EATONTOWN, N.J., Oct. 8 /PRNewswire-FirstCall/ -- QMed, Inc. (Nasdaq: QMED) today announced financial results for the third quarter ending August 31, 2007. Revenue for the three-month period increased to $10,781,247 compared to $2,202,270 in the prior year's quarter. This revenue includes amounts for the disease management segment of $846,860 and $1,763,429 for the three months ended August 31, 2007 and 2006, respectively. On a sequential basis revenue increased 14.1% from 2007's second quarter. Net loss for the quarter increased to $(9,201,399) or $(0.54) per share on a diluted basis, compared to net loss of $(3,317,401) or $(0.20) per share on a diluted basis, for the same period a year ago. The Company's cash position as of August 31, 2007 was approximately $6.4 million, net of statutory reserves.
Revenue for the nine-month period ended August 31, 2007 increased to $26,574,368 from $7,306,588 in the same period a year ago. Net loss for the nine months was $(13,068,372) or $(0.77) per share on a diluted basis, compared to net loss of $(8,924,946) or $(0.53) per share on a diluted basis, for the same period a year ago.
South Dakota SNPs member months totaled 18,450 producing $20.5 million in revenue or $1,113 Per Member Per Month (PMPM). Member months in the New Jersey SNP totaled 1,269 producing $2.2 million in revenue or $1,758 PMPM. As reported in our September 27, 2007 press release, the medical expense ratio (MER) results from a spike in the payment of medical claims related to services from prior months paid in July and August, so that we have reported an increase in our incurred but not reported or paid (IBNP) claims liability. This IBNP estimate will represent approximately 30% of total medical expenses for the nine months ended August 31, 2007 resulting in a MER of approximately 114%. Given our limited claims history, the implications of these payments on our MER cannot be determined with certainty until we achieve a higher claims completion rate.
Jane Murray, QMed president and CEO said, "We believe that medical expenses will moderate over time as:
-- Medicare premium payments rise based upon data submitted through our
-- Members are in our programs longer, so that our interventions gain
"We have seen both phenomena. We received an increase in 2007 for members who joined in 2006. In addition, we have observed in both Medicare demonstrations and in managing Medicare members for other health plan customers, that length of time in the program (LOTIP) correlates with increasingly positive health and financial outcomes."
"We continue to experience strong sequential quarterly growth and obviously expect it to continue. The third quarter's revenue increase is the result of continued strong enrollment in our Medicare Advantage Special Needs Plans in South Dakota coupled with more modest growth in New Jersey. In September we experienced similar trends, as we added another 149 in our chronic SNP in South Dakota, 33 members in New Jersey and 46 in the South Dakota SNP for Duals."
"We enter the 2008 marketing season with strong momentum. As of the end of the third quarter, our revenue run rate was $44,000,000. In addition, we will offer five SNPs in 2008. These include an SNP for those dually eligible for Medicare and Medicaid in South Dakota, as well as a SNP for diabetes and a SNP for cardiovascular disease and stroke in both New Jersey and South Dakota. As we have stated previously, these offerings have the effect of increasing the number of those eligible for our chronic SNPs by nearly 80% in both New Jersey and South Dakota. These two facts, run rate and major expansion of our pool of potential enrollees, combined with increasing confidence among selling agents, providers and our own members, provide a basis for our guidance of $88-$95 million," she concluded.
The Company will hold its quarterly conference call on Monday October 8, at 5:00 pm Eastern time. Investors will have the opportunity to listen to the conference call by dialing 877-356-9649, conference ID: 18623908 at least 5 minutes prior. A replay will be available two hours after the call's completion for 30 days by dialing 800-642-1687, and using the same ID code, and the replay will also be available on the Company's Web site at http://www.qmedinc.com.
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. The Company also operates a Medicare Demonstration to test the feasibility of reimbursing its care coordinated DM services in the vast Medicare fee-for-service program. More information on QMed, Inc. can be obtained at http://www.qmedinc.com, by calling (732) 544-5544 or by emailing email@example.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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
August 31, November 30,
Cash and cash equivalents $ 2,411,562 $ 3,039,695
Investments 4,011,933 10,867,815
Accounts receivable, net of allowances
of $49,910 and $59,505, respectively 2,627,358 2,005,485
Inventory, net of reserve 13,278 36,631
Prepaid commissions 457,045 -
Prepaid expenses and other current
assets 510,435 301,282
Restricted cash and cash equivalents,
non-current 2,975,081 705,881
Property and equipment, net of
accumulated depreciation 762,453 989,329
Product software development costs,
net 1,970,885 2,104,788
Acquired intangibles, net 462,675 587,027
Other assets 142,513 149,202
Investment in joint ventures 19,050 23,703
$ 16,364,268 $ 20,810,838
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 2,410,285 $ 2,827,223
Medical claims payable 7,570,729 364,830
Leases payable, current portion 20,142 65,881
Accrued salaries and commissions 558,796 446,740
Fees reimbursable to health plans 7,825 47,005
Contract billings in excess of revenue 1,564,667 1,396,423
Deferred revenue 528,960 16,583
Leases payable - long term - 11,645
Accrued severance payable, long term 313,589 619,643
Commitments and Contingencies
Common stock $.001 par value;
40,000,000 shares authorized;
17,013,056 and 16,858,539 shares
issued and 16,991,056 and
respectively 17,013 16,859
Paid-in capital 54,885,049 53,433,095
Accumulated deficit (51,423,068) (38,354,696)
Accumulated other comprehensive loss
Unrealized loss on securities
available for sale (14,094) (4,768)
Less treasury stock at cost, 22,000
common shares (75,625) (75,625)
Total stockholders' equity 3,389,275 15,014,865
$ 16,364,268 $ 20,810,838
QMED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the For the For the For the
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
August 31, August 31, August 31, August 31,
2007 2006 2007 2006
Revenue $10,781,247 $2,202,270 $26,574,368 $7,306,588
Cost of revenue 15,430,886 1,371,709 28,741,667 4,951,164
margin (4,649,639) 830,561 (2,167,299) 2,355,424
expenses 4,079,495 4,025,951 12,125,123 11,099,815
expenses 604,031 298,836 1,553,086 1,180,866
operations (9,333,165) (3,494,226) (15,845,508) (9,925,257)
Interest expense (5,903) (4,337) (20,844) (15,146)
Interest income 137,307 201,833 458,682 577,152
joint ventures - (18,927) (24,973) (57,365)
Other income - - 2,375,400 450,000
provision (9,201,761) (3,315,657) (13,057,243) (8,970,616)
income taxes 362 (1,744) (11,129) 45,670
Net loss $(9,201,399) $(3,317,401) $(13,068,372) $(8,924,946)
Basic and diluted
loss per share
outstanding 16,989,180 16,823,885 16,953,750 16,804,457
diluted loss per
share $(.54) $(.20) $(.77) $(.53)
|SOURCE QMed, Inc.|
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