Aveta Reports 2006 Third Quarter Results

Membership Up 54 Percent; Third Quarter Earnings of $0.07 Per Share


NEW YORK, Nov. 28, 2006 (PRIME NEWSWIRE) -- Aveta Inc., a leader in Medicare Advantage and in addressing the healthcare needs of the chronically ill, reported today that revenues for the third quarter of 2006 totaled $501.8 million, an increase of 86.5% over pro forma revenues of $269.1 million for the third quarter of 2005. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 20.3% to $35.1 million in Q3 2006, compared to pro forma EBITDA of $29.2 million in Q3 2005. Adjusted third quarter earnings were $0.13 per share excluding stock option expense. Net income for the quarter was $5.8 million or $0.07 per share which includes $0.06 per share for stock option expense. Aveta's membership base of enrolled Medicare beneficiaries stood at 229,200 as of the end of the third quarter of 2006, up 54% from the corresponding pro forma figure for the third quarter of 2005.

For the first nine months of 2006, revenues totaled $1,400.2 million, up 86.6% from pro forma revenues of $750.4 million for the first nine months of 2005. Year-to-date 2006 EBITDA totaled $146.3 million, an increase of 73.0% over pro forma EBITDA of $84.6 million for the first nine months of 2005. Adjusted earnings for the first nine months of 2006 were $0.93 per share, excluding stock option expenses. Earnings per share including stock option expense totaled $0.84 per share on net income of $65.5 million for the first nine months of 2006.

Premium revenues from the company's core managed care businesses, which focus on meeting the healthcare needs of seniors and the chronically ill, totaled $492.3 million in the third quarter of 2006, up 88.5% over the corresponding pro forma figure for the third quarter of 2005. Premium revenues accounted for more than 98% of the company's total revenues. For the first nine months of 2006, premium revenues reached $1,370.3 million, an increase of 88.8% from pro forma premium revenues of $725.8 million for the corresponding period of 2005.

Medical costs totaled $421.7 million for the quarter, representing a medical loss ratio of 85.7%, compared to a pro forma medical loss ratio of 79.9% in the third quarter of 2005. The higher medical loss ratio in the third quarter reflects increased medical costs and utilization trends in Puerto Rico. Year-to-date, the company's medical loss ratio stands at 80.5% for the first nine months of 2006, an increase from a pro forma medical loss ratio of 79.9% for the first nine months of 2005.

Administrative expenses were $52.8 million in the third quarter of 2006, representing an administrative expense ratio of 10.5%, compared to a pro forma administrative expense ratio of 12.3% in the third quarter of 2005. For the first nine months of 2006, Aveta's administrative expense ratio was 11.3%, compared to 11.8% for the first nine months of 2005.

"Puerto Rico continues to be the backbone of the company's strong growth even as Aveta's operations in California posted solid results for the quarter," said Daniel E. Straus, Chairman and Chief Executive Officer of Aveta. "During the third quarter, Aveta successfully closed on the acquisition of PMC Medicare Choice, which added an additional 72,000 members to our total in Puerto Rico and further strengthened our leadership position there. Through PMC Medicare Choice and our MMM subsidiary, Aveta now serves over 200,000 members in Puerto Rico. As we manage our rapid growth in Puerto Rico, we are developing new medical management program initiatives to address rising medical costs and provide cost efficient and continued high quality medical care to all of our beneficiaries. Puerto Rico exemplifies the effectiveness of Aveta's community based medical management approach, which integrates preventative healthcare and treatment at the local level and enhances our ability to deliver quality care to seniors and the chronically ill."

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 more than 229,200 Medicare beneficiaries, Aveta is the 3rd largest for-profit Medicare Advantage enterprise and 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 Puerto Rico, Southern California, and Illinois.


                       AVETA INC. AND SUBSIDIARIES
                   Condensed Statements of Income (a)
                                Unaudited

 ($ in 000s)        Quarter Ended September 30,   YTD September 30,
                        2006       2005          2006        2005
                      Pro Forma  Pro Forma     Pro Forma   Pro Forma
                      ---------  ---------     ----------  ---------
 Premium revenue       $492,314   $261,241     $1,370,266   $725,750
 Management fees &
  other                   6,444      6,797         22,143     21,681
 Investment income        3,045      1,076          7,774      2,985
                      ---------  ---------     ----------  ---------
 Total Revenue         $501,803   $269,114     $1,400,183   $750,416
                      ---------  ---------     ----------  ---------
 Medical costs          421,706    208,790      1,103,663    579,583
 Selling, general and
  administrative         52,837     33,028        157,637     88,268
 Depreciation &
  amortization            6,583      4,530         16,073     12,438
                      ---------  ---------     ----------  ---------
 Total Operating
  Expenses             $481,126   $246,348     $1,277,373   $680,289
                      ---------  ---------     ----------  ---------
 Operating income        20,677     22,766        122,810     70,127
 Interest expense         8,339     16,235         19,910     23,448
 Stock option and
  related expense         7,299        314         12,048        942
 Minority interests         391        506          1,413      1,487
                      ---------  ---------     ----------  ---------
 Pre-tax Income          $4,648     $5,711        $89,439    $44,250
 Taxes                   (1,146)     5,507         23,914     25,125
                      ---------  ---------     ----------  ---------
 Net income              $5,794       $204        $65,525    $19,125
                      =========  =========     ==========  =========
 Other Operating and
  Financial Information:
 Membership  (in 000s)
 Senior                   229.2      148.8          229.2      148.8
 Commercial               194.2      207.0          194.2      207.0
 EBITDA (b)             $35,148    $29,226       $146,284    $84,566
 Medical Loss Ratio        85.7%      79.9%          80.5%      79.9%
 Administrative Cost
  Ratio                    10.5%      12.3%          11.3%      11.8%
 Total Cash and
  Investments          $239,512   $261,791       $239,512   $261,791
 Total Assets          $910,037   $637,132       $910,037   $637,132
 Total Debt            $482,575   $450,500       $482,575   $450,500
 Shareholders' Equity   $72,815   ($24,618)       $72,815   ($24,618)
 Earnings per
  share-Diluted           $0.07        N/A          $0.84        N/A
 Adjusted Earnings per
  share-Diluted (c)       $0.13        N/A          $0.93        N/A
 Outstanding
  shares-Diluted         78,168        N/A         78,061        N/A

