NWH Announces Third Quarter Results and Plans for Substantial Growth from ENS in Fiscal 2004

NWH Announces Third Quarter Results and Plans for Substantial
Growth from ENS in Fiscal 2004 


NEW YORK, Sept. 14  /PRNewswire-FirstCall/ -- NWH, Inc.
(NASDAQ:NWIRNASDAQ:-NASDAQ:News), the parent company of Electronic Network
Systems, Inc. ("ENS"), today reported financial results for its fiscal third
quarter and nine months ended July 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 third quarter of fiscal 2004 were $4.48 million,
compared to $3.50 million in the third quarter of the prior fiscal year. NWH's
reported net income for the third quarter of fiscal 2004 was $209,556
(including $431,392 of Other Income), or $.07 per share basic and diluted, as
compared to net (loss) of ($82,724) (including $349,347 of Other Income) or
($.03) basic and diluted per share, in the third quarter of the prior fiscal
year. Shares used for computing basic earnings per share were 2,924,631 and
2,920,618, and fully diluted earnings per share were $.07 and ($.03), for the
third fiscal quarter ended July 31, 2004 and 2003, respectively.

Net revenues for the nine months ended July 31, 2004 were $13.04 million, as
compared to net revenue of $9.44 million for the nine months ended July 31,
2003. NWH's net income for the nine months ended July 31, 2004 was $622,630
(including $1,225,342 of Other Income), or $.21 per share basic and diluted,
compared to a net income of $722,405 (including $1,862,600 of Other Income), or
$.25 per share basic and diluted, in fiscal 2003.  Shares used for computing
basic earnings per share were 2,924,631 and 2,920,887, and fully diluted
earnings per share were $.21 and $.25, for the nine month period ended July 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 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 gain on derivative
transactions increased from $171,625 for the three months ended July 31, 2003
to a gain of $357,385 for the three months ended July 31, 2004. The unrealized
gain on BellSouth common stock, reflected in Other Comprehensive Loss, net of
income taxes, for the three months ended July 31, 2003 was a loss of ($93,487)
as compared to a loss of ($209,954) for the three months ended July 31, 2004.

"NWH continued to post strong results in the third quarter of 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 $30.5 million at the end of July," said Terrence S. Cassidy, NWH's
President and CEO.  "Over 37,000 providers are connected to ENS' e-commerce and
Internet services which includes a 22% 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 42% increase in contracted billable provider sites. All of
ENS' growth was obtained through internal sales versus acquisition.  As of
September 13, 2004, 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 93% 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 2004 and into
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 (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 September 14,
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            July 31,    October 31,
                                                     2004           2003
                                                (Unaudited)
  Assets
  Current assets
   Cash and cash equivalents                    $28,313,175    $29,309,192
   Marketable securities                          2,167,200      9,777,901
   Trade and other receivables                    2,431,565      2,419,797
   Prepaid expenses and other current assets        593,770        456,794
   Refundable income taxes                                               -
     Total current assets                        33,505,710     41,963,684
  Property and equipment, net of accumulated
   depreciation and amortization of $2,937,553 and
   $2,865,039, respectively                         696,836        703,739
  Internally developed software, net of
   accumulated amortization of $1,943,440, and
   $1,238,812, respectively                       2,357,547      2,489,215
  Goodwill                                        3,762,187      3,762,187
  Investments and other assets                    1,006,640        957,748
     Total assets                               $41,328,920    $49,876,573
  Liabilities and stockholders' equity
  Current liabilities
   Accounts payable and accrued expenses         $1,963,632     $2,116,881
   Call options written at fair value               294,488      2,148,928
   Current portion of long-term debt                 15,277         71,078
   Current income taxes                           1,059,535        970,426
   Deferred income taxes                          1,422,792      3,598,792
   Dividends payable                              1,462,316      1,462,316
     Total current liabilities                    6,218,040     10,368,421
  Note payable                                      140,000        140,000
  Long-term debt                                                    15,022
     Total liabilities                            6,358,040     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                             16,611,401     20,375,719
   Accumulated other comprehensive income           221,700        839,632
   Treasury stock 417,600 shares at cost         (5,091,634)    (5,091,634)
     Total stockholders' equity                  34,970,880     39,353,130
     Total liabilities and stockholders' equity $41,328,920    $49,876,573


   NWH, Inc.
   Condensed Consolidated Statements of Operations (Unaudited)

                        For the Three Months       For the Nine Months
                            Ended July 31,            Ended July 31,
                          2004         2003         2004         2003

