COVENTRY CORPORATION REPORTS THIRD QUARTER RESULTS; COMPANY ANTICIPATES STRONG GROWTH IN 1996.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)--Nov. 7, 1995-- Third Quarter Highlights: o Enrollment up over 20% versus last year (same-store basis) o 114,000 new members o Achieved largest Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. enrollment in St. Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. o Marketing of 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. risk product initiated in St. Louis o Stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. medical cost trend outlook o Platforms in place for improved profitability in 1996 Coventry Coventry, city, England Coventry (kŏv`əntrē, kŭv`–), city (1991 pop. 318,718) and metropolitan district, central England. Coventry is an industrial center noted for its automobile production. Corporation (Nasdaq/NM:CVTY) reported revenues and earnings for the third quarter and nine months ended September September: see month. 30, 1995. Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. Hertik, Chairman and Chief Executive Officer of Coventry, said, "The third quarter of 1995 marks a significant turning point in the growth and development of Coventry. During this quarter, we have simultaneously implemented measures to control the rise of medical expenses and accelerated the rate of enrollment growth over the 20% mark. On the medical cost front, we believe the adverse trends identified in the second quarter of this year in the Pittsburgh market have stabilized and are expected to show improvement in succeeding quarters. In the Company's other markets, medical cost trends are being maintained in line with premium trends. The overall medical loss ratio for the third quarter (excluding the addition to Western Pennsylvania Western Pennsylvania consists of the western third of the state of Pennsylvania in the United States. Pittsburgh is the largest city in the region, with a metropolitan area of about 2.4 million people, and is the cultural center for Western Pennsylvania. medical claims reserves) was 82.1% compared with 82.6% in the second quarter of 1995 and 80.0% for the third quarter of 1994. For the first nine months of 1995, the medical loss ratio was 82.4% compared with 80.6% for 1994." For the third quarter ended September 30, 1995, revenues totaled $210.8 million, a 7.5% gain over the prior year's $196.1 million. Net earnings for the third quarter were $1.5 million, or $0.05 per share. Third quarter earnings were affected by (a) increases in medical claims liabilities for the Western Pennsylvania market (totaling $3.6 million, after taxes, or $0.12 per share) attributable to the Company's quarterly process for adjusting for settlements of prior quarters and by (b) start-up Start-up The earliest stage of a new business venture. expenses associated with Medicaid and Medicare product development as well as other product and geographic expansion initiatives which are expected to yield future enrollment growth (approximating $2.1 million, after taxes, or $0.07 per share). In the third quarter, selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. increased as a percentage of total operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. to 13.3% from 11.6% for the third quarter of 1994. This increase represents front-end costs in the development of Medicaid products in St. Louis and mid-Missouri; development of a Medicare risk product for St. Louis, Pittsburgh and Central Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York ; hub-and-spoke development; and capability and technology requirements related to managing anticipated growth in self-funded products. The Company anticipates a continuation of this level of investment through the fourth quarter of 1995. For the first nine months of 1995, revenues were $627.8 million, up 8.7% over prior year revenues of $577.7 million. Net earnings for the nine-month period were $13.5 million, or $0.42 per share. Excluding the effect of merger costs and other one-time charges in the second quarter, net earnings for the nine-month period ended September 30, 1995, would have been $18.3 million, or $0.57 per share, compared with $23.2 million, or $0.75 per share, for the prior year. The Company announced that the total enrollment in the Company's health plans increased by 114,000, or 20.1%, over the prior year to 683,000, while HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, and at-risk enrollment grew by 19.1%. Hertik also said, "In the area of enrollment growth, we are very pleased with the market leading success of our HealthCare USA subsidiary in enrolling 48,000 Medicaid members in St. Louis, far outstripping the results of our nearest competitor. Further, on the Medicaid front, we have been awarded a Medicaid contract for the Central Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. market
which will become effective in the first quarter of 1996.
