Coastal Physician Group Inc. Reports Third Quarter and Nine-Month Results.DURHAM, N.C.--(BUSINESS WIRE)--Nov. 9, 1995--Coastal Physician Group Inc. (NYSE NYSE See: New York Stock Exchange : DR) today announced financial results for the third quarter and nine months ended Sept. 30, 1995. Total net operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the third quarter of 1995 was $209,989,000, up 8.9% over third quarter 1994 revenue of $192,785,000. The third quarter operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. was $2,347,000, compared to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $14,396,000 for the same quarter last year. The company reported a net loss for the third quarter of $3,439,000, or $0.15 per share, versus to net income of $7,189,000, or $0.32 per share, in the third quarter of 1994. Weighted average shares outstanding for the third quarter of 1995 increased 4.6% to 23,691,000 compared to 22,659,000 shares in the third quarter of 1994, primarily as a result of shares issued in connection with acquisitions. The change in operating results in the most recent quarter versus the same period in 1994 reflects increased medical expenses related to Coastal's Florida capitated clinic operations, continued start-up expenses in the company's North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of HMOs, and weakness in Coastal's hospital-based contract services business. As was previously reported, the conract services division's operating results were impacted by lower than expected net new business, a temporary imbalance imbalance /im·bal·ance/ (im-bal´ans) 1. lack of balance, such as between two opposing muscles or between electrolytes in the body. 2. dysequilibrium (2). between the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. to Coastal and its contract physicians' compensation, and below average collection experience, as expected. For the nine months ended Sept. 30, 1995, total net operating revenue was $629,190,000, up 15.1% over revenue of $546,883,000 for the first nine months of 1994. The operating loss for the first nine months of 1995 was $3,374,000, compared with operating income of $37,083,000 reported for the same period last year. Net loss for the first nine months of 1995 was $7,564,000, or $0.32 per share, versus net income of $16,037,000, or $0.73 per share, in the same period in 1994. "We experienced lower overall operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: primarily due to the lackluster lack·lus·ter adj. Lacking brightness, luster, or vitality; dull. See Synonyms at dull. Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" performance of our hospital-based contract services business, and continued losses from our start-up HMOs in North Carolina and New York as well as in the company's Florida capitated clinic operations," said Steven M. Scott, M.D., president and chief executive officer of Coastal Physician Group Inc. "We have already taken steps to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the compensation
imbalance which existed in the third quarter, having adopted a physician
education program which should minimize our financial exposure beginning
late in the fourth quarter. While these factors may continue to
pressure operating margins in the near term, we believe the investments
in new businesses and infrastructure will better position Coastal for
growth in 1996."
Florida Clinic Operations On Oct. 20, the company announced that it had signed a definitive stock purchase agreement to sell 47 of its Florida clinics to Humana Inc. for approximately $50 million. While certain transaction-related expenses to be finalized See finalization. at closing will reduce net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to Coastal, the company expects to substantially reduce bank indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . The proposed sale of the clinics is expected to be completed during the fourth quarter of calendar 1995. Coastal will continue to own and operate 14 pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. and OB/GYN clinics in Florida, and will take appropriate measures to streamline operations in south Florida to reflect reduced business activities in that market. Recent Initiatives Separately, the company announced that John A. Hemingway, Coastal's vice chairman, has been appointed chief executive officer of Coastal Physician Services Inc., the company's hospital-based contract management services division. Hemingway replaces Jack Page, M.D., who has become chief medical officer of this division. "John brings a wealth of experience and knowledge to this key business unit, and is well known to our customers," Dr. Scott commented. Hemingway served as president of Coastal Physician Services Inc. from 1992 to 1993 and was president of Coastal Emergency Services emergency services Emergency care '…services …necessary to prevent death or serious impairment of health and, because of the danger to life or health, require the use of the most accessible hospital available and equipped to furnish those services' Inc. from 1990 to 1992. He also held the position as senior vice president of new business development for this division from 1983 to 1990. In addition, the planned installation of the ENHANCE information system in each of Coastal's 11 billing and collections business locations remains on schedule, and is expected to be completed by year end. Installation in its Dallas operation was completed in late August, and initial results of cash flow improvement have been positive. "Access to information is critical for physicians to better support and manage outcomes and continue to provide quality, cost-effective care. We will continue to make significant investments in information technology through 1996. "The implementation will initially impact our billing and collections operations which may result in lower days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). by decreasing 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. , reducing processing time and producing more timely statements, thereby improving collection results. While this process is on schedule, the anticipated benefits to be derived from these measures will not be visible until the first quarter of next year," Dr. Scott concluded. Coastal Physician Group Inc. is one of the largest publicly-traded physician management companies in the U.S. and provides a broad range of health care and administrative services to physicians, hospitals, employers, managed care programs and other health care providers. -0-
COASTAL PHYSICIAN GROUP INC.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1995 1994 1995 1994
Operating revenue, net $ 209,989 $ 192,785 $ 629,190 $ 546,883 Costs and expenses: Physician and other provider services 155,568 132,723 460,983 382,495 Medical support services 31,336 27,342 98,076 76,076 Selling, general and administrative 25,432 18,324 73,505 51,229 Total costs and expenses 212,336 178,389 632,564 509,800 Operating income (loss) (2,347) 14,396 (3,374) 37,083 Other income (expense): Interest expense (2,449) (652) (5,500) (1,624) Interest income 104 493 571 1,646 Acquisition and related expenses -- (1,350) (919) (6,864) Other, net (221) 53 (1,583) (474)
Total other income
(expense) (2,566) (1,456) (7,431) (7,316)
Income (loss) before income taxes (4,913) 12,940 (10,805) 29,767 Provision (benefit) for income taxes (1,474) 5,751 (3,241) 13,730 Net income (loss) $ (3,439) $ 7,189 $ (7,564) $ 16,037 Net income (loss) per share $ (0.15) $ 0.32 $ (0.32) $ 0.73 Weighted average number of shares outstanding 23,691 22,659 23,630 22,116 |
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