NEW YORK, May 19, 2009 (GLOBE NEWSWIRE) -- Aveta Inc., a leader in Medicare Advantage and healthcare management, today reported unaudited first quarter results for the period ended March 31, 2009.
For the first quarter of 2009, the Company reported revenues of $549.6 million, up 13.4% from $484.7 million in the first quarter of 2008. Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) totaled $76.5 million for the quarter, up 38.4% from $55.2 million in the first quarter of 2008. The increase in EBITDA was largely driven by increased premium revenues and a decrease in the Company's medical loss ratio (MLR) to 78.5% from 80.5% in the first quarter of 2008. Net income for the first quarter of 2009 rose to $37.5 million, up 83.7% from $20.4 million in the first quarter of 2008.
Premium revenues from the Company's core managed care businesses totaled $540.9 million in the first quarter of 2009, up 14.1% from the first quarter of 2008. Medicare beneficiaries enrolled in the Company's Medicare Advantage plans or serviced by medical practices managed and/or owned by the Company increased 9.8% during the quarter to 224,883 as of March 31, 2009, up from 204,825 as of March 31, 2008. Commercial members served by medical practices managed and/or owned by Aveta totaled 314,627 as of March 31, compared to 310,450 as of March 31, 2008.
Medical costs totaled $424.4 million in the first quarter of 2009, representing a medical loss ratio of 78.5%, compared to a medical loss ratio of 80.5% in the comparable prior period.
Administrative expenses of $48.7 million in the 2009 first quarter represented an administrative expense ratio of 8.9%, as compared to an administrative expense ratio of 9.9% in the 2008 first quarter.
"Despite challenging economic conditions, we continued to see strength across the board in our operations in California, Puerto Rico and Illinois," said Dr. Rick Shinto, President and Chief Executive Officer of Aveta. "The results reflect our clear focus on effective medical management, through our management services organizations and independent physician networks, and on delivering improved patient outcomes and quality of care while controlling medical costs."
Aveta Inc. Highlights
* The Company's Puerto Rico operations had a strong first quarter, growing membership to over 182,000 members, which represents a 46% market share in the Medicare Advantage segment. The Company's MSO division includes approximately 1,300 primary care physicians and over 130,000 members.
* On May 5th, the Company repaid approximately $26.6 million of debt, reducing overall debt to $311.1 million. In the past 18 months, Aveta has paid down approximately $166.6 million of debt.
About Aveta Inc.
Aveta Inc. is one of the largest health insurance organizations in the United States, which arranges for the care of, and/or owns or manages medical practices with, approximately 225,000 Medicare beneficiaries and 315,000 commercial members. Aveta specializes in building provider networks and management service organizations that emphasize integration and coordination of healthcare. Aveta is headquartered in Ft. Lee, New Jersey and has operations in Puerto Rico, California and Illinois.
The Aveta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2340
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security nor shall any offer, solicitation or sale be deemed to be made by the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Special note regarding forward-looking statements:
The matters disclosed in the foregoing release include, and oral statements made from time to time by representatives of the Company may include, forward-looking statements that represent the Company's current expectations of the future. Any such statements are subject to risks and uncertainties that could cause actual outcomes to differ materially from these expectations. These forward-looking statements include statements relating to the Company's anticipated financial performance and business prospects. These forward-looking statements are necessarily estimates reflecting the best judgment of senior management and involve a number of risks and uncertainties, some of which may be beyond our control, that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, without limitation, the Company's ability to implement its revised business plan and improve the operating performance of its business, membership enrollment and disenrollment patterns; changes in utilization; changes in medical and prescription drug cost trends; the Company's ability to accurately estimate and calculate Part D risk corridor adjustments; CMS retroactive risk adjustments to Medicare rates; marketing expenses related to limited open enrollment; increasing competition and potential confusion in the marketplace regarding other MA, MA-PD, PDP, and PFFS plan offerings; the Company's ability to accurately estimate incurred but not reported medical claims; contractual disputes with providers; increases in costs or liabilities associated with litigation; legislative and regulatory actions or changes; costs associated with information and data systems conversions and compliance with regulatory mandates; recent management changes; and changes in tax estimates, assets, or liabilities and valuation allowances related thereto. These forward-looking statements speak only as of the date stated and the Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized.
