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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Triple S Management Corporation | NYSE:GTS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.99 | 0 | 01:00:00 |
SAN JUAN, Puerto Rico, Nov. 9, 2017 /PRNewswire/ -- Triple-S Management Corporation (NYSE:GTS), a leading managed care company in Puerto Rico, today announced its third quarter 2017 results.
Quarterly Consolidated and Other Highlights
"The impact of two major hurricanes on Puerto Rico within a two-week period during the quarter was a historic event with significant economic and social impact," said Roberto Garcia-Rodriguez, President and Chief Executive Officer. "Seven weeks after María, basic infrastructure is not yet fully functional, with power generation at 42% of average, potable water at 83% of its capacity and telecommunications bandwidth still limited in many parts of the island. Despite the hardship, however, the residents of Puerto Rico have demonstrated tremendous resolve, working tirelessly to help their neighbors and communities recover. We are particularly grateful to our employees and business partners who made it possible for Triple-S to resume operations within days after María landed, our medical groups—many of whom are providing services despite challenging conditions—and the many volunteers who have crisscrossed the island by our side to reconnect patients with doctors.
"We have focused our efforts on ensuring the well-being of our employees, helping our providers resume operations, enabling access to healthcare services, and promptly processing property insurance claims to accelerate the rebuilding of our economy," continued Mr. Garcia-Rodriguez. "Healthcare services are steadily returning to normal, although still somewhat tied to the recovery of Puerto Rico's infrastructure. Over 87% of our primary medical groups are now operational, but utilization of healthcare services overall is below average, reflecting the general population's continued focus on relief and recovery. It is still too early to tell how utilization patterns, the acceleration of outward migration, and reconstruction efforts will impact future results.
"Our third quarter was also characterized by ongoing improvement in our Managed Care operations, reflecting continued strides with our clinical and contracting initiatives. Capitation agreements in home health care, vision care, and durable medical equipment, as well as the re-contracting of our ESRD network, are yielding meaningful savings, and additional initiatives will be implemented as we enter 2018.
"Hurricanes Irma and María have, of course, caused an unusual quarter for our P&C segment as well, with a spike in claims in the quarter for property damage. Given the composition of our catastrophic coverage portfolio, current modeling estimates and our robust reinsurance program, however, we believe the financial impact of these storms has been fully recognized in the third quarter.
"As Puerto Rico concentrates on its recovery, our goal is to enhance its health and well-being through the development of value-based, integrated healthcare delivery models. Our multi-year transformation is on track, and we have both the management team and capital resources necessary to support this strategic agenda," concluded Garcia-Rodriguez.
Selected Consolidated Quarterly Details
Selected Managed Care Segment Quarterly Details
Consolidated Nine-Month Recap
For the nine months ended September 30, 2017, consolidated operating revenues decreased 2.2% year over year, to $2.2 billion, primarily reflecting a $52.8 million decline in Managed Care segment premiums. The premium decrease is mainly due to lower membership in the segment's Medicaid and Commercial businesses, the impact of the suspension of the HIP fee pass through, and lower Medicare risk score adjustments. Consolidated claims for the nine-month period were $1.8 billion, down 3.3% over last year, mostly due to lower claims in the Managed Care segment offset by increased claims in the Property and Casualty segment. The decrease in Managed Care claims primarily reflects lower claims incurred in all of the segment's businesses, driven by an enrollment decline in the segment's Commercial and Medicaid businesses and the estimated decrease in utilization caused by the two hurricanes, as well as favorable fluctuations in the prior-period reserve developments in the Commercial and Medicare businesses.
The Property and Casualty segment's estimated net retained losses related to Hurricanes Irma and Maria were approximately $3.5 million and $10.5 million, respectively, after the application of reinsurance. The consolidated loss ratio and MLR were down 90 basis points and 160 basis points, to 84.9% and 87.2%, respectively. Consolidated operating expenses for the nine months ended September 30, 2017 were $348.8 million and the operating expense ratio was 16.2%. Adjusted net income for the nine-month period was $23.4 million, or $0.97 per diluted share, based on weighted average shares outstanding of 24.2 million, compared with a $0.2 million adjusted net loss, or $0.01 per diluted share, based on weighted average shares outstanding of 24.6 million, at the same time last year.
