Oxford Health Plans, Inc. Announces First Quarter 2001 Results; EPS of $0.65; 91% Over Prior Year Period

Apr 26, 2001, 01:00 ET from Oxford Health Plans, Inc.

    TRUMBULL, Conn., April 26 /PRNewswire Interactive News Release/ -- Oxford
 Health Plans, Inc. (NYSE:   OHP) announced today net income of $67.6 million,
 $0.65 per diluted common share, for the quarter ended March 31, 2001, compared
 to net income of $28.8 million, $0.34 per diluted common share, for the same
 period last year. "Our results further our belief in Oxford's standing as the
 premier health plan in the tri-state area and a leader in the health care
 industry," said Oxford Health Plans' Chairman and Chief Executive Officer,
 Norman C. Payson, M.D.
    Revenue for the quarter was $1.08 billion, compared to $1.02 billion in the
 first quarter last year.  Oxford's fully insured commercial membership
 increased by approximately 24 thousand members during the quarter to
 1.36 million. Medicare membership declined 5 thousand members to 87 thousand
 as a result of the Company's January 1 withdrawal from Medicare in several New
 Jersey counties.  The medical loss ratio ("MLR") for the quarter was 79.5%
 compared to 81.7% in the prior year quarter. The administrative loss ratio was
 11.2% for the quarter compared to 12.1% for the first quarter of last year.
     "The Company's enrollment growth demonstrates the increasing popularity of
 our health plans and our improved competitive position. The medical and
 administrative loss ratios benefited from our continued focus on keeping cost
 increases below core trends for the industry which we believe bodes well for
 our growth prospects," said Dr. Payson.
     The Company reported positive cash flow from operations of $197.4 million
 for the quarter, compared to $109.3 million for the prior year period. As of
 March 31, 2001, the Company had approximately $1.27 billion in current cash
 and marketable securities, including over $94 million at the Parent Company.
 During the quarter, the Parent Company received $18.5 million in dividends
 from its New Jersey and Connecticut health plans based on fourth quarter 2000
 results.  On April 20, New York State regulatory authorities authorized a
 dividend of $130 million by Oxford's New York health plan to the Parent
 Company, which was fully paid by April 23.  "With the New York dividend
 payment, the Parent Company's current available cash balances increased to
 approximately $224 million. The combination of Parent Company cash and
 projected operating cash flows for the remainder of 2001 will allow Oxford to
 continue to invest in membership growth initiatives and customer service
 infrastructure enhancements and retire a substantial amount of bank debt,"
 said Kurt B. Thompson, Oxford's Chief Financial Officer. "The MLR for the
 first quarter of 2001, as well as the first quarter of 2000, each benefited
 from approximately $8 million in favorable development of prior period
 estimates of medical costs. In spite of the favorable development in the
 current quarter and the run-off of Medicare claims reserves for the New Jersey
 counties we exited on January 1, the Company's reserves for incurred but not
 reported or paid medical claims increased $25 million over levels at December
 31, 2000, consistent with our healthcare cost and enrollment trends," Thompson
 added.
 
     Founded in 1984, Oxford Health Plans, Inc. provides health plans to
 employers and individuals in New York, New Jersey and Connecticut, through its
 direct sales force, independent insurance agents and brokers. Oxford's
 services include traditional health maintenance organizations,
 point-of-service plans, third party administration of employer-funded benefits
 plans and Medicare plans.
 
