Continucare Announces Operating and Net Profit for the Third Quarter.Business Editors/Health & Medical Writers MIAMI--(BUSINESS WIRE)--May 12, 2000 Continucare Corporation (AMEX AMEX See: American Stock Exchange :CNU CNU Christopher Newport University CNU Chungnam National University (Korea) CNU Congress for the New Urbanism CNU Chonnam National University (Korea) CNU Consiglio Nazionale degli Utenti ), headquartered in Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. , a provider of outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed. out·pa·tient n. physician care and home healthcare services, reported an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $1.6 million and positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $2.4 million for the three months ended March 31, 2000. Operating profit for the nine months ended March 31, 2000 was $2.7 million, and positive EBITDA of $5.1 million. Revenues for the quarter ended March 31, 2000 decreased to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $30 million from approximately $50 million in the comparable quarter ended March 31, 1999. Revenue for the nine months ended March 31, 2000 decreased to approximately $88 million from approximately $152 million in the comparable quarter ended March 31, 1999. These decreases were primarily due to: (a) the sale or closing of certain underperforming divisions during Fiscal 1999, and (b) a reduction in the number of patients for whom the Company is at risk through its Independent Practice Association. Income for the quarter ended March 31, 2000, before the one time benefit derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from gain on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, was approximately $1.5 million or $0.05 per share, compared to a loss of approximately ($18.0) million or ($1.25) per share in the same period of 1999. Income for the nine months ended March 31, 2000 before the extraordinary gain on extinguishment of debt, was approximately $2.7 million or $.09 per share compared to a loss of approximately ($31.0) million or ($2.16) per share (all per share amounts quoted are fully 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. ). The Company, as a result of the one time benefit derived from gain on extinguishment of debt, reported net income of approximately $10.5 million for the quarter ended March 31, 2000 or $.33 per share. For the nine months ended March 31, 2000 the Company, as a result of gains on extinguishment of debt, reported net income of approximately $13.5 million or $.44 per share. Spencer Spencer, city (1990 pop. 11,066), seat of Clay co., NW Iowa, on the Little Sioux River; inc. 1880. The city lies in a fertile farm area. Beef is processed, and Spencer's manufactures include work clothes, machinery, prefabricated buildings, and metal products. J. Angel, President and Chief Executive Officer said, "We are pleased with our third quarter financial performance. We have made significant progress during the past year improving our operations while still maintaining the high quality of medical care our patients have come to expect. We believe that we are well positioned to continue to achieve positive net earnings and solid EBITDA performance for our current fiscal year and beyond." Except for the historical matters contained herein, statements in this press release are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and are made pursuant to 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 Securities 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. Reform Act of 1995. Investors are cautioned that 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. involve risks and uncertainties which may affect the company's business and prospects, and cause results to differ materially from those set forth in the forward-looking statements. In addition to the factors set forth elsewhere in this release, the economic, competitive, governmental, technological and other factors identified in Continucare's filings with the Securities and Exchange Commission could affect the forward-looking statements contained in this release.
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS March 31, 2000 June 30, 1999
(Unaudited)
---------------- --------------
Current assets
Cash and cash equivalents $3,115,992 $3,185,077
Accounts receivable, net of allowance
for doubtful accounts of $5,752,000 at
March 31, 2000 and June 30, 1999 4,844 604,524
Due from Medicare 443,576 ---
Other receivables 586,086 266,057
Prepaid expenses and other current assets 358,179 298,899
------------ ------------
Total current assets 4,508,677 4,354,557
Equipment, furniture and leasehold
improvements, net 901,674 1,098,289
Cost in excess of net tangible assets
acquired, net of accumulated amortization
of $5,487,000 at March 31, 2000 and
$3,837,000 at June 30, 1999 20,375,593 22,346,156
