AMEH.. $0.085
Continued progress twards earnings..hank
Results of Operations and Operating Data
Three Months Ended April 30, 2010 vs. Three Months Ended April 30, 2009
Net revenues for the three months ended April 30, 2010 of $802,885 increased $301,702, or 60 percent, over net revenues of $501,183 reported for the three months ended April 30, 2009. Net revenues are comprised of net billings by AMH under the various fee structures from health plans, medical groups/IPA’s and hospitals, and income from service fee agreements. Increase was attributable to new hospital contracts, increased same-market area growth and expansion of services with existing medical group clients at new hospitals.
Physician practice salaries, benefits and other expenses for the three months ended April 30, 2010 were $674,686, at 84% of net revenues compared to $419,554 for the three months ended April 30, 2009, at 84% of net revenues. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. Increase in physician costs were attributable to start-up losses at new hospital contracts and expansions of services at new hospitals in the quarter.
General and administrative expenses include all salaries, benefits, supplies and operating expenses, not specifically related to the day-to-day operations of our physician group practices, including billing and collections functions, and our corporate management and overhead. General and administrative expenses were $85,192, at 11% of net revenues, for the three months ended April 30, 2010. General and Administrative expenses were $172,562 for the three months ended April 30, 2009, at 34% of net revenues. In the first quarter of 2010, the Company recorded non-cash compensation expenses of $30,066, related to the issuance of shares for service, compared to $94,500 of such non-cash costs in the first quarter of 2009. In addition, the Company recorded a favorable write-down of its bad debt reserve of $60,647 compared to $462 increase in bad debt reserve in first quarter of 2009.
Depreciation and amortization expense was $3,006 for the three months ended April 30, 2010, and $10,338 for the comparable three-month period in 2009.
The Company reported a profit from operations of $40,001 for the three months ended April 30, 2010, compared to a loss from operations of $101,272 recorded in the same period of 2009. Net revenues in 2010 continued to benefit from the addition of contracts with hospitals and the hiring of several additional physicians. In addition, the operating profit in 2010 benefitted from the lower non-cash compensation costs.
Interest expense and amortization of financing costs totaled $40,044 for the three months ended April 30, 2010, compared to interest and financing costs of $4,849 in the three months ended April 30, 2009. Interest expense and financing costs in 2010 included interest on the subordinated borrowings of $31,523, and the amortization of financing costs of $9,375, related to these notes. Interest expense in the three months ended April 30, 2009 of $4,849 represents interest expense paid on the SBA loan with Wells Fargo Bank, and interest expense accrued at AMM for the related party notes.
Net Loss was $843 for the three months ended April 30, 2010, compared to a net loss of $106,921 for the three months ended April 30, 2009. The reduction in the net loss was the result of the factors discussed above.
Liquidity and Capital Resources
At April 30, 2010, the Company had cash and cash equivalents of $504,540, compared to cash and cash equivalents of $665,737 at January 31, 2010. The cash balance at April 30, 2010 included $486,216 in a money market brokerage account. There were no short-term borrowings at April 30, 2010 or January 31, 2010. Long-term borrowings totaled $1,247,784 as of April 30, 2010 and $1,247,582 on January 31, 2010.
Net cash used in operating activities totaled $155,830 in the three months ended April 30, 2010, compared to net cash used in operations of $17,464 for the comparable three months ended April 30, 2009. The significantly larger increase in accounts receivable, primarily related to new contracts in the first quarter of 2010, was responsible for the decrease in the operating cash flow.
Net cash used in operating activities for the three months ended April 30, 2010 of $155,830 was comprised of a net loss of $843 for the three month period. Adjustments for non-cash charges which include depreciation, bad debt expense, shares issued for service and amortization of commission cost and debt discount, used $17,997. In addition, net changes in operating assets and liabilities used cash of $136,990
The Company invested $4,568 to develop a Web Site and an $800 advance to an affiliated Company in the first quarter of 2010. We did not spend any cash for investing activities in the comparable three-month period of 2009.
For the three months ended April 30, 2010, the Company did not spend any for financing activities. In the first quarter of 2009, ended April 30, 2009, net cash used in financing activities totaled $7,477 and consisted of principal pay downs on the Company's SBA loan with Wells Fargo Bank.
