EATONTOWN, N.J., April 10 /PRNewswire-FirstCall/ -- QMed, Inc. today announced financial results for the first quarter ending February 28, 2006. Revenue for the three-month period decreased to $3,182,623, down approximately 33% from $4,755,486 in the prior year's quarter. Net loss for the quarter was $(2,432,196) or ($.14) per share, compared to net income of $874,803 or $.06 per share, $.05 per share on a diluted basis, for the same period a year ago. The first quarter results include a share-based employee compensation expense of approximately $443,000 related to the adoption of SFAS No. 123R on December 1, 2005.
The net loss for the period, inclusive of the share-based employee compensation expense, is attributable to the Company's segments in the following manner: (i) approximately $920,000 in QMedCare, the subsidiary engaged in Medicare Advantage Special Needs Plans (SNP). This loss is a result of implementation and development costs of the SNP projects and includes approximately $104,000 of costs associated with the New Jersey project. The South Dakota SNP program generated revenue in the first two months of operation of approximately $125,000; (ii) approximately $498,000 in development expenses in the weight and obesity management programs of the Health e Monitoring subsidiary; and (iii) approximately $1,000,000 in losses in the disease management programs as a result of a reduction in revenue associated with previously announced terminated contracts.
Michael W. Cox, QMed president and CEO said, "First quarter results reflect ongoing and accelerated costs as we ramped up our QMedCare South Dakota Medicare Special Needs Plan, prepared and negotiated our four recently announced SNP filings, and funded continued development costs for Health e Monitoring. We have previously indicated that 2006 is an important development year, as we accelerate our transition into these new large-scale markets, investing in our people, systems and marketing. This will include regulatory and implementation work on the four SNPs that we have applied for: one for New Jersey, two for Florida and an expansion in South Dakota. In support of these offerings, we are seeking all regulatory approvals needed for January 2007 implementations. They clearly represent opportunity well beyond that in South Dakota alone, and we are optimistic for approvals."
"We are just now seeing preliminary results in the enrollment process for our South Dakota SNP," he continued. "Widely reported turbulence and confusion over the Medicare Part D drug benefit has been real, and our introduction, while steady, has been slower than anticipated because of it. We are creating a brand name, attracting enrollees and caregivers from the community at large, and engaging physicians and pharmacists. Based on our experience to date, we continue to regard this initial QMedCare market as attractive and it clearly reinforces our optimism for SNPs in other states in 2007 and beyond."
Cox added, "We believe that as an SNP, in addition to providing a much needed option for Medicare beneficiaries, we have important ongoing competitive advantages that should emerge before mid-year on an annual basis that will support enrollment growth. They include a full twelve months of marketing and enrollment as against traditional Medicare Advantage and Medicare Part D Prescription Drug Benefit Plans that are restricted to periods ending on May 15 in 2006, and on March 31 thereafter. It should be noted that there is at least some possibility that the Part D period will be extended, but at this point it is uncertain."
"Our prescription drug benefit, already the most generous benefit available in South Dakota, when coupled with this advantageous enrollment period, could become a more important marketing lever as mid-year approaches, since at that time, many seniors who will have previously enrolled in other Part D programs will enter the so-called "donut hole", only to find that their expenses will have risen beyond what they expected. They would have the option then to disenroll from their first selected programs in order to enroll into our richer plan."
"Health e Monitoring has generated strong interest from several diverse and prominent organizations, not limited to health plans. We believe this subsidiary will contribute to our Company this year, while providing it with further diversification," Cox concluded.
About QMed, Inc.
QMed provides evidence-based clinical information management systems around the country to its health plan customers. The system incorporates Disease Management services to patients and decision support to physicians. The Company's QMedCare subsidiary specializes in serving high-risk populations of Medicare beneficiaries with its first project commencing in South Dakota in January 2006. Health e Monitoring is QMed's subsidiary offering weight, obesity and health promotion programs. The Company has been selected in two Demonstrations in the vast Medicare fee-for-service program. More information on QMed, Inc. can be obtained at www.qmedinc.com, by calling (732) 544-5544 or by emailing investor@qmedinc.com.
QMED, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS February 28, November 30, 2006 2005 ASSETS (unaudited) Current assets Cash and cash equivalents $4,790,444 $4,051,046 Restricted cash 250,000 -- Investments 16,713,397 19,348,503 Accounts receivable, net of allowances of $39,497 and $76,518, respectively 2,808,847 3,377,495 Inventory, net of reserve 31,927 30,887 Prepaid expenses and other current assets 379,173 411,608 24,973,788 27,219,539 Property and equipment, net of accumulated depreciation 1,001,812 1,058,295 Product software development costs, net 1,315,482 1,161,083 Accounts receivable, non-current 472,670 271,809 Acquired intangibles, net 751,577 795,848 Other assets 126,666 128,794 Investment in joint ventures 34,207 37,998 $28,676,202 $30,673,366 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $1,434,079 $1,577,385 Medical claims reserve 65,390 -- Leases payable, current portion 141,609 146,483 Accrued salaries and commissions 459,580 721,792 Fees reimbursable to health plans 24,665 39,000 Contract billings in excess of revenues 916,198 744,743 Deferred warranty revenue 9,279 12,253 Income taxes payable -- 62,610 3,050,800 3,304,266 Leases payable - long term 44,764 76,005 Contract billings in excess of revenue, long term 472,670 271,809 3,568,234 3,652,080 Commitments and Contingencies -- -- Stockholders' equity Common stock $.001 par value; 40,000,000 shares authorized; 16,814,193 and 16,804,846 shares issued and 16,792,193 and 16,782,846 outstanding, respectively 16,814 16,805 Paid-in capital 51,729,431 51,219,617 Accumulated deficit (26,550,668) (24,118,472) Accumulated other comprehensive loss Unrealized loss on securities available for sale (11,984) (21,039) 25,183,593 27,096,911 Less treasury stock at cost, 22,000 common shares (75,625) (75,625) Total stockholders' equity 25,107,968 27,021,286 $28,676,202 $30,673,366 QMED, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three For the Three Months Ended Months Ended February 28, February 28, 2006 2005 Revenue $3,182,623 $4,755,486 Cost of revenue 1,898,889 1,821,486 Gross profit 1,283,734 2,934,000 Selling, general and administrative expenses 3,474,088 1,698,792 Research and development expenses 451,332 268,026 (Loss) income from operations (2,641,686) 967,182 Interest expense (5,849) (7,002) Interest income 185,960 41,160 Loss in operations of joint venture (19,760) (70,885) Other income -- 1,748 (Loss) income before income tax provision (2,481,335) 932,203 Benefit from (provision for) income taxes 49,139 (57,400) Net (loss) income $(2,432,196) $874,803 Basic (loss) earnings per share Weighted average shares outstanding 16,786,323 15,837,577 Basic (loss) earnings per share $(0.14) $.06 Diluted (loss) earnings per share Weighted average shares outstanding 16,786,323 17,972,943 Diluted (loss) earnings per share $(0.14) $.05
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/