Deferred financing costs, net of
accumulated amortization of $141,000
at March 31, 2000 and $1,203,000
at June 30, 1999 3,249,375 2,551,811
Other assets, net 75,526 69,165
------------- -------------
Total assets $29,110,845 $30,419,978
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable $861,964 $842,442
Accrued expenses 3,116,663 2,358,346
Accrued salaries and benefits 1,583,792 1,856,140
Medical claims payable 1,130,139 4,825,081
Due to Medicare --- 302,358
Due to related parties 60,000 ---
Current portion of convertible
subordinated notes payable 700,000 45,000,000
Current portion of long term debt 5,832,764 6,857,946
Accrued interest payable 22,985 2,400,022
Current portion of capital
lease obligations 92,063 112,652
------------- -------------
Total current liabilities 13,400,370 64,554,987
Capital lease obligations,
less current portion 121,347 123,436
Convertible subordinated notes
payable, less current portion 11,400,000 ---
Long term debt, less current portion 1,516,497 1,396,753
------------- -------------
Total liabilities 26,438,214 66,075,176
Commitments and contingencies
Shareholders' equity (deficit)
Common stock; $0 0001 par value;
100,000,000 shares authorized,
36,236,283 shares issued and
33,240,091 shares outstanding at
March 31, 2000; and 17,536,283 shares
issued and 14,540,091 shares
outstanding at June 30, 1999 3,325 1,455
Additional paid-in capital 57,708,595 32,910,465
Accumulated deficit (49,614,588) (63,142,417)
Treasury stock (2,996,192 shares) (5,424,701) (5,424,701)
------------- -------------
Total shareholders' equity (deficit) 2,672,631 (35,655,198)
------------- -------------
Total liabilities and
shareholders' equity (deficit) $29,110,845 $30,419,978
============= =============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31,
2000 1999
Revenue
Medical services, net $29,889,660 $49,983,897
Expenses
Medical services:
Medical claims 19,864,445 36,358,041
Other 4,700,767 10,064,148
Payroll and employee benefits 1,395,032 3,523,160
Provision for bad debt --- 1,135,713
Professional fees 193,362 502,982
General and administrative 1,373,192 3,012,478
Loss on sale of subsidiary --- 11,003,541
Depreciation and amortization 773,044 1,502,012
------------- -------------
Subtotal 28,299,842 67,102,075
Income (loss) from operations 1,589,818 (17,118,178)
Other income (expense)
Interest income 10,942 50,758
Interest expense (708,717) (1,164,240)
Other 103,623 ---
------------- -------------
Income (loss) before extraordinary item 995,666 (18,231,660)
Gain on extinguishment of debt 9,471,710 ---
------------- -------------
Net income (loss) $10,467,376 $(18,231,660)
============= =============
Per share data:
Basic earnings (loss) $.43 $ (1.25)
Diluted earnings (loss) $.33 $ (1.25)
============= =============
Weighted average number of
common shares outstanding:
Basic 24,020,331 14,606,283
Diluted 31,855,476 14,606,283
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended March 31,
2000 1999
Revenue
Medical services, net $87,362,881 $151,177,818
Management fees 450,000 516,642
------------- -------------
Subtotal 87,812,881 151,694,460
Expenses
Medical services:
Medical claims 62,359,925 101,392,977
Contractual revision of previously
recorded medical claims liability (3,053,853) ---
Other 13,711,040 33,201,381
Payroll and employee benefits 4,674,123 11,215,110
Provision for bad debt --- 3,506,217
Professional fees 651,582 1,228,547
General and administrative 4,397,578 9,146,154
Loss on sale of subsidiary --- 15,155,791
Depreciation and amortization 2,340,744 4,651,761
------------- -------------
Subtotal 85,081,139 179,497,938
Income (loss) from operations 2,731,742 (27,803,478)
Other income (expense)
Interest income 35,509 122,313
Interest expense (2,870,952) (3,590,830)
Other 383,623 ---
------------- -------------
Income (loss) before
extraordinary items 279,922 (31,271,995)
Gains on extinguishment of debt 13,247,907 130,977
------------- -------------
Net income (loss) $13,527,829 $(31,141,018)
============= =============
Per share data:
Basic earnings (loss) $ .76 $ (2.16)
============= =============
Diluted earnings (loss) $ .44 $ (2.16)
============= =============
Weighted average number of
common shares outstanding:
Basic 17,731,000 14,428,968
============= =============
Diluted 30,694,636 14,428,968
============= =============
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended March 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $13,527,829 $(31,141,018)
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities:
Depreciation and amortization
including amortization of deferred
loan costs 3,102,067 5,322,902
Provision for bad debt --- 3,506,217
Loss on sale of subsidiary --- 15,155,791
Contractual revision of previously
recorded medical claims liability (350,546) ---
Gain on disposal of equipment (23,123) ---
Gain on extinguishment of debt (13,247,907) (130,977)
