Coventry Health Care Announces Third Quarter Results.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.--(BW HealthWire)--Oct. 27, 1998--Coventry Health Care, Inc. (Nasdaq/NM:CVTY) today reported operating results for the third quarter ended September September: see month. 30, 1998. For the third quarter, revenues totaled $593.3 million, a 93% gain over the prior year's third quarter revenue of $306.7 million. Net income was $5.1 million, or $0.09 per share, compared with third quarter 1997 net income of $2.7 million, or $0.08 per share. "Earnings for the quarter were consistent with our expectations, post-AHERF," 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. . "While we are confident about the future of our company, we also fully appreciate the challenges we face. Our remaining markets, after the sale of 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 and Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , have enormous potential, our management is energized and experienced, and the pricing environment is improving significantly." Core business results: -- Membership. As of September 30, 1998, Coventry had 1.58 million members, 1.35 million of which are 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. members, an increase over the prior quarter of 23,000 members. In October October: see month. , the Company announced definitive agreements to sell two of its health plans, Principal Health Care of Illinois, Inc. and Principal Health Care of Florida, Inc. These two health plans represent approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 203,000 in combined risk membership at September 30, 1998. Coventry also took action this quarter to reduce its exposure to 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. by not renewing re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. its Medicare contracts in three counties in Central Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , three counties in Southern Illinois, and two counties in Missouri Missouri has 114 counties and one independent city. St. Louis City is separate from St. Louis County and is referred to as a "city not within a county." Independent cities
FIPS State Code State State Abbr. . These markets represent approximately 6,600, 1,600 and 200 members respectively. The Company's remaining Medicare markets and the more than 50,000 members they represent, are unaffected. -- Rate Increases. The Company achieved an average 7% rate increase on third quarter renewals, and early indicators show that January January: see month. renewals, which represent approximately 50% of total membership, will at least equal this level of rate increase. -- Medical Loss Ratio (MLR MLR mixed lymphocyte reaction. MLR Myocardial laser revascularization, see there ). MLR was 89.0% for the quarter, as compared to 85.7% for the second quarter. As previously announced, medical costs increased in the third quarter, primarily as a result of AHERF's bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . The Company has reassumed control of medical management for members covered by the AHERF AHERF Allegheny Health Education and Research Foundation contract and continues to implement other actions to improve its overall cost structure. -- Selling, General & Administrative (SG&A) Expenses. SG&A was 13.2% of operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the quarter compared with 14.3% in the second quarter. In closing, Mr. Wise said, "We are pleased with our performance this quarter. We successfully managed the challenges presented by AHERF's bankruptcy and have taken decisive action to address underperforming health plans and Medicare markets. Certainly, there is still much work to be done, but we believe we have a sound business plan and are intensely focused on achieving continued improvement both financially and operationally." 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
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 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. to 1.6 million members in a broad cross section of employer and government-funded groups in 21 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 Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle 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. . This press release contains 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. information. The 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. 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. Forward-looking statements 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. filed with the Securities and Exchange Commission for the year ended December December: see month. 31, 1997. -0-
COVENTRY HEALTH CARE, INC.
Unaudited Financial Highlights (1)
(In thousands, except per share and membership data)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
1998 1997 1998 1997
--------- --------- ---------- ---------
Operating revenues $ 593,278 $ 306,694 $1,507,291 $ 907,120
Operating earnings (loss) 2,179 5,976 (41,881) (48)
Operating earnings (loss)
(excluding non-recurring
items) 2,179 5,976 20,899 (48)
Non-recurring gain
(loss)(2) -- (643) -- 14,918
Net earnings (loss) 5,068 2,658 (17,981) 8,397
Net earnings (loss)
(excluding non-recurring
items) 5,068 3,044 20,786 (554)
Earnings (loss) per share,
basic 0.09 0.08 (0.36) 0.25
Earnings (loss) per share,
diluted 0.09 0.08 (0.36) 0.25
Earnings (loss) per share,
basic (excluding
non-recurring items) 0.09 0.09 0.41 (0.02)
Earnings (loss) per share,
diluted (excluding
non-recurring items) 0.09 0.09 0.40 (0.02)
Weighted average number of
common and common
equivalent shares
outstanding, basic 58,785 33,186 50,242 33,196
Weighted average number of
common and common
equivalent shares
outstanding, diluted 58,899 38,952 54,102 35,833
(1) Coventry Health Care's September 30, 1998, financial position
reflects the combined financial position of Principal Health Care
and Coventry Corporation, which merged on April 1, 1998. The
first quarter of 1998, included in the nine-months ended
September 30 Statement of Operations, reflects the financial
position of Coventry Corporation only.
