First
Health Reports Record Fourth Quarter and Year End Results
Contact: Edward L. Wristen, CEO and President
or
Joseph E. Whitters, CFO
First Health
630-737-7511
FOR IMMEDIATE RELEASE
DOWNERS GROVE, IL, February 19, 2002 - Edward L. Wristen,
Chief Executive Officer and President of First Health Group
Corp. (NASDAQ: FHCC), announced today the results of
operations for the fourth quarter and year ended December
31, 2001, which includes the results from the Company’s acquisition
of CCN Managed Care effective August 16, 2001.
Diluted earnings per share (EPS) and net income for the three
months and twelve months ended December 31, 2001 increased
18% to $.26 or $26.8 million and 20% to $1.00 or $102.9 million,
respectively, compared with $.22 or $21.7 million and $.83
or $82.6 million, respectively, during the same periods last
year. Revenues for the three months and twelve months
ended December 31, 2001 increased 27% to $165.0 million from
$130.3 million and 17% to $593.1 million from $506.7 million,
respectively, during the same periods last year.
Mr. Wristen commented that he is extremely pleased with the
strong results for the fourth quarter and the year.
The Company ended the year with continued strong growth in
the PPO business. Mr. Wristen also noted that the integration
of CCN Managed Care continued to progress on plan. 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 and existing 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 consolidation and rationalization
of the Company’s commercial claims processing business, (iv)
control healthcare benefit expenses, (v) achieve operation
and cost synergies anticipated as a result of the CCN acquisition,
or (vi) 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
December 31, |
|
Twelve Months Ended
December 31, |
| |
|
2001 |
2000 |
% Increase (Decrease) |
|
2001 |
2000 |
% Increase (Decrease) |
| Revenues |
|
$164,968 |
$130,317 |
27% |
|
$593,108 |
$506,741 |
17% |
| Operating Expenses: |
|
|
|
|
|
|
|
|
| Cost of Services |
|
74,992 |
57,538 |
30% |
|
261,985 |
225,783 |
16% |
Selling and
Marketing |
|
17,089 |
12,631 |
35% |
|
58,416 |
48,377 |
21% |
General and
Administrative |
|
11,842 |
8,436 |
40% |
|
39,598 |
34,201 |
16% |
Healthcare
Benefits |
|
3,073 |
3,899 |
(21)% |
|
13,293 |
13,044 |
2% |
| |
|
106,996 |
82,504 |
30% |
|
373,292 |
321,405 |
16% |
| |
|
|
|
|
|
|
|
|
| Operating Income |
|
57,972 |
47,813 |
21% |
|
219,816 |
185,336 |
19% |
| |
|
|
|
|
|
|
|
|
| Depreciation and Amortization |
|
12,564 |
10,024 |
25% |
|
46,527 |
38,389 |
21% |
| |
|
|
|
|
|
|
|
|
| Interest Income |
|
(1,552) |
(1,775) |
(13)% |
|
(6,844) |
(6,639) |
3% |
| Interest Expense |
|
1,868 |
3,059 |
(39)% |
|
7,152 |
14,731 |
(51)% |
| Income Before Income Taxes |
|
45,092 |
36,505 |
24% |
|
172,981 |
138,855 |
25% |
| Income Taxes |
|
(18,265) |
(14,784) |
24% |
|
(70,061) |
(56,236) |
25% |
| Net Income |
|
$26,827 |
$21,721 |
24% |
|
$102,920 |
$82,619 |
25% |
| Weighted Average |
|
|
|
|
|
|
|
|
Shares
Outstanding
-
Basic |
|
99,698 |
95,580 |
4% |
|
98,333 |
95,698 |
3% |
| Net Income Per |
|
|
|
|
|
|
|
|
Common Share
- Basic |
|
$.27 |
$.23 |
17% |
|
$1.05 |
$.86 |
22% |
| Weighted Average |
|
|
|
|
|
|
|
|
Shares
Outstanding
-
Diluted |
|
104,343 |
100,068 |
4% |
|
103,055 |
99,740 |
3% |
| Net Income Per |
|
|
|
|
|
|
|
|
Common Share
- Diluted |
|
$.26 |
$.22 |
18% |
|
$1.00 |
$.83 |
20% |
| First Health Group Corp. |
| (000's Omitted Except Percentages) |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
December 31, |
|
Twelve Months Ended
December 31, |
| |
|
2001 |
2000 |
% Increase (Decrease) |
|
2001 |
2000 |
% Increase (Decrease) |
| Revenue Information: |
|
|
|
|
|
|
|
|
| PPO Services |
|
$102,017 |
$70,818 |
44% |
|
$346,944 |
$272,196 |
27% |
Claims
Administration |
|
42,038 |
39,933 |
5% |
|
167,905 |
153,807 |
9% |
Fee Schedule
Services |
|
10,208 |
8,859 |
15% |
|
35,262 |
36,848 |
(4)% |
Clinical
Management
Services |
|
7,147 |
7,424 |
(4)% |
|
28,325 |
31,715 |
(11)% |
| Premiums |
|
3,558 |
3,283 |
8% |
|
14,672 |
12,175 |
21% |
| Total Revenue |
|
$164,968 |
$130,317 |
27% |
|
$593,108 |
$506,741 |
17% |
Summary Balance Sheet Information:
| |
|
|
December 31, |
December 31, |
| Assets |
|
|
2001 |
2000 |
| Cash and Investments |
|
|
$137,353 |
$127,582 |
| Accounts Receivable |
|
|
78,793 |
57,137 |
| Assets Held for Sale |
|
|
6,958 |
-- |
| Reinsurance Recoverable |
|
|
27,068 |
31,282 |
| Fixed Assets |
|
|
182,509 |
155,717 |
| Goodwill |
|
|
255,855 |
89,975 |
| Intangible Assets |
|
|
42,859 |
-- |
| Deferred Taxes |
|
|
27,429 |
16,480 |
| Other Assets |
|
|
21,910 |
13,423 |
| Total Assets |
|
|
$780,734 |
$491,596 |
| |
|
|
|
|
| Liabilities: |
|
|
|
|
| Accounts Payable |
|
|
33,257 |
31,727 |
| Accrued Expenses |
|
|
34,047 |
28,603 |
| Debt Outstanding |
|
|
197,500 |
127,500 |
| CCN Purchase Reserve |
|
|
32,337 |
-- |
| Deferred Taxes |
|
|
84,828 |
58,621 |
| Claims Reserves |
|
|
$38,448 |
$41,228 |
| Other Liabilities |
|
|
21,018 |
22,504 |
| Total Liabilities |
|
|
441,435 |
310,183 |
| Stockholders' Equity: |
|
|
339,299 |
181.413 |
Total Liabilities and
Stockholders'
Equity |
|
|
$780,734 |
$491,596 |
|
