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DETROIT, May 3, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- United American Healthcare Corporation (Nasdaq: UAHC), a full-service managed care organization, today announced financial results for its third fiscal quarter ended March 31, 2007.
Revenues increased 6 percent to $4.6 million for the quarter ended March 31, 2007, compared with revenues of $4.3 million for the third quarter of fiscal 2006. The Company reported a net loss for the third quarter of fiscal 2007 of $39,000, or ($0.00) per fully diluted share, compared with net income of $433,000, or $0.06 per fully diluted share, for the third quarter of fiscal 2006.
The decline in third quarter profitability was primarily attributable to a budgeted increase in marketing and other expenses for the inaugural launch by the Company's subsidiary, UAHC Health Plan of Tennessee, Inc. (UAHC-TN), of its Medicare Advantage "Special Needs Plan" (MA-SNP). Profitability was further impacted by a decline in UAHC-TN TennCare enrollees. As of March 31, 2007, UAHC-TN's total enrollment included approximately 109,000 members, down from 116,500 members a year earlier.
"Revenues grew during the third quarter compared to the year-ago period, primarily due to the contribution of our first full quarter of medical premium revenues from MA-SNP, which started January 1, 2007," said William C. Brooks, President, Chairman and CEO of United American Healthcare. "While our initial investment in marketing and related initiatives on behalf of MA-SNP resulted in a net loss for the quarter, we are taking necessary action to increase member awareness surrounding UAHC Gold Plus, our branded Medicare Advantage program. We anticipate MA-SNP enrollment will grow, as marketing efforts to attract, educate, enroll and retain new members are increasingly realized."
"While early enrollment in our MA-SNP has been less than we expected, we still believe in the long-term growth prospects of the model," Brooks added. "In an effort to bolster enrollment of potential dual-eligible beneficiaries beyond current levels, we have continued building stronger provider relationships, hiring additional sales agents and engaging respected industry and media spokespersons to communicate the value of UAHC Gold Plus to target audiences throughout Shelby County, Tennessee. We believe this strategy, in conjunction with our ongoing direct mail, telesales and related promotional endeavors, should help grow enrollment in our MA-SNP over time."
Brooks continued: "Our Medicare Advantage Special Needs Plan enrollment included 160 members located throughout Shelby County at March 31, 2007. Despite the slower-than-expected ramp of new enrollees, we continue to focus on the approximately 12,500 dual-eligible beneficiaries in the UAHC-TN member population who reside in Shelby County."
MA-SNP medical premiums revenues were $0.4 million during the third fiscal quarter. Medical expenses for the MA-SNP were $0.3 million in the quarter. The percentage of such medical expenses to medical premiums revenues for the MA-SNP - the medical loss ratio ("MLR") - was 87% for the three-month period ended March 31, 2007.
As of March 31, 2007, United American Healthcare reported cash, cash equivalents and short-term marketable securities of $13.3 million, compared to $6.9 million as of June 30, 2006. The Company remains debt-free.
"Given that dual-eligible beneficiaries are not locked into specified enrollment periods, our marketing efforts will continue throughout the year on a rolling basis, aiming to position UAHC Gold Plus as a recognized MA-SNP of choice for potential enrollees," said Stephen Harris, Executive Vice President and CFO of United American Healthcare. "As expected, marketing-related expenses tied to the launch of the MA-SNP contributed to a net loss in the quarter, but we remain confident that this initial investment will generate long-term returns, as enrollment continues to grow."
Harris concluded: "Our MA-SNP medical claims experience appears to be in line with initial projections. As before, we remain committed to effectively managing costs throughout our business as we seek to grow the profitability of our business on behalf of our shareholders."
Fiscal 2007 Third Quarter Conference Call
United American Healthcare Corporation will host a conference call at 4:30 p.m. Eastern Time today to discuss these results and current business trends. To access the live conference call, please dial (800) 665-0430 and provide the conference passcode 4211267. A replay of the call will be available through Thursday, May 24, 2007. To access the replay, please call (888) 203-1112 and provide the conference passcode 4211267.
