NWH Announces Second Quarter Results and Plans for Substantial
Growth from ENS in Fiscal 2004 NEW YORK, June 10
/PRNewswire-FirstCall/ -- NWH, Inc. (NASDAQ:NWIR), the parent
company of Electronic Network Systems, Inc. ("ENS"), today reported
financial results for its fiscal second quarter and six months
ended April 30, 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
second quarter of fiscal 2004 were $4.4 million, compared to $2.9
million in the second quarter of the prior fiscal year. NWH's
reported net income for the second quarter was $529,560 (including
$851,568 of Other Income), or $0.18 per share basic and diluted, as
compared to net (loss) of ($679,072) (including ($667,890) of Other
Income) or ($0.23) basic and diluted per share, in the second
quarter of the prior fiscal year. Shares used for computing basic
earnings per share were 2,924,631 and 2,919,979, and fully diluted
earnings per share were 2,924,657 and 2,932,299, for the second
fiscal quarter ended April 30, 2004 and 2003, respectively. Net
revenue for the six months ended April 30, 2004 was $8.6 million,
as compared to net revenue of $5.9 million for the six months ended
April 30, 2003. NWH's net income for the six months ended April 30,
2004 was $413,074 (including $793,950 of Other Income), or $0.14
per share basic and diluted, compared to a net income of $805,121
(including $1,513,253 of Other Income), or $0.28 per share basic
and diluted, in fiscal 2003. Shares used for computing basic
earnings per share were 2,924,631 and 2,921,020, and fully diluted
earnings per share were 2,964,657 and 2,924,495, for the six month
period ended April 30, 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 loss on derivative transactions decreased from ($837,998)
for the three months ended April 30, 2003 to a gain of $738,015 for
the three months ended April 30, 2004. The unrealized gain on
BellSouth common stock, reflected in Other Comprehensive Loss, net
of income taxes, for the three months ended April 30, 2003 was
$956,180 as compared to a loss of ($505,566) for the three months
ended April 30, 2004. "NWH posted a strong second quarter of fiscal
2004, reflecting ENS revenues that surpassed our expectations, as
well as better than anticipated expense management. After giving
effect to dividends paid, NWH had a cash and short-term investments
position of $31.8 million at the end of April," said Terrence S.
Cassidy, NWH's President and CEO. "ENS' improving results are
expected to help propel NWH to significant year-over-year revenue
growth in fiscal 2004." 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 June 10, 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 April 30, October 31,
2004 2003 (Unaudited) Assets Current assets Cash and cash
equivalents $26,043,838 $29,309,192 Marketable securities 5,785,105
9,777,901 Trade and other receivables 2,840,630 2,419,797 Prepaid
expenses and other current assets 487,591 456,794 Refundable income
taxes 45,053 Total current assets 35,202,217 41,963,684 Property
and equipment, net of accumulated depreciation and amortization of
$3,119,173 and $2,865,039, respectively 829,590 703,739 Internally
developed software, net of accumulated amortization of $1,701,637
and $1,238,812, respectively 2,447,539 2,489,215 Goodwill 3,762,187
3,762,187 Investments and other assets 1,006,466 957,748 Total
assets $43,247,999 $49,876,573 Liabilities and stockholders' equity
Current liabilities Accounts payable and accrued expenses
$2,086,719 $2,116,881 Call options written at fair value 242,000
2,148,928 Current portion of long-term debt 80,259 71,078 Current
income taxes 970,426 Deferred income taxes 2,690,792 3,598,792
Dividends payable 1,462,316 1,462,316 Total current liabilities
6,562,086 10,368,421 Note payable 140,000 140,000 Long-term debt
112,319 15,022 Total liabilities 6,814,405 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 17,864,161 20,375,719 Accumulated other comprehensive
income 431,654 839,632 Treasury stock 417,600 shares at cost
(5,091,634) (5,091,634) Total stockholders' equity 36,433,594
39,353,130 Total liabilities and stockholders' equity $43,247,999
$49,876,573 NWH, INC. Condensed Consolidated Statement of
Operations (Unaudited) For the Three Months For the Six Months
Ended April 30, Ended April 30, 2004 2003 2004 2003 Services
revenue $4,373,436 $2,890,901 $8,559,746 $5,936,991 Cost of
services 2,350,858 1,494,353 4,536,508 2,985,293 Professional fees
179,002 125,116 397,530 309,476 General and administrative
1,768,232 1,605,902 3,614,018 3,038,324 Depreciation and
amortization 76,352 82,712 142,566 168,022 Total expenses 4,374,444
3,308,083 8,690,622 6,501,115 Loss from operations (1,008)
(417,182) (130,876) (564,124) Other income (expense) Gain (loss) on
securities transactions, net 738,015 (837,998) 558,458 739,113
Dividend income 56,035 98,975 124,571 192,613 Interest income
65,105 87,091 134,920 191,640 Interest expense (7,587) (15,958)
(23,999) (31,366) Other income -- -- -- 421,253 851,568 (667,890)
793,950 1,513,253 Income (loss) before provision for (benefit from)
income taxes 850,560 (1,085,072) 663,074 949,129 Provision for
(benefit from) income taxes 321,000 (406,000) 250,000 144,000 Net
income (loss) $529,560 $(679,072) $413,074 $805,129 Net income
(loss) per common share Basic $.18 (.23) $.14 .28 Diluted $.18
$(.23) $.14 $.28 Weighted average number of common shares
outstanding Basic 2,924,631 2,919,979 2,924,631 2,921,023 Diluted
2,924,657 2,932,299 2,964,657 2,924,495 NWH, Inc. Condensed
Consolidated Statements of Comprehensive Income (Unaudited) For the