     Cautionary Statement Regarding Forward-Looking Statements
     Certain statements in this press release, including statements concerning
 the Company's future results of operations, cash flows, liquidity, capital
 structure and financial position, the Company's competitive position and
 growth prospects and its ability to invest in membership growth initiatives
 and customer service infrastructure enhancements and retire bank debt, and
 other statements contained herein regarding matters that are not historical
 facts, are forward-looking statements (as such term is defined in the
 Securities Exchange Act of 1934); and because such statements involve risks
 and uncertainties, actual results may differ materially from those expressed
 or implied by such forward-looking statements.  Factors that could cause
 actual results to differ materially include, but are not limited to:
 
     *  Changes in Federal or State regulation relating to health care and
        health benefit plans, including proposed patient protection legislation
        and mandated benefits.
     *  Rising medical costs or higher utilization of medical services,
        including higher out-of-network utilization under point-of-service
        plans and new drugs and technologies.
     *  Competitive pressure on the pricing of the Company's products,
        including acceptance of premium rate increases by the Company's
        commercial groups.
     *  Higher than expected administrative costs in operating the Company's
        business and the cost and impact on service of changing technologies.
     *  The ability of the Company to maintain risk transfer and other provider
        arrangements and the resolution of existing and future disputes over
        the reconciliations and performance under such arrangements.
     *  Any changes in the Company's estimates of its medical costs and
        expected cost trends.
     *  The impact of future developments in various litigation (including
        pending class and derivative actions filed against the Company and
        certain of its officers and directors, and other proceedings commenced
        against the Company and several employees by certain healthcare
        providers), the recent class actions in Connecticut and related
        litigation by the Connecticut Attorney General, regulatory proceedings
        and other governmental action (including the ongoing examination,
        investigation and review of the Company by various Federal and State
        authorities).
     *  The Company's ability to renew existing members and attract new
        members.
     *  The Company's ability to develop processes and systems to support its
        operations and any future growth.
     *  Those factors included in the discussion under the caption "Business --
        Cautionary Statement Regarding Forward-Looking Statements" in the
        Company's Annual Report on Form 10-K for the fiscal year ended
        December 31, 2000.
 
 
                     OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
                           Consolidated Income Statements
                     Three Months Ended March 31, 2001 and 2000
        (In thousands, except per share, per member per month and membership
                                  highlights data)
 
                                                          Three Months Ended
                                                              March 31,
                                                           2001        2000
     Revenues:
      Premiums earned                                   $1,055,288  $1,000,871
      Third-party administration, net                        3,076       3,524
      Investment and other income, net                      20,113      17,986
       Total revenues                                    1,078,477   1,022,381
 
     Expenses:
      Health care services                                 839,164     817,365
      Marketing, general and
       administrative                                      118,531     121,769
      Interest and other financing charges                   6,059      11,462
       Total expenses                                      963,754     950,596
 
     Income before income taxes                            114,723      71,785
     Income tax expense                                     47,151      30,150
     Net income before preferred stock
      dividends and amortization                            67,572      41,635
     Preferred stock dividends and
      amortization                                              --     (12,835)
     Net income                                            $67,572     $28,800
 
     Earnings per common and common
      equivalent share:
     Earnings per common share - basic                       $0.69       $0.35
     Earnings per common share - diluted                     $0.65       $0.34
 
 
     Weighted-average common shares
      outstanding-basic                                     98,354      82,049
     Effect of dilutive securities:
      Stock options                                          4,890       2,733
      Warrants                                                   -           -
     Weighted-average common shares
      outstanding-diluted                                  103,244      84,782
 
     Selected Information:
      Medical loss ratio                                     79.5%       81.7%
      Administrative loss ratio                              11.2%       12.1%
      Earnings before income taxes,
       financing charges, depreciation
       and amortization ("EBITDA")                        $124,567     $93,164
      PMPM premium revenue                                 $243.35     $223.19
      PMPM medical expense                                 $193.51     $182.27
      Fully insured member months                          4,336.5     4,484.5
 
                                              As of March 31,    As of Dec. 31,
     Membership Highlights                    2001       2000        2000
 
     Freedom and Liberty Plans            1,138,500   1,143,300    1,115,400
     HMO                                    222,200     225,500      221,600
     Total Fully Insured Commercial       1,360,700   1,368,800    1,337,000
     Medicare                                87,000      89,900       92,000
     Third-party Administration              56,400      61,300       62,400
     Total Membership                     1,504,100   1,520,000    1,491,400
 
