RightCHOICE Posts Record First Quarter Earnings

Strong Sales and Operating Performance Contribute to Solid Earnings Growth



Apr 16, 2001, 01:00 ET from RightCHOICE Managed Care, Inc.

    ST. LOUIS, April 16 /PRNewswire/ -- RightCHOICE Managed Care, Inc.
 (NYSE:   RIT) today reported first quarter net income of $12.8 million, a
 63 percent increase, compared with $7.8 million for the first quarter 2000.
 This is the 12th consecutive comparable quarter of improved profitability for
 the company.  RightCHOICE's revenues were $282 million, an increase of
 $32 million, or 12.8 percent, compared with the first quarter of 2000.
     "RightCHOICE again delivered strong operating results this quarter, which
 we believe demonstrates our ability to consistently execute on our business
 strategy," said John O'Rourke, chairman and chief executive officer of
 RightCHOICE.  "Our demonstrated success in retaining members and attracting
 new ones validates the value of our focus on excellent service and broad
 choices in health benefit plans."
     For the first quarter 2001, the company reported 67 cents diluted earnings
 per share, a 29 percent increase, compared with 52 cents diluted earnings per
 share for first quarter 2000.  [See note 2 in the financial tables for
 information regarding the calculation of earnings per share (EPS)].
     For the three months ended March 31, 2001, compared with the same period
 in 2000:
 
     -- Revenues were $281.6 million compared to $249.6 million, a 12.8 percent
        increase.
     -- Operating income was $17.0 million, compared to $12.5 million, a
        36.1 percent increase.
     -- Earnings before interest expense, taxes, depreciation and amortization
        (EBITDA), excluding the charge for minority interest in 2000, grew
        27.3 percent to $27.5 million compared to $21.6 million.
     -- Medical margin per member per month (PMPM) increased 11.2 percent to
        $28.97 PMPM from $26.06 PMPM.
     -- The Medical Cost Ratio (MCR) improved to 81.3 percent, compared with
        81.4 percent, and the general and administrative (G&A) expense ratio
        improved to 18.9 percent compared with 19.6 percent.
     -- Total membership increased to 2.8 million members as of March 31, 2001,
        a 9.1 percent increase. Underwritten membership increased to more than
        530,000 members despite the intentional exit by RightCHOICE on
        December 31, 2000, from the Missouri Consolidated Health Care Program
        and Medicare risk product, which accounted for about 46,000 members.
        Excluding this membership in 2000, underwritten membership increased
        10.5 percent. Total self-funded membership, including HealthLink Inc.,
        our wholly-owned network rental subsidiary, increased to 2.3 million
        members as of March 31, 2001, an 11.3 percent increase.
 
     The company attributes this increase in membership to continued strong
 service levels and its ability to offer employers and their members a flexible
 range of benefit plan options and services.  This includes access to the
 BlueCard(R) PPO national network available in 48 states and more than 200
 countries.
     "Customer preference in our market is driven by their desire for choice in
 health networks and benefits in addition to service.  We target our business
 practices to be consistent with these preferences in our focus to attract and
 retain membership," O'Rourke added.
     The company expects net income of approximately $50 million in 2001, an
 increase of approximately 40 percent over net income for 2000, resulting in a
 diluted EPS of approximately $2.55.  This EPS is based on approximately 19.7
 million diluted shares, which gives effect to the issuance of 750,000
 additional shares as contemplated in the registration statement filed with the
 Securities and Exchange Commission on March 28, 2001.  Additional information
 about the company's outlook will be discussed during the April 17, 2001
 teleconference.
     RightCHOICE Managed Care, Inc. is the largest provider of health care
 benefits in Missouri in terms of members.  Its HealthLink subsidiary provides
 network rental, administrative services, workers' compensation and other non-
 underwritten health benefit programs in Missouri and six neighboring states.
 
     Caution Concerning Forward-Looking Statements
     This press release includes financial estimates and other forward-looking
 statements that involve risks and uncertainties.  RightCHOICE intends that
 these forward-looking statements be covered by the safe harbor provisions for
 forward-looking statements contained in the Private Securities Litigation
 Reform Act of 1995.  These forward-looking statements are accompanied in this
 press release by words such as "believe," "expect," "anticipate," "estimate"
 and similar expressions.  These forward-looking statements are based on
 management's current expectations and are naturally subject to risks,
 uncertainties and changes in circumstances.  These forward-looking statements
 are not guarantees of future performance.  Actual results may differ
 materially from the expectations described in this press release due to, among
 other things, the factors detailed under the caption "Factors That May Affect
 Future Results of Operations" in RightCHOICE's Annual Report on Form 10-K for
 the year ended December 31, 2000, as on file with the Securities and Exchange
 Commission, to which readers are referred.  RightCHOICE is under no
 obligation, and expressly disclaim any obligation, to update or alter these
 forward-looking statements whether as a result of new information, future
 events or otherwise.
 