Our Medicare risk contract Medicare risk contract Managed care An HMO-like format for delivering care under Medicare in which a Pt/client pays a flat fee to a Medicare risk contractor, which is then responsible for delivering health care; a person covered under an MRC receives only listed has been signed for the St. Louis market with the first enrollees becoming members effective November 1, 1995. Contract applications have been filed for the Pittsburgh and Central Pennsylvania markets. We anticipate approval from Medicare effective January 1, 1996, for Pittsburgh and during the first quarter of 1996 for Central Pennsylvania. Our geographic expansion efforts in the form of hub-and-spoke development have also been yielding excellent results. Including our recent entry into portions of Ohio and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , expansion of our service areas has increased our covered service covered service Covered health care service Managed care 1. A health care service to which a policy holder is entitled under the terms of a contract 2. A service by a primary care provider in a managed care organization, which is not referred to a specialist 3. area by 3.5 million in population, exclusive of acquisitions, in the past 18 months." Hertik concluded by saying, "We are pleased with our strong enrollment growth and the progress we have made in addressing operational issues in Pittsburgh. We have substantially improved our management infrastructure with dynamic new leadership in Pittsburgh and St. Louis, and we believe the investments we are making in new products and geographic expansion have positioned the Company for strong enrollment growth in 1996." Coventry Corporation, headquartered in Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. , is a managed health care company that provides a wide range of health benefits and services to a broad cross section of employer and government-funded groups in Pennsylvania, Ohio, West Virginia, Missouri, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). and Florida. The Company operates from regional headquarters in Pittsburgh and Harrisburg, Pennsylvania This article is about the capital city of the Commonwealth of Pennsylvania. For other places named Harrisburg, see Harrisburg (disambiguation). Harrisburg is the capital of the Commonwealth of Pennsylvania, a state of the United States of America. ; St. Louis, Missouri; Richmond, Virginia Richmond IPA: [ɹɯʒmɐnɖ] is the capital of the Commonwealth of Virginia, in the United States. ; and Jacksonville, Florida “Jacksonville” redirects here. For other uses, see Jacksonville (disambiguation). Jacksonville is the largest city in the state of Florida and the county seat of Duval County. . -0-
COVENTRY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands except per share data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
Revenue
Managed care premiums $ 209,470 $ 194,753 $ 623,182 $ 573,248
Managed care services 1,292 1,369 4,599 4,415
--------- --------- -------- --------
210,762 196,122 627,781 577,663
Expenses:
Health benefits expense 177,981 155,777 513,202 461,999
Selling, general and
administrative expenses 27,954 22,840 79,527 66,270
Other operating costs 3,709 2,842 12,917 7,051
--------- --------- -------- --------
209,644 181,459 605,646 535,320
Operating earnings 1,118 14,663 22,135 42,343 Other income, net of interest expense 1,428 650 2,318 1,586 Income before income taxes and minority interest 2,546 15,313 24,453 43,929 Provision for income taxes 1,081 6,065 10,956 17,461 Minority interest (29) 1,143 (44) 3,301 Net income $ 1,494 $ 8,105 $ 13,541 $ 23,167 Net income per common and common equivalent share, primary and fully diluted $ 0.05 $ 0.26 $ 0.42 $ 0.75 Weighted average number of common and common equivalent shares outstanding - fully diluted 31,952 31,446 32,106 31,023
COVENTRY CORPORATION
UNAUDITED FINANCIAL HIGHLIGHTS
September 30,
Percent
1995 1994 Change
Total enrollment by market:
Western Pennsylvania 249,419 234,037 6.6%
Central Pennsylvania 154,520 134,252 15.1%
St. Louis(1) 189,146 135,133 40.0%
Richmond 63,249 45,324 39.5%
Jacksonville 26,756 20,229 32.3%
Total 683,090 568,975 20.1%
Risk enrollment by market:
Western Pennsylvania 229,974 224,952 2.2%
Central Pennsylvania 122,911 100,668 22.1%
St. Louis(1) 177,470 123,259 44.0%
Richmond 55,591 45,324 22.7%
Jacksonville 26,756 20,229 32.3%
Total 612,702 514,432 19.1%
Non-risk enrollment 70,388 54,543 12.4%
Total 683,090 568,975 20.1%
(1) St. Louis enrollment includes Medicaid voluntary enrollment at
quarter-end and auto assigns as of October 15, 1995.
COVENTRY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
September 30, December 31,
1995 1994
(Unaudited)
ASSETS:
Current assets:
Cash and short term investments $ 92,067 $ 83,675
Other current assets 51,383 39,636
Total current assets 143,450 123,311
Long-term assets 237,950 220,460
TOTAL ASSETS $ 381,400 $ 343,771
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Medical costs payable $ 83,228 $ 70,424
Other current liabilities 69,494 69,870
Total current liabilities 152,722 140,294
Long-term liabilities 75,065 69,353
Total liabilities 227,787 209,647
Stockholders' equity 153,613 134,124
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 381,400 $ 343,771
CONTACT: Coventry Corp., Nashville Richard H. Jones, 615/391-2440 |
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