NWH Announces Fiscal 2004 Results and Plans for Substantial Growth
From ENS in Fiscal 2005 NEW YORK, Jan. 31 /PRNewswire-FirstCall/ --
NWH, Inc. (NASDAQ:NWIR), the parent company of Electronic Network
Systems, Inc. ("ENS"), today reported financial results for its
fiscal year ended October 31, 2004. NWH owns and operates ENS
(http://www.enshealth.com/), a payer services organization that
connects healthcare payers and providers using state of the art
proprietary software and telecommunications services for most
healthcare payment and insurance validation transactions. The
Company focuses its efforts on the development of ENS' business and
continues its business of acquiring and disposing of interests in
healthcare and other business areas. NWH's net revenues for the
fiscal year ended October 31, 2004 were $17,462,554, compared to
$13,396,673 in the prior fiscal year. NWH's reported net income for
fiscal 2004 was $800,662 (including $1,663,499 of Other Income) or
$.27 basic per share, as compared to net income of $440,029
(including $2,112,612 of Other Income), or $.15 per share basic, in
the prior fiscal year. Fully diluted earnings per share were $.27
and $.15, for the fiscal years ended October 31, 2004 and 2003,
respectively. Other Income consists primarily of gain or loss on
securities transactions, reflecting the net results of option and
short sale position and settlements and sale of Bell South Common
Stock. Further, unrealized gains and losses on Bell South Common
Stock are recorded through Other Comprehensive (Loss) Income and
are only recorded in the Statement of Income when realized upon
ultimate sale. The realized and unrealized gain on derivative
transactions increased from a gain of $583,687 for the year ended
October 31, 2003 to a loss of ($228,897) for the year ended October
31, 2004. The unrealized gain on Bell South Common Stock, reflected
in Other Comprehensive (Loss) Income, net of income taxes, for the
year ended October 31, 2003 was $39,246 as compared to a gain of
$136,640 for the year ended October 31, 2004. "NWH continued to
post strong results in fiscal 2004, reflecting continued ENS
revenue growth which improved profitability. After giving effect to
dividends paid, NWH had a cash and short-term investments position
of $27.06 million at the end of October," said Terrence S. Cassidy,
NWH's President and CEO. "Over 42,000 providers are connected to
ENS' e-commerce and Internet services which includes an 18.0%
increase in directly contracted providers. Through payer
arrangements, ENS also currently conducts daily paper to e-commerce
claim conversion for another 185,000 healthcare providers. ENS also
experienced a 36.7% increase in contracted billable provider sites.
All of ENS' growth was obtained through internal sales versus
acquisition. As of January 20, 2005, ENS was connected to over
1,200 payers, including commercial healthcare plans, managed care
organizations, Blue Cross/Blue Shield plans, Medicare, Medicaid and
CHAMPUS. Over 87% of all electronic claims received by ENS are
directly submitted to contracted payers. We are confident that ENS'
results (and consequently NWH's results) will continue to improve,
reflecting the quality of its services, in fiscal 2005 and into
2006." About NWH and ENS ENS is a payer services organization that
connects payers (i.e., insurance companies and third party
administrators) and providers (i.e., doctors, group practices and
other healthcare providers) using state of the art proprietary
software and telecommunications services for most healthcare
payment and insurance validation transactions. ENS provides a state
of the art technology platform for web based graphical user
interfaces on a national basis, which enables its clients, both
payers and providers, to comply fully with applicable regulatory
requirements such as those imposed by HIPAA (as discussed in
Industry below). ENS' service offerings address the full array of
evolving industry needs in this focused area with a complete cycle
of services from a single point of entry (a personal computer in
the client's office) for both providers and payers, compatible with
multiple system and database operating environments. These services
include an Internet transactions portal, payer transactions
hosting, electronic data interchange, Pre-adjudication software
services (PASS(tm)), scanning, optical character recognition and
data entry of paper claims and correspondence and mailroom
services. ENS generates revenue through recurring subscriptions,
flat or per transaction fees and revenue sharing. Safe Harbor
Statement Certain statements contained in this press release,
including, without limitation, statements containing the words
"believes," "anticipates," "expects" and words of similar import,
constitute "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 or by the Securities and
Exchange Commission in its rules, regulations and releases,
regarding the Company's financial and business prospects and
capital requirements. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
following: the limited nature of the Company's operations and the
risk of the Company's failure to acquire additional businesses; the
uncertain acceptance of Health-e Network�; competition; existing
government regulations and changes in, or the failure to comply
with, government regulations; the ability of the Company to
sustain, manage or forecast its growth; dependence on significant
customers and the potential loss thereof; the ability to attract
and retain qualified personnel; risk of technological obsolescence,
and other factors referenced in this Quarterly Report on Form 10-Q
including, without limitation, in "Management's Discussion and
Analysis of Financial Condition and Results of Operations". Certain
of these factors are discussed in more detail in the Company's
Annual Report on Form 10-K for the year ended October 31, 2004,
including, without limitation, under the caption "Business" and
Exhibit 99.1 thereto. Given these uncertainties, undue reliance
should not be placed on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to
