EATONTOWN, N.J., Jan. 27 /PRNewswire-FirstCall/ -- QMed, Inc. today announced financial results for the fiscal year and fourth quarter ending November 30, 2004. Revenue for the year increased to $15,576,599 from $12,899,361 a year ago. Net loss for the year totaled $(1,739,445) or $(0.12) per share compared to a net loss of $(2,151,376) or $(.15) per share a year ago.
Revenue for the three-month period ended November 30, 2004 increased to $4,785,815, up approximately 74% from $2,751,704 in the prior year. Revenues of approximately $200,000 were recognized after a final reconciliation of a completed health plan contract. Net income for the quarter was $1,136,134 or $.08 per share, inclusive of approximately $230,000 related to the sale of net operating losses, compared to a net loss of $(1,178,860) or $(.08) per share for the same period a year ago.
Michael W. Cox, president and CEO, said, “The fourth quarter results return us to profitability, a goal toward which we have worked diligently for several quarters. These positive results give us a good start on the new fiscal year and we clearly expect to operate our current core book of business profitably in 2005. Operational field improvements, coupled with new systems for improved patient identification and predictive assessments surrounding ‘high-risk’ patient selection were instrumental in this profitable fourth quarter achievement. Importantly, too, impressive increases in our Medicare HeartPartners enrollment contributed to these quarterly results, and we now expect a continuing and higher revenue contribution from this project in 2005, than had been anticipated.”
“As of this date, approximately 5,000 heart failure patients have been randomized into this large scale Medicare demonstration project,” he continued. “Considering the complexity of enrolling elderly chronically ill patients into randomized Medicare projects that are designed to test cost effectiveness, we believe this program has given us key insights into patient enrollment and engagement obstacles that must be overcome in order for us -- or for anyone else -- to succeed in future Medicare applications and to be scaleable in multiple markets.”
“In particular, we believe that the Medicare Capitated Disease Management Demonstration, once awarded, and the derived business opportunities it affords us, will be an ideal and a very large scale environment to reap the benefit of these key insights and accomplishments. The longer term implications of success in such a capitated environment are substantial.”
“We reduced the financial risk aspects in all of our health plan contracts and have positioned the Company for dramatic growth in 2005 and beyond. The financial results for this year reflect costs associated with the implementation and planning of large Medicare Demonstration projects, some of which await final award, as well as contract reconciliations and restructurings. We believe that these and other Medicare projects will have substantial benefit in the future. We also believe that restructured contracts will more accurately reflect the positive results of our interventions, while reducing financial risk.”
“We remain confident in our future, in part because in the new regulatory environment health plans are targeting the Medicare Advantage business segment aggressively,” Cox added. “New health plans are looking to get in and existing plans are expanding their participations. As a premier Medicare Advantage Disease Management player, we believe that this is a major trend with beneficial implications for our future.”
“We raised a total of $8 million in new capital during the Fourth Quarter and in December 2004. First, Quest Diagnostics, the nation’s leading provider of diagnostic testing, information, and services, made its second $2 million investment in our Company. Then in December, we completed another transaction at $10.50 per share and raised an additional $6 million in new equity. As a result, our cash and equivalents stand at approximately $11 million as of December 31st, 2004, compared with approximately $5 million at November 30, 2004. These funds are intended to support implementation of new CMS agreements. We continue to be optimistic that the Medicare Capitation Disease Management Demonstration awards will be made in the near term. We will be one of the first companies to complete our audit of internal controls under Sarbanes-Oxley Section 404 and expect to issue our results within the next two weeks,” he concluded.
