DETROIT, Feb. 5 /PRNewswire-FirstCall/ -- United American Healthcare Corporation (Nasdaq: UAHC), which owns and provides comprehensive management services to a managed care organization in Tennessee, today announced financial results for its fiscal second quarter ended Dec. 31, 2008.
Revenues decreased $2.2 million, or 32 percent, to $4.8 million for the second quarter ended Dec. 31, 2008, compared with revenues of $7.0 million for the second quarter of the prior fiscal year. The decline was primarily the result of the transfer of members from the Company's subsidiary, UAHC Health Plan of Tennessee (UAHC-TN), to other service providers on Nov. 1, 2008 in advance of the impending expiration of UAHC-TN's TennCare contract to serve Medicaid beneficiaries in the West Grand Region of Tennessee. Total expenses decreased $0.5 million, or 8 percent, to $6.2 million in the fiscal 2009 second quarter, compared with $6.7 million in the prior fiscal year's second quarter. For the second quarter of fiscal 2009, the Company reported a net loss of $1.4 million, or ($0.16) per basic share, compared with net income of $0.3 million, or $0.03 per basic share, in the comparable quarter a year ago. The loss was primarily due to the decrease in revenue, partially offset by a decrease in marketing, general and administrative expenses due to the impending expiration of UAHC-TN's TennCare contract.
For the first six months of fiscal 2009, revenues fell $1.9 million, or 15 percent, to $11.3 million, compared with $13.2 million for the first six months of fiscal 2008. The change in revenues was primarily caused by the transfer of UAHC-TN's TennCare enrollees to other providers on Nov. 1, 2008. Total expenses for the first six months of fiscal 2009 decreased $0.4 million, or 3 percent, to $12.4 million, compared with $12.8 million for the comparable period in the prior year. The expense reduction was the result of a $1.0 million decrease in marketing, general and administrative expenses, partially offset by an increase in medical expenses in the six months ended Dec. 31, 2008. As a result, the Company reported a net loss for the first half of fiscal 2009 of $1.2 million, or $0.13 per share, compared with net income of $0.3 million, or $0.04 per share, in the first half of fiscal 2008.
"We have largely completed the transition of our TennCare business to new managed care organizations, resulting in a sizable reduction in our revenue base," said William C. Brooks, president and CEO of United American Healthcare. "With lower revenues, our disciplined efforts to control expenses and conserve resources will be even more critical as we move closer to the expiration of UAHC-TN's TennCare contract on June 30, 2009."
UAHC-TN's Medicare Advantage "Special Needs Plan" (MA-SNP) business comprised 50 percent of the Company's total revenue in the fiscal 2009 second quarter. MA-SNP medical premiums revenues were $2.4 million, while medical expenses for MA-SNP decreased to $2.3 million. The percentage of such medical expenses to medical premiums revenues - the "medical loss ratio" - was 81.2% for the quarter. As of January 30, 2009, there were approximately 719 enrollees in UAHC-TN's Medicare Advantage Special Needs Plan.
The Company previously reported that on April 22, 2008, UAHC-TN learned that it will no longer have a TennCare contract to serve Medicaid beneficiaries in the West Grand Region of Tennessee when its current TennCare contract expires. UAHC-TN's TennCare contract represented 44.2 percent of the Company's total revenues for the fiscal 2009 second quarter. UAHC-TN's TennCare members transferred to other managed care organizations on Nov. 1, 2008. UAHC-TN will perform its remaining contractual obligations through its TennCare contract expiration date of June 30, 2009.
Management expects to incur substantial expenses related to the impending TennCare contract discontinuance. The net loss is estimated in the range of $4.6 million to $6.6 million, including claims processing costs, employee severance, lease termination costs and other general administrative expenses from November 2008 through June 2009. As a result of the contract discontinuance, the total number of employees of the Company was 29 at December 31, 2008, compared to 111 at December 31, 2007.
As of Dec. 31, 2008, United American Healthcare reported cash, cash equivalents and short-term marketable securities of $16.6 million, compared to $19.5 million as of June 30, 2008. The Company remains debt-free.
