Cobalt Corporation Announces $0.55 Per Share 1Q Profit.Business Editors MILWAUKEE--(BUSINESS WIRE)--May 6, 2002 Cobalt Corporation (NYSE NYSE See: New York Stock Exchange :CBZ CBZ Carbamazepine CBZ Carbobenzoxy CBZ Centrale Burgerlijke Ziekeninrichting (Dutch) ): - Improved Operating Results - Sale of IRG behavioral health services unit for $27 million - Orderly reduction of AMZ ownership Cobalt Corporation (NYSE:CBZ) has reported net income, including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , of $22.6 million or $0.55 per share for the first quarter of 2002. This compares with $1.7 million or $0.04 per share for the first quarter of 2001. Cobalt Corporation's income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , before investment in American Medical Security Group, Inc., (NYSE:AMZ AMZ see australian Milking Zebu. ), of Green Bay, Wis adv. 1. Certainly; really; indeed. v. t. 1. To think; to suppose; to imagine; - used chiefly in the first person sing. present tense, I wis. See the Note under Ywis. ., was $10.4 million or $0.25 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 of 2002, versus $3.8 million or $0.10 per diluted share for the first quarter of 2001. Revenues from continuing operations declined to $381.0 million in the first quarter of 2002 compared to $409.6 million in the same period last year. This decline was anticipated as Cobalt took actions during the latter half of 2001 to exit unprofitable business in the Milwaukee market. The insured medical loss ratio continued to improve from 90.1% in the fourth quarter of 2001 to 87.9% in the first quarter of 2002. "This was an outstanding quarter for Cobalt Corporation, reflecting continued improvement in the insured medical business," said Thomas R. Hefty heft·y adj. heft·i·er, heft·i·est 1. Of considerable weight; heavy. 2. Rugged and powerful. See Synonyms at heavy. 3. , president, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and chairman of Cobalt Corporation. On March 29, 2002, Cobalt sold its behavioral health Behavioral health was first used in the 1980's to name the combination of the fields mental health and substance abuse. As an example, an organization serving both mental health and substance abuse clients might refer to its practice as behavioral health or subsidiary, Innovative Resource Group LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (IRG (1) (InterRecord Gap) See interrecord gap. (2) (Internet Research Group, Los Altos, CA, www.irgintl.com) A research and consulting firm founded in 1993 that specializes in developing business strategies for Internet-related companies. ) to APS Healthcare of Bethesda, Inc. for $27.0 million. Income from discontinued operations for the first quarter of 2002 of $9.4 million, or $0.23 per diluted share represents the combination of the results of IRG operating results for the quarter and the gain on the sale. The quarterly earnings-per-share (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. ) includes $0.07, which is attributable to Cobalt Corporation's share of AMZ's earnings and the gain from AMZ's 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. of its common stock. In April 2002, AMZ filed an offering document with the Securities and Exchange Commission for the sale of 3.5 million shares of AMZ common stock currently owned by Cobalt. Upon completion of the sale, Cobalt's ownership percentage will be less than 12 percent, down from 45 percent at the end of 2001. "We executed on our plan to focus on core business during the first quarter by selling IRG and completing the first step in reducing Cobalt Corporation's holdings in American Medical Security Group," Hefty said. Cobalt Corporation is the Blue Cross and Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. for the state of Wisconsin. It is one of the leading, publicly traded health care companies in the nation, offering a diverse portfolio of complementary insurance and managed care products to employer, individual, insurer and government customers. Headquartered in Milwaukee and formed by the combination of Blue Cross & Blue Shield United of Wisconsin and United Wisconsin Services, Inc., Cobalt Corporation (NYSE: CBZ) currently serves 1.2 million lives in 50 states. For more information, visit our Web site at www.cobaltcorporation.com Cautionary Statement: This 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. with respect to the financial condition, results of operations and business of Cobalt Corporation. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements. Factors that may cause actual results or events to differ materially from those contemplated by such forward-looking statements include rising health care costs, business conditions, impact of elimination of memberships, competition in the managed care industry, developments in health care reform and other regulatory issues. Disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the : A registration statement relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the securities of American Medical Security Group, Inc. has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers be accepted prior to the time the registration statement becomes effective. This release shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.
COBALT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Pro Forma(1)
--------------
Three months Three months
ended ended
March 31, 2002 March 31, 2001
--------------------------------------
(In thousands, except share data)
Health services revenues
and premium equivalents: $ 535,565 $ 551,416
============== ==============
Revenues:
Health services revenues:
Premium $ 337,966 $ 366,869
Government contract fees 28,809 26,903
Other 11,264 12,337
Investment results 2,931 3,483
-------------- --------------
Total revenues 380,970 409,592
Expenses:
Medical and other benefits 292,358 320,407
Selling, general,
administrative and other (2) 76,868 83,342
Interest 172 183
Amortization of goodwill 0 1,515
-------------- --------------
Total expenses 369,398 405,447
-------------- --------------
Operating income from continuing
operations 11,572 4,145
Income (loss) from investment
in affiliates, net of tax (3) 2,852 (2,285)
-------------- --------------
Pre-tax income from continuing
operations 14,424 1,860
Income tax expense 1,180 297
-------------- --------------
Income from continuing operations 13,244 1,563
Income from discontinued operations,
net of tax (4) 9,359 171
-------------- --------------
Net income $ 22,603 $ 1,734
============== ==============
Earnings per share:
Diluted EPS from continuing
operations $ 0.32 $ 0.04
Diluted EPS discontinued
operations 0.23 0.00
-------------- --------------
Total diluted EPS $ 0.55 $ 0.04
============== ==============
Weighted average common shares 40,637,194 40,412,393
============== ==============
Diluted weighted average
common shares 40,967,943 40,585,385
============== ==============
(1)Includes the operations of the former UWS and BCBSUW as if the
combination was completed at the beginning of the reporting
period. Reclassifications have also been made from previously
disclosed information to conform with the reporting of
discontinued operations as the result of the sale of a specialty
company on March 29, 2002.
(2) The three months ended March 31, 2002 includes a net favorable
settlement of approximately $2.6 million.
(3) The three months ended March 31, 2002 includes a $0.4 million gain
on the sale of 1.4 million shares of AMZ.
(4) The three months ended March 31, 2002 includes a $9.9 million
after tax gain on the sale of discontinued operation.
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