Q22010: Net income of $5.8 million or $0.14 per diluted share, compared to $3.2 million or $0.7 per diluted share in 2009
WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Metropolitan Health Networks, Inc. (NYSE Amex:MDF), (“Metcare”) a leading provider of healthcare services in Florida, today announced the financial results for their second quarter ended June 30, 2010. Highlights include the following:
Net income of $5.8 million in the second quarter of 2010 or $0.14 per diluted share, compared to $3.2 million or $0.7 per diluted share in 2009’s second quarter;
a reduction in the medical expense ratio (“MER”) in the second quarter of 2010 to 83.8% from 89.8% in the second quarter of 2009;
net income of $12.9 million or $0.31 per diluted share for the six months ended June 30, 2010, compared to $7.2 million or $0.15 per diluted share for the same period in 2009;
a reduction in the MER to 82.8% for the first half of 2010 compared to 88.8% for the first half of 2009; and,
working capital of $40.9 million at June 30, 2010, up $13.2 million or 48% over December 31, 2009’s balance.
Second Quarter Financial Highlights:
The Company recognized revenue of $92.6 million for the second quarter of 2010 as compared to $87.1 million in the 2009 second quarter, a 6.3% increase. The Company’s medical expense ratio, or MER, was 83.8% in the second quarter of 2010 compared to 89.8% in the same quarter of 2009.
Operating income was $9.3 million in 2010 compared to $5.1 million in 2009. Net income for the 2010 second quarter was $5.8 million or $0.15 per share basic and $0.14 per diluted share as compared to $3.2 million or $0.07 per basic and diluted share for the same quarter last year. Weighted average common shares outstanding used to compute diluted earnings per share for the three month periods ended June 30, 2010 and 2009 were 41.2 million and 47.0 million, respectively.
Year to Date Financial Highlights:
For the six months ended June 30, 2010, the company’s revenue totaled $185.6 million compared to $177.5 million for the same period in the prior year, an increase of 4.6%. The Company’s MER, was 82.8% in the first six months of 2010 compared to 88.8% in the same period of 2009 and 88.5% for all of 2009.
Operating income was $20.5 million for the first six months of 2010 compared to $11.5 million for the same period in 2009. Net income was $ 12.9 million, or $0.33 per basic share and $0.31 per diluted share, compared to net income of $7.2 million, or $0.15 per basic and diluted share for the same period of 2009, an increase of 107% for diluted earnings per share. Weighted average common shares outstanding used to compute diluted earnings per share for the six month periods ended June 30, 2010 and 2009 were 41.1 million and 47.6 million, respectively.
Medicare Advantage customers decreased slightly to 35,200 at June 30, 2010 as compared to 35,300 customers at June 30, 2009. Total customer months, the combined total customers for each month of the measurement period, for the first six months of 2010 increased by 0.3% to 212,200 in 2010 from 211,500 in 2009.
Balance Sheet Highlights:
Cash, cash equivalents and short-term investments at June 30, 2010 totaled $33.2 million compared to $33.8 million at December 31, 2009. Net working capital increased to $40.9 million at June 30, 2010 from $27.7 million at December 31, 2009. Included in working capital at June 30, 2010 is $10.7 million due from Humana. We expect to collect $8.5 million of this amount in August 2010.
Share Repurchase Program:
The Company’s Board of Directors has previously authorized the repurchase of up to 20 million shares of common stock. From the inception of the program through June 30, 2010 the Company has repurchased 13.7 million shares, and options exercisable to purchase 684,200 shares, at an average cost of $1.90 per share. Shares repurchased from January 1 through June 30, 2010 totaled approximately 1.7 million reducing total shares then outstanding to approximately 40.6 million. No shares were repurchased in the second quarter of 2010. Approximately 5.6 million shares remain available for purchase under the plan. The number of shares to be repurchased and the timing of the purchases will be influenced by a number of factors, including the then prevailing market price of the common stock of the Company, other perceived opportunities that may become available to the Company, and regulatory requirements.
Commenting on the results of the second quarter, Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health Networks, Inc., stated, “2010 continues to be the best year in the company’s history, both in terms of financial results and in our positioning of the company to better serve our customers. In terms of financial performance, we, like most in our industry, are benefiting from lower utilization and cost trends in 2010. This, combined with changes in the benefits of the plans we service, has resulted in a lower medical expense ratio in 2010.”
Continuing, Earley noted, “The last two years were characterized by uncertainty with health care reform and in the financial markets. We took the opportunity to turn inward and focus on and invest in our operations and core business. The positive outcomes from these efforts are becoming clear. Our advances with the Patient Centered Medical Home model of care, the addition of medical and management staffing, and the implementation of new technology have produced benefits in 2010 and, we expect, will produce benefits in the future. Along with tangible financial performance, we are seeing measurable gains in customer satisfaction and employee engagement. A critical driver in our success has been our dedicated team of professionals, managers and staff that has accepted the challenge and embraced change, and we thank them for that. Today we are better positioned to address the needs of a growing senior population and better positioned to grow our business overall. The skills of providing and coordinating high quality care, of managing medical costs and risk, are more valuable than ever today. These skills, our scale, and a demographically explosive market, provide us ample opportunity for real growth in the future.”