Continucare Reports Results for the Third Quarter Fiscal 2001.Business Editors MIAMI--(BUSINESS WIRE)--May 16, 2001 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 leader in the field of providing 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 services through managed care arrangements and home healthcare services 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, today reported that revenues for the quarter ended March 31, 2001 decreased to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $29.6 million from approximately $29.9 million in the comparable quarter ended March 31, 2000. Revenue for the nine months ended March 31, 2001 increased to approximately $89.0 million from approximately $87.8 million in the comparable quarter ended March 31, 2000. Income from operations for the three months ended March 31, 2001 was approximately $1.8 million as compared to approximately $1.6 million for the three months ended March 31, 2000. Excluding the contractual revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. of previously recorded medical claims liability of $3.6 million, loss from operations was approximately $1.8 million in the three months ended March 31, 2001. Loss from operations for the nine months ended March 31, 2001 was approximately $3.1 million as compared to income from operations of approximately $2.7 million for the three months ended March 31, 2000. Excluding the contractual revision of previously recorded medical claims liability of $3.6 million, loss from operations was approximately $6.7 million in the nine months ended March 31, 2001. Excluding the contractual revision of previously recorded medical claims liability of $3.1 million, loss from operations was approximately $322,000 in the nine months ended March 31, 2000. Net income for the three months ended March 31, 2001 was approximately $2.4 million or $.07 per share on approximately 33.2 million 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. weighted average shares outstanding, as compared to net income of approximately $10.5 million for the three months ended March 31, 2000 or $.33 per share on approximately 31.9 million fully diluted weighted average shares outstanding. Excluding the contractual revision of previously recorded claims liability of approximately $3.6 million and 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 of $1.0 million, net loss for the three months ended March 31, 2001 was approximately $2.2 million. Excluding the gain on extinguishment of debt of approximately $9.5 million, net income for the three months ended March 31, 2000 was approximately $996,000. Net loss for the nine months ended March 31, 2001 was approximately $3.4 million or $.10 per share on approximately 33.2 million fully diluted weighted average shares outstanding, as compared to net income of approximately $13.5 million for the nine months ended March 31, 2000 or $.44 per share on approximately 30.7 million fully diluted weighted average shares outstanding. Excluding the contractual revision of previously recorded claims liability of approximately $3.6 million and gain on extinguishment of debt of $1.0 million, net loss for the nine months ended March 31, 2001 was approximately $8.0 million. Excluding the contractual revision of previously recorded claims liability of approximately $3.1 million and the gain on extinguishment of debt of approximately $13.2 million, net loss for the nine months ended March 31, 2000 was approximately $2.8 million. "We continued to focus on strengthening our core business unit during our third quarter," said 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 of Continucare. "By enhancing our physician network, we continue to position ourselves as an industry leader in Florida as third party manager of risk in the healthcare market. Additionally, we are beginning to feel the benefits from federal legislation that will increase payments to HMOs, as well as the creative changes in benefit packages offered by our 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, partners." Mr. Angel further commented on the status of the April 30, 2001 interest payment by stating, "We are currently in discussions with our note holders and a related party to negotiate a transaction whereby the terms of a portion of the outstanding notes would be restructured and the balance of notes would be purchased and converted into common stock. It is the desire of the Company to conclude the transaction prior to the May 30, 2001 interest default date." Continucare Corporation, 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 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 that 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. -tables to follow-
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS March 31, 2001 June 30, 2000
(Unaudited) (Note 1)
Current assets
Cash and cash
equivalents...........................$ 967,930 $ 2,535,540
Accounts receivable, net of allowance
for doubtful accounts of $5,752,000
at March 31, 2001 and June 30, 2000 147,744 94,966
Other receivables........................ 477,813 697,977
Prepaid expenses and other current assets 307,136 368,431
---------- ----------
Total current assets................. 1,900,623 3,696,914
Equipment, furniture and leasehold
improvements, net......................... 860,217 880,873
Cost in excess of net tangible assets
acquired, net of accumulated amortization
of approximately $7,742,000 at March 31,
2001 and approximately $5,929,000 at
June 30, 2000............................. 18,120,786 19,932,891
Deferred financing costs, net of
accumulated amortization of
approximately $1,438,000 at
March 31, 2001 and $426,000 at
June 30, 2000............................. 1,966,875 2,964,375
Other assets, net........................... 91,955 70,127
---------- ----------
Total assets.........................$22,940,456 $27,545,180
========== ==========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Current liabilities
Accounts payable.........................$ 780,043 $ 687,703
Accrued expenses......................... 2,042,662 2,336,398
Accrued salaries and benefits............ 1,383,792 923,656
Due (from) to HMOs, net.................. (752,940) 985,835
Line of credit........................... 600,000 ---
Advances from HMO........................ 886,689 ---
Due to Medicare.......................... 251,771 73,527
Current portion of convertible
subordinated notes payable............. 10,700,000 700,000
Current portion of long term debt........ 3,191,044 2,276,635
Accrued interest payable................. 12,216 6,044
Current portion of capital lease
obligations............................ 175,383 115,685
---------- ----------
Total current liabilities............ 19,270,660 8,105,483
Capital lease obligations, less current
portion................................... 144,329 103,682
Convertible subordinated notes payable, less
current portion........................... 700,000 11,050,000
Long term debt, less current portion........ 2,920,436 5,023,244
---------- ----------
