NWH Announces Third Quarter Results and Plans for Substantial
Growth from ENS in Fiscal 2004 NEW YORK, Sept. 14
/PRNewswire-FirstCall/ -- NWH, Inc.
(NASDAQ:NWIRNASDAQ:-NASDAQ:News), the parent company of Electronic
Network Systems, Inc. ("ENS"), today reported financial results for
its fiscal third quarter and nine months ended July 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 third quarter of fiscal 2004 were $4.48 million,
compared to $3.50 million in the third quarter of the prior fiscal
year. NWH's reported net income for the third quarter of fiscal
2004 was $209,556 (including $431,392 of Other Income), or $.07 per
share basic and diluted, as compared to net (loss) of ($82,724)
(including $349,347 of Other Income) or ($.03) basic and diluted
per share, in the third quarter of the prior fiscal year. Shares
used for computing basic earnings per share were 2,924,631 and
2,920,618, and fully diluted earnings per share were $.07 and
($.03), for the third fiscal quarter ended July 31, 2004 and 2003,
respectively. Net revenues for the nine months ended July 31, 2004
were $13.04 million, as compared to net revenue of $9.44 million
for the nine months ended July 31, 2003. NWH's net income for the
nine months ended July 31, 2004 was $622,630 (including $1,225,342
of Other Income), or $.21 per share basic and diluted, compared to
a net income of $722,405 (including $1,862,600 of Other Income), or
$.25 per share basic and diluted, in fiscal 2003. Shares used for
computing basic earnings per share were 2,924,631 and 2,920,887,
and fully diluted earnings per share were $.21 and $.25, for the
nine month period ended July 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 BellSouth Common Stock.
Further, unrealized gains and losses on BellSouth common stock are
recorded through Other Comprehensive Income (Loss) and are only
recorded in the Statement of Operations when realized upon ultimate
sale. The realized gain on derivative transactions increased from
$171,625 for the three months ended July 31, 2003 to a gain of
$357,385 for the three months ended July 31, 2004. The unrealized
gain on BellSouth common stock, reflected in Other Comprehensive
Loss, net of income taxes, for the three months ended July 31, 2003
was a loss of ($93,487) as compared to a loss of ($209,954) for the
three months ended July 31, 2004. "NWH continued to post strong
results in the third quarter of 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 $30.5 million at the end of July," said Terrence S.
Cassidy, NWH's President and CEO. "Over 37,000 providers are
connected to ENS' e-commerce and Internet services which includes a
22% 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 42% increase in contracted billable provider sites.
All of ENS' growth was obtained through internal sales versus
acquisition. As of September 13, 2004, 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 93% 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, in fiscal 2004
and into 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 (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(R); 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, 2003, 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 September 14, 2004, 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 July 31, October 31,
2004 2003 (Unaudited) Assets Current assets Cash and cash
equivalents $28,313,175 $29,309,192 Marketable securities 2,167,200
9,777,901 Trade and other receivables 2,431,565 2,419,797 Prepaid
expenses and other current assets 593,770 456,794 Refundable income
taxes - Total current assets 33,505,710 41,963,684 Property and
equipment, net of accumulated depreciation and amortization of
$2,937,553 and $2,865,039, respectively 696,836 703,739 Internally
developed software, net of accumulated amortization of $1,943,440,
and $1,238,812, respectively 2,357,547 2,489,215 Goodwill 3,762,187
3,762,187 Investments and other assets 1,006,640 957,748 Total
assets $41,328,920 $49,876,573 Liabilities and stockholders' equity
Current liabilities Accounts payable and accrued expenses
$1,963,632 $2,116,881 Call options written at fair value 294,488
2,148,928 Current portion of long-term debt 15,277 71,078 Current
income taxes 1,059,535 970,426 Deferred income taxes 1,422,792
3,598,792 Dividends payable 1,462,316 1,462,316 Total current
liabilities 6,218,040 10,368,421 Note payable 140,000 140,000
