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SAFEGUARD HEALTH ENTERPRISES INC. REPORTS SUBSTANTIAL INCREASE IN FIRST QUARTER NET INCOME AND EARNINGS

 SAFEGUARD HEALTH ENTERPRISES INC. REPORTS SUBSTANTIAL INCREASE
 IN FIRST QUARTER NET INCOME AND EARNINGS
 Safeguard Also Reports Establishment of Small Group Plan
 and Enhancement of Vision Care Plan
 ANAHEIM, Calif., April 28 /PRNewswire/ -- Safeguard Health Enterprises Inc. (NASDAQ-NMS: SFGD) announced its financial results for the first quarter ended March 31, 1992. Earnings per share increased 100 percent to $.20, compared to $.10 a year ago on a fully diluted basis. Net income increased 114.4 percent to $956,000, compared to $446,000 a year earlier. Revenue increased 2.7 percent to $15,391,000, compared to $14,993,000 for the same quarter a year ago.
 "We are pleased to report a continued increase in net income and earnings per share for the first quarter of 1992 and that these results exceeded analysts' expectations for the quarter. Pretax income increased to 10.2 percent of revenue, compared to 4.9 percent for the same period a year ago. While net income was up over 114 percent compared to last year, earnings per share were up 100 percent due to a higher number of shares outstanding as a result of the treasury stock method of calculating fully diluted shares outstanding for the quarter. Revenue increased primarily due to increased sales to new small- and mid-size clients and increased revenue in the company's dental office subsidiary," said Steven J. Baileys, D.D.S., president and chief operating officer.
 "Earnings per share were positively affected by lower general and administrative costs, significantly improved results in the company's dental office subsidiary and slightly higher membership in the first quarter. The company's results were also positively affected by lower overall specialty care costs and increased copayment revenue in the dental office subsidiary. By hiring more specialists to provide direct dental care for our dental office subsidiary, we have been able to lower our specialty care costs by 38.6 percent for the first quarter of 1992, compared to the same period a year ago," Baileys said.
 "We are also pleased to report that Safeguard's dental office subsidiary continues to post significant increases in revenue and improved controls over operating expenses. Revenues for the first quarter of 1992 are already 36.3 percent ahead of last year's comparable period and it is anticipated that the trend of increased revenue should continue throughout 1992. We are also pleased to note that the company's dental office subsidiary was profitable during the first quarter of 1992, the first profitable quarter since 1986," Baileys said.
 "Despite continued layoffs in the aerospace and defense industries, the company still recorded a net increase in membership for the first quarter compared to the end of 1991. This was a result of the large number of new small- and mid-size client groups sold during the quarter. More new small- and mid-sized accounts were sold during the first quarter of 1992, than in any quarter in the last three years. With the introduction of several new products during the remainder of 1992, this trend should continue to offset any further down-sizing in the aerospace and defense industries," Baileys said.
 "We are also pleased to announce the establishment and implementation of a new small group program for groups of two to nine employees. In the past, we have not concentrated on this segment of the marketplace," Baileys said, "since the administrative costs and processing expenses were so high compared to the premium revenue generated. Now with improved plan design, substantially improved administrative capability as a result of our significantly enhanced computer processing software fully implemented at the end of 1991, the company is now able to efficiently process small group plans while maintaining an acceptable profit margin. In addition, significantly enhanced plan design has improved upon the marketability of this small group program. While the program has just recently been introduced, it has already met with great success and we anticipate the small group plan to be a positive revenue and net income contributor during 1992 and beyond," Baileys said.
 "We are also pleased to announce the enhancement of our Vision Care program in California. For several years, Safeguard has maintained a vision care program providing benefits to about 28,000 members through over 100 provider locations. The company has recently completed an agreement with a large East Coast-based third party administrator, which has a substantial provider network already in place in California. This expanded provider network will significantly enhance the marketability of our new vision care program," Baileys said.
 "In conjunction with this agreement, we have completely redesigned our vision care benefit programs to provide enhanced benefits, a more competitive premium structure and a significantly expanded panel of providers from whom present and potential members may elect coverage. Other key features of the program include the ability of the member to seek the services of any contracting provider without pre-selecting the provider, and affording the member the opportunity to go outside the panel to receive services, although with substantially lower benefits. We have received regulatory approval for this new plan and we anticipate a formal introduction during the second quarter of 1992," Baileys said.
 Safeguard operates managed care dental programs in 13 states, providing managed care dental benefits to more than 667,000 members through more than 2,900 contracting providers.
 SAFEGUARD HEALTH ENTERPRISES INC.
 (000s omitted, except per share data)
 Percent of Percent of Percent
 1992 Revenue 1991 Revenue Change
 Quarter ended
 March 31,
 Earnings summary
 Health care
 revenues $15,391 100.0 $14,993 100.0 2.7
 Health care
 expense 11,178 72.6 11,344 75.7 (1.5)
 SG&A expense 2,759 17.9 3,019 20.1 (8.6)
 Other income 113 .7 102 .7 10.8
 Income before
 income taxes 1,567 10.2 732 4.9 114.0
 Net income 956 6.2 446 3.0 114.4
 Net income
 per share $.20 --- $.10 --- 100.0
 Average shares
 outstanding 4,779 --- 4,365 --- 9.5
 Selected Balance
 Sheet Data
 Cash and
 marketable
 securities $12,986 --- $10,473 --- 24.0
 Current assets 15,944 --- 13,993 --- 13.9
 Current
 liabilities 2,540 --- 3,807 --- (33.3)
 Long-term debt 0 --- 730 --- (100.0)
 Shareholders'
 equity 19,632 --- 15,859 --- 23.8
 Total assets 23,021 --- 21,211 --- 8.5
 -0- 4/28/92
 /CONTACT: Ronald I. Brendzel, senior VP of Safeguard Health Enterprises Inc., 714-778-1284/
 (SFGD) CO: Safeguard Health Enterprises Inc. ST: California IN: HEA SU: ERN


KJ-JL -- LA002 -- 3589 04/28/92 09:09 EDT
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Publication:PR Newswire
Date:Apr 28, 1992
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