EPS of $0.78; 20% Over Prior Year Period; Commercial Membership Ahead of
Expectations; 2002 Full Year Commercial Membership Growth Projection
Raised to 4%
TRUMBULL, Conn., May 1 /PRNewswire-FirstCall/ -- Oxford Health Plans, Inc.
(NYSE: OHP) today announced net income of $71.4 million, $0.78 per diluted
common share, for the quarter ended March 31, 2002, compared to net income of
$67.6 million, $0.65 per diluted common share, for the same period last year.
Revenue for the quarter was $1.17 billion, compared to $1.08 billion in
the first quarter last year. Oxford's fully insured commercial membership,
excluding the effect of its recent MedSpan acquisition, increased by
approximately 19,700 members during the quarter to 1.392 million. Medicare
membership declined 10,300 members to 67,500 as a result of the Company's
January 1 withdrawal from Medicare in Nassau County, New York and all but one
New Jersey County. The medical loss ratio for the quarter was 79.9% compared
to 79.5% in the prior year quarter.
"Oxford's timely new benefit plans, focus on service and health care
affordability have resulted in significant and above expectation enrollment
gains," Norman C. Payson, MD, Oxford's Chairman and CEO said. "We now believe
our full year 2002 net fully insured commercial enrollment growth will be
approximately 4%, exclusive of our recent MedSpan acquisition. Enrollment
growth together with a medical loss ratio better than our expectations
resulted in strong earnings for our first quarter," Payson added.
As of March 31, 2002, the Company had approximately $1.23 billion in
current cash and marketable securities, including over $166 million at the
Parent Company. On April 30, the Parent Company received a dividend of $57
million from its New York health plan based on fourth quarter 2001 results.
"During the first quarter we repurchased 1.9 million common shares for $72
million. We believe our free cash position and future operating cash flows
will support our continued share repurchase program with its remaining
authority of $62 million and will allow us to increase the capital strength of
our operating subsidiaries," said Kurt B. Thompson, Oxford's Chief Financial
Officer.
As previously announced, the Company will hold a conference call on
Wednesday, May 1, 2002 at 9:00 am (Eastern Time) to review the results of the
first quarter and discuss the outlook for the remainder of 2002. The public
is invited to listen to this conference call by dialing 1-888-677-8170 (using
the password "Oxford") at least 10 minutes prior to the start of the call.
Individuals who dial in will be asked to identify themselves and their
affiliations. Investors, analysts and the public are also invited to listen to
the conference call over the Internet by visiting our website at
http://www.oxfordhealth.com. To listen to this call live on the Internet,
visit the investor page of Oxford's Web site at least 20 minutes early (to
download and install any necessary audio software)
Founded in 1984, Oxford Health Plans, Inc. provides health plans to
employers and individuals in New York, New Jersey and Connecticut, through its
direct sales force, independent insurance agents and brokers. Oxford's
services include traditional health maintenance organizations, point-of-
service plans, third party administration of employer-funded benefits plans
and Medicare plans.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements concerning
the Company's future fully-insured commercial enrollment growth, future free
cash, future operating cash flows and share repurchase program, and future
capital strength of its operating subsidiaries, and other statements contained
herein regarding matters that are not historical facts, are forward-looking
statements as defined in the Securities Exchange Act of 1934; and because such
statements involve risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially include, but are
not limited to:
* Changes in Federal or State regulation relating to health care
and health benefit plans, including proposed patient protection
legislation and mandated benefits.
* The state of the economy.
* The impact of the September 11, 2001 terrorist attacks, subsequent
cases of anthrax infection or exposure, and any future acts of
terrorism or war.
* Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point-of-service
plans and new drugs and technologies.
* Competitive pressure on the pricing of the Company's products,
including acceptance of premium rate increases by the Company's
commercial groups.
* Higher than expected administrative costs in operating the Company's
business and the cost and impact on service of changing technologies.
* The ability of the Company to maintain risk transfer and other
provider arrangements and the resolution of existing and future
disputes over the reconciliations and performance under such
arrangements.
* Any changes in the Company's estimates of its medical costs and
expected cost trends.
* The impact of future developments in various litigation (including
pending class and derivative actions filed against the Company and
certain of its officers and directors, and other proceedings commenced
against the Company and several employees by certain healthcare
providers), class actions in Connecticut and New York and related
litigation by the Connecticut Attorney General, regulatory proceedings
and other governmental action (including the ongoing examination,
investigation and review of the Company by various Federal and State
authorities).
* The Company's ability to renew existing members and attract new
members.
* The Company's ability to develop processes and systems to support its
operations and any future growth and administer new health care
benefit designs.
* Those factors included in the discussion under the caption
"Business -- Cautionary Statement Regarding Forward-Looking
Statements" in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001.
