Nwh (NASDAQ:NWIR)
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NWH Announces Second Quarter Results and Continued Substantial
Growth from ENS in Fiscal 2005 Wednesday, June 15, 2005, 4:00 P.M. ET
NEW YORK, June 15 /PRNewswire-FirstCall/ -- NWH, Inc. (NASDAQ:NWIR), the
parent company of Electronic Network Systems, Inc. ("ENS"), today reported
financial results for its fiscal second quarter ended April 30, 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 second quarter of fiscal 2005 were $4.77 million,
compared to $4.37 million in the second quarter of fiscal 2004. NWH's reported
net income for the second quarter of fiscal 2005 was $127,065 (including
$168,473 of Other Income, with no gain on securities transactions), or $.04 per
share basic and diluted, as compared to net income of $529,560 (including
$851,568 of Other Income, of which $738,015 was gain on transactions relating
to BellSouth stock), or $.18 basic and diluted per share, in the second quarter
of fiscal 2004. Shares used for computing basic earnings per share were
2,923,631 and 2,924,631, and fully diluted earnings per share were 2,926,954
and 2,924,657, for the fiscal quarters ended April 30, 2005 and 2004,
respectively.
Net revenue for the six months ended April 30, 2005 was $9.42 million, as
compared to net revenue of $8.56 million for the six months ended April 30,
2004. NWH's net income for the six months ended April 30, 2005 was $311,462
(including $284,456 of Other Income with no gain on securities transactions),
or $0.11 per share basic and diluted, compared to a net income of $413,074
(including $793,950 of Other Income, of which $558,458 was gain on transactions
relating to BellSouth stock), or $0.14 per share basic and diluted, in fiscal
2004. Shares used for computing basic earnings per share were 2,924,139 and
2,924,631, and fully diluted earnings per share were 2,927,624 and 2,924,657,
for the six month periods ended April 30, 2005 and 2004, respectively.
Since we sold all of our BellSouth common stock in fiscal 2004, in fiscal 2005
there was no gain on securities transactions.
NWH continued to post strong results in the second 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 $23.7 million at the end of April. Over 54,000 providers are
connected to ENS' e-commerce and Internet services which represents a 47%
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 32.6% increase in contracted
billable provider sites over the prior year. All of ENS' growth was obtained
through internal sales versus acquisition. As of June 7, 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. Nearly 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, throughout the rest of 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 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 NWH's Quarterly Report on Form 10-Q for the quarter ended April
30, 2005, 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 June 14, 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
April 30, October 31,
2005 2004
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 23,698,860 $ 12,137,155
Marketable securities - 14,926,737
Trade and other receivables, net of
allowances of $45,000 and $40,000 3,121,294 2,862,921
Prepaid expenses and other current assets 690,424 475,895
Deferred income taxes 138,200 -
Refundable income taxes 230,924 -
Total current assets 27,839,702 30,402,708
Property and equipment, net of accumulated
depreciation of $3,279,245 and $3,054,359 785,414 750,474
Internally developed software, net of
accumulated amortization of $2,707,379
and $2,195,888 2,310,336 2,313,785
Goodwill 3,762,187 3,762,187
Investments and other assets 1,040,193 1,065,453
Total assets $35,737,832 $38,294,607
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $2,602,548 $2,376,072
Current portion of long-term debt 3,856 11,494
Income taxes payable - 147,035
Dividends payable 1,461,816 1,462,316
Total current liabilities 4,068,212 3,996,917
Note payable 140,000 140,000
Deferred income taxes 691,992 692,792
Total liabilities 4,900,212 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 12,714,446 15,327,119
Treasury stock, 418,600 and 417,600 shares,
at cost (5,106,239) (5,091,634)
Total stockholders' equity 30,837,620 33,464,898
Total liabilities and
stockholders' equity $35,737,832 $38,294,607
NWH, Inc.
