Coventry Health Care Announces First Quarter Results.Business Editors/Health & Medical Writers BETHESDA Bethesda, city, United States Bethesda, uninc. city (1990 pop. 62,936), Montgomery co., W central Md., an affluent residential and commercial suburb of Washington, D.C. The area was settled in the late 17th cent. , Md--(BUSINESS WIRE)--May 3, 2000 17% Year over Year Revenue Growth 42% Year over Year Net Earnings Growth Coventry Health Care Coventry Health Care, Inc. (Coventry) (NYSE: CVH) is a managed health care company in the United States. On February 8th of 2007 Coventry agreed to acquire Concentra's Workers Compensation Managed Care Services Businesses. External links
Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. totaled $617.4 million for the quarter, a 17% increase over first quarter 1999 revenues of $527.8 million. Net earnings were $11.7 million, or $0.18 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, a 42% increase over the prior year's first quarter earnings of $8.3 million, or $0.14 per diluted share. "We are extremely pleased with our first quarter results. Even more significantly, excluding the Principal Life fee income that ended December December: see month. 31, 1999, revenues for the quarter were up 19% and net earnings were up 220% compared to first quarter 1999," said Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. F. Wise, president and chief executive officer of Coventry Coventry, city, England Coventry (kŏv`əntrē, kŭv`–), city (1991 pop. 318,718) and metropolitan district, central England. Coventry is an industrial center noted for its automobile production. . "This financial performance demonstrates the significant progress we have made in all key areas of our business - growing membership, pricing appropriately, controlling medical expenses and reducing overhead." Core business results: -- Membership. As of March 31, 2000, Coventry had a total of 1.5 million members in 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 , a 5% increase from the prior quarter. The Company's at-risk at-risk adj. Being endangered, as from exposure to disease or from a lack of parental or familial guidance and proper health care: efforts to make the vaccine available to at-risk groups of children. membership of 1.3 million also increased 5% over the prior quarter, with 2% of the growth coming from acquisitions in St. Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. , Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. and
West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. that closed February February: see month. 2000. On a product basis, Commercial membership increased by 36,000 members, or 4%, with 18,900 members the result of the PrimeONE acquisition in West Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). and the balance the result of strong January January: see month. sales in St. Louis. As expected, 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. membership declined slightly, with disenrollments related to 2000 benefit and premium changes offset by enrollment in Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). . Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. membership increased by 29,000 members, the majority of which came from the Prudential Prudential is the name of two different companies and buildings named after them: Companies:
competitor's market exit in Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). . -- Rate Increases. Coventry achieved commercial rate increases in excess of 10.5% on first quarter renewals, representing 554,000 members. Based on continued strength in the pricing environment, the Company now expects commercial rate increases for the second quarter of 2000 to be in the 10-12% range, on about 7% of Commercial membership. -- Medical Loss Ratio (MLR MLR mixed lymphocyte reaction. MLR Myocardial laser revascularization, see there ). MLR was 85.4% for the quarter, down 1.7% from the prior quarter, and flat compared to first quarter 1999. As expected, flu-related inpatient inpatient /in·pa·tient/ (in´pa-shent) a patient who comes to a hospital or other health care facility for diagnosis or treatment that requires an overnight stay. in·pa·tient n. utilization and pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. costs that had a negative impact on medical expenses in the fourth quarter continued into the early part of the year but had decreased by the end of March to more normal levels. -- Selling, General & Administrative (SG&A) Expenses. SG&A expenses were 13.2% of operating revenues for the quarter, a 1.7% improvement from first quarter 1999 SG&A rate of 14.9% and in line with Company guidance in the fourth quarter of 1999. The Company expects continued improvement in its SG&A rate during the year, with a goal to be under 13% by the end of 2000. "In just about every way, this quarter has produced the best results of any quarter in my 14-quarter tenure with the Company," said Mr. Wise in closing. "The fundamental outlook for our Company remains strong. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the current environment will allow us to continue to grow revenue and expand margins as we have done in the past." Coventry Health Care is a managed health care company operating under the names Coventry Health and Life, Coventry Health Care, HealthAmerica, HealthAssurance, HealthCare USA, Group Health Plan, Southern Health, SouthCare and Carelink Health Plans. The Company provides a full range of managed care products and services including 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, , PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there , POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale , Medicare Risk and Medicaid to 1.5 million members in a broad cross section of employer and government-funded groups in 15 markets throughout the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , Mid-Atlantic and Southeast United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . More information on Coventry is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.cvty.com. This press 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. 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. These statements relate to future events or future financial performance and may be significantly impacted by certain risks and uncertainties described herein and 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 year ended December 31, 1999 filed with the Securities and Exchange Commission.
COVENTRY HEALTH CARE, INC.
