Continucare Corporation Reports Results for the Year Ended Fiscal 2003.Business Editors/Health/Medical Writers MIAMI--(BUSINESS WIRE)--Sept. 29, 2003 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 ), 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. healthcare and home health services health services Managed care The benefits covered under a health contract through managed care, 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. direct and fee for service arrangements, in the Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and market, reported results for its fiscal year ended June June: see month. 30, 2003. Fiscal 2003 Results In Fiscal 2003, medical services revenue was $101,409,690, compared with $95,350,313 in Fiscal 2002. Income from operations in Fiscal 2003 was $663,287 compared with $818,727 in Fiscal 2002. Loss 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 was $292,098, or $.01 per share in Fiscal 2003, compared with a loss of $3,159,989 or $.08 per share in Fiscal 2002. Income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in Fiscal 2003 was $350,696, or $.01 per share, as compared to a loss of $486,399, or $.01 per share in Fiscal 2002. Discontinued operations consist of a group of independent physician contracts terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: effective January January: see month. 1, 2003. Net income in Fiscal 2003 was $58,598, or $.00 per share, compared with a net loss of $3,646,388 or $.09 per share in Fiscal 2002. Results for Three Months Ended June 30, 2003 For the three months ended June 30, 2003, medical services revenue was $26,700,858 compared with $24,724,527 for the three months ended June 30, 2002. Income from operations for the three months ended June 30, 2003 was $786,088 compared with $1,458,873 for the three months ended June 30, 2002. Income from continuing operations for the three months ended June 30, 2003 was $518,633, or $.01 per share, compared with income from continuing operations for the three months ended June 30, 2003 of $1,067,485, or $.03 per share. Income from discontinued operations for the three months ended June 30, 2003 was $305,712, or $.01 per share, as compared to a loss of $135,157, or $.01 per share for the three months ended June 30, 2002. Net income for the three months ended June 30, 2003 was $824,345, or $.02 per share, compared with $932,328, or $.02 per share, for the three months ended June 30, 2002. 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. Angel, President and 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. of Continucare, commented, "In 2003, we focused on enhancing the prospects of our core business. We anticipate that 2004 will involve continued evaluation of our operational performance as well as fine tuning Fine Tuning is the name of XM Satellite Radio's eclectic music channel. The program director for Fine Tuning is Ben Smith. The channel is described as "A musical oasis for the sophisticated listener culled from every imaginable genre and country. the core business model." About Continucare Corporation Continucare Corporation, http://www.continucare.com, 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. , is a holding company with subsidiaries engaged in the business of providing outpatient physician care and home healthcare services. Except for historical matters contained herein, statements made 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 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 and others 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. include risks and uncertainties, which may affect our business and prospects and cause actual results to differ materially from those set forth in the forward-looking statements. These factors include, without limitation, our ability to service our 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. and respond to capital needs, pricing pressures exerted on us by managed care organizations, the level of payment we receive from governmental programs and other third party payors, future legislation and changes in governmental regulations, general economic conditions and uncertainties generally associated with the health care business. These and other applicable risks, cautionary statements and factors that could cause actual results to differ from the Company's forward-looking statements are included in the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended June 30, 2003 and other filings with the SEC. We undertake no obligation to update or revise these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" .
CONTINUCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30,
ASSETS 2003 2002
------------ ------------
Current assets
Cash and cash equivalents $160,743 $180,410
Certificates of deposit, current 101,258 100,813
Accounts receivable, net of allowance for
doubtful accounts of $4,823,000 and
$4,807,000, respectively 323,443 94,967
Other receivables 410,765 834,227
Due from Medicare, net 258,930 -
Due from HMOs, net of a liability for
incurred but not reported medical claims
expense of approximately $13,014,000 and
$12,480,000, respectively 1,414,469 1,798,651
Prepaid expenses and other current assets 572,744 548,322
------------ ------------
Total current assets 3,242,352 3,557,390
Certificates of deposit 30,000 60,000
Assets related to discontinued operations - 6,646
Equipment, furniture and leasehold
improvements, net 632,402 580,779
Goodwill, net of accumulated amortization of
approximately $3,661,000, 14,663,392 14,663,392
Managed care contracts, net of accumulated
amortization of approximately $1,717,000 and
$1,364,000, respectively 1,793,431 2,146,243
Deferred financing costs, net of accumulated
amortization of $3,562,000 and $2,985,000,
respectively 518,382 435,375
Other assets, net 120,017 97,160
------------ ------------
Total assets $20,999,976 $21,546,985
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $683,488 $680,443
Accrued expenses 2,283,048 2,400,410
Liabilities related to discontinued
operations, net 110,345 629,789
Credit Facility 2,315,000 2,315,000
Due to Medicare, net - 350,991
Current portion of convertible subordinated
notes payable 233,716 273,896
Current portion of long-term debt 2,640,943 4,375,329
Current portion of related party note
payable 63,854 63,854
Accrued interest payable 51,754 10,708
Current portion of capital lease obligations 70,913 107,479
------------ ------------
Total current liabilities 8,453,061 11,207,899
Deferred revenue 3,850,000 -
Capital lease obligations, less current
portion 125,606 42,171
Convertible subordinated notes payable 4,122,751 4,356,468
Long-term debt, less current portion 1,341,947 3,597,122
Related party note payable, less current
portion 997,333 1,061,186
------------ ------------
Total liabilities 18,890,698 20,264,846
Commitments and contingencies
Shareholders' equity
Common stock, $0.0001 par value: 100,000,000
shares authorized; 45,375,194 shares issued
and 42,379,001 shares outstanding at June
30, 2003; and 42,630,794 shares issued and
39,634,601shares outstanding at June 30,
2002 4,239 3,964
Additional paid-in capital 60,279,880 59,511,614
Accumulated deficit (52,750,140) (52,808,738)
Treasury stock (2,996,192 shares at June 30,
2003 and 2002) (5,424,701) (5,424,701)
------------ ------------
Total shareholders' equity 2,109,278 1,282,139
------------ ------------
Total liabilities and shareholders'
equity $20,999,976 $21,546,985
============ ============
CONTINUCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Periods Ended June 30
2003 2002 (1)
------------------------- ------------------------
4th Quarter Year to Date 4th Quarter Year to Date
------------------------- ------------------------
Medical services
revenue, net $26,700,858 $101,409,690 $24,724,527 $95,350,313
Other income - - 150,000 150,000
------------------------- ------------------------
Subtotal 26,700,858 101,409,690 24,874,527 95,500,313
Expenses
Medical services:
Medical
claims 19,296,643 74,046,265 16,816,730 69,340,067
Other 3,230,593 12,953,301 3,268,703 12,457,814
------------------------- ------------------------
Total medical
services 22,527,236 86,999,566 20,085,433 81,797,881
Payroll and
employee
benefits 1,301,775 6,070,398 1,352,807 5,312,498
Provision for bad
debts 31,976 44,333 5,196 65,668
Professional fees 278,717 807,222 210,478 1,404,337
General and
administrative 1,622,728 6,188,525 1,585,830 5,073,980
Depreciation and
amortization 152,338 636,359 175,910 1,027,222
------------------------- ------------------------
Subtotal 25,914,770 100,746,403 23,415,654 94,681,586
------------------------- ------------------------
Income from
operations 786,088 663,287 1,458,873 818,727
Other income
(expense)
Interest income 1,500 6,647 2,688 36,124
Interest expense (268,955) (962,032) (394,076) (1,573,869)
Provision for
Medicare
settlement
related to
terminated
operations - - - (2,440,971)
------------------------- ------------------------
Income (loss) from
continuing
operations 518,633 (292,098) 1,067,485 (3,159,989)
Income (loss) from
discontinued
operations 305,712 350,696 (135,157) (486,399)
------------------------- ------------------------
Net income (loss) $824,345 $58,598 $932,328 $(3,646,388)
========================= ========================
Basic and diluted
income (loss) per
common share:
Income (loss)
from continuing
operations per
common share $.01 $(.01) $.03 $(.08)
Income (loss) from
discontinued
operations per
common share .01 .01 (.01) (.01)
------------------------- ------------------------
Net income (loss)
per common share $.02 $ - $.02 $(.09)
========================= ========================
(1) These amounts have been adjusted to reflect the termination of
certain lines of business as discontinued operations which are more
fully discussed in Note 1-General of our Consolidated Financial
Statements.
CONTINUCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended
June 30,
------------------------
2003 2002
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $58,598 $(3,646,388)
(Income) loss from discontinued operations (350,696) 486,399
----------- ------------
Loss from continuing operations (292,098) (3,159,989)
Depreciation and amortization, including
amortization of deferred
loan costs 1,236,645 2,317,906
Provision for bad debts 44,333 65,668
Gain on disposal of property and
equipment and release from asset related
liabilities 500 (28,642)
Director compensation paid through the
issuance of restricted common stock 123,000 -
Gain on early extinguishment of debt - -
Changes in assets and liabilities, excluding
the effect of acquisitions and disposals:
Increase in accounts receivable (272,809) (79,503)
(Increase) decrease in prepaid expenses and
other current assets (24,422) (242,061)
Decrease (increase) in other receivables 423,462 (70,590)
Increase in other assets (29,629) (6,641)
Decrease in accounts payable and accrued
expenses (114,317) (399,151)
Decrease (increase) in Due from HMOs, net 384,182 (1,158,598)
Increase in due to/from Medicare, net (137,695) 3,118,054
Increase (decrease) in accrued interest
payable 41,046 (6,995)
----------- ------------
Net cash provided by (used in) continuing
operations 1,382,198 349,458
Net cash (used in) provided by discontinued
operations (84,189) (97,865)
----------- ------------
Net cash provided by (used in) operating
activities 1,298,009 251,593
CASH FLOWS FROM INVESTING ACTIVITIES
Cash proceeds from disposal of property and
equipment 500 -
Purchase of certificate of deposit (70,000) -
Proceeds from maturity of certificates of
deposit 99,555 26,187
Property and equipment additions (170,273) (185,599)
----------- ------------
Net cash (used in) provided by continuing
operations (140,218) (159,412)
Net cash provided by discontinued operations 3,593 -
----------- ------------
Net cash (used in) provided by investing
activities (136,625) (159,412)
CONTINUCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Year Ended
June 30,
-----------------------
2003 2002
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on Convertible Subordinated Notes (273,897) (273,896)
Payments on Related Party Notes (63,853) (63,854)
Principal repayments under capital lease
obligation (112,256) (106,251)
Payment of deferred financing costs (15,000) (15,000)
Repayment of Term and Revolving Notes - -
Net increase in Credit Facility - 1,815,000
Advances from HMOs 75,000 -
Payments on advances from HMOs (75,000) (450,000)
Third party assumption of capital lease
obligation (1,789) -
Repayments to Medicare per agreement (632,750) (770,746)
----------- -----------
Net cash (used in) provided by continuing
operations (1,099,545) 135,253
Net cash used in discontinued operations (81,506) (418,494)
----------- -----------
Net cash used in financing activities (1,181,051) (283,241)
Net decrease in cash and cash equivalents (19,667) (191,060)
Cash and cash equivalents at beginning of
fiscal year 180,410 371,470
----------- -----------
Cash and cash equivalents at end of fiscal year $160,743 $180,410
=========== ===========
SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Stock issued for deferred financing costs $645,541 $ -
=========== ===========
Stock issued as final consideration for a prior
business combination $ - $ 18
=========== ===========
Repayment plans issued for refunds due to
Medicare for overpayments $694,800 $3,267,108
=========== ===========
Medicare repayment plan canceled due to
settlement of cost report reopening $222,574 $ -
=========== ===========
Purchase of furniture and fixtures with
proceeds of capital lease obligations $167,258 $ 48,784
=========== ===========
Cash paid for interest $325,337 $266,945
=========== ===========
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