American Healthways Reports First-Quarter Earnings of $0.10 Per Share, Up 67% From Comparable Pro Forma Earnings for Fiscal 2001.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)--Dec. 20, 2001 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 first quarter of fiscal 2002. Total revenues for the quarter, which ended November 30, 2001, were $24,542,000, an increase of 48% from $16,536,000 for the first quarter of fiscal 2001. Net income for the latest quarter rose 122% to $1,494,000 from $672,000 for the first quarter of fiscal 2001. As previously reported, during the quarter, the Company's Board of Directors approved a 3-for-2 stock split in the form of a stock dividend distributed on November 23, 2001. Post-split, net income 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 increased 100% to $0.10 from $0.05. All prior period data have been adjusted for this stock split. Also as previously reported, the Company 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 ") No. 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 2002. Assuming the Company had adopted SFAS No. 142 as of the start of fiscal 2001, net income and net income per diluted share for the latest quarter increased 95% and 67%, respectively, from 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 and net income per diluted share of $768,000 and $0.06 for the first quarter of fiscal 2001.A reconciliation of fiscal 2001 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of by quarter that adjusts for the impact of the stock split and the adoption of SFAS No. 142 on a pro forma basis is included at the end of our Financial Highlights. "American Healthways continues to produce substantial profitable growth as, for the first quarter of our new fiscal year, we again exceeded our earnings expectations," said Mr. Cigarran. "We attribute our successful financial results, as well as our strengthening growth prospects, to our position as the leading care enhancement company in the country. We have proven that through care enhancement, we can improve the clinical outcomes - or health - of health plan members and, thereby, lower the cost of their healthcare in both the short and long term. At a time of recent and projected double-digit increases in the nation's healthcare expenditures, industry demand for this capability is rising rapidly, and we believe no other company is as well positioned as American Healthways to meet this demand. "For the first quarter, the Company's revenue growth was driven by a 66% increase in its average health plan equivalent lives under management to 346,460 for the quarter from 209,058 for the first quarter of fiscal 2001. This increase resulted primarily from increases in equivalent lives under contracts signed prior to the first quarter of fiscal 2002. Since the start of the new fiscal year, we have also signed two major new health plan contracts, which substantially increased our total health plan equivalent lives compared with the first quarter of the last fiscal year. We signed the first of these contracts with Hawaii Medical Services Association ("HMSA HMSA Hawaii Medical Service Association HMSA Hypermobility Syndrome Association HMSA Hitachi Medical Systems America, Inc. HMSA Health Manpower Shortage Area HMSA Hmong Minnesota Student Association HMSA Humane Methods of Slaughter Act of 1958 "), a significant existing customer already providing its members with our diabetes disease management services. Having evaluated the positive impact of that program on its members, HMSA expanded its relationship with us and is now providing its members with our cardiac disease management services, as well. We believe that our expanded relationship with HMSA demonstrates the potential we have to provide more comprehensive services to existing health plan customers. "The second contract, signed shortly after the quarter's end, is a landmark agreement with 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 Minnesota ("BCBSMN"), representing the first total population care enhancement contract ever executed in the healthcare industry. Through this agreement, we will initially provide comprehensive and integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. covering nearly one million of BCBSMN's members. From March 1, 2002 through June 2002, we will implement programs specifically targeted to members with diabetes, coronary artery disease coronary artery disease, condition that results when the coronary arteries are narrowed or occluded, most commonly by atherosclerotic deposits of fibrous and fatty tissue. , 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. , 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. , 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. and end stage renal disease Renal disease Kidney disease. Mentioned in: Glycogen Storage Diseases hypertension High blood pressure Cardiovascular disease An abnormal ↑ systemic arterial pressure, corresponding to a systolic BP of > 160 mm Hg . We will then begin the implementation of programs for members with one or more of 11 impact conditions such as atrial fibrillation atrial fibrillation Irregular rhythm (arrhythmia) of contraction of the atria (upper heart chambers). The most common major arrhythmia, it may result as a consequence of increased fibrous tissue in the aging heart, of heart disease, or in association with severe infection. , low back pain, osteoarthritis osteoarthritis or osteoarthrosis or degenerative joint disease Most common joint disorder, afflicting over 80% of those who reach age 70. It does not involve excessive inflammation and may have no symptoms, especially at first. and osteoporosis osteoporosis (ŏs'tēō'pərō`sĭs), disorder in which the normal replenishment of old bone tissue is severely disrupted, resulting in weakened bones and increased risk of fracture; osteopenia . Furthermore, all these members will be supported by our Caresteps(SM) personal health information and MMIQ(SM) neural-net predictive modeling applications to identify those who are at high risk for 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. health status compromise, thereby enabling those members and their physicians to initiate effective, proactive interventions to minimize or eliminate the predicted negative health status impact. These services will also be made available to BCBSMN's 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 customers - representing another 1.2 million potential members - who elect to include the programs in their benefits package. "Including the