Alliance HealthCard Reports Fiscal 2009 Third Quarter Results
Successfully Integrates Acquired Access Plans USA Operations
NORMAN, OK -- (Marketwire) -- 08/13/09 -- Alliance HealthCard, Inc. (OTCBB: ALHC), a leading membership and insurance marketing company, today announced financial results for its fiscal third quarter ended June 30, 2009. The Company's acquisition of Access Plans USA, completed on April 1, 2009, was a positive contributor to operating income in the fiscal 2009 third quarter.
As a result of the acquisition and the Company's significantly larger base of operations, Alliance HealthCard will now segment its reporting along three divisions: Wholesale Plans, Retail Plans, and Insurance Marketing.
For the fiscal 2009 third quarter, revenues increased to $14.0 million compared to $5.4 million in the prior-year period primarily as a result of the acquired Access Plans USA operations. Operating income was unchanged versus the prior-year at $1.3 million which reflected the impact of the acquired Access Plans USA operations, higher claims expense in Wholesale Plans, and a one-time $350,000 benefit related to a non-recurring transaction in April 2009. During the quarter, the Company made significant progress in the integration of the acquired operations including elimination of redundant costs, consolidation of back-office operations, and improved network purchasing economies, which is expected to benefit operating performance in future periods. Net income for the fiscal 2009 third quarter was $862,000, or $0.04 per diluted share, compared to net income in the prior-year period of $530,000, or $0.04 per diluted share. As a result of the Access Plans USA acquisition, Alliance HealthCard had 21.6 million shares outstanding at June 30, 2009, versus 14.8 million shares outstanding at the end of last year's third quarter.
"In the third quarter, we made significant progress integrating the acquired Access Plans businesses with our operations," commented Danny Wright, Chief Executive Officer. "As a result, we turned a previously unprofitable business into a positive contributor to our operating performance. We expect to further improve operating performance in the acquired operations which should favorably impact our Retail and Insurance Marketing Divisions. In addition, we plan to expand Wholesale Plans into additional markets and further develop relationships with new and existing clients in our Retail Plans."
Mr. Wright continued, "We believe that, regardless of the outcome, the current national debate on healthcare reform will provide us with ample markets for membership programs and insurance marketing of both standard health insurance and supplemental insurance plans."
Wholesale Plans
In the fiscal 2009 third quarter, revenues for the Wholesale Plans Division increased 7.9% to $5.0 million, or 36% of total revenues, compared to $4.7 million in the prior-year period. The revenue increase was attributable to growth of an existing client relationship and the addition of new rent-to-own locations which represent the division's primary distribution channel. Profitability for the division was impacted by higher claims expense on certain product protection programs related primarily to increases in the national unemployment rate. As a result, operating income for the division declined to $508,000 from $1.1 million in the prior-year period.
Retail Plans
Revenues for the Retail Plans Division more than doubled to $4.5 million, or 32%, of total revenues, prior to inter-company eliminations, versus $1.9 million in the prior-year period. The increase was attributable primarily to the acquired Access Plans USA operations which expanded the Company's discount health membership offerings. Operating income for the division increased to $860,000 compared to $417,000 in the prior-year period.
Insurance Marketing
Insurance Marketing Division revenues were $5.7 million, or 41% of total revenues. Operating income was $114,000. The Insurance Marketing Division comprises the America's Health Care Plans (AHCP) operations acquired as part of the Access Plans USA acquisition. As a result, there are no comparable results from the prior-year period.
Mr. Wright concluded, "With the integration of the Access Plan USA operations largely complete, we will focus on driving top-line growth and margin expansion through several organic initiatives that leverage our existing assets including our installed client base and distribution capabilities. We will also look to further our successful track record of acquiring complementary businesses that meet our stringent criteria."
