NEW YORK, March 29, 2006 (PRIMEZONE) -- Aveta Inc., one of the largest companies focusing on Medicare Advantage and a leader in addressing the healthcare needs of the chronically ill, reported today pro forma full-year revenues for 2005 of $938.2 million, an increase of 51.4% over pro forma revenues of $619.6 million in 2004. Pro forma earnings before interest, taxes, depreciation and amortization (EBITDA) grew 143.3% to $110.2 million in 2005, compared to pro forma EBITDA of $45.3 million in 2004. Aveta's membership base of enrolled Medicare beneficiaries grew 31.3% during 2005 to 130,543 at year's end.
Pro forma premium revenues from the company's core managed care businesses, which focus on meeting the healthcare needs of seniors and the chronically ill, totaled $905.7 million in 2005, accounting for more than 95% of the company's total revenues and representing 53% growth compared to the prior year. Pro forma medical costs totaled $725.4 million in 2005, representing a medical loss ratio of 80.1%, compared to a pro forma medical loss ratio of 83.6% in 2004. Pro forma administrative expenses were $103.6 million in 2005, representing an administrative expense ratio of 11.0%, as compared to a pro forma administrative expense ratio of 12.7% in 2004.
"2005 was a year of dynamic growth for Aveta as the number of seniors in plans provided or managed by our operating companies in Puerto Rico, California and Illinois grew by more than 30% while our range of plan offerings and medical management services continued to expand," said Timothy J. O'Donnell, President and Chief Executive Officer of Aveta. "On a pro forma basis, medical loss and administrative expense ratios improved, reflecting higher reimbursements and Aveta's strong focus on its core competency of community medical management, an innovative approach to integrating healthcare prevention and treatment at the local level. We credit that approach for the strong acceptance of Aveta's MMM subsidiary, Puerto Rico's largest provider of Medicare Advantage services. MMM received a 100th percentile overall rating in customer satisfaction in the annual survey of Medicare Advantage plan customers conducted by the Centers for Medicare and Medicaid Services (CMS).
"We also took a number of steps that will position Aveta for future growth," he said. "In December, Aveta successfully completed a 144A private placement of 28.8 million shares of common stock to institutional investors, generating $389 million of proceeds. A portion of the proceeds of the offering were used to repay $165 million in company debt. The issuance of equity and reduction in debt resulted in upgrades of our credit ratings by Moody's and Standard & Poor's.
"During the year, we received approvals from CMS to offer three Special Needs Plans (SNPs) in 2006, including chronic special needs plans in Puerto Rico and Illinois and a dual-eligibles special needs plan in Puerto Rico. A number of senior appointments in late 2005 and early 2006, including those of CFO and COO, will ensure that Aveta has the talent and management bandwidth to continue to build its existing businesses and seek new opportunities going forward."
About Aveta Inc.
Aveta is one of the largest companies focusing on Medicare Advantage and a leader in addressing the unique healthcare needs of the chronically ill. Caring for over 130,000 Medicare beneficiaries, Aveta is the 5th largest for-profit Medicare Advantage enterprise, and operates more Chronic SNPs than any other company. Aveta has a successful track record of managing care for seniors achieved through its core competency of community medical management. Aveta is headquartered in Fort Lee, New Jersey and currently has operating subsidiaries in Southern California, Puerto Rico, and Illinois.
