DETROIT, Feb. 16 /PRNewswire-FirstCall/ -- United American Healthcare Corporation (Nasdaq: UAHC) today announced financial results for the Company's fiscal second quarter ended Dec. 31, 2009.
Revenues for the second quarter were $1.7 million, down $2.8 million, or 62 percent, compared with revenues of $4.5 million for the second quarter of the prior fiscal year. The decline was primarily the result of the complete transfer of TennCare enrollees served by the Company's subsidiary, UAHC Health Plan of Tennessee (UAHC-TN), to other managed care organizations on Nov. 1, 2008, and the discontinuance of UAHC-TN's Medicaid managed care services as a TennCare contractor. The decrease in revenues was also attributable to the decrease in enrollment and associated revenue from the wind down of the Company's Medicare Advantage Special Needs Plan (MA-SNP), as the Medicare Advantage contract expired at the end of calendar 2009.
Total expenses decreased $3.3 million, or 53 percent, to $2.9 million in the fiscal 2010 second quarter, compared with total expenses of $6.2 million in the prior fiscal year's second quarter. The decrease was primarily related to reduced medical expenses, as well as lower marketing, general and administrative expenses in the quarter. For the second quarter of fiscal 2010, the Company reported a net loss of $1.1 million, or ($0.14) per share, compared with a net loss of $1.4 million, or ($0.16) per share, in the second quarter of fiscal 2009. The net loss in the most recent quarter was primarily the result of the loss of TennCare revenue and the wind down of the MA-SNP, partially offset by the reduction in expenses.
"United American Healthcare continues to move through a transitional period characterized by the end of our Medicare Advantage business at the end of the fiscal second quarter," said William C. Brooks, President and CEO of United American Healthcare. "As these operations come to an end, our revenues will no doubt be adversely affected. Moreover, the contraction of our revenue base is occurring even as we face the remaining medical expenses associated with our obligations as a Medicare provider. In light of these challenges, we continue to maintain tight control on all remaining expenses in our current lean operational structure."
As of Dec. 31, 2009, United American Healthcare reported cash, cash equivalents, short-term marketable securities and restricted marketable securities of $14.2 million, compared to $19.9 million as of June 30, 2009. The decrease in cash was primarily the result of the operating loss generated in the first half of fiscal 2010 as well as the payment in September 2009 of approximately $3.3 million in settlement of a lawsuit. The Company remains free of debt.
United American Healthcare continued to take actions to reduce expenses and conserve cash during the second quarter of fiscal 2010. The Company significantly reduced the number of employees to fit its lower level of operating activity. At Dec. 31, 2009, the total number of employees was reduced to 12 from 29 employees a year earlier, representing a year-over-year cost reduction of approximately $1.9 million. With the expiration of the MA-SNP contract on Dec. 31, 2009, the total number of employees was further reduced by 4 following the end of the second quarter.
The expiration of the TennCare and Medicare contracts has served as a primary impetus for the Company's Board of Directors and management team to continue their review of a variety of long-term strategic alternatives. The review process continues to be guided by the goal of pursuing a strategic alternative that satisfies three primary objectives: providing significant revenues, providing immediate positive EBITDA and having long-term growth opportunities. During this review, all feasible options are being considered, including pursuing a joint venture or other strategic partnership, completing a strategic acquisition or merger, or liquidating the Company's assets.
"Despite the tumultuous environment we find ourselves in, we are making progress in the ultimate transformation of our Company, while continuing to control costs and conserve our cash resources," concluded Brooks. "We now believe we are much closer to the end of this extensive process, and we remain committed to completing the hard work required to identify the best possible alternative to benefit all shareholders. When we conclude this process, we will communicate our results to shareholders and provide a strategic framework that will shape the future direction of our Company."
Resolution of Deficiency Notice Related to Nasdaq Minimum Closing Bid Price Rule
On Nov. 12, 2009, the Company received a letter from The Nasdaq Stock Market advising that, for the previous 30 consecutive business days, the closing bid price of the Company's common stock was below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market. This notification had no effect on the listing of Company's common stock, which has continued to trade on The Nasdaq Capital Market under the symbol UAHC.
On Jan. 25, 2010, the Company received notification from the Nasdaq Stock Market advising that the closing bid price of the Company's common stock had been at $1.00 per share or greater for at least 10 consecutive business days. Accordingly, the Company has regained compliance with the Nasdaq Stock Market's Listing Rule 5550(a)(2), and the matter is now closed.
About United American Healthcare Corporation
United American Healthcare Corporation (UAHC) is a healthcare management company that has 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 ongoing impact of the U.S. recession, the termination of the TennCare contract, the wind down of our CMS Medicare business, the review of strategic alternatives, the ongoing impact of the global credit and financial crisis and other changes in general economic conditions, 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 current 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 Six Months Ended December 31, December 31, ------------------ ---------------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues Fixed administrative fees $- $1,173 $- $4,596 Variable administrative fees 345 944 345 944 Medical premiums 1,356 2,395 3,116 5,257 ----- ----- ----- ----- Total revenues 1,701 4,512 3,461 10,797 Expenses Medical expenses 1,300 2,267 3,029 4,790 Marketing, general and administrative 1,524 3,692 3,118 7,331 Depreciation and amortization 40 56 80 117 Loss on disposal of fixed assets - 135 - 135 --- --- --- --- Total expenses 2,864 6,150 6,227 12,373 ----- ----- ----- ------ Operating loss (1,163) (1,638) (2,766) (1,576) Interest and other income 36 274 76 482 --- --- --- --- Loss before income tax (1,127) (1,364) (2,690) (1,094) ------ ------ ------ ------ Income tax expense - - - 80 --- --- --- --- Net loss $(1,127) $(1,364) $(2,690) $(1,174) ======= ======= ======= ======= Net loss per common share – basic and diluted Net loss per common share $(0.14) $(0.16) $(0.33) $(0.13) ====== ====== ====== ====== Weighted average shares outstanding 8,138 8,728 8,138 8,731 ===== ===== ===== ===== United American Healthcare Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, June 30, 2009 2009 ------------ --------- (Unaudited) Assets Current assets Cash and cash equivalents $11,837 $13,100 Marketable securities - 4,475 Accounts receivable – State of Tennessee, net 358 39 Other receivables 267 1,419 Prepaid expenses and other 127 215 --- --- Total current assets 12,589 19,248 Property and equipment, net 54 134 Marketable securities – restricted 2,370 2,370 Other assets 486 486 --- --- Total assets $15,499 $22,238 ======= ======= Liabilities and Shareholders' Equity Current liabilities Medical claims payable $1,591 $2,160 Accounts payable and accrued expenses 1,043 1,228 Accrual for legal settlement - 3,250 Accrued compensation and related benefits 297 388 Other current liabilities 15 57 --- --- Total current liabilities 2,946 7,083 Total liabilities 2,946 7,083 Commitments and contingencies Shareholders' equity Preferred stock, 5,000,000 shares authorized; none issued. - - Common stock, no par, 15,000,000 shares authorized 8,137,903 issued and outstanding at both December 31, 2009 and June 30, 2009 17,684 17,684 Additional paid in capital-stock options 1,617 1,480 Additional paid in capital-warrants 444 444 Accumulated deficit (7,134) (4,444) Accumulated other comprehensive loss, net of tax (58) (9) --- --- Total shareholders' equity 12,553 15,155 ====== ====== Total liabilities and shareholders' equity $15,499 $22,238 ======= =======
SOURCE United American Healthcare Corporation
|SOURCE United American Healthcare Corporation|
Copyright©2010 PR Newswire.
All rights reserved