Nwh (NASDAQ:NWIR)
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NWH Announces First Quarter Results and Continued Substantial
Growth from ENS in Fiscal 2005
NEW YORK, March 17 /PRNewswire-FirstCall/ -- NWH, Inc. (NASDAQ:NWIR), the
parent company of Electronic Network Systems, Inc. ("ENS"), today reported
financial results for its fiscal first quarter ended January 31, 2005. 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 first quarter of fiscal 2005 were $4.65 million,
compared to $4.19 million in the first quarter of fiscal 2004. NWH's reported
net income for the first quarter of fiscal 2005 was $184,397, or $.06 per share
basic and diluted, as compared to net (loss) of ($116,486) or ($.04) basic and
diluted per share, in the first quarter of fiscal 2004. There were 2,924,631
shares outstanding, which were used for computing basic earnings per share, for
the fiscal quarters ended January 31, 2005 and 2004.
"NWH continued to post strong results in the first quarter of fiscal 2005,
reflecting continued ENS revenue growth which improved profitability. After
giving effect to dividends paid, NWH had a cash and short-term investments
position of $25.5 million at the end of January," said Terrence S. Cassidy,
NWH's President and CEO. "Over 42,000 providers are connected to ENS'
e-commerce and Internet services which represents a 14.2% increase over the
prior year. Through payer arrangements, ENS also currently conducts daily
paper to e-commerce claim conversion for another 185,000 healthcare providers.
ENS also experienced a 31.8% increase in contracted billable provider sites
over the prior year. All of ENS' growth was obtained through internal sales
versus acquisition. As of March 10, 2005, ENS was connected to over 1,200
payers, including commercial healthcare plans, managed care organizations, Blue
Cross/Blue Shield plans, Medicare, Medicaid and CHAMPUS. Over 90% of all
electronic claims received by ENS are directly submitted to contracted payers.
We are confident that ENS' results (and consequently NWH's results) will
continue to improve, reflecting the quality of its products and services, in
fiscal 2005."
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. 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, 2004,
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 March 17,
2005, 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
January 31, October 31,
2005 2004
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 10,559,828 $ 12,137,155
Marketable securities 14,988,574 14,926,737
Trade and other receivables 2,283,035 2,862,921
Prepaid expenses and other current assets 467,553 475,895
Deferred income taxes 130,000 -
Refundable income taxes 249,924 -
Total current assets 28,678,914 30,402,708
Property and equipment, net of
accumulated depreciation of
$3,163,383 and $3,054,359, respectively 706,533 750,474
Internally developed software, net of
accumulated amortization of
$2,447,071 and $2,195,888, respectively 2,301,198 2,313,785
Goodwill 3,762,187 3,762,187
Investments and other assets 1,066,238 1,065,453
Total assets $ 36,515,070 $ 38,294,607
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 2,049,295 $ 2,376,072
Current portion of long-term debt 7,688 11,494
Income taxes payable - 147,035
Dividends payable 1,462,316 1,462,316
Total current liabilities 3,519,299 3,996,917
Note payable 140,000 140,000
Deferred income taxes 668,792 692,792
Total liabilities 4,328,091 4,829,709
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 14,049,200 15,327,119
Treasury stock, 417,600 shares (5,091,634) (5,091,634)
Total stockholders' equity 32,186,979 33,464,898
Total liabilities and
stockholders' equity $ 36,515,070 $ 38,294,607
NWH, Inc.
Condensed Consolidated Statements of Operations (unaudited)
For the Three Months
Ended January 31,
2005 2004
Services revenue $ 4,647,780 $ 4,186,310
Cost of services 2,345,381 2,185,650
Professional fees 326,256 218,528
General and administrative 2,058,520 1,845,786
Depreciation and amortization 87,209 66,214
Total expenses 4,817,366 4,316,178
Loss from operations (169,586) (129,868)
Other income (expense)
Loss on securities transactions, net - (179,577)
Dividend income - 68,536
Interest income 119,656 69,815
Interest expense (3,673) (16,412)
115,983 (57,618)
Loss before benefit for income taxes (53,603) (187,486)
Benefit for income taxes (238,000) (71,000)
Net income (loss) $ 184,397 $ (116,486)
Net income (loss) per common share
Basic $ .06 $ (.04)
Diluted $ .06 $ (.04)
Weighted average number of
common shares outstanding
Basic $ 2,924,631 $ 2,924,631
Diluted $ 2,928,141 $ 2,924,631
NWH, Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income
(unaudited)
For the Three Months
Ended January 31,
2005 2004
Net income (loss) $ 184,397 $ (116,486)
Other comprehensive income
Net unrealized holding gain on
marketable securities arising during
the period, net of income taxes of
$ 0 and $222,528, respectively - 430,192
Reclassification adjustment for losses
recognized in net income (loss),
net of income taxes of $ 0 and
$(169,567), respectively - (332,604)
Other comprehensive income - 97,588
Comprehensive income (loss) $ 184,397 $ (18,898)
NWH, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
For the Three Months
Ended January 31,
2005 2004
Cash flows from operating activities
Net income (loss) $ 184,397 $ (116,486)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 406,526 383,669
Loss on securities transactions, net - 180,542
Unrealized gain on securities transactions, net - (985)
Accretion of interest (61,837) -
Deferred income taxes (154,000) (800,000)
Bad debt expense 823 14,470
Changes in assets and liabilities
Trade and other receivables 579,063 118,432
Refundable income taxes (249,924) -
Prepaid expenses and other current assets 8,342 (19,092)
Investments and other assets (47,104) (32,414)
Accounts payable and accrued expenses (326,777) (157,456)
Income taxes payable (147,035) (398,979)
Net cash provided by (used in)
operating activities 192,474 (828,299)
Cash flows from investing activities
Acquisition of property and equipment (65,083) (136,240)
Increase in internally developed software (238,596) (253,660)
Proceeds from sale of marketable securities 4,144,784
Acquisition of written call options - (3,097,425)
Proceeds from sale of written call options - 950,600
Net cash (used in) provided by
investing activities (303,679) 1,608,059
Cash flows from financing activities
Dividends paid (1,462,316) (1,462,316)
Principal payments of
short-term and long-term debt (3,806) (8,799)
Principal payments of capital leases - (46,063)
Net cash used in financing activities (1,466,122) (1,517,178)
Net decrease in cash
and cash equivalents (1,577,327) (737,418)
Cash and cash equivalents
Beginning of period 12,137,155 29,309,192
End of period $ 10,559,828 $ 28,571,774
Contact: Carl Nicola
212-582-1212
DATASOURCE: NWH, Inc.
CONTACT: Carl Nicola of NWH, Inc., +1-212-582-1212
Web site: http://www.nwhinc.com/
http://www.enshealth.com/