  Services revenue    $4,480,541   $3,498,567  $13,040,287   $9,435,558
  Cost of services     2,241,285    1,859,045    6,777,793    4,844,338
  Professional fees      260,100      240,247      657,630      549,722
  General and
   administrative      1,964,553    1,626,345    5,578,571    4,664,670
  Depreciation and
   amortization           77,939       79,001      220,505      247,023
     Total expenses    4,543,877    3,804,638   13,234,499   10,305,753
  Loss from operations   (63,336)    (306,071)    (194,212)    (870,195)
  Other income (expense)
  Gain (loss) on
   securities transactions,
   net                   357,385      171,625      915,843      910,738
  Dividend income         32,400      111,238      156,971      303,851
  Interest income         72,136       76,438      207,056      268,078
  Interest expense       (30,529)      (9,954)     (54,528)     (41,320)
  Other income                              -                   421,253
                         431,392      349,347    1,225,342    1,862,600
      Income before
       provision for
       income taxes      368,056       43,276    1,031,130      992,405

  Provision for income
   taxes                 158,500      126,000      408,500      270,000
  Net income (loss)     $209,556     $(82,724)    $622,630     $722,405
  Net income (loss) per
   common share
  Basic                     $.07        $(.03)        $.21         $.25
  Diluted                   $.07        $(.03)        $.21         $.25
  Weighted average number
   of common shares
   outstanding
  Basic                2,924,631    2,920,618    2,924,631    2,920,887
  Diluted              2,952,749    2,920,618    2,961,177    2,931,507


   NWH, Inc.
   Condensed Consolidated Statements of Comprehensive (Loss) Income
   (Unaudited)

                             For the Three Months      For the Nine Months
                                Ended July 31,            Ended July 31,
                               2004        2003         2004         2003

  Net income (loss)         $209,556    $(82,724)     $622,630     $722,405
  Other comprehensive
   (loss) income
   Net unrealized
    holding (loss) gain
    on marketable
     Securities arising
      during the period,
      net of income tax of
      $4,726, $19,779,
      $57,476 and $(110,231),
      respectively             7,794      34,202       107,030     (187,991)
    Reclassification
     adjustment for gains
     recognized in net income,
     net of income taxes of
     $(112,173), $(65,779),
     ($373,476) and $(65,779),
     respectively           (217,747)   (127,689)     (724,962)    (127,689)
        Other comprehensive
         loss               (209,954)    (93,487)     (617,932)    (315,680)
        Comprehensive (loss)
         income                $(398)  $(176,211)       $4,698     $406,725


   NWH, Inc.
   Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                        For the Nine Months
                                                           Ended July 31,
                                                        2004          2003

  Cash flows from operating activities
  Net income                                         $622,630      $722,405
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities
    Depreciation and amortization                   1,170,670       969,081
    Gain on securities transactions, net             (915,843)     (910,738)
    Gain on sale of investment                              -      (421,253)
    Deferred income taxes                          (1,860,000)     (402,625)
    Bad debt expense                                   30,064        30,366
  Changes in assets and liabilities
    Trade and other receivables                       (41,832)     (318,652)
    Prepaid expenses and other current assets        (227,610)     (364,931)
    Other assets                                      (48,892)       29,114
    Accounts payable and accrued expenses            (153,249)      (10,517)
    Current income taxes payable                       89,109      (957,620)
       Net cash used in operating activities       (1,334,953)   (1,635,370)
  Cash flows from investing activities
  Acquisition of property and equipment              (190,780)     (326,811)
  Cash paid for internally developed software        (555,607)     (588,633)
  Proceeds from sale of marketable securities       7,775,207     1,338,155
  Proceeds from sale of marketable equity
   securities-short sale                                          1,309,805
  Acquisition of marketable securities-short sale                (2,566,701)
  Acquisition of written call options              (4,232,025)  (11,952,845)
  Proceeds from sale of written call options        2,195,000     9,968,315
  Proceeds from sale of investment                                1,421,253
       Net cash provided by (used in) investing
        activities                                  4,991,795    (1,397,462)
  Cash flows from financing activities
  Acquisition of treasury stock                                    (369,564)
  Proceeds of short-term debt                         100,000             -
  Dividends paid                                   (4,386,948)            -
  Principal payments of short and long-term debt     (117,664)     (106,913)
  Principal payments of capital leases               (248,247)      124,211
       Net cash used in financing activities       (4,652,859)     (352,266)
       Net decrease in cash and cash equivalents     (996,017)   (3,385,098)
  Cash and cash equivalents
  Beginning of period                              29,309,192    31,498,217
  End of period                                   $28,313,175   $28,113,119
  Capital lease assets acquired and obligations
   incurred                                          $195,085            $-

   CONTACT:
   Carl Nicola
   NWH, Inc.
   212 582 1212


DATASOURCE: NWH, Inc.



CONTACT:  Carl Nicola of NWH, Inc., [phone]



Web site:  http://www.enshealth.com/ 

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