 
                    OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
                            Consolidated Balance Sheets
                    As of March 31, 2001 and December 31, 2000
                         (In thousands, except share data)
 
                                       Assets
                                                  March 31,        December 31,
                                                    2001               2000
     Current assets:
      Cash and cash equivalents                    $331,065          $198,632
      Investments - available-for-sale, at
       market value                                 939,815           868,380
      Premiums receivable, net                       57,989            56,694
      Other receivables                              31,172            80,994
      Prepaid expenses and other current
       assets                                         5,133             4,761
      Deferred income taxes                          39,363            46,102
        Total current assets                      1,404,537         1,255,563
 
     Property and equipment, net                     29,004            19,779
     Deferred income taxes                           59,455           102,133
     Restricted cash and investments                 56,869            57,194
     Other noncurrent assets                         10,872             9,941
        Total assets                             $1,560,737        $1,444,610
 
 
                       Liabilities and Shareholders' Equity
 
     Current liabilities:
      Medical costs payable                        $616,689          $612,930
      Current portion of long term debt             169,531           147,000
      Trade accounts payable and accrued
       expenses                                     111,226           103,459
      Unearned premiums                             117,872            88,299
      Current portion of capital lease
       obligations                                    3,797             5,700
        Total current liabilities                 1,019,115           957,388
 
     Long-term debt                                      --            28,000
 
     Shareholders' equity:
      Preferred stock, $.01 par value,
       authorized 2,000,000 shares                       --                --
      Common stock, $.01 par value,
       authorized 400,000,000
       shares; issued and outstanding
        98,612,112 shares in 2001
       and 98,304,384 shares in 2000                    986               983
      Additional paid-in capital                    569,181           561,857
      Accumulated deficit                           (39,684)         (107,256)
      Accumulated other comprehensive
       income                                        11,139             3,638
       Total shareholders' equity                   541,622           459,222
 
       Total liabilities and shareholders'
        equity                                   $1,560,737        $1,444,610
 
 
                     OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Cash Flows
                    Three Months Ended March 31, 2001 and 2000
                                   (In thousands)
 
                                                       Three Months Ended
                                                             March 31,
                                                       2001             2000
 
     Cash flows from operating activities:
      Net income                                     $67,572           $41,635
      Adjustments to reconcile net earnings
       to
       net cash provided (used) by
        operating activities:
        Depreciation and amortization                  3,785            10,406
        Deferred income taxes                         46,590            30,150
        Realized (gain) loss on sale of
         investments                                  (1,818)              614
        Changes in assets and liabilities:
         Premiums receivable                          (1,295)              963
         Other receivables                            49,822             1,107
         Prepaid expenses and other current
          assets                                        (372)           (2,035)
         Medical costs payable                         3,759            17,365
         Trade accounts payable and accrued
          expenses                                       212             3,774
         Unearned premiums                            29,573             8,628
         Other, net                                     (450)           (3,354)
          Net cash provided by operating
           activities                                197,378           109,253
 
     Cash flows from investing activities:
      Capital expenditures                            (5,051)           (2,602)
      Purchases of investments                      (189,141)         (124,751)
      Sales and maturities of investments            132,181           103,730
      Other, net                                           -            (4,407)
          Net cash used by investing
           activities                                (62,011)          (28,030)
 
     Cash flows from financing activities:
      Proceeds from exercise of stock
       options                                         4,438               775
      Redemption of notes payable                     (5,469)          (14,000)
      Redemption of preferred stock                        -          (130,000)
      Payments under capital leases                   (1,903)           (3,745)
          Net cash used by financing
           activities                                 (2,934)         (146,970)
 
     Net increase (decrease) in cash and
      cash equivalents                               132,433           (65,747)
     Cash and cash equivalents at beginning
      of period                                      198,632           332,882
     Cash and cash equivalents at end of
      period                                        $331,065          $267,135
 
