Metropolitan Health Networks Reports Record 6 Month Results

Aug 08, 2009 (Close-Up Media via COMTEX) -- MDPA | Quote | Chart | News | PowerRating -- Metropolitan Health Networks, Inc., a provider of health care services in Florida, announced financial results for the second quarter and six months ended June 30.

Year to Date Financial Highlights:

In a release on August 4, the Company noted that for the six months ended June 30, the company's revenue totaled $177.5 million compared to $158.2 million in the prior year period, an increase of 12.2 percent. Net income was $7.2 million, or $0.15 per basic and diluted share, compared to $3.4 million, or $0.07 per basic share and $0.06 per diluted share, for the same period of 2008. Weighted average common shares outstanding used to compute diluted earnings per share for the six month periods ended June 30, and 2008 were 47.6 million and 52.7 million, respectively.

The Company's consolidated medical expense ratio, or MER, was 88.8 percent in the first six months of 2009 compared to 87.7 percent in the same period of 2008 and 88.4 percent for full year 2008. Operating expenses dropped 37.9 percent from $14.2 million in the first six months of 2008 to $8.8 million in the same period in 2009, primarily the result of the reduction in administrative costs resulting from the sale of the Company's Medicare Advantage plan, or HMO, in August 2008.

Second Quarter Financial Highlights:

The Company recognized revenue of $87.1 million for the second quarter, as compared to $82.2 million in the 2008 second quarter, a 5.9 percent increase and the best second quarter revenue number in the Company's history. Net income for the 2009 second quarter was $3.2 million or $0.07 per basic and diluted share, as compared to $3.7 million or $0.07 per share basic and diluted for the same quarter last year.

The Company's consolidated medical expense ratio, or MER, was 89.8 percent in the second quarter of 2009 compared to 85.7 percent in the same quarter of 2008 and 88.4 percent for full year 2008. Operating expenses dropped 28.7 percent from $6.0 million in the 2008 second quarter to $4.2 million in 2009, driven primarily by the sale of the Company's HMO and the elimination of certain associated operating expenses.

Customer Information:

There was a net increase of 2,200 Medicare Advantage customers served by the Company between June 2008 and June 2009 to 35,300. Total customer months, the combined total customers for each month of the measurement period, increased by 6.8 percent to 211,500 for the first six months of 2009, up from 198,000 in the 2008 period.

Balance Sheet Highlights:

Cash, cash equivalents and investments at June 30, totaled $29.7 million compared to $36.3 million at December 31, 2008. During the six months ended June 30, $4.9 million of cash was used to repurchase 3.0 million shares of the Company's common stock. The Company had a working capital surplus of $37.6 million as of June 30, as compared to a surplus of $34.5 million as of December 31, 2008. Included in working capital at June 30, was a receivable for 2009's Medicare mid-year risk adjustment totaling $10.3 million, which amount is expected to be received in early August 2009. The Company has no outstanding debt and stockholders' equity increased $2.9 million from $42.8 million at December 31, 2008 to $45.7 million at June 30.

Share Repurchase Program:

On August 3, the Company's Board of Directors approved a 5 million share increase to its previously announced share repurchase program bringing the total number of shares of common stock authorized for repurchase under the program to 15 million shares. Through June 30, the Company has repurchased 7.2 million shares of its common stock at an average cost of $1.73 per share. Shares repurchased as of July 31, totaled 7.3 million. With the increased authorization, approximately 7.7 million shares are currently available for purchase under the plan. The number of shares to be repurchased and the timing of the purchases will be influenced by a number of factors, including the then prevailing market price of the common stock of the Company, other perceived opportunities that may become available to the Company, and regulatory requirements.

Acquisition Activity:

The Company's subsidiary, Metcare of Florida, Inc., has completed the acquisition of the assets and assumption of certain liabilities of Senior Health Care of Volusia, P.A. Led by Kenneth Lucas, M.D., board certified in Family Practice, Senior Health Care is a physician practice located in Daytona Beach, Florida, that serves approximately 1,100 Humana Medicare Advantage customers. The practice is currently contracted with Metcare and its Humana membership is already included in Metcare's customer base.

In addition, Metcare of Florida, Inc., has entered into a Definitive Agreement to acquire the assets and assume certain liabilities of Hallmark Medical Center, Inc. Led by Leon Roth, M.D., board certified in Internal Medicine, Hallmark is a physician practice located in Hallandale Beach, Florida, that serves approximately 600 patients including 200 Humana Medicare Advantage members. The practice is not currently contracted with Metcare therefore its Humana membership will increase Metcare's customer base. Terms of the transaction were not disclosed.

Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health Networks, Inc., said, "The first half of 2009 has benefited from continuing growth in customers, the impact of the sale of our HMO effective September 1, 2008, improved risk scoring compliance, and better cost controls. These actions have set the foundation for 2009 to be a record year for Metropolitan. With our continuing operating improvements and stronger-than-ever balance sheet, we believe that we are well positioned to deal with the uncertainties and changes that may result from the ongoing debate on health care reform that will impact our industry and our business. Now more than ever it remains important to have a fiscally healthy organization that is unburdened by debt and has the cash resources to remain nimble and proactive in the current health care environment. Regardless of the outcome of the ongoing debate, we are confident of Metropolitan's ability to be a very active player in the growing industry of providing and coordinating care for people with Medicare in Florida and perhaps beyond."

Continuing, Earley noted, "We have made great strides in the last 18 months transforming our owned-medical practices into the Patient-Centered Medical Home model, the much discussed operating model that focuses care, and coordination of care, within the customer's primary care provider's office. Specifically, we have brought additional medical personnel to each of our offices, have installed e-prescribing technology and, as recently announced, have begun the process of implementing the e-ClinicalWorks electronic medical record solution in our practices. We expect to secure NCQA certification as medical homes for our owned-practices by year-end. These are substantial advancements that reflect the capacity and commitment of our team to secure the organization's position as a provider of senior oriented health care services, today and in the future," Earley concluded.

Metropolitan is a growing health care organization in Florida that provides health care services for Medicare Advantage members and other patients in South and Central Florida.

((Comments on this story may be sent to health@closeupmedia.com))

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index