Three Months For the Six Months Ended April 30, Ended April 30,
2004 2003 2004 2003 Net income (loss) $529,560 $(679,072) 413,074
805,129 Other comprehensive (loss) income Net unrealized holding
(loss) gain on marketable securities arising during the period, net
of income tax of ($261,000), $489,990, $52,457 and ($130,010),
respectively (505,566) 956,180 99,237 (222,193) Reclassification
adjustment for gains recognized in net income, net of income taxes
of $0, $0, ($261,293) and $0, respectively (507,215) Other
comprehensive (loss) income (505,566) 956,180 (407,978) (222,193)
Comprehensive income $23,994 $277,108 $5,096 $582,936 NWH, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited) For the
Six Months Ended April 30, 2004 2003 Cash flows from operating
activities Net income $413,074 $805,129 Adjustments to reconcile
net income to net cash provided by (used in) operating activities
Depreciation and amortization 770,624 691,224 Gain on securities
transactions, net (558,458) (739,113) Gain on sale of investment --
(421,253) Deferred income taxes (700,000) (402,625) Bad debt
expense 24,641 21,040 Changes in assets and liabilities Trade and
other receivables (445,474) 158,354 Prepaid expenses and other
current assets (82,788) (310,156) Refundable income taxes (45,053)
-- Other assets (48,718) 22,990 Accounts payable and accrued
expenses (30,162) 40,382 Current income taxes payable (970,426)
(583,620) Net cash used in operating activities (1,672,740)
(717,648) Cash flows from investing activities Acquisition of
property and equipment (202,251) (232,170) Cash paid for internally
developed software (405,479) (294,859) Proceeds from sale of
marketable securities 4,144,783 -- Proceeds from sale of marketable
equity securities-short sale -- 1,309,805 Acquisition of marketable
securities-short sale -- (1,301,382) Acquisition of written call
options (3,585,825) (7,373,090) Proceeds from sale of written call
options 1,469,400 6,155,611 Proceeds from sale of investment --
1,421,253 Net cash provided by (used in) investing activities
1,420,628 (314,832) Cash flows from financing activities
Acquisition of treasury stock -- (323,106) Proceeds of short-term
debt 100,000 -- Dividends paid (2,924,632) -- Principal payments of
short and long-term debt (117,664) (136,667) Principal payments of
capital leases (70,946) -- Net cash used in financing activities
(3,013,242) (459,773) Net decrease in cash and cash equivalents
(3,265,354) (1,492,253) Cash and cash equivalents Beginning of
period 29,309,192 31,498,217 End of period $26,043,838 $30,005,964
Capital lease assets acquired and obligations incurred $195,087 $
-- NWH, Inc. Marketable Securities Unrealized Holding Fair Cost
Gain Value BellSouth Common Stock $5,131,451 $653,654 $5,785,105
NWH, Inc. Stock Options Three Months Ended Six Months Ended April
30, April 30, 2004 2003 2004 2003 Net income (loss) As reported
$529,560 $(679,072) $413,074 $805,129 Deduct: total stock based
employee Compensation expense determined under fair value based
method for all awards, net of related tax effects (6,500) (19,770)
(13,180) (39,539) Pro forma 523,060 (698,842) 399,894 765,590 Net
income (loss) per share Basic - as reported $ .18 $ (.23) $ .14 $
.28 Basic - pro forma .18 (.24) .13 .26 Diluted - as reported .18
(.23) .14 .28 Diluted - pro forma .18 (.24) .13 .26 NWH, Inc.
Earnings Per Share Three Months Ended Six Months Ended April 30,
April 30, 2004 2003 2004 2003 Basic EPS shares outstanding
(weighted average) 2,924,631 2,919,979 2,924,631 2,921,023 Effect
of dilutive securities 26 12,320 40,026 3,472 Diluted EPS shares
outstanding 2,924,657 2,932,299 2,964,657 2,924,495 NWH, Inc.
Marketable Securities NWH and Other ENS Total Three months ended
April 30, 2004 Revenues Service $-- $4,373,436 $4,373,436 Expenses
Cost of services, professional fees, and general and administrative
485,137 3,812,955 4,298,092 Depreciation and amortization -- 76,352
76,352 (Loss) income from operations $(485,137) $ 484,129 $(1,008)
Capital expenditure for property and equipment and internally
developed software $-- $ 326,767 $326,767 Three months ended April
30, 2003 Revenues Service $-- $2,890,901 $2,890,901 Expenses Cost
of services, professional fees, and general and administrative
487,966 2,737,405 3,225,371 Depreciation and amortization 465
82,247 82,712 (Loss) income from operations $(488,431) $71,249
$(417,182) Capital expenditure for property and equipment and
internally developed software $-- $ 312,767 $312,767 Six months
ended April 30, 2004 Revenues Service $-- $8,559,746 $8,559,746
Expenses Cost of services, professional fees, and general and
administrative 987,900 7,560,156 8,548,056 Depreciation and
amortization 500 142,066 142,566 (Loss) income from operations
$(988,400) $857,524 $(130,876) Total assets $32,499,354 $10,748,645
$43,247,999 Capital expenditure for property and equipment and
internally developed software $-- $802,817 $802,817 Six months
ended April 30, 2003 Revenues Service $-- $5,936,991 $5,936,991
Expenses Cost of services, professional fees, and general and
administrative 869,287 5,463,806 6,333,093 Depreciation and
amortization 930 167,092 168,022 (Loss) income from operations
$(870,217) $306,093 $(564,124) Total assets $44,311,549 $9,053,941
$53,365,490 Capital expenditure for property and equipment and
internally developed software $-- $ 527,029 $527,029 DATASOURCE:
NWH, Inc. CONTACT: Carl Nicola of NWH, Inc., +1-212-582-1212 Web
site: http://www.enshealth.com/
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