About United American Healthcare Corporation
United American Healthcare Corporation (UAHC) is a full-service healthcare management company, pioneering the delivery of healthcare services to Medicaid recipients since 1985. UAHC owns and manages UAHC Health Plan, which is based in western Tennessee and includes the Memphis market. UAHC provides access to more than 900 primary and specialty care physicians and more than 19 hospitals for the members of UAHC Health Plan. For more information, please visit the Company's web site at www.uahc.com.
United American Healthcare Corporation Safe Harbor Statement
Forward-looking statements by United American Healthcare Corporation, including those in this announcement, involve known and unknown risks, which may cause actual results and corporate developments to differ materially from those expected. Factors that could cause results and developments to differ materially from expectations include, without limitation, the effects of state and federal regulations, the effects of acquisitions and divestitures, and other risks described from time to time in each of United American Healthcare's SEC reports, including quarterly reports on Form 10-Q, annual reports on Form 10-K, and reports on Form 8-K.
United American Healthcare Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
Three months ended Nine months ended
March 31, March 31,
2007 2006 2007 2006
Revenues
Fixed administrative fees $ 3,833 $ 4,158 $ 11,795 $ 12,956
Medical premiums 372 - 372 -
Interest and other income 345 121 780 322
Total revenues 4,550 4,279 12,947 13,278
Expenses
Medical expenses 325 - 325 -
Marketing, general and
administrative 4,228 3,759 11,937 11,745
Depreciation and
amortization 27 33 86 95
Total expenses 4,580 3,792 12,348 11,840
Earnings (loss) from
operations before income
taxes (30) 487 599 1,438
Income tax expense 9 54 78 162
Net earnings (loss) $ (39) $ 433 $ 521 $ 1,276
Net earnings (loss) per
common share - basic
Net earnings (loss) per
common share $ (0.00) $ 0.06 $ 0.07 $ 0.17
Weighted average shares
outstanding 8,579 7,476 7,941 7,467
Net earnings (loss) per
common share - diluted
Net earnings (loss) per
common share $ (0.00) $ 0.06 $ 0.06 $ 0.17
Weighted average shares
outstanding 8,579 7,607 8,284 7,598
See accompanying Notes to the Unaudited Condensed Consolidated Financial
Statements.
United American Healthcare Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
March 31, June 30,
2007 2006
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 6,263 $ 4,316
Marketable securities 7,041 2,605
Accounts receivable - State of
Tennessee, net 1,463 1,463
Other receivables 884 384
Prepaid expenses and other 313 265
Deferred income taxes 1,914 1,950
Total current assets 17,878 10,983
Property and equipment, net 328 142
Goodwill 3,452 3,452
Marketable securities 7,475 7,342
Restricted assets 2,721 2,721
Other assets 586 586
Total assets $ 32,440 $ 25,226
Liabilities and Shareholders' Equity
Current liabilities
Medical claims payable $ 343 $ 156
Accounts payable and accrued expenses 1,116 920
Accrued compensation and related
benefits 466 732
Accrued rent 146 244
Other current liabilities 1,285 1,124
Total current liabilities 3,356 3,176
Total liabilities 3,356 3,176
Shareholders' equity
Preferred stock, 5,000,000 shares
authorized; none issued - -
Common stock, no par, 15,000,000
shares authorized; 8,588,210 and
7,527,023 issued and outstanding at
March 31, 2007 and June 30, 2006,
respectively 18,311 12,541
Paid-in-capital - stock options 428 259
Warrants 444 -
Retained earnings 9,941 9,420
Accumulated other comprehensive
loss, net of deferred federal
income taxes (40) (170)
Total shareholders' equity $ 29,084 $ 22,050
$ 32,440 $ 25,226
See accompanying Notes to the Unaudited Condensed Consolidated Financial
Statements.
SOURCE United American Healthcare Corporation
Stephen D. Harris, CFO of United American Healthcare Corp., +1-313-393-4571, Investor_relations@uahc.com; or Investor Relations, Lambert, Edwards & Associates, +1-616-233-0500
http://www.uahc.com/
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