QMED, INC. AND SUBSIDIARIES Consolidated Balance Sheets November 30, Assets 2004 2003 Current assets Cash and cash equivalents $3,292,571 $1,638,271 Investments in securities 2,097,362 6,213,825 Accounts receivable, net of allowance for doubtful accounts of $52,690 and $2,000, respectively 2,750,507 1,315,021 Inventory, net of reserve 38,355 146,239 Prepaid expenses and other current assets 440,620 392,783 8,619,415 9,706,139 Property and equipment, net of accumulated depreciation 1,180,050 1,133,419 Product software development costs, net 858,022 441,020 Accounts receivable, non-current - 1,474,674 Other assets 132,136 163,059 Investment in joint venture 47,854 - $10,837,477 $12,918,311 Liabilities and Stockholders’ Equity Current liabilities Accounts payable and accrued liabilities $817,234 $975,724 Lease payable, current portion 119,757 73,463 Accrued salaries and commissions 416,382 565,524 Fees reimbursable to health plans 161,178 182,359 Performance guarantee payable - - Contract billings in excess of revenues 1,245,862 1,717,657 Deferred warranty revenue 23,652 33,235 Income taxes payable 16,000 6,810 2,800,065 3,554,772 Leases payable, long term 146,742 44,429 Contract billings in excess of revenue, long term - 2,270,928 2,946,807 5,870,129 Commitments and contingencies Stockholders’ equity Common stock, $.001 par value, 40,000,000 shares authorized, 15,150,054 and 14,627,384 shares issued 15,128,054 and 14,605,384 outstanding, respectively 15,150 14,627 Paid-in capital 35,961,800 33,380,751 Accumulated deficit (28,004,017) (26,264,572) Accumulated other comprehensive income Unrealized losses on securities available for sale (6,638) (6,999) 7,966,295 7,123,807 Less treasury stock at cost, 22,000 common shares (75,625) (75,625) Total stockholders’ equity 7,890,670 7,048,182 $10,837,477 $12,918,311 QMED, INC. AND SUBSIDIARIES Consolidated Statements of Operations For the Three Months Ended November 30, 2004 2003 Sales Disease management services $4,731,510 $2,697,420 Medical equipment 54,305 54,284 4,785,815 2,751,704 Cost of sales Disease management services 1,663,850 1,674,894 Medical equipment 141,935 85,161 Cost of sales 1,805,785 1,760,055 Gross profit 2,980,030 991,649 Selling, general and administrative expenses 1,665,666 1,759,999 Research and development expenses 196,599 223,2840 Income (loss) from operations 1,117,765 (991,634) Interest expense (9,540) (6,917) Interest income, net 16,332 20,166 Loss in operations of joint venture (214,147) (193,775) Income (loss) before income tax benefit (provision) 910,410 (1,172,160) Gain on sale of state tax benefits 229,724 - Provision for state income taxes (4,000) (6,700) Net (loss) income $1,136,134 $(1,178,860) Basic (loss) income per share Weighted average shares outstanding 14,920,523 14,603,552 Basic (loss) earnings per share $0.08 $(.08) Diluted (loss) income per share Weighted average shares outstanding 16,719,362 14,603,552 Diluted (loss) earnings per share $0.07 $(.08) QMED, INC. AND SUBSIDIARIES Consolidated Statements of Operations For the Years Ended November 30, 2004 2003 2002 Sales Disease management services $15,343,884 $12,650,406 $12,324,877 Medical equipment 232,715 248,955 419,877 15,576,599 12,899,361 12,744,754 Cost of sales Disease management services 8,618,542 6,534,116 5,392,550 Medical equipment 259,562 192,751 215,013 Cost of sales 8,878,104 6,726,867 5,607,563 Gross profit 6,698,495 6,172,494 7,137,191 Selling, general and administrative expenses 7,288,783 6,875,834 5,789,730 Research and development expenses 903,921 905,360 999,985 Litigation settlement - 230,000 - (Loss) income from operations (1,494,209) (1,838,700) 347,476 Interest expense (33,874) (25,595) (9,173) Interest income, net 68,238 90,418 220,014 Loss in operations of joint venture (502,027) (362,499) (47,500) Other income 8,703 - 104,444 (Loss) income before income tax benefit (provision) (1,953,169) (2,136,376) 615,261 Gain on sale of state tax benefits 229,724 - 129,885 Provision for state income taxes (16,000) (15,000) (40,000) Net (loss) income $(1,739,445) $(2,151,376) $705,146 Basic (loss) income per share Weighted average shares outstanding 14,766,895 14,568,781 14,433,922 Basic (loss) earnings per share $(0.12) $(.15) $.05 Diluted (loss) income per share Weighted average shares outstanding 14,766,895 14,568,781 16,587,169 Diluted (loss) earnings per share $(0.12) $(.15) $.04 About QMed, Inc.
QMed, Inc., provides DM services to patients and physicians around the country through its health plan customers. The Company has been selected in two Medicare Demonstrations to test the feasibility of reimbursing its care coordinated DM services in the vast Medicare fee-for-service program. In addition, QMed is the largest DM service provider to Medicare managed care plans. More information on QMed, Inc. can be obtained at http://www.qmedinc.com/, by calling (732) 544-5544 or by emailing investor@qmedinc.com.
Except for historical information contained herein, matters discussed in this news release are forward-looking statements that involve risks and uncertainties. They include but are not limited to those relating to the timely implementation of programs, the impact of competitive product introductions, acceptance and pricing, and those risks detailed in the Company’s filings with the Securities and Exchange Commission (SEC). Actual results may differ materially from any forward-looking statements due to these risks and uncertainties.
QMed, Inc.
CONTACT: Robert Mosby, QMed, Inc., +1-732-544-5544 ext. 1107
Web site: http://www.qmedinc.com/