First Health Reports Record Results
Contact:
Edward L. Wristen, President and CEO
or
Joseph E. Whitters, CFO
First Health
630-737-7511
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FOR IMMEDIATE RELEASE
DOWNERS GROVE, Illinois, April 29, 2002 - Edward L. Wristen,
President and Chief Executive Officer of First Health Group
Corp. (NASDAQ: FHCC), announced today the results of operations
for the first quarter ended March 31, 2002.
Diluted earnings per share (EPS) and net income for the three
months ended March 31, 2002 increased 25% to $.30 or $31.0
million, compared with $.24 or $24.4 million, during the same
period last year. Revenue for the three months ended March
31, 2002 increased 24% to $169.4 million from $137.0 million,
from the same period last year.
Mr. Wristen commented that the first quarter has started
out very strong and we are on track to have another record
year. The Company continued strong growth in the PPO business
helped by the addition of new clients January 1. Mr. Wristen
also noted that the integration of CCN Managed Care continued
to progress well. The realization of expense synergies improved
EBITDA margins to 37.9% for the quarter from 35.1% in the
fourth quarter of 2001. Additionally, Mr. Wristen noted that
he expects continued strong growth in 2002 as the Company
currently estimates revenue of approximately $700 million
and EPS of $1.25.
First Health, the nation's premier full-service national
health benefits company, specializes in providing large employers
with one integrated source for group health and workers' compensation.
By combining pioneering technology with expert industry knowledge,
First Health delivers comprehensive, cost-effective solutions
for its clients nationally. For more information, visit the
company web site at www.firsthealth.com.
Certain statements herein regarding anticipated financial
results for 2002 and the Company's business prospects are
forward-looking statements that involve substantial risks
and uncertainties. In accordance with the Private Securities
Litigation Reform Act of 1995, factors that could cause the
Company's actual results to differ materially from those expressed
or implied by such forward-looking statements include, among
others, the inability of the Company to continue to: (i) enter
into contracts with and successfully implement programs for
new clients within the time frame established by the Company
and achieve the revenue growth expected to result from the
addition of such clients, (ii) expand its group health, workers'
compensation and public sector business, (iii) control healthcare
benefit expenses, (iv) achieve operation and cost synergies
anticipated as a result of the CCN acquisition, or (v) add
CCN's contracted providers to the First Health Medical Network
on a timely basis. All forward-looking statements herein are
made as of the date hereof and the Company undertakes no obligation
to update such statements.
| First Health
Group Corp. |
| (000's Omitted
Except EPS and Percentages) |
| (Unaudited) |
| |
|
|
|
|
| |
|
Three Months Ended March
31, |
| |
|
2002 |
2001 |
% Increase (Decrease) |
| Revenues |
|
$169,361 |
$136,984 |
24% |
| Operating Expenses: |
|
|
|
|
| Cost of Services |
|
72,972 |
59,737 |
22% |
| Selling and Marketing |
|
17,078 |
12,944 |
32% |
| General and Administrative |
|
11,393 |
8,370 |
36% |
| Healthcare Benefits |
|
3,781 |
3,703 |
2% |
| |
|
105,224 |
84,754 |
24% |
| |
|
|
|
|
| Operating Income |
|
64,137 |
52,230 |
23% |
| |
|
|
|
|
| Depreciation and Amortization |
|
12,972 |
10,602 |
22% |
| Interest Income |
|
(1,628) |
(1,851) |
(12)% |
| Interest Expense |
|
1,316 |
2,471 |
(47)% |
| Income Before Income Taxes |
|
51,477 |
41,008 |
26% |
| Income Taxes |
|
(20,463) |
(16,608)
|
23% |
|
|
|
|
|
| Net Income |
|
$31,014 |
$24,400 |
27% |
|
|
|
|
|
| Weighted Average |
|
|
|
|
| Shares Outstanding - Basic |
|
100,257 |
96,726 |
4% |
| Net Income Per |
|
|
|
|
| Common Share - Basic |
|
$.31 |
$.25 |
24% |
| Weighted Average |
|
|
|
|
| Shares Outstanding - Diluted |
|
104,443 |
101,698 |
3% |
| Net Income Per |
|
|
|
|
| Common Share - Diluted |
|
$.30 |
$.24 |
25% |
| First Health Group Corp. |
| (000's Omitted Except EPS
and Percentages) |
| (Unaudited) |
| |
|
|
|
|
| |
|
Three Months Ended March 31, |
| |
|
2002 |
2001 |
% Increase (Decrease) |
| Revenue Information: |
|
|
|
|
| Sources of Revenue: |
|
|
|
|
| PPO Services |
|
$104,921 |
$75,711 |
39% |
| Claims Administration |
|
43,820 |
41,545 |
5% |
| Fee Schedule Services |
|
10,031 |
8,754 |
15% |
| Clinical Management Services |
|
6,579 |
7,087 |
(7)% |
| Premiums |
|
4,010 |
3,887 |
3% |
|
|
|
|
|
| Total Revenue |
|
$169,361 |
$136,984 |
24% |
Summary Balance Sheet Information:
| |
|
|
March 31, |
December 31, |
| |
|
|
2002 |
2001 |
Assets:
Cash and Investments |
|
|
$139,078 |
$137,353 |
| Accounts Receivable |
|
|
80,256 |
78,793 |
| Reinsurance Recoverable |
|
|
26,253 |
27,068 |
| Fixed Assets |
|
|
177,530 |
182,509 |
| Goodwill |
|
|
255,855 |
255,855 |
| Intangible Assets |
|
|
42,143 |
42,859 |
| Assets Held for Sale |
|
|
8,564 |
6,958 |
| Deferred Taxes |
|
|
27,463 |
27,429 |
| Other Assets |
|
|
14,267 |
21,910 |
| Total Assets |
|
|
$771,409 |
$780,734 |
Liabilities: |
|
|
|
|
| Claims Reserves |
|
|
$37,377 |
$38,448 |
| Debt Outstanding |
|
|
140,000 |
197,500 |
| Deferred Taxes |
|
|
84,645 |
84,828 |
| CCN Purchase Reserve |
|
|
30,556 |
32,337 |
| Accounts Payable |
|
|
35,925 |
33,257 |
| Accrued Expenses |
|
|
33,646 |
34,047 |
| Other Liabilities |
|
|
30,783 |
21,018 |
| Total Liabilities |
|
|
392,932 |
441,435 |
Stockholders' Equity: |
|
|
378,477 |
339,299 |
Total Liabilities and
Stockholders' Equity |
|
|
$771,409 |
$780,734 |
|