 Note (a): The Proforma Statements of Income for 2006 and 2005 were
 prepared on a pro forma basis as if Aveta Inc. owned all of its
 operating subsidiaries for both years. NAMM California and NAMM
 Illinois were acquired by Aveta in August 2005. PMC Medicare Choice
 and PHM were acquired by Aveta in August 2006. The Balance Sheet
 information reflects the Aveta, Inc. September 30, 2006 and 2005
 unaudited Balance Sheets.

 Note (b): EBITDA reflects net income with the following items added
 back: interest expense, taxes, depreciation and amortization, noncash
 stock options and related charges and restructuring charges included
 in selling, general and administrative expenses. Restructuring
 charges were $3,179 and $2,436 for the quarters ended September 30,
 2006 and 2005 respectively, and $3,714 and $3,488 for the years to
 date ended September 30, 2006 and 2005 respectively. EBITDA for the
 2006 periods includes a $5,100 addition for a Medicaid revenue
 reduction booked in the third quarter of 2006 attributable to 2004
 and 2005 prior periods.

 Note (c): 2006 Adjusted Earnings per Share is prior to noncash stock
 option related expense of $7,299 pre-tax, or $4,379 after tax for the
 quarter ended September 30, 2006 and expense of $12,048 pre-tax, or
 $7,229 after tax for the YTD ended September 30, 2006.




                     AVETA, INC. AND SUBSIDIARIES
   (Formerly known as Aveta Holdings, LLC and Green Field, II, LLC)
                      CONSOLIDATED BALANCE SHEETS
            As of September 30, 2006 and December 31, 2005

                            (In thousands)

                                    Sept. 30, 2006     Dec. 31, 2005
                                    --------------     -------------
                                      Unaudited

 Assets
 Current assets:
  Cash and cash equivalents           $145,856             $67,135
  Investments                           93,656              38,930
                                      --------            --------
  Total cash and investments           239,512             106,065
 Premiums receivable, net              110,914              48,271
 Deferred income taxes                   8,149               2,241
 Prepaid expenses and other
  current assets                        12,393               4,760
                                      --------            --------
   Total current assets               $370,968            $161,337
 Property and equipment, net            12,550               8,093
 Goodwill                              393,562             218,955
 Other intangible assets, net          119,198              99,483
 Debt issue costs, net                  11,015               8,734
 Other assets                            2,744               2,166
                                      --------            --------
   Total assets                       $910,037            $498,768
                                      ========            ========
 Liabilities and Stockholders' Equity
  and Members' Equity
 Current liabilities:
  Medical claims liabilities          $178,695             $91,559
  Accounts payable and accrued
   expenses                             70,023              30,941
  Current maturities of
   long-term debt                        4,468               4,200
  Income taxes payable                   7,908              11,403
  Risk Sharing Payable                  28,683                  --
  Reinsurance Payable                   22,659                  --
                                      --------            --------
   Total current liabilities          $312,436            $138,103
 Long-term debt, excluding current
  installments                         478,107             282,800
 Deferred income taxes                  45,760              38,096
 Minority interests                        919               1,548
                                      --------            --------
   Total liabilities                  $837,222            $460,547
                                      --------            --------
 Stockholders' equity and members'
  equity:
  Preferred stock, par value $0.001
   per share, 5,000,000 shares
   authorized; 0 shares issued and
   outstanding                              --                  --
  Common Stock, par value $0.001 per
   share, 250,000,000 shares authorized,
   91,779,775 and 88,000,000 shares
   issued and outstanding at
   September 30, 2006 and
   December 31, 2005 respectively           92                  88
  Additional paid in capital           220,726             166,712
  Retained earnings                     26,790                (885)
  Accumulated other comprehensive
   income                                 (305)                (56)
  Less treasury stock at cost,
   13,750,000 and 10,000,000 shares at
   September 30, 2006 and
   December 31, 2005, respectively    (174,488)           (126,900)
  Unearned compensation                     --                (738)
                                      --------            --------
   Total stockholders' equity and
    members' equity (deficit)          $72,815             $38,221
                                      --------            --------
   Total liabilities, minority
    interest, and stockholders'
    equity and members' equity        $910,037            $498,768
                                      ========            ========

            

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