(2) Amounts included in other income, net of interest expense.
COVENTRY HEALTH CARE, INC.
MEMBERSHIP
September 30,
1998
------------
At-risk membership by market:
Carolinas 21,530
Illinois/Chicago 56,358
Delaware/Baltimore 53,948
Georgia 17,763
Indiana 27,275
Iowa 80,516
Kansas City 46,496
Louisiana 38,881
Nebraska 33,825
Richmond 54,596
St. Louis 315,516
Wichita 33,839
Florida 146,647
Western Pennsylvania 258,175
Central Pennsylvania 167,509
------------
Total at-risk membership by market 1,352,874
Non-risk membership 228,273
------------
Total membership by market 1,581,147
============
Total membership by product:
Commercial HMO 927,037
Commercial PPO/POS 253,468
Medicare risk 70,869
Medicare cost 1,954
Medicaid 99,546
------------
Total at-risk membership by product 1,352,874
Non-risk membership 228,273
------------
Total membership by product 1,581,147
============
COVENTRY HEALTH CARE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (1)
(amounts in thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
1998 1997 1998 1997
--------- --------- ---------- ---------
Operating revenues:
Managed care premiums $ 568,280 $ 300,904 $1,454,022 $ 892,357
Management services 24,998 5,790 53,269 14,763
--------- --------- ---------- ---------
Total operating
revenues 593,278 306,694 1,507,291 907,120
Operating expenses:
Health benefits 505,518 254,551 1,261,817 772,363
Selling, general and
administrative 78,077 43,287 206,434 124,892
Depreciation and
amortization 7,504 2,880 18,141 9,913
Non-recurring items -- -- 62,780 --
--------- --------- ---------- ---------
Total operating
expenses 591,099 300,718 1,549,172 907,168
Operating earnings (loss) 2,179 5,976 (41,881) (48)
Other income, net of
interest expense 5,809 (1,542) 13,113 14,075
--------- --------- ---------- ---------
Earnings (loss) before
income taxes and
minority interest 7,988 4,434 (28,768) 14,027
Provision for
(benefit from)
income taxes 2,920 1,774 (10,787) 5,611
Minority interest -- 2 -- 19
--------- --------- ---------- ---------
Net earnings (loss) $ 5,068 $ 2,658 $ (17,981) $ 8,397
========= ========= ========== =========
Net earnings (loss) per
common and common
equivalent shares, basic $ 0.09 $ 0.08 $ (0.36) $ 0.25
========= ========= ========== =========
Net earnings (loss) per
common and common
equivalent shares,
diluted $ 0.09 $ 0.08 $ (0.36) $ 0.25
========= ========= ========== =========
Net earnings (loss) per
share, basic (excluding
non-recurring items) $ 0.09 $ 0.09 $ 0.41 $ (0.02)
========= ========= ========== =========
Net earnings (loss) per
share, diluted
(excluding non-recurring
items) $ 0.09 $ 0.09 $ 0.40 $ (0.02)
========= ========= ========== =========
Weighted average number of
common and common
equivalent shares
outstanding, basic 58,785 33,186 50,242 33,196
Weighted average number of
common and common
equivalent shares
outstanding, diluted 58,899 38,952 54,102 35,833
(1) Coventry Health Care's September 30, 1998, financial position
reflects the combined financial position of Principal Health Care
and Coventry Corporation, which merged on April 1, 1998. The
first quarter of 1998, included in the nine- months ended
September 30 Statement of Operations, reflects the financial
position of Coventry Corporation only.
COVENTRY HEALTH CARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (1)
(amounts in thousands)
(Unaudited)
September 30, December 31,
1998 1997
---------- ---------
ASSETS:
Current assets:
Cash and short-term investments $ 353,567 $ 157,849
Other current assets 168,613 79,275
---------- ---------
Total current assets 522,180 237,124
Long-term investments 159,461 76,288
Other long-term assets 425,663 155,919
---------- ---------
TOTAL ASSETS $1,107,304 $ 469,331
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Medical claim liabilities $ 358,978 $ 118,022
Other current liabilities 235,531 142,839
---------- ---------
Total current liabilities 594,509 260,861
Long-term liabilities 80,840 90,652
---------- ---------
Total liabilities 675,349 351,513
Stockholders' equity 431,955 117,818
---------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,107,304 $ 469,331
========== =========
(1) Coventry Health Care's September 30, 1998, financial position
reflects the combined financial position of Principal Health Care
and Coventry Corporation, which merged on April 1, 1998. The
December 31, 1997, Balance Sheet reflects the financial position
of Coventry Corporation only.
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