:
AMHC Aviation Structural Mechanic Hydraulics Chief ), today announced financial results for the third quarter and first nine months of fiscal 2002. For the quarter, which ended May 31, 2002, total revenues increased 71% to $31,561,000 from $18,459,000 for the third quarter of fiscal 2001. For the second consecutive quarter, net income more than tripled from the comparable prior-year quarter. Net income for the third quarter increased to $2,587,000 from $840,000 for the third quarter of fiscal 2001. Earnings 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 latest quarter increased 167% to $0.16 per diluted share - above the Company's target range of $0.14 to $0.15 - compared with $0.06 for the same quarter in fiscal 2001. "American Healthways continued its strong financial performance for its third fiscal quarter, producing substantial profitable growth and strengthening its financial position," said Mr. Cigarran. "As a result of this better-than-expected performance, we are increasing our targeted range for fiscal 2002 earnings per diluted share from the previous range of $0.55 to $0.57 to the new range of $0.57 to $0.58. Earnings per diluted share for fiscal 2001 were $0.22. "As anticipated, the Company's revenue and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. growth resulted from the continuing growth in equivalent lives under management, which doubled to 485,000 at the end of the third quarter from 238,000 at the end of the third quarter of fiscal 2001, as well as from continuing high performance in meeting outcomes targets. "The Company has also maintained a substantial 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 equivalent lives through the continued success of its marketing initiatives. These lives will be converted to lives under management and begin generating revenue in the months ahead. As we have previously announced, contract signings in the third quarter included HealthSpring, which is the Company's second total population care enhancement contract; Heartland Health System, which added a 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. program to its existing diabetes program; and CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) , which added Asthma asthma (ăz`mə, ăs`–), chronic inflammatory respiratory disease characterized by periodic attacks of wheezing, shortness of breath, and a tight feeling in the chest. A cough producing sticky mucus is symptomatic. , Chronic Obstructive Pulmonary Disease chronic obstructive pulmonary disease n. Abbr. COPD A chronic lung disease, such as asthma or emphysema, in which breathing becomes slowed or forced. (COPD COPD chronic obstructive pulmonary disease. COPD abbr. chronic obstructive pulmonary disease Chronic obstructive pulmonary disease (COPD) ) and low back pain programs. These three contracts in total represent approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 125,000 new equivalent lives, contributing to the 76% year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. growth in our total equivalent lives under contract to approximately 640,000 at the end of the third quarter from 363,000 at the end of the fourth quarter of fiscal 2001. "In the third quarter we added approximately 13,000 equivalent lives to our backlog due to actual sales into the PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there business, a much faster penetration of this business than previously anticipated. Because of the level of activity currently being experienced, and the large size of the opportunity it represents, we have added additional resources to this business and have raised our expectation of equivalent lives it will contribute by the end of fiscal 2003 from 50,000 to 75,000. Only lives actually sold, however, are included in our lives under contract." "Based on continuing contract discussions, we currently expect significant further growth in our total equivalent lives under contract by the end of fiscal 2002. While our previously 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). internal target of 800,000 equivalent lives under contract may not be reached by the end of fiscal 2002 due to unanticipated delays in contract completions, our contracting momentum remains strong. The impact of the delays is fully reflected in both our guidance for earnings per diluted share for fiscal 2002, which increased from prior guidance to $0.57 to $0.58, and our guidance for fiscal 2003, provided today for the first time, of $1.00 to $1.04 per share." Mr. Cigarran concluded, "American Healthways' strong performance for the third quarter and the first nine months of fiscal 2002 and its prospects for continued significant profitable growth are based on the proven success of its programs that are at the leading edge of the healthcare industry's efforts to improve the quality of care and, thereby, reduce its cost. The recently announced NCQA NCQA National Committee on Quality Assurance, see there (National Committee for Quality Assurance National Committee for Quality Assurance Medical practice A private, not-for-profit organization which has become the leading accreditor of managed care plans; in site visits, NCQA reviewers evaluate a managed care plan in terms of quality management, physicians' ) accreditation accreditation, n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice. of our programs, the first and only such accreditation in the industry today, assures our health plan customers that the programs provided to their members meet essential quality and operational standards for success. We are the acknowledged leader of this business because of - among other reasons - the extensive clinical success we have achieved with large health plan populations, the sophistication so·phis·ti·cate v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates v.tr. 1. To cause to become less natural, especially to make less naive and more worldly. 