Total liabilities.................... 23,035,425 24,282,409
Commitments and contingencies
Shareholders' (deficit) equity
Common stock; $0.0001 par value;
100,000,000 shares authorized,
36,236,282 shares issued (including
treasury shares) and 33,240,090
shares outstanding at both March 31,
2001 and June 30, 2000................. 3,325 3,325
Additional paid-in capital.................. 57,708,595 57,708,595
Accumulated deficit......................(52,382,188) (49,024,448)
Treasury stock (2,996,192 shares at
March 31, 2001 and June 30, 2000)..... (5,424,701) (5,424,701)
---------- ----------
Total shareholders' (deficit) equity... (94,969) 3,262,771
---------- ----------
Total liabilities and shareholders'
(deficit) equity.....................$22,940,456 $27,545,180
========== ==========
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31,
2001 2000
Medical services revenue, net............$29,589,882 $29,889,660
Expenses
Medical services:
Medical claims 23,290,468 19,864,445
Contractual revision of previously recorded
medical claims liability (3,638,205) ---
Other 4,275,068 4,700,767
Payroll and employee benefits.......... 1,494,662 1,395,032
Professional fees...................... 256,581 193,362
General and administrative............. 1,348,147 1,373,192
Depreciation and amortization.......... 727,900 773,044
---------- ----------
Subtotal............................. 27,754,621 28,299,842
Income from operations...................... 1,835,261 1,589,818
Other income (expense)
Interest income........................ 6,733 10,942
Interest expense....................... (448,083) (708,717)
Other.................................. --- 103,623
---------- ----------
Net income before extraordinary item........ 1,393,911 995,666
Gain on extinguishment of debt.............. 1,000,000 9,471,710
---------- ----------
Net income..................................$ 2,393,911 $10,467,376
========== ==========
Per share data:
Basic earnings....................$ .07 $ .43
========== ==========
Diluted earnings..................$ .07 $ .33
========== ==========
Weighted average number of common shares
outstanding:
Basic............................. 33,240,090 24,020,331
========== ==========
Diluted........................... 33,240,090 31,855,476
========== ==========
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended March 31,
2001 2000
Medical services revenue, net............$89,149,934 $87,812,881
Expenses
Medical services:
Medical claims 71,478,867 62,359,925
Contractual revision of previously recorded
medical claims liability (3,638,205) (3,053,853)
Other 12,816,254 13,711,040
Payroll and employee benefits.......... 4,402,353 4,674,123
Professional fees...................... 851,187 651,582
General and administrative............. 4,167,640 4,397,578
Depreciation and amortization.......... 2,180,035 2,340,744
---------- ----------
Subtotal............................. 92,258,131 85,081,139
(Loss) income from operations............... (3,108,197) 2,731,742
Other income (expense)
Interest income........................ 31,142 35,509
Interest expense....................... (1,280,989) (2,870,952)
Other.................................. 304 383,623
---------- ----------
(Loss) income before extraordinary item..... (4,357,740) 279,922
Gain on extinguishment of debt.............. 1,000,000 13,247,907
---------- ----------
Net (loss) income...........................$(3,357,740) $13,527,829
========== ==========
Per share data:
Basic (loss) earnings.............$ (.10) $ .76
========== ==========
Diluted (loss) earnings...........$ (.10) $ .44
========== ==========
Weighted average number of common shares
outstanding:
Basic............................. 33,240,090 17,731,000
========== ==========
Diluted........................... 33,240,090 30,694,636
========== ==========
CONTINUCARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended March 31,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income........................$(3,357,740) 13,527,829
Adjustments to reconcile net (loss)
income to cash used in operating
activities:
Depreciation and amortization including
amortization of deferred loan costs.. 3,270,480 3,102,067
Contractual revision of previously
recorded medical claims liability (3,638,205) (3,053,853)
Loss (gain) on disposal of equipment... 33,426 (23,123)
Gain on extinguishment of debt......... (1,000,000) (13,247,907)
Changes in operating assets and
liabilities, excluding the effect
of acquisitions and disposals:
(Increase) decrease in accounts
receivable........................... (52,778) 599,680
Decrease (increase) in prepaid expenses
and other current assets............. 61,295 (59,280)
Decrease (increase) in other
receivables.......................... 220,164 (320,029)
Increase in other assets............... (21,828) (6,361)
Increase (decrease) in due to (from)
HMOs................................. 1,899,430 (991,635)
Increase (decrease) in due to (from)
Medicare............................. 548,866 (108,378)
Increase in accounts payable and
accrued expenses..................... 258,740 505,491
Increase in accrued interest payable... 6,172 2,045,984
---------- ----------
Net cash used in operating activities (1,771,978) 1,970,485
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposals of property
and equipment........................... 1,500 ---
Property and equipment additions......... (215,580) (134,637)
---------- ----------
Net cash used in investing activities....... (214,080) (134,637)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit............. 600,000 ---
Advances from HMO........................ 1,450,000 ---
Payments on advances from HMO............ (563,311) ---
Payments on convertible subordinated
notes.................................. (350,000) (210,000)
Principal repayments under capital lease
obligation............................. (66,276) (22,815)
Payments on long term debt............... (651,965) (1,406,326)
Payment to related party................. --- (90,000)
Payment of deferred financing costs...... --- (175,792)
---------- ----------
Net cash provided by (used in) financing
activities................................ 418,448 (1,904,933)
---------- ----------
Net decrease in cash and cash equivalents... (1,567,610) (69,085)
---------- ----------
Cash and cash equivalents at beginning of
period.................................... 2,535,540 3,185,077
---------- ----------
Cash and cash equivalents at end of period..$ 967,930 $ 3,115,992
========== ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Note payable issued for refunds due to
Medicare for overpayments.................$ 370,622 $ 637,556
========== ==========
Purchase of furniture and fixtures with
proceeds of capital lease obligations.....$ 166,621 $ 158,023
========== ==========
Common stock issued for deferred financing
costs.....................................$ --- $ 3,375,000
========== ==========
Common stock issued for extinguishment of
debt......................................$ --- $21,312,500
========== ==========
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