AVETA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
Three Months Ended
March 31, March 31,
2009 2008
--------- ---------
Premiums earned $ 540,909 $ 473,884
Management fees 7,452 7,585
Investment income 1,243 3,263
--------- ---------
Total Revenues 549,604 484,732
--------- ---------
Medical costs and claims 424,370 381,530
Selling, general and
administrative expenses 48,703 47,283
Noncash equity compensation
charges 2,002 1,057
Restructuring and other charges -- 271
Depreciation & amortization 6,821 6,178
Interest expense 6,631 9,948
--------- ---------
Total costs and expenses 488,527 446,267
--------- ---------
Income before income taxes and
minority interests 61,077 38,465
Provision for income taxes 23,559 17,401
Minority interests 48 671
--------- ---------
Net income $ 37,470 $ 20,393
--------- ---------
Other Operating and Financial
Information:
Membership (in 000s) (1)
Senior 224.9 204.8
Commercial 314.6 310.5
EBITDA (2) $76,483 $55,248
Medical Loss Ratio 78.5% 80.5%
Administrative Cost Ratio 8.9% 9.9%
Notes:
1) Membership includes Professional Risk, Full Risk and Managed
lives. Note that previously disclosed Membership did not include
Managed Lives.
2) EBITDA reflects net income with the following items added back:
interest expense, taxes, depreciation and amortization, noncash
equity compensation charges and restructuring and other charges.
CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)
March 31, Dec. 31,
2009 2008
-------- --------
Assets
Current assets:
Cash and cash equivalents $337,072 $362,005
Investments 75,168 36,973
-------- --------
Total cash and investments 412,240 398,978
Receivables, net 31,616 20,502
Deferred income taxes 10,205 9,342
Prepaid expenses and other current
assets 10,818 9,859
-------- --------
Total current assets 464,879 438,681
Investments held to maturity 3,500 3,500
Property and equipment, net 14,594 13,786
Goodwill 264,015 264,008
Other intangible assets, net 62,506 67,452
Debt issue costs, net 6,740 7,789
Other assets 9,454 2,546
-------- --------
Total assets $825,688 $797,762
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Liabilities and Stockholders' Equity
Current liabilities:
Medical claims liabilities $238,646 $260,657
Accounts payable and accrued expenses 86,760 52,585
Current maturities of long-term debt 3,511 57,356
Income taxes payable 46,291 20,959
Advanced Premiums 3,905 426
-------- --------
Total current liabilities 379,113 391,983
Long-term debt, less current
installments 334,279 335,153
Deferred income taxes 22,550 17,961
Other liabilities 2,910 5,163
-------- --------
Total liabilities 738,852 750,260
-------- --------
Stockholders' equity and members'
equity:
Preferred stock, par value $0.001
per share. Authorized 5,000,000
shares; none issued and outstanding -- --
Common Stock, Class A, par value
$0.001 per share. Authorized
250,000,000 shares, issued
92,116,301 and 92,099,113 shares
at March 31, 2009 and December 31,
2008 respectively, and outstanding
79,116,301 and 78,549,113 shares
at March 31, 2009 and December 31,
2008, respectively 92 92
Common Stock, Class B, par value
$0.001 per share. Authorized
3,000,000 shares, issued and
outstanding 635,356 shares at
March 31, 2009 and December 31,
2008 1 1
Additional paid-in capital 235,865 235,513
Retained earnings (accumulated
deficit) 22,807 (14,663)
Accumulated other comprehensive
income (125) 13
Less treasury stock at cost,
13,000,000 and 13,550,000 shares
at March 31, 2009 and December 31,
2008, respectively (171,804) (173,454)
-------- --------
Total stockholders' equity 86,836 47,502
-------- --------
Total liabilities and
stockholders' equity $825,688 $797,762
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