2. and comprehensiveness of our proprietary technology information platform and infrastructure, our demonstrated, scalable business model and, most important, our growing list of satisfied customers. As we continue to expand our number of lives under management, the disease conditions for which we have programs in operation, and our total population management initiative, we are confident that we can further strengthen our leadership position and our stockholder value." All prior-period data have been adjusted for the Company's three-for-two stock split, effected November November: see month. 23, 2001. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income for the third quarter of fiscal 2001 was $936,000, or $0.07 per diluted share, which reflects the elimination of goodwill amortization as if we had adopted Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," as of the start of fiscal 2001 rather than the start of fiscal 2002. Pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per diluted share (post-split) for fiscal year 2001 were $0.26. See "Fiscal 2001 Pro Forma EPS Calculation" table on page 4 of this release. 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 the following web site - www.streetevents.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 replay will be available at these Web sites shortly after the call through the end of business on July July: see month. 20, 2002. 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, 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 Company's ability to execute new contracts for health plan disease management services and care enhancement services and to execute new contracts for hospital-based diabetes services; the risks associated with a significant concentration of the Company's revenues with a limited number of health plan customers; the Company's ability to effect cost savings and clinical outcomes improvements under health plan 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 under the terms of its health plan contracts ahead of data collection and reconciliation; the ability of the Company's health plan 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 health plan customers; the ability of the Company to effectively integrate new technologies such as those encompassed in its care enhancement initiatives into the Company's care management information technology 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 improve its health plan sales and marketing effectiveness Marketing Effectiveness is the function of improving how marketers go to market with the goal of optimizing their marketing spend to achieve even better results for both the short-term and long-term. Also related to Marketing ROI and Return on Marketing Investment (ROMI). as a result of the integration of Empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems Health personnel into its existing management organization; the ability of the Company to implement its care enhancement strategy within the 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 health plan operations and to support or guarantee the Company's performance under new health plan contracts; unusual and unforeseen patterns of healthcare 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 and 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 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 with hospitals and health plan organizations; 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 healthcare 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; and general economic conditions. The Company undertakes no obligation to update or revise any such forward-looking statements. Nashville-based American Healthways (www.americanhealthways.com) 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 care enhancement services to health plans, physicians and hospitals. The Company's programs have been recognized for innovation and excellence, most recently by the Disease Management Association of America's 2001 Comprehensive Disease Management Company Leadership Award. American Healthways has contracts to provide disease and care management programs to health plans with members in all 50 states, 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). , and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. . The Company also operates diabetes management This article is about the management of diabetes mellitus. For more on the disease itself see diabetes mellitus. Diabetes is a chronic disease with no cure as of 2007. It is associated with an impaired glucose cycle, altering metabolism. programs in hospitals nationwide.
AMERICAN HEALTHWAYS, INC.
