NWIR Nwh (MM)

NWH Announces Second Quarter Results and Continued Substantial Growth from ENS in Fiscal 2005 Wednesday, June 15, 2005, 4:00 P.M. ET NEW YORK, June 15 /PRNewswire-FirstCall/ -- NWH, Inc. (NASDAQ:NWIR), the parent company of Electronic Network Systems, Inc. ("ENS"), today reported financial results for its fiscal second quarter ended April 30, 2005. 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 second quarter of fiscal 2005 were $4.77 million, compared to $4.37 million in the second quarter of fiscal 2004. NWH's reported net income for the second quarter of fiscal 2005 was $127,065 (including $168,473 of Other Income, with no gain on securities transactions), or $.04 per share basic and diluted, as compared to net income of $529,560 (including $851,568 of Other Income, of which $738,015 was gain on transactions relating to BellSouth stock), or $.18 basic and diluted per share, in the second quarter of fiscal 2004. Shares used for computing basic earnings per share were 2,923,631 and 2,924,631, and fully diluted earnings per share were 2,926,954 and 2,924,657, for the fiscal quarters ended April 30, 2005 and 2004, respectively. Net revenue for the six months ended April 30, 2005 was $9.42 million, as compared to net revenue of $8.56 million for the six months ended April 30, 2004. NWH's net income for the six months ended April 30, 2005 was $311,462 (including $284,456 of Other Income with no gain on securities transactions), or $0.11 per share basic and diluted, compared to a net income of $413,074 (including $793,950 of Other Income, of which $558,458 was gain on transactions relating to BellSouth stock), or $0.14 per share basic and diluted, in fiscal 2004. Shares used for computing basic earnings per share were 2,924,139 and 2,924,631, and fully diluted earnings per share were 2,927,624 and 2,924,657, for the six month periods ended April 30, 2005 and 2004, respectively. Since we sold all of our BellSouth common stock in fiscal 2004, in fiscal 2005 there was no gain on securities transactions. NWH continued to post strong results in the second quarter of fiscal 2005, reflecting continued ENS revenue growth which improved profitability. After giving effect to dividends paid, NWH had a cash and short-term investments position of $23.7 million at the end of April. Over 54,000 providers are connected to ENS' e-commerce and Internet services which represents a 47% increase over the prior year. Through payer arrangements, ENS also currently conducts daily paper to e-commerce claim conversion for another 185,000 healthcare providers. ENS also experienced a 32.6% increase in contracted billable provider sites over the prior year. All of ENS' growth was obtained through internal sales versus acquisition. As of June 7, 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. Nearly 90% 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 products and services, throughout the rest of fiscal 2005. 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. 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 NWH's Quarterly Report on Form 10-Q for the quarter ended April 30, 2005, 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 Quarterly Report on Form 10-Q as filed with the SEC on June 14, 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. Condensed Consolidated Balance Sheets April 30, October 31, 2005 2004 (unaudited) Assets Current assets Cash and cash equivalents $ 23,698,860 $ 12,137,155 Marketable securities - 14,926,737 Trade and other receivables, net of allowances of $45,000 and $40,000 3,121,294 2,862,921 Prepaid expenses and other current assets 690,424 475,895 Deferred income taxes 138,200 - Refundable income taxes 230,924 - Total current assets 27,839,702 30,402,708 Property and equipment, net of accumulated depreciation of $3,279,245 and $3,054,359 785,414 750,474 Internally developed software, net of accumulated amortization of $2,707,379 and $2,195,888 2,310,336 2,313,785 Goodwill 3,762,187 3,762,187 Investments and other assets 1,040,193 1,065,453 Total assets $35,737,832 $38,294,607 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $2,602,548 $2,376,072 Current portion of long-term debt 3,856 11,494 Income taxes payable - 147,035 Dividends payable 1,461,816 