NEW YORK, May 5, 2009 (GLOBE NEWSWIRE) -- Aveta Inc., a leader in Medicare Advantage and healthcare management, today reported audited full-year revenues for 2008 of $1.976 billion, up from $1.972 billion in 2007. Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) totaled $202.3 million in 2008, down 5.3% from EBITDA of $213.7 million in 2007. The decrease in EBITDA was largely driven by a $21.9 million increase in SG&A as the Company invested in its business and medical management capabilities and an $8.0 million decrease in investment income due to lower interest rates and lower cash balances as the Company paid down debt. Net income for 2008 rose to $75.7 million, up 15.4% from $65.6 million in 2007.
Premium revenues from the Company's core managed care businesses totaled $1.934 billion in 2008, up 0.6% from 2007. Medicare beneficiaries enrolled in the Company's Medicare Advantage plans or serviced by medical practices managed and/or owned by the Company increased 9.0% in 2008 to 226,900 as of year end, up from 208,100 at the end of 2007. Commercial members served by medical practices managed and/or owned by Aveta totaled 342,600 at the end of 2008, compared to 348,600 at the end of 2007.
Medical costs totaled $1.574 billion in 2008, representing a medical loss ratio of 81.4%, compared to a medical loss ratio of 82.2% in 2007.
Administrative expenses of $196.5 million in 2008 represented an administrative expense ratio of 10.1%, as compared to an administrative expense ratio of 9.0% in 2007.
"Our operations in California, Puerto Rico and Illinois continued to perform well in a competitive and challenging healthcare environment," said Dr. Rick Shinto, President and Chief Executive Officer of Aveta. "Aveta's approach to medical management, reflected in the strength of our medical services organizations and independent physician networks, allows us to offer enhanced benefits, access and improved quality of care to our members while controlling our medical costs."
"In addition to posting solid operational results, Aveta continued to strengthen its balance sheet in 2008," said Warren Cole, Aveta's Chief Financial Officer, noting that the Company has significantly deleveraged by retiring more than $166.5 million of its debt in the last 18 months. In recognition of Aveta's improving financial condition, Moody's Investor Service and Standard and Poor's both upgraded Aveta in 2008.
Aveta Inc. Highlights
* The Company's Puerto Rico operations had a strong year, growing
membership 6.3% to approximately 180,000 members, which
represents a 46% market share in the Medicare Advantage segment.
The Company's MSO division grew 30% to include more than 1,200
primary care physicians and approximately 125,000 members at
December 31, 2008.
* NAMM California continued to increase its presence in the
Southern California market with the November acquisition of
Primary Care Associated Medical Group, an IPA with over 30,000
commercial and 5,200 senior enrollees.
* The Company paid down approximately $84.1 million of debt in 2008
and has paid down an additional $81.3 million in 2009, reducing
total outstanding debt to $311.1 million.
About Aveta Inc.
Aveta Inc. is one of the largest health insurance organizations in the United States, which arranges for the care of, and/or owns or manages medical practices with, approximately 227,000 Medicare beneficiaries and more than 342,000 commercial members. Aveta specializes in building provider networks and management service organizations that emphasize integration and coordination of healthcare. Aveta is headquartered in Ft. Lee, New Jersey and has operations in Puerto Rico, California and Illinois.
The Aveta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2340
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security nor shall any offer, solicitation or sale be deemed to be made by the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Special note regarding forward-looking statements:
The matters disclosed in the foregoing release include, and oral statements made from time to time by representatives of the Company may include, forward-looking statements that represent the Company's current expectations of the future. Any such statements are subject to risks and uncertainties that could cause actual outcomes to differ materially from these expectations. These forward-looking statements include statements relating to the Company's anticipated financial performance and business prospects. These forward-looking statements are necessarily estimates reflecting the best judgment of senior management and involve a number of risks and uncertainties, some of which may be beyond our control, that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, without limitation, the Company's ability to implement its revised business plan and improve the operating performance of its business, membership enrollment and disenrollment patterns; changes in utilization; changes in medical and prescription drug cost trends; the Company's ability to accurately estimate and calculate Part D risk corridor adjustments; CMS retroactive risk adjustments to Medicare rates; marketing expenses related to limited open enrollment; increasing competition and potential confusion in the marketplace regarding other MA, MA-PD, PDP, and PFFS plan offerings; the Company's ability to accurately estimate incurred but not reported medical claims; contractual disputes with providers; increases in costs or liabilities associated with litigation; legislative and regulatory actions or changes; costs associated with information and data systems conversions and compliance with regulatory mandates; recent management changes; and changes in tax estimates, assets, or liabilities and valuation allowances related thereto. These forward-looking statements speak only as of the date stated and the Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized.
