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FOUNDATION REPORTS SECOND QUARTER RESULTS

 RANCHO CORDOVA, Calif., Jan. 25 /PRNewswire/ -- Foundation Health Corp. (NYSE: FH) today announced that net income for the quarter ended Dec. 31, 1992 -- before one-time charges for acquiring and restructuring two companies, as well as related tax effects -- rose 50.7 percent to $18.8 million, or 62 cents per share, from net income a year ago of $12.5 million or 46 cents per share. The average number of shares outstanding increased to 30.3 million from 27.0 million a year ago.
 After the one-time charge of $12.4 million and the corresponding tax effects related to the acquisitions in October of Century MediCorp Inc. (Century) and Occupational Health Services Inc. (OHS), net income for the quarter was $9.6 million or 32 cents per share. Revenues for the quarter were $334.1 million compared to $320.0 million a year ago.
 Pretax income for the quarter before one-time charges increased 56.1 percent to $30.6 million from $19.6 million a year ago.
 All financial and enrollment data have been restated to reflect the acquisitions of Century and OHS. Each has been accounted for as a pooling of interests.
 For the six months ended Dec. 31, 1992, net income before the one-time charges and the corresponding tax effect was $33.5 million or $1.11 per share, on revenues of $682.9 million versus net income of $24.0 million, or 89 cents per share, on revenues of $627.2 million for the period a year earlier. The average number of shares outstanding rose to 30.2 million from 26.8 million. After the one-time charge and related tax effects, net income for the first half of the fiscal year was $24.3 million or 81 cents per share.
 "The quarterly earnings -- before special charges -- grew despite an increase in both the effective tax rate and the number of shares outstanding," said Daniel D. Crowley, president and chief executive officer of Foundation. "Earnings growth was primarily due to effective medical and administrative cost containment in both the commercial and CHAMPUS operations."
 The medical loss ratio for the company's medical HMOs during the quarter was 73.9 percent compared to 76.1 percent a year ago, and 75.3 percent versus 77.2 percent for the comparable six-month periods. The ratio of CHAMPUS health care and subcontractor costs to CHAMPUS revenues for the quarter was 81.4 percent versus 89.5 percent a year earlier, and 84.4 percent versus 90.6 percent for the comparable six-month periods.
 Crowley added: "The recently acquired OHS, Century and AVP Vision Plans are performing well and posted strong enrollment growth during the past quarter. They are opening doors to new markets and beginning to provide cross-selling opportunities for our existing products."
 Enrollment in the company's health maintenance organization (HMO) and insured medical products was 448,000 on Dec. 31, 1992, compared to 416,000 a year earlier.
 The number of eligible individuals covered by the company's specialty managed care, administrative services and life insurance products was 1.77 million at Dec. 31, 1992, up from 1.53 million a year earlier. This group includes the dental, vision, mental health and employee assistance plan (EAP) products, as well as life insurance and third-party administrative services.
 Enrollment in CHAMPUS Prime at Dec. 31, 1992, increased to 224,000 -- including 7,000 in New Orleans -- compared to a total of 151,000 a year earlier.
 Crowley said that the last quarter was marked by a number of achievements, including completion of three previously announced acquisitions: Century, with 138,000 HMO enrollees at Dec. 31; OHS, with more than 1.1 million eligible beneficiaries of its EAP and managed behavioral health care plan on Dec. 31; and AVP Vision Plans, with 31,000 vision HMO members at Dec. 31.
 In addition, Crowley said that it has now been a full year since the company entered the dental managed care business with the acquisition of DentiCare. During the past 12 months, enrollment in the dental products increased by more than 23 percent to 463,000.
 Crowley also noted that quarterly revenues from non-HMO specialty services subsidiaries grew to $12.9 million, a 136.3-percent increase from a year ago.
 "Foundation now touches more than 3 million eligible individuals through our commercial and government managed care programs," Crowley said. "Just 18 months ago, at the beginning of our last fiscal year and before our acquisitions, we served only about a million eligible individuals. We are beginning to realize our goal of becoming a diversified managed care company that is positioned to benefit from government and private sector efforts to contain health care costs."
 Foundation is a leading managed health care company serving industry and government. Through its HMO, specialty services and government contracting subsidiaries, the company administers a variety of health benefits for more than 3 million eligible individuals.
 -0- 1/25/93
 /CONTACT: Jeffrey L. Elder, senior vice president and chief financial officer, 916-631-5381, or Kurt D. Davis, director of investor relations, 916-631-5288, both of Foundation Health/
 (FH)


CO: Foundation Health Corp. ST: California IN: HEA SU: ERN

SG-TM -- SF001 -- 8214 01/25/93 07:02 EST
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Date:Jan 25, 1993
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