AVETA INC. AND SUBSIDIARIES
Condensed Proforma Statements of Income(1)
Pro Forma Results
($ in 000s) Year Ended December 31,
2005 2004
-------- --------
Premium revenue $905,700 $591,800
Management fees & other 26,900 25,700
Investment income 5,600 2,100
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Total Revenue $938,200 $619,600
-------- --------
Medical costs 725,400 495,000
Selling, general and administrative 103,600 78,500
Depreciation & amortization 16,361 3,400
-------- --------
Total Operating Expenses $845,361 $576,900
-------- --------
Operating income 92,839 42,700
Interest expense 34,222 1,400
Restructuring charges 3,061 1,600
Incentive interest compensation
charges 6,519 0
Minority interests 1,800 800
-------- --------
Pre-tax Income $ 47,237 $ 38,900
Taxes 35,100 7,100
-------- --------
Net income $ 12,137 $ 31,800
-------- --------
Other Operating and
Financial Information:
Membership (in 000s)
Senior 130.5 99.1
Commercial 208.0 214.0
EBITDA $110,200 $ 45,300
Medical Loss Ratio 80.1% 83.6%
Administrative Cost Ratio 11.0% 12.7%
Total Cash and Investments $106,000 $ 93,500
Total Assets $498,800 $338,200
Total Debt $287,000 $144,800
Shareholders' Equity $ 38,200 $ 72,300
Note 1: The financial information was prepared on a pro forma
basis as if Aveta Inc. owned all of its operating subsidiaries
for the entire years of 2004 and 2005. MMM Healthcare of
Puerto Rico was acquired by Aveta in November 2004. NAMM
California and NAMM Illinois were acquired by Aveta in
August 2005.
Note 2: Interest expense in 2005 includes $10.6 of one-time costs
associated with the refinancing in August, 2005 (discount on
prior seller notes, prior debt issuance costs, and prepayment
penalties)
Note 3: EBITDA reflects net income with the following items added
back: interest expense, taxes, depreciation and amortization,
noncash compensation charges, restructuring charges, and
certain management fees. Approximately $2.8 of such items are
included in SG&A costs which are being added back to EBITDA
in 2005.
AVETA, INC. AND SUBSIDIARIES
(Formerly known as Aveta Holdings, LLC and Green Field, II, LLC)
CONSOLIDATED BALANCE SHEETS
As of December 31, 2005 and September 30, 2005
(In thousands)
Dec. 31, Sept. 30,
2005 2005
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 67,135 $ 192,253
Investments 38,930 69,538
--------- ---------
Total cash and investments 106,065 261,791
--------- ---------
Premiums receivable, net 48,271 34,826
Deferred income tax 2,241 0
Prepaid expenses and other
current assets 4,760 2,209
--------- ---------
Total current assets $ 161,337 $ 298,826
Property and equipment, net 8,093 7,017
Goodwill 218,955 216,808
Other intangible assets, net 99,483 103,305
Debt issue costs 8,734 9,034
Other assets 2,166 2,142
--------- ---------
Total assets $ 498,768 $ 637,132
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Liabilities and Stockholders'
Equity and Members' Equity
Current liabilities:
Medical claims liabilities $ 91,559 $ 92,868
Accounts payable and accrued
expenses 26,626 18,990
Current maturities of long-term
debt 4,200 4,200
Income taxes payable 11,403 4,905
Unearned premiums -- 50,297
Due to Aveta Health 4,315 4,544
Other current liabilities -- 1,588
--------- ---------
Total current liabilities $ 138,103 $ 177,392
Long-term debt, excluding current
installments 282,800 446,300
Deferred income taxes 38,096 36,271
--------- ---------
Total liabilities $ 460,547 $ 659,963
--------- ---------
Minority interests 1,548 1,787
Stockholders' equity and
members' equity:
Preferred stock, par value $0.001 per
share, 5,000 shares authorized;
no shares issued and outstanding -- --
Common Stock, par value $0.001 per
share, 250,000 shares authorized,
88,000,000 shares issued and
outstanding at December 31, 2006 88 --
Additional paid in capital 167,426 --
Members interest -- (19,488)
Retained earnings -- --
Accumulated other comprehensive
income (56) 117
Less treasury stock at cost, 10,000
shares at December 31, 2005 (126,900) --
Unearned compensation (2,337) (5,247)
Total stockholders' equity and
members' equity (deficit) $ 38,221 ($ 24,618)
--------- ---------
Total liabilities, minority interest,
and stockholders' equity and
members' equity $ 498,768 $ 637,132
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