MEMBERSHIP
March 31, December 31, March 31,
2000 1999 1999
Membership by Market: --------- ------------ ---------
At-risk membership
in continuing operations:
Carolinas 38,972 48,205 21,279
Delaware 74,414 56,700 60,275
Georgia 29,217 27,485 23,641
Iowa 75,155 76,205 78,609
Kansas City 77,068 66,753 57,527
Louisiana 40,649 37,837 38,079
Nebraska 25,898 26,927 27,175
Pennsylvania 367,325 376,416 378,201
Richmond 55,402 53,333 47,733
St. Louis 346,610 314,298 325,044
West Virginia 93,990 78,968 23,505
Wichita 42,411 39,177 39,980
--------- --------- ---------
Total at-risk
membership by market
1,267,111 1,202,304 1,121,048
Self-funded membership 240,301 237,635 246,119
--------- --------- ---------
Total membership in
continuing operations 1,507,412 1,439,939 1,367,167
--------- --------- ---------
Total membership in
non-continuing
operations:
Indiana 10,703 23,434 28,190
--------- --------- ---------
Total membership: 1,518,115 1,463,373 1,395,357
Membership by
Product:
At-risk membership
in continuing
operations:
Commercial 1,023,106 987,181 949,819
Medicare 68,118 68,632 61,296
Medicaid 175,887 146,491 109,933
--------- --------- ---------
Total at-risk
membership by
product 1,267,111 1,202,304 1,121,048
Self-funded
membership 240,301 237,635 246,119
--------- --------- ---------
Total membership
in continuing
operations 1,507,412 1,439,939 1,367,167
--------- --------- ---------
Total membership
in non-continuing
operations:
Indiana 10,703 23,434 28,190
--------- --------- ---------
Total membership: 1,518,115 1,463,373 1,395,357
--------- --------- ---------
COVENTRY HEALTH CARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
------------------------
2000 1999
-------- --------
Operating revenues:
Managed care premiums $606,337 $507,678
Management services 11,073 20,170
-------- --------
Total operating
revenues 617,410 527,848
Operating expenses:
Health benefits 517,972 433,641
Selling, general
and administrative 81,485 78,530
Depreciation and
amortization 6,803 6,994
-------- --------
Total operating
expenses 606,260 519,165
Operating earnings 11,150 8,683
Other income, net
of interest expense 8,997 6,008
-------- --------
Earnings before
income taxes 20,147 14,691
Provision for
income taxes 8,405 6,398
-------- --------
Net earnings $ 11,742 $ 8,293
======== ========
Net earnings per
share, basic $ 0.20 $ 0.14
======== ========
Net earnings per
share, diluted $ 0.18 $ 0.14
======== ========
Weighted average
common shares
outstanding, basic 58,850 58,851
Weighted average
common shares
outstanding, diluted 63,814 64,084
COVENTRY HEALTH CARE, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
March 31, December 31,
2000 1999
Assets: ---------- ------------
Current assets:
Cash $ 240,095 $ 240,076
Short-term investments 72,073 88,365
Accounts receivable, net 61,157 53,173
Other receivables 46,024 42,304
Deferred income taxes 56,192 56,157
Other current assets 6,158 3,330
---------- -----------
Total current assets 481,699 483,405
Long-term investments 313,696 286,162
Property and
equipment, net 37,374 37,863
Goodwill and
intangible assets, net 267,911 268,289
Other long-term assets 5,899 5,864
---------- ----------
Total assets $1,106,579 $1,081,583
========== ==========
Liabilities and
Stockholders' Equity:
Current liabilities:
Medical claim
liabilities $ 315,793 $ 308,095
Other medical
liabilities 59,748 54,691
Accounts payable
and accrued liabilities 109,112 110,186
Deferred revenue 56,528 49,914
---------- ----------
Total current
liabilities 541,181 522,886
Long-term liabilities 31,261 31,217
---------- ----------
Total liabilities 572,442 554,103
Redeemable convertible
preferred stock 47,095 47,095
Stockholders' equity 487,042 480,385
---------- ----------
Total liabilities and
stockholders' equity $1,106,579 $1,081,583
========== ==========
COVENTRY HEALTH CARE, INC.
CONSOLIDATED CHANGES IN CASH AND INVESTMENTS
(Amounts in thousands)
(Unaudited)
March 31, 2000
Cash Flows from Operating Activities: ----------
Net Earnings $ 11,742
Depreciation and Amortization 6,803
Changes in Working Capital:
Accounts Receivable, Net (7,370)
Medical Claim Liabilities 4,152
Other Medical Liabilities 5,058
Accounts Payable and Accrued Liabilities (1,379)
Deferred Revenue 6,441
Changes in Other Working Capital (6,761)
----------
Total Cash Flows from Operating Activities 18,686
----------
Cash Flows from Investing Activities:
Capital Expenditures, Net (3,617)
Purchase Price of Acquisitions* (1,750)
Payments for Net Worth and Transaction Costs, Net** 2,774
----------
Total Cash Flows from Investing Activities (2,593)
----------
Cash Flows from Financing Activities:
Change in Stock and Dividends (4,832)
----------
Total Cash Flows from Financing Activities (4,832)
----------
Change in Cash and Investments for Current Period, Net 11,261
Cash and Investments at Beginning of Period 614,603
----------
Cash and Investments at End of Period $ 625,864
==========
(1) Represents $1.25 million for PrimeONE and $0.5 million for Prudential Medicaid membership in St. Louis. (2) Represents PrimeONE cash and investments of $5.5 million less statutory net worth of $2.2 million and transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). of $0.5 million. |
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