1,462,316 Total current liabilities 4,068,212 3,996,917 Note payable 140,000 140,000 Deferred income taxes 691,992 692,792 Total liabilities 4,900,212 4,829,709 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 12,714,446 15,327,119 Treasury stock, 418,600 and 417,600 shares, at cost (5,106,239) (5,091,634) Total stockholders' equity 30,837,620 33,464,898 Total liabilities and stockholders' equity $35,737,832 $38,294,607 NWH, Inc. Condensed Consolidated Statements of Income For the Three Months For the Six Months Ended April 30 Ended April 30 2005 2004 2005 2004 Service Revenue $4,770,308 $4,373,436 $9,418,088 $8,559,746 Cost of services 2,255,419 2,350,541 4,600,800 4,494,783 Professional fees 253,410 179,002 579,666 397,530 General and administrative 2,139,293 1,768,549 4,197,813 3,655,743 Depreciation and amortization 89,594 76,352 176,803 142,566 Total expenses 4,737,716 4,374,444 9,555,082 8,690,622 Income (loss) from operations 32,592 (1,008) (136,994) (130,876) Other income (expense): Gain on securities transactions, net - 738,015 - 558,458 Dividend income 137,551 56,035 137,551 124,571 Interest income 34,015 65,105 153,671 134,920 Interest expense (3,093) (7,587) (6,766) (23,999) 168,473 851,568 284,456 793,950 Income before provision (benefit) for income taxes 201,065 850,560 147,462 663,074 Provision (benefit) for income taxes 74,000 321,000 (164,000) 250,000 Net income $127,065 $529,560 $311,462 $413,074 Net income per common share Basic $ .04 $ .18 $ .11 $ .14 Diluted $ .04 $ .18 $ .11 $ .14 Weighted average number of common shared outstanding: Basic 2,923,631 2,924,631 2,924,139 2,924,631 Diluted 2,926,954 2,924,657 2,927,624 2,924,657 NWH, Inc. Condensed Consolidated Statements of Comprehensive Income For the Three Months For the Six Months Ended April 30 Ended April 30 2005 2004 2005 2004 (unaudited) Net income (loss) $127,065 $529,560 $311,462 $413,074 Other comprehensive income, net of tax: Net unrealized holding gain on marketable securities arising during the period, net of income taxes of $0 and ($261,000), 0 and $52,457, respectively - (505,566) - 99,237 Reclassification adjustment for losses recognized in net income (loss), net of income tax benefit of $0, 0, 0, ($169,293), respectively - - - (507,215) Other comprehensive loss - (505,566) - (407,978) Comprehensive income $127,065 $23,994 $311,462 $5,096 NWH, Inc. Condensed Consolidated Statements of Cash Flows For the Six Months Ended April 30, 2005 2004 (unaudited) Cash flows from operating activities Net income $311,462 $413,074 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 835,432 770,624 Accretion of interest (61,274) - Loss on securities transactions, net - (558,458) Deferred income taxes (139,000) (700,000) Bad debt expense 23,572 - Changes in assets and liabilities Trade and other receivables (281,945) (445,474) Refundable income taxes (190,924) (45,053) Prepaid expenses and other current assets (214,532) (82,788) Investments and other assets (73,795) (48,718) Accounts payable and accrued expenses 226,476 (30,162) Income taxes payable (147,035) (970,426) Net cash provided by (used in) operating activities 288,437 (1,672,740) Cash flows from investing activities Acquisition of property and equipment (259,826) (202,251) Increase in internally developed software (508,042) (405,479) Proceeds from sale of marketable securities 14,988,011 4,144,783 Acquisition of written call options - (3,585,825) Proceeds from sale of written call options - 1,469,400 Net cash provided by investing activities 14,220,143 1,420,628 Cash flows from financing activities Proceeds of short term debt - 100,000 Dividends paid (2,924,632) (2,924,632) Principal payments of short-term and long-term debt (7,638) (117,664) Acquisition of treasury stock (14,605) - Principal payments of capital leases - (70,946) Net cash used in financing activities (2,946,875) (3,013,242) Net increase (decrease) in cash and cash equivalents 11,561,705 (3,265,354) Cash and cash equivalents Beginning of period 12,137,155 29,309,192 End of period $ 23,698,860 $26,043,838 Contact: Carl Nicola 212-582-1212 DATASOURCE: NWH, Inc. CONTACT: Carl Nicola of NWH, Inc., +1-212-582-1212, Web site: http://www.enshealth.com/

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