2017 Outlook
Triple-S has previously provided directional guidance for its Commercial and Medicare businesses and last quarter also provided directional guidance for its Government Health Plan (GHP), since the contract extension gives the Company more visibility into the outlook of that business. The directional guidance provided below was prepared considering the economic situation in Puerto Rico in the aftermath of Hurricanes Irma and Maria, as well as the expected impact in the Company's Managed Care and Property and Casualty segments:
Conference Call and Webcast
Management will host a conference call and webcast on November 9, 2017 at 9:00 a.m. Eastern Time to discuss its financial results for the three months and the nine months ended September 30, 2017. To participate, callers within the U.S. and Canada should dial 1-855-327-6837 and international callers should dial 1-631-891-4304 about five minutes before the call.
To listen to the webcast, participants should visit the "Investor Relations" section of the Company's website at www.triplesmanagement.com several minutes before the event is broadcast and follow the instructions provided to ensure they have the necessary audio application downloaded and installed. This program is provided at no charge to the user. An archived version of the call, also located on the "Investor Relations" section of Triple-S Management's website, will be available about two hours after the call ends and for at least the following two weeks. This news release, along with other information relating to the call, will be available on the "Investor Relations" section of the website.
About Triple-S Management Corporation
Triple-S Management Corporation is an independent licensee of the Blue Cross Blue Shield Association. It is one of the leading players in the managed care industry in Puerto Rico. Triple-S Management has the exclusive right to use the Blue Cross Blue Shield name and mark throughout Puerto Rico, the U.S. Virgin Islands, and Costa Rica. With more than 55 years of experience in the industry, Triple-S Management offers a broad portfolio of managed care and related products in the Commercial, Medicare Advantage, and Medicaid markets under the Blue Cross Blue Shield marks. It also provides non-Blue Cross Blue Shield branded life and property and casualty insurance in Puerto Rico. For more information about Triple-S Management, visit www.triplesmanagement.com or contact kwaller@allwayscommunicate.com.
Non-GAAP Financial Measures
This earnings release presents information about the Company's adjusted net income, which is a non-GAAP financial metric provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (GAAP). A reconciliation of adjusted net income to net income, the most comparable GAAP financial measure, is provided in the accompanying tables found at the end of this release.
Forward-Looking Statements
This document contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information about possible or assumed future sales, results of operations, developments, regulatory approvals or other circumstances. Sentences that include "believe", "expect", "plan", "intend", "estimate", "anticipate", "project", "may", "will", "shall", "should" and similar expressions, whether in the positive or negative, are intended to identify forward-looking statements.
All forward-looking statements in this news release reflect management's current views about future events and are based on assumptions and subject to risks and uncertainties. Consequently, actual results may differ materially from those expressed here as a result of various factors, including all the risks discussed and identified in public filings with the U.S. Securities and Exchange Commission (SEC).
In addition, the Company operates in a highly competitive, constantly changing environment, influenced by very large organizations that have resulted from business combinations, aggressive marketing and pricing practices of competitors, and regulatory oversight. The following factors, if markedly different from the Company's planning assumptions (either individually or in combination), could cause Triple-S Management's results to differ materially from those expressed in any forward-looking statements shared here:
This list is not exhaustive. Management believes the forward-looking statements in this release are reasonable. However, there is no assurance that the actions, events or results anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on the Company's results of operations or financial condition. In view of these uncertainties, investors should not place undue reliance on any forward-looking statements, which are based on current expectations. In addition, forward-looking statements are based on information available the day they are made, and (other than as required by applicable law, including the securities laws of the United States) the Company does not intend to update or revise any of them in light of new information or future events.
Readers are advised to carefully review and consider the various disclosures in the Company's SEC reports.
