NEW YORK, May 15, 2006 (PRIMEZONE) -- Aveta Inc., one of the largest companies focusing on Medicare Advantage and a leader in addressing the healthcare needs of the chronically ill, reported today that revenues for the first quarter of 2006 totaled $293.7 million, an increase of 43.2% over pro forma revenues of $205.1 million for the first quarter of 2005. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 78.9% to $31.3 million in Q1 2006, compared to pro forma EBITDA of $17.5 million in Q1 2005. Adjusted first quarter earnings were $0.18 per share excluding stock option expense. Net income for the quarter was $12.3 million or $0.16 per share which includes $0.02 per share for stock option expense. Aveta's membership base of enrolled Medicare beneficiaries grew by more than 11,000 during the first quarter of 2006 to a total of 142,000, up 32% from the corresponding pro forma figure for the first quarter of 2005.
Premium revenues from the company's core managed care businesses, which focus on meeting the healthcare needs of seniors and the chronically ill, totaled $284.9 million in the first quarter of 2006, up 44.2% over the corresponding pro forma figure for the first quarter in 2005. Premium revenues accounted for more than 97% of the company's total revenues. Medical costs totaled $227.0 million for the quarter, representing a medical loss ratio of 79.7%, compared to a pro forma medical loss ratio of 83.3% in the first quarter of 2005. The improvement in the medical loss ratio for the quarter reflects greater medical cost efficiencies including favorable prior period reserve development. Administrative expenses were $34.9 million in the first quarter of 2006, representing an administrative expense ratio of 11.9%, compared to a pro forma administrative expense ratio of 11.0% in the first quarter of 2005.
"Aveta's continues to leverage its community medical management expertise to better serve the special needs of the chronically ill and strengthen our position in the markets we serve," said Timothy J. O'Donnell, President and Chief Executive Officer of Aveta. "During the first quarter of 2006, our operating companies in Puerto Rico, California and Illinois all posted solid growth. Aveta's MMM subsidiary, which pioneered Medicare Advantage in Puerto Rico, broke new ground during the quarter with the launch of two new Medicare Advantage special needs plans (SNPs) serving the chronically ill and dual-eligible beneficiaries. Our recently announced acquisition of PMC Medicare Choice in Puerto Rico will expand our provider network and strengthen our provider relationships on the island, enhancing our ability to better serve the rapidly growing Medicare Advantage population there."
Aveta also launched two additional chronic SNP initiatives in the quarter, for populations in Cook County, Illinois, and the Inland Empire of Southern California. Medicare beneficiaries with qualifying conditions can enroll in these plans throughout the rest of the calendar year due to their one-time exemption from standard CMS lock-in provisions.
"Aveta remains committed to improving the healthcare for all Medicare beneficiaries," said O'Donnell, "and especially for the large and growing segment with one or more chronic illnesses."
About Aveta Inc.
Aveta is one of the largest companies focusing on Medicare Advantage and a leader in addressing the unique healthcare needs of the chronically ill. Caring for over 140,000 Medicare beneficiaries, Aveta is the 5th largest for-profit Medicare Advantage enterprise, and operates more Chronic SNPs than any other company. Aveta has a successful track record of managing care for seniors achieved through its core competency of community medical management. Aveta is headquartered in Fort Lee, New Jersey and currently has operating subsidiaries in Southern California, Puerto Rico, and Illinois.