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SOURCE Oxford Health Plans, Inc.
    TRUMBULL, Conn., April 26 /PRNewswire Interactive News Release/ -- Oxford
 Health Plans, Inc. (NYSE:   OHP) announced today net income of $67.6 million,
 $0.65 per diluted common share, for the quarter ended March 31, 2001, compared
 to net income of $28.8 million, $0.34 per diluted common share, for the same
 period last year. "Our results further our belief in Oxford's standing as the
 premier health plan in the tri-state area and a leader in the health care
 industry," said Oxford Health Plans' Chairman and Chief Executive Officer,
 Norman C. Payson, M.D.
    Revenue for the quarter was $1.08 billion, compared to $1.02 billion in the
 first quarter last year.  Oxford's fully insured commercial membership
 increased by approximately 24 thousand members during the quarter to
 1.36 million. Medicare membership declined 5 thousand members to 87 thousand
 as a result of the Company's January 1 withdrawal from Medicare in several New
 Jersey counties.  The medical loss ratio ("MLR") for the quarter was 79.5%
 compared to 81.7% in the prior year quarter. The administrative loss ratio was
 11.2% for the quarter compared to 12.1% for the first quarter of last year.
     "The Company's enrollment growth demonstrates the increasing popularity of
 our health plans and our improved competitive position. The medical and
 administrative loss ratios benefited from our continued focus on keeping cost
 increases below core trends for the industry which we believe bodes well for
 our growth prospects," said Dr. Payson.
     The Company reported positive cash flow from operations of $197.4 million
 for the quarter, compared to $109.3 million for the prior year period. As of
 March 31, 2001, the Company had approximately $1.27 billion in current cash
 and marketable securities, including over $94 million at the Parent Company.
 During the quarter, the Parent Company received $18.5 million in dividends
 from its New Jersey and Connecticut health plans based on fourth quarter 2000
 results.  On April 20, New York State regulatory authorities authorized a
 dividend of $130 million by Oxford's New York health plan to the Parent
 Company, which was fully paid by April 23.  "With the New York dividend
 payment, the Parent Company's current available cash balances increased to
 approximately $224 million. The combination of Parent Company cash and
 projected operating cash flows for the remainder of 2001 will allow Oxford to
 continue to invest in membership growth initiatives and customer service
 infrastructure enhancements and retire a substantial amount of bank debt,"
 said Kurt B. Thompson, Oxford's Chief Financial Officer. "The MLR for the
 first quarter of 2001, as well as the first quarter of 2000, each benefited
 from approximately $8 million in favorable development of prior period
 estimates of medical costs. In spite of the favorable development in the
 current quarter and the run-off of Medicare claims reserves for the New Jersey
 counties we exited on January 1, the Company's reserves for incurred but not
 reported or paid medical claims increased $25 million over levels at December
 31, 2000, consistent with our healthcare cost and enrollment trends," Thompson
 added.
 
     Founded in 1984, Oxford Health Plans, Inc. provides health plans to
 employers and individuals in New York, New Jersey and Connecticut, through its
 direct sales force, independent insurance agents and brokers. Oxford's
 services include traditional health maintenance organizations,
 point-of-service plans, third party administration of employer-funded benefits
 plans and Medicare plans.
 
     Cautionary Statement Regarding Forward-Looking Statements
     Certain statements in this press release, including statements concerning
 the Company's future results of operations, cash flows, liquidity, capital
 structure and financial position, the Company's competitive position and
 growth prospects and its ability to invest in membership growth initiatives
 and customer service infrastructure enhancements and retire bank debt, and
 other statements contained herein regarding matters that are not historical
 facts, are forward-looking statements (as such term is defined in the
 Securities Exchange Act of 1934); and because such statements involve risks
 and uncertainties, actual results may differ materially from those expressed
 or implied by such forward-looking statements.  Factors that could cause
 actual results to differ materially include, but are not limited to:
 