BCBSMN members for whom our programs will be implemented, our total health plan equivalent lives under contract were approximately 465,000 at the end of the first quarter compared with 324,000 at the same time in the previous fiscal year. Because of the visibility of these contracts and the ongoing strengthening of our pipeline of potential contracts with new and existing customers, we continue to target growth in our total equivalent lives under contract to approximately 800,000 by the end of the fiscal year. "American Healthways' hospital business operated profitably for the first quarter and generated substantial cash flow. We believe this business is positioned to continue the expansion evident in the increase in average contracts in operation during the first quarter to 55 compared with 52.7 for the first quarter of fiscal 2001. "Looking forward, American Healthways continues to expect that earnings per diluted share will approximately double for fiscal 2002, to a range of $0.52 to $0.54 from 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 share of $0.26 for fiscal 2001 as adjusted for the impact of SFAS 142. As discussed in the Company's news release for the fourth quarter of 2001, the BCBSMN contract will require the acceleration of certain development and startup expenditures into the first half of the current fiscal year to meet its implementation schedule. In addition, the normal membership enrollment and disenrollment processes of the Company's health plan customers result in a seasonal reduction in lives under management during the Company's second and third fiscal quarters. Therefore, for the second quarter of fiscal 2002, the Company is giving guidance of earnings per diluted share in a range of $0.10 to $0.11 compared with pro forma earnings of $0.05 per share for the second quarter of fiscal 2001. The Company also expects, as previously discussed, second-quarter revenues will increase slightly from the first quarter before significantly accelerating in the third and fourth quarters." Mr. Cigarran concluded, "Our expectations of profitable growth in the quarters ahead reflect the momentum building in the healthcare industry's interest in an outcomes-driven approach to healthcare. As the only company in the healthcare industry with the proven expertise, the clinical and financial information systems, the technology platform and the scalability to provide outcomes-driven services to the total populations of our health plan customers, we are confident of the Company's prospects for achieving increased stockholder value." 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 estimated 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 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 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; any impact of the transitional impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. test of goodwill as required by SFAS No. 142; 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 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. American Healthways will hold a conference call to discuss this release today at 4:15 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 January 20, 2002. 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.
Financial Highlights
(In thousands, except per share data)
Three Months Ended
November 30,
Consolidated Statements of Operations: 2001 2000
-------------- -------------
Revenues $ 24,542 $ 16,536
-------------- -------------
Expenses:
Salaries and benefits 14,045 10,087
Other operating expenses 6,407 4,054
Depreciation and amortization 1,504 1,231
Interest 53 12
-------------- -------------
Total expenses 22,009 15,384
-------------- -------------
Income before income taxes 2,533 1,152
Income tax expense 1,039 480
-------------- -------------
Net income $ 1,494 $ 672
============== =============
Basic income per share(1) $ 0.10 $ 0.05
============== =============
Diluted income per share(1) $ 0.10 $ 0.05
============== =============
Weighted average common shares
and equivalents: (1)
Basic 14,250 12,412
Diluted 15,475 13,197
(1) Restated to reflect effect of November 2001 three-for-two
stock split.
November 30, August 31,
Financial Position: 2001 2001
-------------- -------------
Cash and cash equivalents $ 13,708 $ 12,376
Current assets 28,265 24,610
Property and equipment (net) 14,412 13,366
Total assets $ 73,571 $ 69,118
Current liabilities $ 12,186 $ 11,559
Long-term liabilities 3,351 3,443
Stockholders' equity 58,034 54,116
Total liabilities and
stockholders' equity $ 73,571 $ 69,118
AMERICAN HEALTHWAYS, INC.
Financial Highlights
(Dollars in thousands)
Three Months Ended
November 30,
----------------------------
2001 2000
-------------- -------------
Segment Operating Information:
Revenues:
Health plan contracts $ 19,761 $ 11,664
Hospital contracts 4,680 4,772
Other revenue 101 100
-------------- -------------
$ 24,542 $ 16,536
============== =============
Income (loss) before income taxes:
Health plan contracts $ 4,837 $ 2,573
Hospital contracts 1,042 1,192
Shared support services (2,720) (1,944)
----------------------------
Total segments 3,159 1,821
General corporate (626) (669)
----------------------------
$ 2,533 $ 1,152
============== =============
Operating Statistics:
Health Plan Segment
-------------------
Health plan equivalent lives under
management at end of period(1) 358,549 215,286
Health plan equivalent lives in backlog
at end of period(1)(2) 105,000 109,000
Total health plan equivalent lives under
contract at end of period(1)(2) 463,549 324,286
Average number health plan equivalent
lives under management during period 346,460 209,058
(1) Equivalent lives converts cardiac and respiratory lives to the
approximate revenue equivalent of diabetes lives. (2) Includes
equivalent lives added for the Blue Cross and Blue Shield of Minnesota
contract signed in December 2001.
Hospital Segment
Contracts at end of period 55 53
Hospital sites at end of period 78 73
New contracts signed during period 1 3
Contracts discontinued during period 1 1
Contracts renewed during period 1 2
Average number of contracts in operation
during period 55.0 52.7
Fiscal 2001 Pro Forma EPS Calculation:
Diluted EPS Q1 Q2 Q3 Q4 Total
--------- ------- -------- ------- -------
EPS as Reported $ 0.08 $ 0.07 $ 0.09 $ 0.10 $ 0.34
FAS 142 adjustment 0.01 0.01 0.01 0.03 0.06
Stock split adjustment (0.03) (0.03) (0.03) (0.05) (0.14)
--------- ------- -------- ------- -------
Pro forma EPS $ 0.06 $ 0.05 $ 0.07 $ 0.08 $ 0.26
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