NWH Announces Fiscal 2004 Results and Plans for Substantial Growth From ENS in Fiscal 2005

NWH Announces Fiscal 2004 Results and Plans for Substantial
Growth From ENS in Fiscal 2005 


NEW YORK, Jan. 31  /PRNewswire-FirstCall/ -- NWH, Inc. (NASDAQ:NWIR), the
parent company of Electronic Network Systems, Inc. ("ENS"), today reported
financial results for its fiscal year ended October 31, 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 fiscal year ended October 31, 2004 were $17,462,554,
compared to $13,396,673 in the prior fiscal year.  NWH's reported net income
for fiscal 2004 was $800,662 (including $1,663,499 of Other Income) or $.27
basic per share, as compared to net income of $440,029 (including $2,112,612 of
Other Income), or $.15 per share basic, in the prior fiscal year.  Fully
diluted earnings per share were $.27 and $.15, for the fiscal years ended
October 31, 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 Bell South Common Stock. 
Further, unrealized gains and losses on Bell South Common Stock are recorded
through Other Comprehensive (Loss) Income and are only recorded in the
Statement of Income when realized upon ultimate sale.  The realized and
unrealized gain on derivative transactions increased from a gain of $583,687
for the year ended October 31, 2003 to a loss of ($228,897) for the year ended
October 31, 2004.  The unrealized gain on Bell South Common Stock, reflected in
Other Comprehensive (Loss) Income, net of income taxes, for the year ended
October 31, 2003 was $39,246 as compared to a gain of $136,640 for the year
ended October 31, 2004.

"NWH continued to post strong results in fiscal 2004, reflecting continued ENS
revenue growth which improved profitability.  After giving effect to dividends
paid, NWH had a cash and short-term investments position of $27.06 million at
the end of October," said Terrence S. Cassidy, NWH's President and CEO.  "Over
42,000 providers are connected to ENS' e-commerce and Internet services which
includes an 18.0% increase in directly contracted providers. Through payer
arrangements, ENS also currently conducts daily paper to e-commerce claim
conversion for another 185,000 healthcare providers.  ENS also experienced a
36.7% increase in contracted billable provider sites. All of ENS' growth was
obtained through internal sales versus acquisition.  As of January 20, 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 87% 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 services, in fiscal 2005 and into 2006."

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 Networkâ; 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 Annual Report on Form 10-K as filed with the SEC on January 31, 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.
  Consolidated Balance Sheets

                                                 October 31,    October 31,
                                                       2004           2003
  Assets
  Current assets
   Cash and cash equivalents                    $12,137,155    $29,309,192
   Marketable securities                         14,926,737      9,777,901
   Trade and other receivables                    2,862,921      2,419,797
   Prepaid expenses and other current assets        475,895        456,794
           Total current assets                  30,402,708     41,963,684

  Property and equipment, net of accumulated
   depreciation and amortization of $3,054,359
    and $2,865,039, respectively                    750,474        703,739
  Internally developed software, net of accumulated
   amortization of $2,195,888, and $1,238,812,
    respectively                                  2,313,785      2,489,215
  Goodwill                                        3,762,187      3,762,187
  Investments and other assets                    1,065,453        957,748

           Total assets                         $38,294,607    $49,876,573

  Liabilities and stockholders' equity
  Current liabilities
   Accounts payable and accrued expenses         $2,376,072     $2,116,881
   Call options written at fair value                    --      2,148,928
   Current portion of long-term debt                 11,494         71,078
   Current income taxes                             147,035        970,426
   Deferred income taxes, net                            --      2,773,583
   Dividends payable                              1,462,316      1,462,316
          Total current liabilities               3,996,917      9,543,212

  Note payable                                      140,000        140,000
  Long-term debt                                         --         15,022
  Deferred income taxes, net                        692,792        825,209
          Total liabilities                       4,829,709     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                             15,327,119     20,375,719
   Accumulated other comprehensive income                --        839,632
   Treasury stock 417,600 shares at cost         (5,091,634)    (5,091,634)

          Total stockholders' equity             33,464,898     39,353,130

          Total liabilities and stockholders'
           equity                               $38,294,607    $49,876,573


  NWH, Inc.
  Consolidated Statements of Income
                                                     For the Fiscal Year
                                                       Ended October 31,