"We will continue managing prudently in this transition to the discontinuance of UAHC-TN's TennCare contract," concluded Brooks. "In the face of these immediate challenges, as well as the broader challenges in the overall economy, the Company's management team and board continue to take actions to reduce expenses and conserve cash until a final decision is made concerning the strategic options available to the Company."
Fiscal 2009 Second Quarter Conference Call
United American Healthcare Corporation will host a conference call at 4:30 p.m. Eastern Time today to discuss these results and current business trends. To access the live conference call, please dial 1-877-857-6167 and provide the conference passcode 8412524. A replay of the call will be available through Tuesday, April 28, 2009. To access the replay, please call 1-888-203-1112 and provide conference passcode 8412524.
Participation in the call's question-and-answer session will be limited to institutional investors and analysts. Individual investors and retail brokers are invited to listen via a live webcast. To listen, please go to the investor section of the Company's website at www.uahc.com. The webcast will be archived on the United American Healthcare website for 90 days from the date of the call.
About United American Healthcare Corporation
United American Healthcare Corporation (UAHC) is a full-service healthcare management company that pioneered the delivery of healthcare services to Medicaid recipients since 1985. UAHC owns and manages UAHC Health Plan, which is based in western Tennessee and includes the Memphis market. For more information, 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, 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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended Six Months Ended December 31, December 31, 2008 2007 2008 2007 Revenues Fixed administrative fees $ 1,173 $ 3,677 $ 4,596 $ 7,383 Variable administrative fees 944 280 944 280 Medical premiums 2,395 2,707 5,257 4,789 Interest and other income 274 384 482 784 Total revenues 4,786 7,048 11,279 13,236 Expenses Medical expenses 2,267 2,551 4,790 4,415 Marketing, general and administrative 3,692 4,089 7,331 8,280 Depreciation and amortization 56 51 117 91 Loss on disposal of fixed assets 135 - 135 - Total expenses 6,150 6,691 12,373 12,786 Earnings (loss) from operations before income taxes (1,364) 357 (1,094) 450 Income tax expense - 101 80 121 Net earnings (loss) $ (1,364) $ 256 $ (1,174) $ 329 Net earnings (loss) per common share - basic Net earnings (loss) per common share $ (0.16) $ 0.03 $ (0.13) $ 0.04 Weighted average shares outstanding 8,728 8,612 8,731 8,636 Net earnings (loss) per common share - diluted Net earnings (loss) per common share $ (0.16) $ 0.03 $ (0.13) $ 0.04 Weighted average shares outstanding 8,728 8,778 8,731 8,797 United American Healthcare Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share data) December 31, June 30, 2008 2008 (Unaudited) Assets Current assets Cash and cash equivalents $ 6,025 $ 10,713 Marketable securities 10,624 8,774 Accounts receivable - State of Tennessee, net 1,900 1,093 Interest receivable 282 551 Other receivables 318 374 Prepaid expenses and other 310 299 Total current assets 19,459 21,804 Property and equipment, net 211 472 Marketable securities 7,618 7,514 Restricted assets 421 421 Other assets 586 586 Total assets $ 28,295 $ 30,797 Liabilities and Shareholders' Equity Current liabilities Medical claims payable $ 2,060 $ 2,563 Accounts payable and accrued expenses 1,353 1,726 Accrued compensation and related benefits 525 896 Accrued rent 117 90 Other current liabilities 858 1,183 Total current liabilities 4,913 6,458 Total liabilities 4,913 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; 8,689,520 and 8,734,214 issued and outstanding at December 31, 2008 and June 30, 2008, respectively 18,499 18,558 Paid in capital - stock options 1,334 1,153 Warrants 444 444 Retained earnings 3,087 4,261 Accumulated other comprehensive income (loss), net of deferred federal income taxes 18 (77) Total shareholders' equity 23,382 24,339 Total liabilities and shareholders' equity $ 28,295 $ 30,797
|SOURCE United American Healthcare Corporation|
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