     *  Changes in Federal or State regulation relating to health care and
        health benefit plans, including proposed patient protection legislation
        and mandated benefits.
     *  Rising medical costs or higher utilization of medical services,
        including higher out-of-network utilization under point-of-service
        plans and new drugs and technologies.
     *  Competitive pressure on the pricing of the Company's products,
        including acceptance of premium rate increases by the Company's
        commercial groups.
     *  Higher than expected administrative costs in operating the Company's
        business and the cost and impact on service of changing technologies.
     *  The ability of the Company to maintain risk transfer and other provider
        arrangements and the resolution of existing and future disputes over
        the reconciliations and performance under such arrangements.
     *  Any changes in the Company's estimates of its medical costs and
        expected cost trends.
     *  The impact of future developments in various litigation (including
        pending class and derivative actions filed against the Company and
        certain of its officers and directors, and other proceedings commenced
        against the Company and several employees by certain healthcare
        providers), the recent class actions in Connecticut and related
        litigation by the Connecticut Attorney General, regulatory proceedings
        and other governmental action (including the ongoing examination,
        investigation and review of the Company by various Federal and State
        authorities).
     *  The Company's ability to renew existing members and attract new
        members.
     *  The Company's ability to develop processes and systems to support its
        operations and any future growth.
     *  Those factors included in the discussion under the caption "Business --
        Cautionary Statement Regarding Forward-Looking Statements" in the
        Company's Annual Report on Form 10-K for the fiscal year ended
        December 31, 2000.
 
 
                     OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
                           Consolidated Income Statements
                     Three Months Ended March 31, 2001 and 2000
        (In thousands, except per share, per member per month and membership
                                  highlights data)
 
                                                          Three Months Ended
                                                              March 31,
                                                           2001        2000
     Revenues:
      Premiums earned                                   $1,055,288  $1,000,871
      Third-party administration, net                        3,076       3,524
      Investment and other income, net                      20,113      17,986
       Total revenues                                    1,078,477   1,022,381
 
     Expenses:
      Health care services                                 839,164     817,365
      Marketing, general and
       administrative                                      118,531     121,769
      Interest and other financing charges                   6,059      11,462
       Total expenses                                      963,754     950,596
 
     Income before income taxes                            114,723      71,785
     Income tax expense                                     47,151      30,150
     Net income before preferred stock
      dividends and amortization                            67,572      41,635
     Preferred stock dividends and
      amortization                                              --     (12,835)
     Net income                                            $67,572     $28,800
 
     Earnings per common and common
      equivalent share:
     Earnings per common share - basic                       $0.69       $0.35
     Earnings per common share - diluted                     $0.65       $0.34
 
 
     Weighted-average common shares
      outstanding-basic                                     98,354      82,049
     Effect of dilutive securities:
      Stock options                                          4,890       2,733
      Warrants                                                   -           -
     Weighted-average common shares
      outstanding-diluted                                  103,244      84,782
 
     Selected Information:
      Medical loss ratio                                     79.5%       81.7%
      Administrative loss ratio                              11.2%       12.1%
      Earnings before income taxes,
       financing charges, depreciation
       and amortization ("EBITDA")                        $124,567     $93,164
      PMPM premium revenue                                 $243.35     $223.19
      PMPM medical expense                                 $193.51     $182.27
      Fully insured member months                          4,336.5     4,484.5
 
                                              As of March 31,    As of Dec. 31,
     Membership Highlights                    2001       2000        2000
 
     Freedom and Liberty Plans            1,138,500   1,143,300    1,115,400
     HMO                                    222,200     225,500      221,600
     Total Fully Insured Commercial       1,360,700   1,368,800    1,337,000
     Medicare                                87,000      89,900       92,000
     Third-party Administration              56,400      61,300       62,400
     Total Membership                     1,504,100   1,520,000    1,491,400
 
 
                    OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
                            Consolidated Balance Sheets
                    As of March 31, 2001 and December 31, 2000
                         (In thousands, except share data)
 
