HEALTHSOURCE, INC. REPORTS 61 PERCENT INCREASE IN SECOND QUARTER EARNINGS; UNVEILS PLAN FOR A NEW HMO IN GEORGIA
CONCORD, N.H., July 20 /PRNewswire/ -- Healthsource, Inc. (NYSE: HS), a leading operator of HMOs and managed health care services, today reported that net income for the three month period ended June 30, 1993 was up 61 percent to $6.0 million from the $3.7 million earned in the three month period ended June 30, 1992.
Quarterly Earnings Per Share and Revenue Growth
Earnings per share on a fully diluted basis for the quarter ended June 30, 1993 increased 48 percent to 46 cents vs. 31 cents for the same period a year ago. Last year's earnings per share have been adjusted to reflect a 3-for-2 stock split effected in the form of a 50 percent stock dividend and paid on Dec. 15, 1992. Total revenues for the second quarter increased 70 percent to $72.9 million compared with $42.8 million for the second quarter in 1992.
Six Month Results
For the six month period ended June 30, 1993, net income increased 46 percent to $11.5 million from $7.9 million for the same period in the previous year and earnings per share on a fully diluted basis increased 42 percent to 91 cents compared with 64 cents in 1992. Revenues for the period reached $131.8 million, up 76 percent from the $74.8 million for the comparable period of 1992.
Acquisitions, Membership and Medical Loss Ratios
The increase in earnings and revenue for the 1993 periods include the effect of the company's recent acquisition of the majority interest in its South Carolina affiliate which occurred on March 31, 1993 and the effect of the acquisition in May 1992 of its Indiana managed care plan. In addition, earnings reflect membership increases in owned and affiliated HMOs of 28 percent to 251,800 on June 30, 1993 compared to 196,900 at June 30, 1992 and improved medical loss ratios for owned HMOs of 75.1 percent for the six months ended June 30, 1993 compared to 75.6 percent for the same period in the previous year.
Healthsource also announced an agreement to enter the Savannah, Ga., market in a joint venture with Candler Hospital, a 335-bed hospital in Savannah. Candler has entered into a 10-year provider contract with the new venture. As part of the agreement Candler will have the ability to own up to 20 percent of the new company with Healthsource owning at least 80 percent. Healthsource will invest $5.0 million for its interest in the new company, and will utilize, in part, its Charleston, S.C. management and administrative resources. On Dec. 31, 1992 the state of Georgia had 6.5 percent HMO penetration compared to 16.1 percent nationally. Healthsource, Inc. is a geographically diversified provider of a broad range of managed health care services. Healthsource, Inc. owns HMOs operating in New Hampshire, South Carolina, Indiana and Tennessee and has minority ownership interests in and provides services to HMOs in North Carolina and Maine. Healthsource, Inc. also offers point of service plans, preferred provider organizations and utilization review managed care services, and provides managed care services to other health care payors, primarily Vermont Blue Cross. Healthsource, Inc. also owns EBPA, one of the largest third party claims administrators in New England. Effective April 1, 1993 Healthsource began providing managed care services to Liberty Mutual for the New Hampshire workers compensation residual market. On April 13, 1993, Healthsource announced a joint venture with Chubb LifeAmerica to develop an HMO in New York City. HEALTHSOURCE, INC. Financial Summary (in thousands, except per share data) Three Months Ended June 30, 1993 1992 (unaudited) (unaudited) Revenue: Medical premiums $66,087 $37,780 Administrative and managed care fees 5,265 3,284 Management fees 1,593 1,774 Total revenue 72,945 42,838 Expenses: Cost of medical premiums 49,822 29,288 Premium tax 703 545 Selling, general and administrative 14,343 8,704 Depreciation and amortization 1,464 983 Total expenses 66,332 39,520 Operating income 6,613 3,318 Interest income 1,463 1,172 Income before provision for income taxes and equity items 8,076 4,490 Equity in income of unconsolidated affiliates 681 745 Provision for income taxes (2,717) (1,476) Minority interest in net earnings of consolidated entity (26) (27) Net income $6,014 $3,732 Net income per share: Primary 46 cents 31 cents Fully diluted 46 cents 31 cents Weighted average number of common and common equivalent shares outstanding: Primary 13,074 12,207 Fully diluted 13,103 12,207 Six Months Ended June 30, 1993 1992 (unaudited) (unaudited) Revenue: Medical premiums $118,145 $64,736 Administrative and managed care fees 10,136 6,388 Management fees 3,557 3,632 Total revenue 131,838 74,756 Expenses: Cost of medical premiums 88,708 48,932 Premium tax 1,399 1,080 Selling, general and administrative 26,306 15,993 Depreciation and amortization 2,673 1,643 Total expenses 119,086 67,648 Operating income 12,752 7,108 Interest income 2,650 2,301 Income before provision for income taxes and equity items 15,402 9,409 Equity in income of unconsolidated affiliates 1,342 1,436 Provision for income taxes (5,188) (2,965) Minority interest in net earnings of consolidated entity (55) (27) Net income $11,501 $7,853 Net income per share: Primary 91 cents 64 cents Fully diluted 91 cents 64 cents Weighted average number of common and common equivalent shares outstanding: Primary 12,691 12,195 Fully diluted 12,705 12,200 SELECTED BALANCE SHEET DATA (in thousands) June 30, Dec. 31, 1993 1992 (unaudited) (unaudited) Cash, cash equivalents, and current marketable securities $70,527 $67,103 Current assets 87,061 77,313 Long-term marketable securities 50,497 27,847 Total assets 190,940 146,568 Medical claims payable 30,266 19,600 Current liabilities 38,294 25,541 Shareholders' equity 151,158 119,480 COMMONLY USED RATIOS (Unaudited) June 30, Dec. 31, 1993 1992 Book value per common shares outstanding (12,796,300 at June 30, 1993 and 12,036,000 at Dec. 31, 1992) $11.81/share $9.93/share Working capital $48.8 million $51.8 million Current ratio 2.3 3.0 Days of health care expense in medical claims payable (medical claims payable divided 55.3 days 51.0 days by average daily health care expenses for the three months ended June 30, 1993 and Dec. 31, 1992) -0- 7/20/93 /CONTACT: Thomas Congoran, chief financial officer, or Tracey Turner, shareholder relations, both of Healthsource, 603-225- 5077; or Kerry Thalheim, 212-661-8030, or Kathy Brunson, 312-266-7800, both of The Financial Relations Board, Inc. for Healthsource/ (HLTH)
CO: Healthsource, Inc. ST: New Hampshire IN: HEA SU: ERN
DJ -- NE026 -- 3628 07/20/93 17:44 EDT
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|Date:||Jul 20, 1993|
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