AVETA INC. AND SUBSIDIARIES
Condensed Statements of Income (1)
($ in 000s) Quarter Ended March 31,
2006 2005
Actual Pro Forma
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Premium revenue $284,865 $197,498
Management fees & other 7,209 6,580
Investment income 1,614 1,040
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Total Revenue $293,688 $205,118
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Medical costs 226,953 164,551
Selling, general and
administrative 34,902 22,634
Depreciation & amortization 4,500 4,001
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Total Operating Expenses $266,355 $191,186
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Operating income 27,333 13,932
Interest expense 6,268 3,363
Stock option and related expense 2,437 66
Minority interests 562 391
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Pre-tax Income $ 18,066 $ 10,112
Taxes 5,804 2,991
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Net income $ 12,262 $ 7,121
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Other Operating and Financial
Information:
Membership (in 000s)
Senior 142.0 108.0
Commercial 202.0 212.0
EBITDA $ 31,300 $ 17,500
Medical Loss Ratio 79.7% 83.3%
Administrative Cost Ratio 11.9% 11.0%
Total Cash and Investments $229,100 $115,000
Total Assets $622,600 $347,900
Total Debt $286,300 $144,600
Shareholders' Equity $ 52,400 $ 74,300
Earnings per share $ 0.16 N/A
Adjusted Earnings per share $ 0.18 N/A
Weighted average common shares
outstanding:
Basic 77,391 N/A
Diluted 77,953 N/A
Note 1: The financial information for 2005 was prepared on a pro forma
basis as if Aveta Inc. owned all of its operating subsidiaries for the
entire year of 2005. NAMM California and NAMM Illinois were acquired by
Aveta in August 2005.
Note 2: EBITDA reflects net income with the following items added back:
interest expense, taxes, depreciation and amortization, noncash stock
options and related charges.
Note 3: 2006 Adjusted Earnings per Share is prior to noncash stock option
related expense of $2,437 pre-tax, or $1,655 after tax.
AVETA, INC. AND SUBSIDIARIES
(Formerly known as Aveta Holdings, LLC and Green Field, II, LLC)
CONSOLIDATED BALANCE SHEETS
As of March 31, 2006 and December 31, 2005
(In thousands)
Mar. 31, 2006 Dec. 31, 2005
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Assets
Current assets:
Cash and cash equivalents $ 160,117 $ 67,135
Investments 69,027 38,930
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Total cash and investments 229,144 106,065
Premiums receivable, net 50,970 48,271
Deferred income tax 3,042 2,241
Prepaid expenses and other
current assets 4,866 4,760
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Total current assets $ 288,022 $ 161,337
Property and equipment, net 8,420 8,093
Goodwill 218,986 218,955
Other intangible assets, net 95,826 99,483
Debt issue costs 8,348 8,734
Other assets 3,009 2,166
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Total assets $ 622,611 $ 498,768
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Liabilities and Stockholders'
Equity and Members' Equity
Current liabilities:
Medical claims liabilities $ 110,594 $ 91,559
Accounts payable and accrued
expenses 39,801 26,626
Current maturities of long-term
debt 3,650 4,200
Income taxes payable 16,582 11,403
Unearned premiums 75,707 --
Due to Aveta Health 4,266 4,315
Other current liabilities -- --
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Total current liabilities $ 250,600 $ 138,103
Long-term debt, excluding
current installments 282,670 282,800
Deferred income taxes 36,180 38,096
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Total liabilities $ 569,450 $ 458,999
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Minority interests 787 1,548
Stockholders' equity and
members' equity:
Preferred stock, par value
$0.001 per share, 5000 shares
authorized; -0- shares issued
and outstanding -- --
Common Stock, par value $0.001
per share, 250,000 shares
authorized, 91,779,775 and
88,000,000 shares issued and
outstanding at March 31, 2006
and December 31, 2005
respectively 92 88
Additional paid in capital 216,013 166,712
Members interest -- --
Retained earnings 11,377 (885)
Accumulated other comprehensive
income (620) (56)
Less treasury stock at cost,
13,750 and 10,000 shares at
March 31, 2006 and December 31,
2005, respectively (174,488) (126,900)
Unearned compensation 0 (738)
Total stockholders' equity and
members' equity (deficit) $ 52,374 $ 38,221
------------- -------------
Total liabilities, minority
interest, and stockholders'
equity and members' equity $ 622,611 $ 498,768
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