DETROIT, Nov. 4 /PRNewswire-FirstCall/ -- United American Healthcare Corporation , a pioneer in health care services for Medicaid recipients, announced today its financial results for its fiscal 2006 first quarter ended September 30, 2005.
Total revenues for the fiscal quarter ended September 30, 2005 were $4.5 million, down from revenues of $5.4 million in the first fiscal quarter of 2005. The decrease in revenues, year-over-year, was principally a result of a reduction in administrative fees from TennCare effective July 1, 2005 pursuant to a contract amendment between the Company’s subsidiary, UAHC Health Plan of Tennessee, Inc. (UAHC-TN), and the State of Tennessee, doing business as TennCare. Through the amendment, TennCare implemented a reduction in administrative fees and also implemented a modified risk arrangement for UAHC-TN, the same as for all of TennCare’s contracted managed care organizations, which are now at risk for losing up to 10% of administrative fee revenue and may receive up to 15% incentive bonus revenue, based on performance relative to benchmarks.
Also a factor in the decrease in revenues for the fiscal quarter ended September 30, 2005 was TennCare’s disenrollment of non-medically needy adults who are not eligible for Medicaid from TennCare coverage throughout Tennessee. As a result, UAHC-TN lost approximately 5,000 members in its fiscal first quarter, and expects to lose an additional 5,000-7,000 members over the remainder of the current fiscal year, primarily in the second fiscal quarter, representing its only remaining working uninsured and uninsurable adult members.
Net earnings were $0.4 million, or $0.05 per basic common share, for the fiscal quarter ended September 30, 2005, compared to the immediately preceding quarter’s net earnings of $0.4 million, or $0.06 per share, and down from the $1.5 million, or $0.20 per basic common share, reported in the first fiscal quarter ended September 30, 2004. The decrease, year-over-year, was principally due to a decrease in administrative fee revenues, coupled with an increase in general and administrative expenses, which increased 8% over the prior year, due primarily to the administrative supervision order applicable to UAHC-TN since April 20, 2005, legal fees associated with ongoing litigation, and an increase in claims processing costs.
William C. Brooks, President, CEO and Chairman of United American Healthcare, commented, “We are pleased with our results for the first quarter of this year as we remained profitable despite the modified TennCare program and continued to deliver excellent service to our TennCare enrollees. We continue to work closely and effectively with the State of Tennessee to meet all regulatory requirements while we remain under administrative supervision.”
Mr. Brooks, concluded, “We remain excited about the opportunities ahead for UAHC in fiscal 2006. Over the past three years we have worked diligently to position the company to succeed in a modified risk arrangement, and we are confident in our ability to operate profitably under the modified TennCare program. We were also very pleased to receive last quarter an extension of our TennCare contract through June 30, 2006, which we believe is a testament to our dedicated employees. We will continue to look for expansion opportunities, while focusing on delivering profitable results for the remainder of the year.”
At September 30, 2005, the Company had cash and cash equivalents and short-term marketable securities of $5.9 million, compared to $13.6 million at June 30, 2005. The decline in cash and cash equivalents is primarily due to an increase in TennCare statutory reserve requirements and funding of two escrow agreements.
Fiscal 2006 Second Quarter Guidance
The following statements are based on the Company’s current expectations. These statements are forward-looking, and actual results may differ materially. Except as expressly set forth below, these statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be closed or entered into after September 30, 2005.
UAHC anticipates fiscal 2006 second quarter revenue to be in the range of $3.7 - $4.2 million and net earnings to be in the range of $0.00 - $0.03 per basic share.
Corporate Conference Call
The Company will host a conference call today at 8:30 a.m. EST (5:30 a.m. PST) to review the first fiscal quarter financial results and other corporate events. William Brooks, UAHC’s Chairman, President and CEO, and Stephen Harris, UAHC’s CFO, will be on-line to discuss these results and take part in a Q&A session.
To access the live conference call, dial 800-257-2236, and give the Company name, “United American Healthcare.” Participants are asked to call the assigned number approximately 10 minutes before the conference call begins.