AVETA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
Twelve Months Ended
Dec. 31, Dec. 31,
2008 2007
----------- -----------
Premiums earned $1,934,181 $1,923,249
Management fees 32,464 31,373
Investment income 9,355 17,388
----------- -----------
Total Revenues 1,976,000 1,972,010
----------- -----------
Medical costs and claims 1,573,952 1,580,517
Selling, general and administrative expenses 196,541 175,805
Noncash equity compensation charges 4,913 4,126
Restructuring and other charges 3,485 17,333
Depreciation & amortization 25,039 25,050
Interest expense 37,425 46,744
----------- -----------
Total costs and expenses 1,841,355 1,849,575
----------- -----------
Income before income taxes and
minority interests 134,645 122,435
Provision for income taxes 55,709 54,817
Minority interests 3,194 2,025
----------- -----------
Net income (loss) $ 75,742 $ 65,593
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Other Operating and Financial Information:
Membership (in 000s)(1)
Senior 226.9 208.1
Commercial 342.6 348.6
EBITDA(2) $ 202,313 $ 213,663
Medical Loss Ratio 81.4% 82.2%
Administrative Cost Ratio 10.1% 9.0%
Notes:
(1) Membership includes Professional Risk, Full Risk and Managed
lives. Note that previously disclosed Membership did not include
Managed Lives.
(2) EBITDA reflects net income with the following items added back:
interest expense, taxes, depreciation and amortization, noncash
equity compensation charges and restructuring and other charges.
AVETA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)
Dec. 31, Dec. 31,
2008 2007
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 362,005 $ 329,646
Investments 36,973 69,705
----------- -----------
Total cash and investments 398,978 399,351
Receivable, net 20,502 89,773
Deferred income taxes 9,342 4,760
Prepaid expenses and other current assets 9,859 5,390
----------- -----------
Total current assets 438,681 499,274
Investments held to maturity 3,500 4,500
Property and equipment, net 13,786 13,670
Goodwill 264,008 259,593
Other intangible assets, net 67,452 75,019
Debt issue costs, net 7,789 8,110
Other assets 2,546 2,839
----------- -----------
Total assets 797,762 863,005
=========== ===========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Medical claims liabilities $ 260,657 $ 220,974
Accounts payable and accrued expenses 52,585 45,534
Current maturities of long-term debt 57,356 74,143
Income taxes payable 20,959 45,045
Advanced Premiums 426 85,320
----------- -----------
Total current liabilities 391,983 471,016
Long-term debt, less current installments 335,153 402,370
Deferred income taxes 17,961 22,707
Other liabilities 5,163 945
----------- -----------
Total liabilities $ 750,260 $ 897,038
----------- -----------
Stockholders' equity (deficit) and members'
equity (deficit):
Preferred stock, par value $0.001 per share.
Authorized 5,000,000 shares; none issued
and outstanding -- --
Common Stock, Class A, par value $0.001 per
share. Authorized 250,000,000 shares,
issued 92,099,113 and 92,030,363 shares at
December 31, 2008 and 2007,respectively,
and outstanding 78,549,113 and 78,280,363
shares at December 31, 2008 and 2007,
respectively 92 92
Common Stock, Class B, par value $0.001
per share. Authorized 3,000,000 shares,
issued and outstanding 635,356 shares at
December 31, 2008 1 --
Additional paid-in capital 235,513 230,999
Accumulated deficit (14,663) (90,405)
Accumulated other comprehensive income 13 (231)
Less treasury stock at cost, 13,550,000 and
13,750,000 shares at December 31, 2008 and
2007, respectively (173,454) (174,488)
----------- -----------
Total stockholders' equity (deficit) $ 47,502 ($34,033)
----------- -----------
Total liabilities and stockholders' equity
(deficit) 797,762 863,005
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