United American Healthcare Corporation Announces Fiscal 2009 First Quarter Results
Revenues increased five percent to $6.5 million for the first fiscalquarter ended Sept. 30, 2008, compared with revenues of $6.2 million for thefirst quarter of fiscal 2008. Total expenses increased two percent to $6.2million in the fiscal 2009 first quarter, compared to $6.1 million in theprior fiscal year's first quarter. For the first quarter of fiscal 2009, theCompany reported net income of $190,000, or $0.02 per basic share, comparedwith net income of $73,000, or $0.01 per basic share, in the comparablequarter a year ago. The increase was primarily due to an increase in MedicareAdvantage "Special Needs Plan" (MA-SNP) revenue of the Company's subsidiary,UAHC Health Plan of Tennessee (UAHC-TN), and a decrease in marketing, generaland administrative expenses due to the pending expiration of UAHC-TN'sTennCare contract to serve Medicaid beneficiaries in the West Grand Region ofTennessee.
The increase in fiscal 2009 first quarter revenue helped to offset aneight percent decrease in TennCare-related fixed administrative fee revenuefrom the prior fiscal year's first quarter, principally due to a decrease inthe number of UAHC-TN's TennCare enrollees. As of Sept. 30, 2008, UAHC-TN'stotal TennCare enrollment was 97,000 members, down from 107,000 members a yearearlier.
"As we continued the transition of our TennCare business to new providers,we maintained firm control over our expenses and utilization of our assets,which resulted in our profitability for the quarter," said William C. Brooks,president, chairman and CEO of United American Healthcare. "As we move closerto the final expiration of UAHC-TN's TennCare contract on June 30, 2009, wewill continue to maintain a disciplined approach to our expenses and continueconserving our resources in anticipation of pursuing a new business strategy."
UAHC-TN's MA-SNP business comprised 44.1 percent of the Company's totalrevenue in the fiscal 2009 first quarter. MA-SNP medical premiums revenueswere $2.9 million, while medical expenses for MA-SNP increased to $2.5 millionin that quarter. The percentage of such medical expenses to medical premiumsrevenues -- the "medical loss ratio" -- was 88.1% for the quarter.
On April 22, 2008, UAHC-TN learned that it will no longer have a TennCarecontract to serve Medicaid beneficiaries in the West Grand Region of Tennesseewhen its current TennCare contract expires. UAHC-TN's TennCare contractrepresented 53 percent of the Company's total revenues for the fiscal 2009first quarter. UAHC-TN's TennCare members transferred to other managed careorganizations on Nov. 1, 2008, after which UAHC-TN will perform its remainingcontractual obligations through its TennCare contract expiration date of June30, 2009.
Management expects to incur a number of substantial expenses related tothe TennCare contract discontinuance. Such total costs are estimated in therange of $4.6 million to $6.6 million, including claims processing costs,employee severance, lease termination costs and other general administrativeexpenses from November 2008 through June 2009.
As of September 30, 2008, United American Healthcare reported cash, cashequivalents and short-term marketable securities of $26.8 million, compared to$27 million as of June 30, 2008. The Company remains debt free.
"While we are fortunate to have significant cash, cash equivalents,short-term marketable securities, and statutory reserves given the currentstate of the financial markets, it is important to note that a substantialportion of those assets must be retained for regulatory purposes and to fundour remaining obligations under the TennCare contract," concluded Brooks. "TheCompany's management team and board have been actively engaged in a review ofa variety of long-term strategic alternatives for the Company. In consideringthese options, we are currently guided by three objectives: a significantrevenue contribution, positive EBITDA and long-term growth opportunities. Aswe evaluate these alternatives and when the board comes to a decisionregarding our strategic options, we will have more clarity regarding our needfor and the ultimate utilization of our cash balances."
Fiscal 2009 First Quarter Conference Call
United American Healthcare Corporation will host a conference call at 4:30p.m. Eastern Time today to discuss these results and current business trends.To access the live conference call, please dial 1-877-795-3610 and provide theconference passcode 4526496. A replay of the call will be available throughMonday, Jan. 28, 2009. To access the replay, please call 1-888-203-1112 andprovide conference passcode 4526496. Participation in the call'squestion-and-answer session will be limited to institutional investors andanalysts. Individual investors and retail brokers are invited to listen via alive webcast. To listen, please go to the investor section of the Company'swebsite at www.uahc.com. The webcast will be archived on the United AmericanHealthcare website for 90 days from the date of the call.
About United American Healthcare Corporation
United American Healthcare Corporation ("UAHC") is a full-servicehealthcare management company, pioneering the delivery of healthcare servicesto Medicaid recipients since 1985. UAHC owns and manages UAHC Health Plan,which is based in western Tennessee and includes the Memphis market. For moreinformation, please visit the Company's web site at www.uahc.com.
United American Healthcare Corporation Safe Harbor Statement
Forward-looking statements by United American Healthcare Corporation,including those in this announcement, involve known and unknown risks, whichmay cause actual results and corporate developments to differ materially fromthose expected. Factors that could cause results and developments to differmaterially from expectations include, without limitation, the effects of stateand federal regulations, the effects of acquisitions and divestitures, andother risks described from time to time in each of United AmericanHealthcare's SEC reports, including quarterly reports on Form 10-Q, annualreports on Form 10-K, and reports on Form 8-K.United American Healthcare Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three months ended September 2008 2007 Revenues Fixed administrative fees $3,423 $3,706 Medical premiums 2,862 2,082 Interest and other income 208 400 Total revenues 6,493 6,188 Expenses Medical expenses 2,523 1,864 Marketing, general and administrative 3,639 4,191 Depreciation and amortization 61 40 Total expenses 6,223 6,095 Earnings from operations before income taxes 270 93 Income tax expense 80 20 Net earnings $190 $73 Net earnings per common share - basic Net earnings per common share $0.02 $0.01 Weighted average shares outstanding 8,734 8,589 Net earnings per common share - diluted Net earnings per common share $ 0.02 $0.01 Weighted average shares outstanding 8,753 8,800 United American Healthcare Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share data) September 30, June 30, 2008 2008 (Unaudited) Assets Current assets Cash and cash equivalents $10,081 $10,713 Marketable securities 9,161 8,774 Accounts receivable - State of Tennessee, net 1,088 1,093 Interest receivable 218 551 Other receivables 419 374 Prepaid expenses and other 212 299 Total current assets 21,179 21,804 Property and equipment, net 411 472 Marketable securities 7,562 7,514 Restricted assets 421 421 Other assets 586 586 Total assets $30,159 $30,797 Liabilities and Shareholders' Equity Current liabilities Medical claims payable $2,362 $2,563 Accounts payable and accrued expenses 1,351 1,726 Accrued compensation and related benefits 488 896 Accrued rent 78 90 Other current liabilities 1,220 1,183 Total current liabilities 5,499 6,458 Total liabilities 5,499 6,458 Commitments and contingencies Shareholders' equity Preferred stock, 5,000,000 shares authorized; none issued Common stock, no par, 15,000,000 shares authorized; 8,734,214 issued and outstanding both at September 30, 2008 and June 30, 2008 18,558 18,558 Paid in capital - stock options 1,252 1,153 Warrants 444 444 Retained earnings 4,451 4,261 Accumulated other comprehensive loss, net of deferred federal income taxes (45) (77) Total shareholders' equity 24,660 24,339 Total liabilities and shareholders' equity $30,159 $30,797
SOURCE United American Healthcare Corporation
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