For those unable to participate in the conference call, a replay of the call will be available two hours after the call for the following five business days by dialing 800-405-2236 within the U.S. or by dialing 305-590-3000 internationally and entering the following pass code: 11042296#. Also, an instant replay of the conference call will be available over the Internet at http://www.uahc.com in the Investor Relations area of the site or by going to http://www.mkr-group.com.
About United American Healthcare
United American Healthcare is a full-service healthcare management company, pioneering the delivery of healthcare services to the Medicaid population since 1985. The Company owns and manages UAHC Health Plan in western Tennessee, including Memphis. UAHC serves 123,500 enrollees in Tennessee. For more information on the Company, please visit the Company website at www.uahc.com.
Forward-looking statements by United American Healthcare Corporation, including those in this announcement, involve known and unknown risks, which may cause actual results and corporate developments to differ materially from those expected. Factors that could cause results and developments to differ materially from expectations include, without limitation, the effects of state and federal regulations, the effects of acquisitions and divestitures, and other risks described from time to time in each of United American Healthcare’s SEC reports, including quarterly reports on Form 10-Q, annual reports on Form 10-K, and reports on Form 8-K.
United American Healthcare Corporation and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three months ended September 30, 2005 2004 Revenues Fixed administrative fees $4,490 $5,128 Medical premiums -- 19 Interest and other income 18 261 Total revenues 4,508 5,408 Expenses Medical services -- 19 General and administrative 4,018 3,737 Depreciation and amortization 33 49 Interest expense -- 8 Total expenses 4,051 3,813 Earnings from continuing operations before income taxes 457 1,595 Income tax expense 54 -- Earnings from continuing operations 403 1,595 Discontinued operations Loss from discontinued operations -- (129) Net earnings $403 $1,466 Net earnings per common share - basic Earnings from continuing operations $0.05 $0.22 Loss from discontinued operations -- (0.02) Net earnings per common share $0.05 $0.20 Weighted average shares outstanding 7,459 7,391 Net earnings per common share - diluted Earnings from continuing operations $0.05 $0.21 Loss from discontinued operations -- (0.02) Net earnings per common share $0.05 $0.19 Weighted average shares outstanding 7,583 7,443
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
United American Healthcare Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) September 30, June 30, 2005 2005 (Unaudited) Assets Current assets Cash and cash equivalents $3,337 $9,843 Marketable securities 2,605 3,730 Accounts receivable - State of Tennessee 1,240 1,360 Other receivables 487 583 Prepaid expenses and other 197 172 Deferred income taxes 2,169 1,950 Total current assets 10,035 17,638 Property and equipment, net 150 179 Goodwill 3,452 3,452 Marketable securities 7,110 2,380 Restricted Assets 2,721 -- Other assets 586 586 Total assets $24,054 $24,235 Liabilities and Shareholders’ Equity Current liabilities Medical claims payable $156 $172 Accounts payable and accrued expenses 904 1,096 Accrued compensation and related benefits 446 711 Accrued rent 135 235 Other current liabilities 1,529 1,538 Total current liabilities 3,170 3,752 Total liabilities 3,170 3,752 Shareholders’ equity Preferred stock, 5,000,000 shares authorized; none issued -- -- Common stock, no par, 15,000,000 shares authorized; 7,471,835 and 7,450,235 issued and outstanding at September 30, 2005 and June 30, 2005, respectively 12,583 12,476 Retained earnings 8,448 8,047 Accumulated other comprehensive loss, net of income taxes (147) (40) Total shareholders’ equity 20,884 20,483 $24,054 $24,235
United American Healthcare Corporation
CONTACT: Stephen D. Harris, Chief Financial Officer of United AmericanHealthcare Corp., +1-313-393-4571, investor_relations@uahc.com; or InvestorRelations, Charles Messman or Todd Kehrli, both of MKR Group, LLC,+1-818-556-3700, ir@mkr-group.com, for United American HealthcareCorporation
Web site: http://www.uahc.com//