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Income Statements
Three Months Ended March 31, 2002 and 2001
(In thousands, except per share, per member per month and membership
highlights data)
Three Months Ended
March 31,
2002 2001
Revenues:
Premiums earned $ 1,144,144 $ 1,055,288
Third-party administration, net 3,824 3,076
Investment and other income, net 21,164 20,113
Total revenues 1,169,132 1,078,477
Expenses:
Health care services 914,441 839,164
Marketing, general and administrative 130,188 118,531
Interest and other financing charges 3,208 6,059
Total expenses 1,047,837 963,754
Earnings before income taxes 121,295 114,723
Income tax expense 49,852 47,151
Net earnings $71,443 $67,572
Earnings per common share - basic $0.82 $0.69
Earnings per common share - diluted $0.78 $0.65
Weighted-average common shares
outstanding-basic 87,431 98,354
Effect of dilutive securities:
Stock options 4,646 4,890
Weighted-average common shares
outstanding-diluted 92,077 103,244
Selected Information
Medical loss ratio 79.9% 79.5%
Administrative loss ratio 11.3% 11.2%
Earnings before income taxes, financing
charges, depreciation
and amortization ("EBITDA") $129,403 $124,567
PMPM premium revenue $259.02 $243.35
PMPM medical expense $207.02 $193.51
Fully insured member months 4,417.2 4,336.5
As of March 31,
Membership Highlights 2002 2001
Freedom and Liberty Plans 1,204,900 1,138,500
HMO 236,700 222,200
Total Fully Insured Commercial 1,441,600(1) 1,360,700
Medicare 67,500 87,000
Third-party Administration 65,400(2) 56,400
Total Membership 1,574,500 1,504,100
(1) Includes Fully Insured Commercial membership of 49,700 related to
MedSpan.
(2) Includes Third-party Administration membership of 22,400 related to
MedSpan.
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of March 31, 2002 and December 31, 2001
(In thousands, except share data)
Assets
March 31, Dec. 31,
2002 2001
Current assets:
Cash and cash equivalents $198,824 $345,530
Investments - available-for-sale,
at market value 1,035,646 961,652
Premiums receivable, net 56,961 37,127
Other receivables 23,487 24,678
Prepaid expenses and other current assets 6,340 3,450
Deferred income taxes 82,764 83,416
Total current assets 1,404,022 1,455,853
Property and equipment, net 34,732 35,084
Deferred income taxes 14,348 8,348
Restricted cash and investments 58,879 58,813
Goodwill and other intangible assets 26,217 --
Other noncurrent assets 22,497 18,627
Total assets $ 1,560,695 $ 1,576,725
Liabilities and Shareholders' Equity
Current liabilities:
Medical costs payable $631,089 $595,064
Current portion of long term debt 27,344 26,250
Trade accounts payable and accrued expenses 138,447 116,601
Unearned revenue 158,309 201,225
Income taxes payable 7,470 47,789
Total current liabilities 962,659 986,929
Long-term debt 120,104 126,876
Shareholders' equity:
Preferred stock, $.01 par value,
authorized 2,000,000 shares -- --
Common stock, $.01 par value,
authorized 400,000,000
shares; issued and outstanding
104,232,369 shares in 2002
and 100,353,007 shares in 2001 1,042 1,004
Additional paid-in capital 686,365 605,661
Retained earnings 286,608 215,165
Accumulated other comprehensive income 68 7,587
Treasury stock, at cost (496,151) (366,497)
Total shareholders' equity 477,932 462,920
Total liabilities and
shareholders' equity $ 1,560,695 $ 1,576,725
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2002 and 2001
(In thousands)
Three Months Ended
March 31,
2002 2001
Cash flows from operating
activities:
Net income $71,443 $67,572
Adjustments to reconcile net
earnings to
net cash provided by operating
activities:
Depreciation and amortization 5,178 3,785
Noncash income (3,800) --
Deferred income taxes 5,901 46,590
Realized gain on sale of
investments (2,376) (1,818)
Changes in assets and liabilities
(net of balances acquired):
Premiums receivable (16,163) (1,295)
Other receivables 1,191 49,822
Prepaid expenses and other
current assets 1,342 (372)
Medical costs payable 11,498 3,759
Trade accounts payable and
accrued expenses 8,198 212
Unearned revenue (41,619) 29,573
Income taxes payable (9,599) --
Other, net (2,653) (450)
Net cash provided by operating
activities 28,541 197,378
Cash flows from investing
activities:
Capital expenditures (3,459) (5,051)
Purchases of investments (470,810) (189,141)
Sales and maturities of investments 387,435 132,181
Acquisitions, net of cash acquired (1,898) --
Net cash used by investing
activities (88,732) (62,011)
Cash flows from financing
activities:
Proceeds from exercise of stock
options 16,204 4,438
Redemption of notes payable (6,563) (5,469)
Payments under capital leases -- (1,903)
Payment of withholding tax on
option exercises (24,056) --
Purchase of treasury shares (72,100) --
Net cash used by financing
activities (86,515) (2,934)
Net increase (decrease) in cash and
cash equivalents (146,706) 132,433
Cash and cash equivalents at
beginning of period 345,530 198,632
Cash and cash equivalents at end of
period $198,824 $331,065
SOURCE Oxford Health Plans, Inc.
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Related links:
http://www.oxfordhealth.com
CONTACT:
Investor - Gary Frazier, +1-203-459-7331,
gfrazier@oxfordhealth.com, or Deborah Abraham, +1-203-459-6674,
dabraham@oxfordhealth.com, or Media - Maria Gordon-Shydlo,
+1-203-459-7674, mshydlo@oxfordhealth.com, all of Oxford Health
Plans
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