publicly announce the result of any revisions to any of the
forward- looking statements contained or incorporated by reference
herein to reflect future events or developments. Additional
information on these and other factors are contained in NWH's
reports filed with the Securities and Exchange Commission (SEC),
including the Company's Annual Report on Form 10-K as filed with
the SEC on January 31, 2005, copies of which are available at the
website maintained by the SEC at http://www.sec.gov/ . NWH assumes
no obligation to update the forward-looking statements included in
this press release. NWH, Inc. Consolidated Balance Sheets October
31, October 31, 2004 2003 Assets Current assets Cash and cash
equivalents $12,137,155 $29,309,192 Marketable securities
14,926,737 9,777,901 Trade and other receivables 2,862,921
2,419,797 Prepaid expenses and other current assets 475,895 456,794
Total current assets 30,402,708 41,963,684 Property and equipment,
net of accumulated depreciation and amortization of $3,054,359 and
$2,865,039, respectively 750,474 703,739 Internally developed
software, net of accumulated amortization of $2,195,888, and
$1,238,812, respectively 2,313,785 2,489,215 Goodwill 3,762,187
3,762,187 Investments and other assets 1,065,453 957,748 Total
assets $38,294,607 $49,876,573 Liabilities and stockholders' equity
Current liabilities Accounts payable and accrued expenses
$2,376,072 $2,116,881 Call options written at fair value --
2,148,928 Current portion of long-term debt 11,494 71,078 Current
income taxes 147,035 970,426 Deferred income taxes, net --
2,773,583 Dividends payable 1,462,316 1,462,316 Total current
liabilities 3,996,917 9,543,212 Note payable 140,000 140,000
Long-term debt -- 15,022 Deferred income taxes, net 692,792 825,209
Total liabilities 4,829,709 10,523,443 Stockholders' equity
Preferred stock, $.01 par value; 1,000,000 shares authorized; no
shares issued or outstanding -- -- Common stock, $.01 par value:
20,000,000 shares authorized; 3,342,231 shares issued 33,422 33,422
Additional paid-in capital 23,195,991 23,195,991 Retained earnings
15,327,119 20,375,719 Accumulated other comprehensive income --
839,632 Treasury stock 417,600 shares at cost (5,091,634)
(5,091,634) Total stockholders' equity 33,464,898 39,353,130 Total
liabilities and stockholders' equity $38,294,607 $49,876,573 NWH,
Inc. Consolidated Statements of Income For the Fiscal Year Ended
October 31, 2004 2003 Services revenue 17,462,554 $13,396,673 Cost
of services 9,051,276 6,889,251 Professional fees 933,630 827,682
General and administrative 7,650,727 6,360,109 Depreciation and
amortization 309,758 316,214 Total expenses 17,945,391 14,393,256
Loss from operations (482,837) (996,583) Other income (expense)
Gain (loss) on securities transactions, net 1,250,303 1,002,793
Dividend income 156,971 412,329 Interest income 318,085 324,696
Interest expense (61,860) (48,459) Other income -- 421,253
1,663,499 2,112,612 Income before provision for income taxes
1,180,662 1,116,029 Provision for income taxes 380,000 676,000 Net
income $800,662 $440,029 Net income per common share Basic $0.27
$0.15 Diluted $0.27 $0.15 Weighted average number of common shares
outstanding Basic 2,924,631 2,921,830 Diluted 2,955,312 2,938,396
For the Fiscal Year Ended October 31, 2004 2003 Net income 800,662
440,029 Other comprehensive loss, net of tax Net unrealized holding
gain (loss) on marketable securities arising during the year, net
of income taxes of $72,938 and $20,217 136,640 39,246
Reclassification adjustment for losses recognized in net income,
net of income tax benefit of $(502,928), and $(190,227)
respectively (976,272) (337,286) Other comprehensive loss (839,632)
(298,040) Comprehensive (loss) income $(38,970) $141,989 NWH, Inc.
Consolidated Statements of Cash Flows For the Fiscal Year Ended
October 31, 2004 2003 Cash flows from operating activities Net
income $800,662 $440,029 Adjustments to reconcile net income to net
cash used in operating activities Depreciation and amortization
1,585,899 1,242,584 Gain on sale of partnership investment --
(421,253) Accretion of interest (53,771) -- Gain on securities
transactions, net (1,250,303) (1,591,397) Unrealized loss on
securities transactions, net -- 588,604 Deferred income taxes
(2,476,100) (977,000) Bad debt expense 35,850 48,920 Trade and
other receivables (478,974) (385,064) Refundable income taxes -- --
Prepaid expenses and other current assets (19,101) (180,019)
Investments and other assets (244,304) (229,335) Accounts payable
and accrued expenses 259,191 322,438 Current income taxes payable
(823,391) 12,296 Deferred revenue -- -- Net cash used in operating
activities (2,664,252) (1,129,197) Cash flows from investing
activities Acquisition of property and equipment (407,792)
(396,562) Increase in internally developed software (764,293)
(1,066,121) Proceeds from sale of marketable securities 9,987,480
4,127,894 Proceeds from sale of marketable equity securities-short
sale -- 1,309,805 Acquisition of marketable securities (14,872,996)
-- Acquisition of marketable securities-short sale -- (2,566,701)
Acquisition of written call options (4,572,825) (13,595,055)
Proceeds from sale of written call options 2,195,000 11,684,140
Proceeds from sale of partnership investment -- 1,421,253 Net cash
(used in) provided by investing activities (8,435,396) 918,653 Cash
flows from financing activities Borrowing of short-term and
long-term debt 100,000 100,000 Acquisition of treasury stock --
(369,564) Dividends paid (5,849,262) (1,462,315) Principal payments
of short-term and long-term debt (117,664) (134,134) Principal
payments of capital leases (205,463) (236,679) Proceeds from
exercise of stock options -- 124,211 Net cash used in financing
activities (6,072,389) (1,978,481) Net decrease in cash and cash
equivalents (17,172,037) (2,189,025) Cash and cash equivalents
Beginning of year 29,309,192 31,498,217 End of year $12,137,155
$29,309,192 CONTACT: Carl Nicola of NWH, +1-212-582-1212
DATASOURCE: NWH, Inc. CONTACT: Carl Nicola of NWH, +1-212-582-1212
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