Condensed Consolidated Statements of Income
For the Three Months For the Six Months
Ended April 30 Ended April 30
2005 2004 2005 2004
Service Revenue $4,770,308 $4,373,436 $9,418,088 $8,559,746
Cost of services 2,255,419 2,350,541 4,600,800 4,494,783
Professional fees 253,410 179,002 579,666 397,530
General and
administrative 2,139,293 1,768,549 4,197,813 3,655,743
Depreciation and
amortization 89,594 76,352 176,803 142,566
Total expenses 4,737,716 4,374,444 9,555,082 8,690,622
Income (loss) from
operations 32,592 (1,008) (136,994) (130,876)
Other income (expense):
Gain on securities
transactions, net - 738,015 - 558,458
Dividend income 137,551 56,035 137,551 124,571
Interest income 34,015 65,105 153,671 134,920
Interest expense (3,093) (7,587) (6,766) (23,999)
168,473 851,568 284,456 793,950
Income before provision
(benefit) for
income taxes 201,065 850,560 147,462 663,074
Provision (benefit)
for income taxes 74,000 321,000 (164,000) 250,000
Net income $127,065 $529,560 $311,462 $413,074
Net income per common
share
Basic $ .04 $ .18 $ .11 $ .14
Diluted $ .04 $ .18 $ .11 $ .14
Weighted average number
of common shared
outstanding:
Basic 2,923,631 2,924,631 2,924,139 2,924,631
Diluted 2,926,954 2,924,657 2,927,624 2,924,657
NWH, Inc.
Condensed Consolidated Statements of Comprehensive Income
For the Three Months For the Six Months
Ended April 30 Ended April 30
2005 2004 2005 2004
(unaudited)
Net income (loss) $127,065 $529,560 $311,462 $413,074
Other comprehensive
income, net of tax:
Net unrealized holding
gain on marketable
securities arising
during the period, net of
income taxes of $0
and ($261,000), 0
and $52,457, respectively - (505,566) - 99,237
Reclassification adjustment
for losses recognized in
net income (loss), net of
income tax benefit of $0,
0, 0, ($169,293),
respectively - - - (507,215)
Other comprehensive loss - (505,566) - (407,978)
Comprehensive income $127,065 $23,994 $311,462 $5,096
NWH, Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months
Ended April 30,
2005 2004
(unaudited)
Cash flows from operating activities
Net income $311,462 $413,074
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 835,432 770,624
Accretion of interest (61,274) -
Loss on securities transactions, net - (558,458)
Deferred income taxes (139,000) (700,000)
Bad debt expense 23,572 -
Changes in assets and liabilities
Trade and other receivables (281,945) (445,474)
Refundable income taxes (190,924) (45,053)
Prepaid expenses and other current assets (214,532) (82,788)
Investments and other assets (73,795) (48,718)
Accounts payable and accrued expenses 226,476 (30,162)
Income taxes payable (147,035) (970,426)
Net cash provided by (used in) operating
activities 288,437 (1,672,740)
Cash flows from investing activities
Acquisition of property and equipment (259,826) (202,251)
Increase in internally developed software (508,042) (405,479)
Proceeds from sale of marketable securities 14,988,011 4,144,783
Acquisition of written call options - (3,585,825)
Proceeds from sale of written call options - 1,469,400
Net cash provided by
investing activities 14,220,143 1,420,628
Cash flows from financing activities
Proceeds of short term debt - 100,000
Dividends paid (2,924,632) (2,924,632)
Principal payments of short-term and
long-term debt (7,638) (117,664)
Acquisition of treasury stock (14,605) -
Principal payments of capital leases - (70,946)
Net cash used in financing activities (2,946,875) (3,013,242)
Net increase (decrease) in cash and cash
equivalents 11,561,705 (3,265,354)
Cash and cash equivalents
Beginning of period 12,137,155 29,309,192
End of period $ 23,698,860 $26,043,838
Contact:
Carl Nicola
212-582-1212
DATASOURCE: NWH, Inc.
CONTACT: Carl Nicola of NWH, Inc., +1-212-582-1212,
Web site: http://www.enshealth.com/