Changes in operating assets and
liabilities, excluding the effect
of acquisitions and disposals:
Decrease (increase) in accounts
receivable 599,680 (3,283,212)
Decrease in income taxes receivable --- 1,800,000
Increase in prepaid expenses and
other current assets (59,280) (507,323)
(Increase) decrease in other receivables (320,029) 692,045
(Increase) decrease in other assets (6,361) 271,840
(Decrease) increase in medical
claims payable (3,694,942) 4,521,625
Increase in due to (from) Medicare (108,378) 944,099
Increase in accounts payable and
accrued expenses 505,491 457,368
Increase in accrued interest payable 2,045,984 876,466
------------- -------------
Net cash provided by (used in)
operating activities 1,970,485 (1,514,177)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisitions --- (4,225,000)
Cash paid for purchase of contracts --- (734,806)
Property and equipment additions (134,637) (673,638)
Proceeds from sale of subsidiary --- 141,187
Proceeds from notes receivable --- 104,320
------------- -------------
Net cash used in investing activities (134,637) (5,387,937)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment to extinguish debt (210,000) (720,000)
Principal repayments under
capital lease obligation (22,815) (369,037)
Payment on notes payable (1,406,326) (1,421,850)
Proceeds from long term debt --- 5,000,000
Payment of deferred financing costs (175,792) (168,192)
------------- -------------
Net cash (used in) provided
by financing activities (1,904,933) 2,320,921
------------- -------------
Net decrease in cash and
cash equivalents (69,085) (4,581,193)
------------- -------------
Cash and cash equivalents
at beginning of period 3,185,077 7,435,724
------------- -------------
Cash and cash equivalents
at end of period $ 3,115,992 $2,854,531
============= =============
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Stock issued for acquisition $ --- $1,811,250
============= =============
Note payable for purchase of contracts $ --- $2,500,000
============= =============
Note payable for amendment of contract $ --- $3,509,983
============= =============
Note payable issued for refunds
due to Medicare for overpayments $ 637,556 $ --
============= =============
Purchase of furniture and fixtures
with proceeds of capital lease
obligations $ 158,023 $ --
============= =============
Common stock issued for deferred
financing costs $ 3,375,000 $ ---
============= =============
Common stock issued for
extinguishment of debt $21,312,500 $ ---
============= =============
CONTINUCARE CORPORATION
STATEMENTS OF basic and diluted earnings / (loss) per share
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------- --------------------
2000 1999 2000 1999
------ ------ ------ ------
(unaudited) (unaudited) (unaudited) (unaudited)
Numerator for
earnings (loss)
before
extraordinary item:
Numerator for basic
earnings (loss) per
share-income (loss)
before
extraordinary
item,
as reported $995,666 $(18,231,660) $279,922 $(31,271,995)
Effect of dilutive
securities:
Interest expense
related to
convertible
subordinated
notes 490,937 --- 2,460,997 ---
--------- ------------- ----------- -------------
Numerator for diluted
earnings (loss) per
share - income (loss)
before extraordinary
item after assumed
conversions $1,486,603 $(18,231,660) $2,740,919 $(31,271,995)
========== ============= ========== =============
Numerator for extraordinary item:
Numerator for basic
earnings (loss)
per share -
extraordinary
item $9,471,710 --- $13,247,907 $130,977
Effect of dilutive
securities:
Interest expense
related to
convertible
subordinated
notes (490,937) --- (2,460,997) ---
---------- ------------ ----------- ------------
Numerator for
diluted earnings
(loss) per
share -
extraordinary
item $8,980,773 --- $10,786,910 $130,977
========== ============ =========== ============
Denominator:
Denominator for
basic earnings
(loss) per
share -
weighted-average
shares 24,020,331 14,606,283 17,731,000 14,428,968
Dilutive common
shares:
Convertible
subordinated
notes 7,835,145 --- 12,963,636 ---
---------- ------------ ----------- ------------
Denominator for
diluted earnings
(loss) per share -
adjusted
weighted-average
shares and assumed
conversions 31,855,476 14,606,283 30,694,636 14,428,968
========== ============ ============ ============
Basic earnings (loss)
per share, before
extraordinary item $ .04 $(1.25) $ .02 $(2.17)
Extraordinary item .39 --- .74 .01
---------- ------------ ----------- ------------
Basic earnings
(loss) per share $ .43 $(1.25) $ .76 $(2.16)
========== ============ =========== ============
Diluted earnings
(loss) per share
before extraordinary
item $ .05 $(1.25) $ .09 $(2.17)
Extraordinary item .28 --- .35 .01
---------- ------------ ----------- ------------
Diluted earnings
(loss) per share $ .33 $(1.25) $ .44 $(2.16)
========== ============ =========== ============
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