Unaudited Financial Highlights
(In thousands, except per share data)
Three Months Ended
May 31,
Consolidated Statements of Operations: 2002 2001(1)
-------- ---------
Revenues $31,561 $18,459
Cost of services 21,968 13,489
------- -------
Gross margin 9,593 4,970
Selling, general and
administrative expenses 3,284 2,052
Depreciation and amortization 1,834 1,393
Interest 90 38
------- -------
Income before income taxes 4,385 1,487
Income tax expense 1,798 647
------- -------
Net income $2,587 $840
======= =======
Basic income per share(2) $0.17 $0.07
======= =======
Diluted income per share(2) $0.16 $0.06
======= =======
Weighted average common shares and
equivalents(2):
Basic 15,246 12,727
Diluted 16,314 13,962
Nine Months Ended
May 31,
2002 2001(1)
--------- --------
Revenues $84,483 $52,694
Cost of services 59,513 38,966
------- -------
Gross margin 24,970 13,728
Selling, general and
administrative expenses 8,688 5,987
Depreciation and amortization 5,007 3,888
Interest 209 62
------- -------
Income before income taxes 11,066 3,791
Income tax expense 4,537 1,649
------- -------
Net income $6,529 $2,142
======= =======
Basic income per share(2) $0.44 $0.17
======= =======
Diluted income per share(2) $0.41 $0.16
======= =======
Weighted average common shares and
equivalents(2):
Basic 14,857 12,552
Diluted 16,039 13,598
Fiscal 2001 Pro Forma EPS Calculation:
Q1 Q2 Q3 Q4 Total(3)
--------- ------ --------- ------- --------
EPS as reported $ 0.08 $ 0.07 $ 0.09 $ 0.10 $ 0.34
FAS 142 adjustment(2) 0.01 0.01 0.01 0.02 0.04
Stock split adjustment (0.03) (0.03) (0.03) (0.03) (0.12)
-------- ------- -------- ------ ------
Pro forma EPS(3) $ 0.06 $ 0.05 $ 0.07 $ 0.08 $ 0.26
======== ======= ======== ====== ======
May 31, February 28,
Financial Position: 2002 2002
----------- -------------
Cash and cash equivalents $ 16,407 $ 14,542
Current assets 38,470 36,742
Property and equipment (net) 18,892 16,323
Total assets $ 105,159 $ 100,804
Contract billings in excess of
earnings $ 3,082 $ 4,720
Current liabilities 16,519 15,893
Long-term liabilities 4,156 3,838
Stockholders' equity 84,483 81,073
Total liabilities and
stockholders' equity $ 105,159 $ 100,804
(1) Certain items have been reclassified to conform to current
classifications.
(2) Restated to reflect effect of November 2001 3-for-2 stock
split.
(3) Income (loss) per share calculations for each of the quarters
is based on the weighted average number of shares and dilutive
options outstanding. Accordingly, the sum of the components
may not necessarily be equal to the total due to rounding.
AMERICAN HEALTHWAYS, INC.
Unaudited Financial Highlights
(Dollars in thousands)
Three Months Ended
May 31,
------------------------
2002 2001
----------- ---------
Segment Operating Information:
Revenues:
Health plan contracts $26,932 $13,307
Hospital contracts 4,557 5,033
Other revenue 72 119
--------- ---------
$31,561 $18,459
========= =========
Income (loss) before income taxes:
Health plan contracts $8,232 $3,072
Hospital contracts 1,071 1,404
Shared support services (3,916) (2,120)
--------- ---------
Total segments 5,387 2,356
General corporate (1,002) (869)
--------- ---------
$4,385 $1,487
========= =========
Operating Statistics:
Health Plan Segment - Equivalent Lives(1)
Lives under management at end of period 485,037 238,137
Lives in backlog at end of period 154,000 156,000
Total lives at end of period 639,037 394,137
Average number of lives under
management during period 430,625 217,821
Hospital Segment
Contracts at end of period 56 56
Hospital sites at end of period 77 79
New contracts signed during period 3 3
Contracts discontinued during period 1 2
Contracts renewed during period - 2
Average number of contracts in
operation during period 54.7 55.7
Nine Months Ended
May 31
------------------------
2002 2001
--------- -----------
Segment Operating Information:
Revenues:
Health plan contracts $70,386 $37,685
Hospital contracts 13,850 14,672
Other revenue 247 337
--------- ---------
$84,483 $52,694
========= =========
Income (loss) before income taxes:
Health plan contracts $20,596 $8,686
Hospital contracts 3,082 3,825
Shared support services (9,938) (6,224)
--------- ---------
Total segments 13,740 6,287
General corporate (2,674) (2,496)
--------- ---------
$11,066 $3,791
========= =========
Operating Statistics:
Health Plan Segment - Equivalent Lives(1)
Lives under management at end of period 485,037 238,137
Lives in backlog at end of period 154,000 156,000
Total lives at end of period 639,037 394,137
Average number of lives under
management during period 375,861 214,800
(1) Equivalent lives converts cardiac and respiratory lives to the
approximate revenue equivalent of diabetes lives.
Hospital Segment
Contracts at end of period 56 56
Hospital sites at end of period 77 79
New contracts signed during period 4 9
Contracts discontinued during period 3 4
Contracts renewed during period 4 8
Average number of contracts in
operation during period 54.6 53.9
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