Earnings Release Schedules and Supplementary Information | |
Condensed Consolidated Balance Sheets |
Exhibit I |
Condensed Consolidated Statements of Earnings |
Exhibit II |
Condensed Consolidated Statements of Cash Flows |
Exhibit III |
Segment Performance Supplemental Information |
Exhibit IV |
Reconciliation of Non-GAAP Financial Measures |
Exhibit V |
Exhibit I
Condensed Consolidated Balance Sheets | |||||||||||
(dollar amounts in thousands) | |||||||||||
Unaudited | |||||||||||
September 30, |
December 31, | ||||||||||
Assets |
|||||||||||
Investments |
$ |
1,468,794 |
$ |
1,433,392 | |||||||
Cash and cash equivalents |
269,942 |
103,428 | |||||||||
Premium and other receivables, net |
930,972 |
286,365 | |||||||||
Deferred policy acquisition costs and value of business acquired |
201,467 |
194,787 | |||||||||
Property and equipment, net |
73,609 |
66,369 | |||||||||
Other assets |
142,008 |
134,658 | |||||||||
Total assets |
$ |
3,086,792 |
$ |
2,218,999 | |||||||
Liabilities and Stockholders' Equity |
|||||||||||
Policy liabilities and accruals |
$ |
1,835,042 |
$ |
1,102,237 | |||||||
Accounts payable and accrued liabilities |
322,150 |
219,191 | |||||||||
Long-term borrowings |
32,870 |
35,085 | |||||||||
Total liabilities |
2,190,062 |
1,356,513 | |||||||||
Stockholders' equity: |
|||||||||||
Common stock |
23,902 |
24,272 | |||||||||
Other stockholders' equity |
873,507 |
838,891 | |||||||||
Total Triple-S Management Corporation stockholders' equity |
897,409 |
863,163 | |||||||||
Non-controlling interest in consolidated subsidiary |
(679) |
(677) | |||||||||
Total stockholders' equity |
896,730 |
862,486 | |||||||||
Total liabilities and stockholders' equity |
$ |
3,086,792 |
$ |
2,218,999 | |||||||
Exhibit II
Condensed Consolidated Statements of Earnings | ||||||||||||||||||
(dollar amounts in thousands, except per share data) | ||||||||||||||||||
Unaudited | ||||||||||||||||||
For the Three Months Ended |
For the Nine Months Ended | |||||||||||||||||
September 30, |
September 30, | |||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||
Revenues: |
||||||||||||||||||
Premiums earned, net |
$ |
714,325 |
$ |
721,187 |
$ |
2,139,489 |
$ |
2,188,770 | ||||||||||
Administrative service fees |
3,391 |
4,146 |
12,318 |
13,749 | ||||||||||||||
Net investment income |
12,395 |
12,337 |
37,109 |
36,570 | ||||||||||||||
Other operating revenues |
941 |
871 |
3,027 |
2,598 | ||||||||||||||
Total operating revenues |
731,052 |
738,541 |
2,191,943 |
2,241,687 | ||||||||||||||
Net realized investment gains (losses): |
||||||||||||||||||
Total other-than-temporary impairment losses on securities |
- |
- |
- |
(1,434) | ||||||||||||||
Net realized gains, excluding other-than-temporary impairment losses on securities |
3,753 |
5,376 |
8,143 |
8,388 | ||||||||||||||
Net realized investment gains on sale of securities |
3,753 |
5,376 |
8,143 |
6,954 | ||||||||||||||
Other income, net |
3,409 |
734 |
6,521 |
5,468 | ||||||||||||||
Total revenues |
738,214 |
744,651 |
2,206,607 |
2,254,109 | ||||||||||||||
Benefits and expenses: |
||||||||||||||||||
Claims incurred |
583,625 |
629,169 |
1,815,785 |
1,877,950 | ||||||||||||||
Operating expenses |
119,145 |
