|
First Health Reports Record Fourth Quarter and Year End Results
FOR IMMEDIATE RELEASE
Contact: James C. Smith, Chairman and CEO
or
Joseph E. Whitters, CFO
First Health Group Corp.
630-737-7511
DOWNERS GROVE, Illinois, February 20, 2001 - James C. Smith,
Chairman and Chief Executive Officer of First Health Group
Corp. (NASDAQ: FHCC ), announced today the results of operations
for the fourth quarter and year ended December 31, 2000.
Diluted earnings per share (EPS) and net income for the three
months ended December 31, 2000 increased 19% to $.43 or $21,721,000
compared with $.36 or $17,618,000 during the same period last
year. Diluted earnings per share and net income for the twelve
months ended December 31, 2000 increased 22% to $1.66 or $82,619,000
compared with $1.36 or $69,297,000 during the same period
last year. Revenues for the three months and twelve months
ended December 31, 2000 increased 16% to $130,317,000 from
$112,281,000 and 11% to $506,741,000 from $458,493,000, respectively,
during the same periods last year.
Mr. Smith commented that the strong results in the fourth
quarter capped off a superb year in 2000 which was led by
22% growth in our PPO revenue. The record results generated
over $150 million in free cash flow that allowed the Company
to pay down approximately $113 million of debt during the
year as well as repurchase $47 million of stock. Mr. Smith
also noted that he looks forward to building on this strong
showing in 2001 and beyond. Currently the Company estimates
revenue in 2001 of approximately $560 million and EPS of $1.95.
First Health, the nation's premier full-service 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 website at http://www.firsthealth.com.
Certain statements herein regarding anticipated financial
results for fiscal 2000 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) achieve the
improved operating results that are anticipated with the recent
completion of the consolidation and rationalization of the
Company's commercial claims processing business, (iv) achieve
the growth in the group health area that is anticipated as
a result of the Company's strategy of focusing on larger,
multi-sited national employers, or (v) control healthcare
benefit expenses. 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
December 31, |
|
Twelve Months Ended
December 31, |
| |
|
2000 |
1999 |
% Increase (Decrease) |
|
2000 |
1999 |
% Increase (Decrease) |
| Revenues |
|
130,317 |
$112,281 |
16% |
|
506,741 |
$458,493 |
11% |
| Operating Expenses: |
|
|
|
|
|
|
|
|
| Cost of Services |
|
57,538 |
52,079 |
10% |
|
225,783 |
215,480 |
5% |
| Selling and Marketing |
|
12,631 |
11,144 |
13% |
|
48,377 |
45,588 |
6% |
| General and Administrative |
|
8,436 |
8,718 |
(3)% |
|
34,201 |
36,549 |
(6)% |
| Healthcare Benefits |
|
3,899 |
110 |
3,445% |
|
13,044 |
6,192 |
111% |
| |
|
82,504 |
72,051 |
15% |
|
321,405 |
303,809 |
6% |
| |
|
|
|
|
|
|
|
|
| Operating Income |
|
47,813 |
40,230 |
19% |
|
185,336 |
154,684 |
20% |
| |
|
|
|
|
|
|
|
|
| Depreciation and Amortization |
|
10,024 |
7,702 |
30% |
|
38,389 |
29,445 |
30% |
| |
|
|
|
|
|
|
|
|
| Interest Income |
|
(1,775) |
(1,331) |
33% |
|
(6,639) |
(6,293) |
5% |
| Interest Expense |
|
3,059 |
4,078 |
(25)% |
|
14,731 |
15,017 |
(2)% |
| Income Before Income Taxes |
|
36,505 |
29,781 |
23% |
|
138,855 |
116,515 |
19% |
| Income Taxes |
|
(14,784) |
(12,163) |
22% |
|
(56,236) |
(47,218) |
19% |
| Net Income |
|
$21,721 |
$17,618 |
23% |
|
$82,619 |
$69,297 |
19% |
| Weighted Average |
|
|
|
|
|
|
|
|
| Shares Outstanding - Basic |
|
47,790 |
48,042 |
(1)% |
|
47,849 |
50,270 |
(5)% |
| Net Income Per |
|
|
|
|
|
|
|
|
| Common Share - Basic |
|
$.45 |
$.37 |
22% |
|
$1.73 |
$1.38 |
25% |
| Weighted Average |
|
|
|
|
|
|
|
|
| Shares Outstanding - Diluted |
|
50,034 |
49,321 |
1% |
|
49,870 |
51,003 |
(2)% |
| Net Income Per |
|
|
|
|
|
|
|
|
| Common Share - Diluted |
|
$.43 |
$.36 |
19% |
|
$1.66 |
$1.36 |
22% |
| First Health Group Corp. |
| (000's Omitted Except Percentages) |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
December 31, |
|
Twelve Months Ended
December 31, |
| |
|
2000 |
1999 |
% Increase (Decrease) |
|
2000 |
1999 |
% Increase (Decrease) |
| Revenue Information: |
|
|
|
|
|
|
|
|
| PPO Services |
|
$70,818 |
$56,390 |
26% |
|
$272,196 |
$223,143 |
22% |
| Claims Administration |
|
39,875 |
38,008 |
5% |
|
152,901 |
158,388 |
(3)% |
| Clinical Management Services |
|
7,424 |
7,715 |
(4)% |
|
31,715 |
33,768 |
(6)% |
| Fee Schedule Services |
|
8,859 |
7,858 |
13% |
|
36,848 |
33,062 |
11% |
| Premiums |
|
3,283 |
1,929 |
70% |
|
12,175 |
7,673 |
59% |
| Service |
|
58 |
381 |
(85)% |
|
906 |
2,459 |
(63)% |
| Total Revenue |
|
$130,317 |
$112,281 |
16% |
|
$506,741 |
$458,493 |
11% |
Summary Balance Sheet Information:
| |
|
|
December 31, |
December 31, |
| |
|
|
2000 |
1999 |
| Cash and Investments |
|
|
$127,582 |
$128,596 |
| Accounts Receivable |
|
|
57,137 |
59,482 |
| Reinsurance Recoverable |
|
|
31,282 |
52,512 |
| Fixed Assets |
|
|
155,717 |
128,012 |
| Goodwill |
|
|
89,975 |
93,629 |
| Other Assets |
|
|
29,903 |
26,503 |
| Total Assets |
|
|
$491,596 |
$488,734 |
| |
|
|
|
|
| Claims Reserves |
|
|
41,228 |
$61,438 |
| Long-Term Debt |
|
|
127,500 |
240,000 |
| Other Liabilities |
|
|
141,455 |
100,564 |
| Stockholders' Equity |
|
|
181,413 |
86,732 |
| Total Liabilities and |
|
|
|
|
| Stockholders' Equity |
|
|
$491,596 |
$488,734 |
|