                                                      2004           2003

  Services revenue                              17,462,554    $13,396,673

  Cost of services                               9,051,276      6,889,251
  Professional fees                                933,630        827,682
  General and administrative                     7,650,727      6,360,109
  Depreciation and amortization                    309,758        316,214
          Total expenses                        17,945,391     14,393,256

  Loss from operations                            (482,837)      (996,583)

  Other income (expense)
  Gain (loss) on securities transactions, net    1,250,303      1,002,793
  Dividend income                                  156,971        412,329
  Interest income                                  318,085        324,696
  Interest expense                                 (61,860)       (48,459)
  Other income                                          --        421,253
                                                 1,663,499      2,112,612
         Income before provision for income
          taxes                                  1,180,662      1,116,029

  Provision for income taxes                       380,000        676,000

  Net income                                      $800,662       $440,029

  Net income per common share
  Basic                                              $0.27          $0.15

  Diluted                                            $0.27          $0.15

  Weighted average number of common shares
   outstanding

  Basic                                          2,924,631      2,921,830

  Diluted                                        2,955,312      2,938,396


                                                        For the Fiscal Year
                                                          Ended October 31,

                                                       2004            2003

  Net income                                        800,662         440,029

  Other comprehensive loss, net of tax
   Net unrealized holding gain (loss) on marketable
    securities arising during the year, net of income
    taxes of $72,938 and $20,217                    136,640          39,246

   Reclassification adjustment for losses recognized
    in net income, net of income tax benefit of
    $(502,928), and $(190,227) respectively        (976,272)       (337,286)

      Other comprehensive loss                     (839,632)       (298,040)

      Comprehensive (loss) income                  $(38,970)       $141,989


  NWH, Inc.
  Consolidated Statements of Cash Flows

                                                        For the Fiscal Year
                                                         Ended October 31,
                                                       2004           2003
  Cash flows from operating activities
  Net income                                       $800,662       $440,029
  Adjustments to reconcile net income to net cash
   used in operating activities
   Depreciation and amortization                  1,585,899      1,242,584
   Gain on sale of partnership investment                --       (421,253)
   Accretion of interest                            (53,771)            --
   Gain on securities transactions, net          (1,250,303)    (1,591,397)
   Unrealized loss on securities transactions,
    net                                                  --        588,604
   Deferred income taxes                         (2,476,100)      (977,000)
   Bad debt expense                                  35,850         48,920
  Trade and other receivables                      (478,974)      (385,064)
  Refundable income taxes                                --             --
  Prepaid expenses and other current assets         (19,101)      (180,019)
  Investments and other assets                     (244,304)      (229,335)
  Accounts payable and accrued expenses             259,191        322,438
  Current income taxes payable                     (823,391)        12,296
  Deferred revenue                                       --             --

          Net cash used in operating activities  (2,664,252)    (1,129,197)

  Cash flows from investing activities
  Acquisition of property and equipment            (407,792)      (396,562)
  Increase in internally developed software        (764,293)    (1,066,121)
  Proceeds from sale of marketable securities     9,987,480      4,127,894
  Proceeds from sale of marketable equity
   securities-short sale                                 --      1,309,805
  Acquisition of marketable securities          (14,872,996)            --
  Acquisition of marketable securities-short sale        --     (2,566,701)
  Acquisition of written call options            (4,572,825)   (13,595,055)
  Proceeds from sale of written call options      2,195,000     11,684,140
  Proceeds from sale of partnership investment           --      1,421,253
         Net cash (used in) provided by
          investing activities                   (8,435,396)       918,653

  Cash flows from financing activities
  Borrowing of short-term and long-term debt        100,000        100,000
  Acquisition of treasury stock                          --       (369,564)
  Dividends paid                                 (5,849,262)    (1,462,315)
  Principal payments of short-term and long-term
   debt                                            (117,664)      (134,134)
  Principal payments of capital leases             (205,463)      (236,679)
  Proceeds from exercise of stock options                --        124,211

         Net cash used in financing activities   (6,072,389)    (1,978,481)

         Net decrease in cash and cash
          equivalents                           (17,172,037)    (2,189,025)

  Cash and cash equivalents
  Beginning of year                              29,309,192     31,498,217

  End of year                                   $12,137,155    $29,309,192


  CONTACT:  Carl Nicola of NWH, [phone]


DATASOURCE: NWH, Inc.



CONTACT:  Carl Nicola of NWH, [phone]

Copyright