123,406 |
348,811 |
367,498 | ||||||||||||||
Total operating costs |
702,770 |
752,575 |
2,164,596 |
2,245,448 | ||||||||||||||
Interest expense |
1,709 |
1,893 |
5,116 |
5,729 | ||||||||||||||
Total benefits and expenses |
704,479 |
754,468 |
2,169,712 |
2,251,177 | ||||||||||||||
Income (loss) before taxes |
33,735 |
(9,817) |
36,895 |
2,932 | ||||||||||||||
Income tax expense (benefit) |
11,824 |
(7,873) |
6,622 |
(2,457) | ||||||||||||||
Net income (loss) |
21,911 |
(1,944) |
30,273 |
5,389 | ||||||||||||||
Less: Net loss attributable to the non-controlling interest |
1 |
3 |
2 |
6 | ||||||||||||||
Net income (loss) attributable to Triple-S Management Corporation |
$ |
21,912 |
$ |
(1,941) |
$ |
30,275 |
$ |
5,395 | ||||||||||
Earnings per share attributable to Triple-S Management Corporation: |
||||||||||||||||||
Basic net income (loss) per share |
$ |
0.91 |
$ |
(0.08) |
$ |
1.25 |
$ |
0.22 | ||||||||||
Diluted net income (loss) per share |
$ |
0.91 |
$ |
(0.08) |
$ |
1.25 |
$ |
0.22 | ||||||||||
Weighted average of common shares |
24,142,192 |
24,386,076 |
24,177,344 |
24,534,647 | ||||||||||||||
Dilutive weighted average of common shares |
24,208,022 |
24,386,076 |
24,231,708 |
24,605,279 | ||||||||||||||
Exhibit III
Condensed Consolidated Statements of Cash Flows | |||||||||||
(dollar amounts in thousands) | |||||||||||
Unaudited | |||||||||||
For the Nine Months Ended | |||||||||||
September 30, | |||||||||||
2017 |
2016 | ||||||||||
Net cash provided by operating activities |
$ |
191,849 |
$ |
83,011 | |||||||
Cash flows from investing activities: |
|||||||||||
Proceeds from investments sold or matured: |
|||||||||||
Securities available for sale: |
|||||||||||
Fixed maturities sold |
287,223 |
227,631 | |||||||||
Fixed maturities matured/called |
15,503 |
32,308 | |||||||||
Equity securities sold |
38,318 |
67,054 | |||||||||
Securities held to maturity - fixed maturities matured/called |
1,546 |
1,220 | |||||||||
Acquisition of investments: |
|||||||||||
Securities available for sale: |
|||||||||||
Fixed maturities |
(260,538) |
(258,378) | |||||||||
Equity securities |
(75,507) |
(153,399) | |||||||||
Securities held to maturity - fixed maturities |
(1,550) |
(1,124) | |||||||||
Increase in other investments |
(2,207) |
(1,939) | |||||||||
Net change in policy loans |
(696) |
(471) | |||||||||
Net capital expenditures |
(15,949) |
(3,517) | |||||||||
Net cash used in investing activities |
(13,857) |
(90,615) | |||||||||
Cash flows from financing activities: |
|||||||||||
Change in outstanding checks in excess of bank balances |
8,371 |
(1,035) | |||||||||
Repayments of long-term borrowings |
(2,028) |
(1,230) | |||||||||
Repurchase and retirement of common stock |
(12,553) |
(21,371) | |||||||||
Proceeds from policyholder deposits |
12,130 |
12,488 | |||||||||
Surrender of policyholder deposits |
(17,398) |
(13,543) | |||||||||
Net cash used in financing activities |
(11,478) |
(24,691) | |||||||||
Net increase (decrease) in cash and cash equivalents |
166,514 |
(32,295) | |||||||||
Cash and cash equivalents, beginning of period |
103,428 |
197,818 | |||||||||
Cash and cash equivalents, end of period |
$ |
269,942 |
$ |
165,523 | |||||||