Long-term debt 15,022 Total liabilities 6,358,040 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 16,611,401 20,375,719 Accumulated
other comprehensive income 221,700 839,632 Treasury stock 417,600
shares at cost (5,091,634) (5,091,634) Total stockholders' equity
34,970,880 39,353,130 Total liabilities and stockholders' equity
$41,328,920 $49,876,573 NWH, Inc. Condensed Consolidated Statements
of Operations (Unaudited) For the Three Months For the Nine Months
Ended July 31, Ended July 31, 2004 2003 2004 2003 Services revenue
$4,480,541 $3,498,567 $13,040,287 $9,435,558 Cost of services
2,241,285 1,859,045 6,777,793 4,844,338 Professional fees 260,100
240,247 657,630 549,722 General and administrative 1,964,553
1,626,345 5,578,571 4,664,670 Depreciation and amortization 77,939
79,001 220,505 247,023 Total expenses 4,543,877 3,804,638
13,234,499 10,305,753 Loss from operations (63,336) (306,071)
(194,212) (870,195) Other income (expense) Gain (loss) on
securities transactions, net 357,385 171,625 915,843 910,738
Dividend income 32,400 111,238 156,971 303,851 Interest income
72,136 76,438 207,056 268,078 Interest expense (30,529) (9,954)
(54,528) (41,320) Other income - 421,253 431,392 349,347 1,225,342
1,862,600 Income before provision for income taxes 368,056 43,276
1,031,130 992,405 Provision for income taxes 158,500 126,000
408,500 270,000 Net income (loss) $209,556 $(82,724) $622,630
$722,405 Net income (loss) per common share Basic $.07 $(.03) $.21
$.25 Diluted $.07 $(.03) $.21 $.25 Weighted average number of
common shares outstanding Basic 2,924,631 2,920,618 2,924,631
2,920,887 Diluted 2,952,749 2,920,618 2,961,177 2,931,507 NWH, Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income
(Unaudited) For the Three Months For the Nine Months Ended July 31,
Ended July 31, 2004 2003 2004 2003 Net income (loss) $209,556
$(82,724) $622,630 $722,405 Other comprehensive (loss) income Net
unrealized holding (loss) gain on marketable Securities arising
during the period, net of income tax of $4,726, $19,779, $57,476
and $(110,231), respectively 7,794 34,202 107,030 (187,991)
Reclassification adjustment for gains recognized in net income, net
of income taxes of $(112,173), $(65,779), ($373,476) and $(65,779),
respectively (217,747) (127,689) (724,962) (127,689) Other
comprehensive loss (209,954) (93,487) (617,932) (315,680)
Comprehensive (loss) income $(398) $(176,211) $4,698 $406,725 NWH,
Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended July 31, 2004 2003 Cash flows from
operating activities Net income $622,630 $722,405 Adjustments to
reconcile net income to net cash provided by (used in) operating
activities Depreciation and amortization 1,170,670 969,081 Gain on
securities transactions, net (915,843) (910,738) Gain on sale of
investment - (421,253) Deferred income taxes (1,860,000) (402,625)
Bad debt expense 30,064 30,366 Changes in assets and liabilities
Trade and other receivables (41,832) (318,652) Prepaid expenses and
other current assets (227,610) (364,931) Other assets (48,892)
29,114 Accounts payable and accrued expenses (153,249) (10,517)
Current income taxes payable 89,109 (957,620) Net cash used in
operating activities (1,334,953) (1,635,370) Cash flows from
investing activities Acquisition of property and equipment
(190,780) (326,811) Cash paid for internally developed software
(555,607) (588,633) Proceeds from sale of marketable securities
7,775,207 1,338,155 Proceeds from sale of marketable equity
securities-short sale 1,309,805 Acquisition of marketable
securities-short sale (2,566,701) Acquisition of written call
options (4,232,025) (11,952,845) Proceeds from sale of written call
options 2,195,000 9,968,315 Proceeds from sale of investment
1,421,253 Net cash provided by (used in) investing activities
4,991,795 (1,397,462) Cash flows from financing activities
Acquisition of treasury stock (369,564) Proceeds of short-term debt
100,000 - Dividends paid (4,386,948) - Principal payments of short
and long-term debt (117,664) (106,913) Principal payments of
capital leases (248,247) 124,211 Net cash used in financing
activities (4,652,859) (352,266) Net decrease in cash and cash
equivalents (996,017) (3,385,098) Cash and cash equivalents
Beginning of period 29,309,192 31,498,217 End of period $28,313,175
$28,113,119 Capital lease assets acquired and obligations incurred
$195,085 $- CONTACT: Carl Nicola NWH, Inc. 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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