                                       Assets
                                                  March 31,        December 31,
                                                    2001               2000
     Current assets:
      Cash and cash equivalents                    $331,065          $198,632
      Investments - available-for-sale, at
       market value                                 939,815           868,380
      Premiums receivable, net                       57,989            56,694
      Other receivables                              31,172            80,994
      Prepaid expenses and other current
       assets                                         5,133             4,761
      Deferred income taxes                          39,363            46,102
        Total current assets                      1,404,537         1,255,563
 
     Property and equipment, net                     29,004            19,779
     Deferred income taxes                           59,455           102,133
     Restricted cash and investments                 56,869            57,194
     Other noncurrent assets                         10,872             9,941
        Total assets                             $1,560,737        $1,444,610
 
 
                       Liabilities and Shareholders' Equity
 
     Current liabilities:
      Medical costs payable                        $616,689          $612,930
      Current portion of long term debt             169,531           147,000
      Trade accounts payable and accrued
       expenses                                     111,226           103,459
      Unearned premiums                             117,872            88,299
      Current portion of capital lease
       obligations                                    3,797             5,700
        Total current liabilities                 1,019,115           957,388
 
     Long-term debt                                      --            28,000
 
     Shareholders' equity:
      Preferred stock, $.01 par value,
       authorized 2,000,000 shares                       --                --
      Common stock, $.01 par value,
       authorized 400,000,000
       shares; issued and outstanding
        98,612,112 shares in 2001
       and 98,304,384 shares in 2000                    986               983
      Additional paid-in capital                    569,181           561,857
      Accumulated deficit                           (39,684)         (107,256)
      Accumulated other comprehensive
       income                                        11,139             3,638
       Total shareholders' equity                   541,622           459,222
 
       Total liabilities and shareholders'
        equity                                   $1,560,737        $1,444,610
 
 
                     OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Cash Flows
                    Three Months Ended March 31, 2001 and 2000
                                   (In thousands)
 
                                                       Three Months Ended
                                                             March 31,
                                                       2001             2000
 
     Cash flows from operating activities:
      Net income                                     $67,572           $41,635
      Adjustments to reconcile net earnings
       to
       net cash provided (used) by
        operating activities:
        Depreciation and amortization                  3,785            10,406
        Deferred income taxes                         46,590            30,150
        Realized (gain) loss on sale of
         investments                                  (1,818)              614
        Changes in assets and liabilities:
         Premiums receivable                          (1,295)              963
         Other receivables                            49,822             1,107
         Prepaid expenses and other current
          assets                                        (372)           (2,035)
         Medical costs payable                         3,759            17,365
         Trade accounts payable and accrued
          expenses                                       212             3,774
         Unearned premiums                            29,573             8,628
         Other, net                                     (450)           (3,354)
          Net cash provided by operating
           activities                                197,378           109,253
 
     Cash flows from investing activities:
      Capital expenditures                            (5,051)           (2,602)
      Purchases of investments                      (189,141)         (124,751)
      Sales and maturities of investments            132,181           103,730
      Other, net                                           -            (4,407)
          Net cash used by investing
           activities                                (62,011)          (28,030)
 
     Cash flows from financing activities:
      Proceeds from exercise of stock
       options                                         4,438               775
      Redemption of notes payable                     (5,469)          (14,000)
      Redemption of preferred stock                        -          (130,000)
      Payments under capital leases                   (1,903)           (3,745)
          Net cash used by financing
           activities                                 (2,934)         (146,970)
 
     Net increase (decrease) in cash and
      cash equivalents                               132,433           (65,747)
     Cash and cash equivalents at beginning
      of period                                      198,632           332,882
     Cash and cash equivalents at end of
      period                                        $331,065          $267,135
 
                     MAKE YOUR OPINION COUNT -- Click Here
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 SOURCE  Oxford Health Plans, Inc.

RELATED LINKS

http://www.oxhp.com