Exhibit IV
Segment Performance Supplemental Information
(Unaudited) |
Three months ended September 30, |
Nine months ended September 30, | ||||||||||
(dollar amounts in millions) |
2017 |
2016 |
Percentage |
2017 |
2016 |
Percentage | ||||||
Premiums earned, net: |
||||||||||||
Managed Care: |
||||||||||||
Commercial |
$ 198.9 |
$ 206.3 |
(3.6%) |
$ 607.4 |
$ 636.8 |
(4.6%) | ||||||
Medicare |
264.3 |
255.3 |
3.5% |
788.5 |
789.4 |
(0.1%) | ||||||
Medicaid |
190.9 |
199.4 |
(4.3%) |
560.3 |
582.8 |
(3.9%) | ||||||
Total Managed Care |
654.1 |
661.0 |
(1.0%) |
1,956.2 |
2,009.0 |
(2.6%) | ||||||
Life Insurance |
40.9 |
38.9 |
5.1% |
121.4 |
116.8 |
3.9% | ||||||
Property and Casualty |
19.9 |
22.0 |
(9.5%) |
63.4 |
65.0 |
(2.5%) | ||||||
Other |
(0.6) |
(0.7) |
14.3% |
(1.5) |
(2.0) |
25.0% | ||||||
Consolidated premiums earned, net |
$ 714.3 |
$ 721.2 |
(1.0%) |
$ 2,139.5 |
$ 2,188.8 |
(2.3%) | ||||||
Operating revenues (loss): 1 |
||||||||||||
Managed Care |
$ 663.0 |
$ 669.8 |
(1.0%) |
$ 1,984.6 |
$ 2,037.5 |
(2.6%) | ||||||
Life Insurance |
47.0 |
45.3 |
3.8% |
139.9 |
135.5 |
3.2% | ||||||
Property and Casualty |
22.0 |
24.3 |
(9.5%) |
69.6 |
71.6 |
(2.8%) | ||||||
Other |
(0.9) |
(0.8) |
(12.5%) |
(2.2) |
(2.9) |
24.1% | ||||||
Consolidated operating revenues |
$ 731.1 |
$ 738.6 |
(1.0%) |
$ 2,191.9 |
$ 2,241.7 |
(2.2%) | ||||||
Operating income (loss): 2 |
||||||||||||
Managed Care |
$ 34.8 |
$ (22.0) |
258.2% |
$ 19.2 |
$ (26.4) |
172.7% | ||||||
Life Insurance |
4.5 |
4.2 |
7.1% |
13.4 |
14.9 |
(10.1%) | ||||||
Property and Casualty |
(11.1) |
4.0 |
(377.5%) |
(5.2) |
9.5 |
(154.7%) | ||||||
Other |
0.1 |
(0.2) |
150.0% |
(0.1) |
(1.8) |
94.4% | ||||||
Consolidated operating income (loss) |
$ 28.3 |
$ (14.0) |
(302.1%) |
$ 27.3 |
$ (3.8) |
(818.4%) | ||||||
Operating margin: 3 |
||||||||||||
Managed Care |
5.2% |
(3.3%) |
850 bp |
1.0% |
(1.3%) |
230 bp | ||||||
Life Insurance |
9.6% |
9.3% |
30 bp |
9.6% |
11.0% |
-140 bp | ||||||
Property and Casualty |
(50.5%) |
16.5% |
-6,700 bp |
(7.5%) |
13.3% |
-2,080 bp | ||||||
Consolidated |
3.9% |
(1.9%) |
580 bp |
1.2% |
(0.2%) |
140 bp | ||||||
Depreciation and amortization expense |
$ 3.4 |
$ 3.3 |
3.0% |
$ 9.8 |
$ 10.6 |
(7.5%) | ||||||
1 Operating revenues include premiums earned, net, administrative service fees and net investment income. |
2 Operating income or loss include operating revenues minus operating costs. Operating costs include claims incurred and operating expenses. |
3 Operating margin is defined as operating income or loss divided by operating revenues. |
Managed Care Additional Data |
Three months ended |
Nine months ended |
|||||||||
(Unaudited) |
2017 |
2016 |
2017 |
2016 |
|||||||
Member months enrollment: |
|||||||||||
Commercial: |
|||||||||||
Fully-insured |
994,409 |
1,039,842 |
3,009,252 |
3,199,546 |
|||||||
Self-insured |
495,616 |
534,653 |
1,504,283 |
1,617,900 |
|||||||
Total Commercial |
1,490,025 |
1,574,495 |
4,513,535 |
4,817,446 |
|||||||
Medicare Advantage |
368,102 |
344,167 |
1,095,086 |
1,059,702 |
|||||||
Medicaid |
1,138,162 |
1,205,792 |
3,480,525 |
3,634,029 |
|||||||
Total member months |
2,996,289 |
3,124,454 |
9,089,146 |
9,511,177 |
|||||||
Claim liabilities (in millions) |
$ 356.3 |
$ 349.1 |
* | ||||||||
Days claim payable |
57 |
54 |
* | ||||||||
Premium PMPM: |
|||||||||||
Managed Care |
$ 261.57 |
$ 255.23 |
$ 257.91 |
$ 254.52 |
|||||||
Commercial |
200.02 |
198.40 |
201.84 |
199.03 |
|||||||
Medicare Advantage |
718.01 |
741.79 |
720.03 |
744.93 |
|||||||
Medicaid |
167.73 |
165.37 |
160.98 |
160.37 |
|||||||
Medical loss ratio: |
82.4% |
90.5% |
87.2% |
88.8% |
|||||||
Commercial |
73.1% |
87.4% |
79.1% |
86.4% |
|||||||
Medicare Advantage |
83.3% |
93.6% |
89.3% |
90.0% |
|||||||
Medicaid |
91.0% |
89.7% |
92.9% |
89.7% |
|||||||
Adjusted medical loss ratio: 1 |
83.8% |
86.4% |
88.2% |
88.6% |
|||||||
Commercial |
75.7% |
81.2% |
80.0% |
84.9% |
|||||||
Medicare Advantage |
85.0% |
87.5% |
90.4% |
90.4% |
|||||||
Medicaid |
90.6% |
90.1% |
93.3% |
90.1% |
|||||||
Operating expense ratio: |
|||||||||||
Consolidated |
16.6% |
17.0% |
16.2% |
16.7% |
|||||||
Managed Care |
13.5% |
14.1% |
13.2% |
13.8% |
|||||||
*Information provided as of December 31, 2016. |
|||||||||||
1 The adjusted medical loss ratio accounts for subsequent adjustments to estimates, such as prior-period reserve developments and Medicare premium adjustments, and presents them in the corresponding period. |
Managed Care Membership by Segment |
As of September 30, | ||||||
2017 |
2016 | ||||||
Members: |
|||||||
Commercial: |
|||||||
Fully-insured |
328,777 |
344,311 | |||||
Self-insured |
163,721 |
177,683 | |||||
Total Commercial |
492,498 |
521,994 | |||||
Medicare Advantage |
123,194 |
113,950 | |||||
Medicaid |
379,199 |
402,358 | |||||
Total members |
994,891 |
1,038,302 | |||||
Exhibit V
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income (Loss) | ||||||||||
(Unaudited) |
Three months ended |
Nine months ended | ||||||||
(dollar amounts in millions) |
2017 |
2016 |
2017 |
2016 | ||||||
Net income (loss) |
$ 21.9 |
$ (1.9) |
$ 30.3 |
$ 5.4 | ||||||
Less adjustments: |
||||||||||
Net realized investment gains, net of tax |
3.0 |
4.3 |
6.5 |
5.6 | ||||||
Private equity investment income, net of tax |
0.2 |
0.1 |
0.4 |
- | ||||||
Adjusted net income (loss) |
$ 18.7 |
$ (6.3) |
$ 23.4 |
$ (0.2) | ||||||
Diluted adjusted net income (loss) per share |
$ 0.77 |
$ (0.26) |
$ 0.97 |
$ (0.01) | ||||||
Adjusted net income is a non-GAAP financial metric and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Management believes that the use of this adjusted net income and adjusted net income per share provides investors and management useful information about the earnings impact of realized investment gains and other non-recurring items impacting the Company's results of operations. This non-GAAP metric does not consider all of the items associated with the Company's operations as determined in accordance with GAAP. As a result, one should not consider these measures in isolation.
View original content:http://www.prnewswire.com/news-releases/triple-s-management-corporation-reports-third-quarter-2017-results-300552712.html
SOURCE Triple-S Management Corporation
Copyright 2017 PR Newswire
1 Year Triple S Management Chart |
1 Month Triple S Management Chart |
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