     Live Webcast of Conference Call
     A live webcast of RightCHOICE's first quarter earnings conference call
 will be available on April 17, 2001, starting at 8:30 a.m. Central Daylight
 time (9:30 a.m. Eastern Daylight Time).  Log on at www.ritusa.com .
 
     RightCHOICE Managed Care, Inc.
     Consolidated Financial and Operating Results
     (Unaudited; amounts in thousands except shares, per share and operating
      data)
 
     THREE MONTHS ENDED
     March 31,                                         2001           2000
 
     Underwritten premium revenue:
       PPO                                           $106,019        $79,666
       POS                                             59,689         46,486
       HMO (includes other POS)                        37,690         56,320
       Medicare supplement                             21,996         22,796
       Managed indemnity                                  689            685
       Other specialty services                        20,738         14,389
         Total premium revenue                        246,821        220,342
     Self-funded PPO/POS, HMO and ASO
      (includes HealthLink and other income)           33,933         28,632
     Non-affiliated real estate rental income             832            653
         Total fees and other income                   34,765         29,285
         Total revenues                               281,586        249,627
     Operating expenses:
       Health care services                           200,753        179,318
       Commissions                                     10,474          8,948
       General and administrative (excludes
        depreciation and amortization)                 47,890         43,826
       Depreciation and amortization                    5,469          5,047
         Total operating expenses                     264,586        237,139
     Operating income                                  17,000         12,488
     Investment income:
       Interest and dividends                           4,362          3,958
       Realized gains, net                                739            139
         Total investment income, net                   5,101          4,097
     Interest expense                                    (782)          (913)
     Other expense, net                                   (45)           (14)
     Minority interest in consolidated subsidiary           0         (1,468)
     Income tax expense                                (8,477)        (6,348)
         Net income                                   $12,797         $7,842
     Weighted average common shares                18,719,091     14,962,500
     Potential dilutive common shares                 477,479        236,528
     Basic earnings per share                           $0.68          $0.52
     Diluted earnings per share                         $0.67          $0.52
 
     BALANCE SHEET DATA:
     Cash and investments                            $331,136       $292,854
     Medical claims payable                          $142,304       $139,630
     Debt                                             $24,063        $32,063
     Minority interest in consolidated subsidiary          $-        $32,539
     Stockholders' equity                            $317,462       $221,862
 
     Book value per share*                             $16.94         $14.83
     Tangible book value per share*                    $12.12         $10.26
     Days in Medical Claims Payable                      63.8           70.9
 
     *Book value per share calculation is based on the number of common shares
      outstanding at quarter end.
 
     OPERATING DATA:
     Medical cost ratio                                 81.3%          81.4%
     G&A ratio                                          18.9%          19.6%
     Adjusted G&A ratio (excluding
      depreciation and amortization)                    17.0%          17.6%
 
     MEMBERSHIP DATA
     Number of members at end of period
       Underwritten:
         PPO                                          247,389        210,138
         POS                                          146,958        134,051
         HMO (includes other POS)**                    86,008        128,574
         Medicare supplement                           48,350         51,863
         Managed indemnity                              1,548          1,596
           Total underwritten membership              530,253        526,222
       Self-funded:
         PPO/POS                                       57,380         44,308
         HMO                                            5,065          7,633
         ASO (includes HealthLink):
         Workers' compensation                        782,800        639,765
         Other ASO                                  1,426,794      1,350,266
         Total self-funded membership               2,272,039      2,041,972
           Total membership                         2,802,292      2,568,194
 
     ** HMO Membership at March 31, 2000 included 41,571 members and 4,880
        members of the Missouri Consolidated Health Care Plan and Blue Horizons
        Medicare HMO plan (our Medicare risk product), respectively, both of
        which terminated as anticipated on December 31, 2000.
 
     Note 1:
     Health care services expense for the quarter ending March 31, 2000, has
     been reduced for the beneficial effect of reducing the premium deficiency
     relating to losses on a single contract, which was terminated as of
     December 31, 2000.
 
     Note 2:
     The reported financial results for the first quarter of 2001, and
     comparable results for the prior period, reflect the reorganization and
     merger of RightCHOICE and its parent, Blue Cross and Blue Shield of
     Missouri.  Prior to the reorganization and merger on November 30, 2000,
     Blue Cross and Blue Shield of Missouri owned approximately 15 million
     shares, or 80 percent, of RightCHOICE's 18.7 million common shares issued
     and outstanding, with the remainder of the stock being held by the public,
     known as the minority stockholders.  The Missouri Foundation For Health
     created during the November 30, 2000 reorganization and merger owned
     approximately 80 percent of the RightCHOICE outstanding common stock as of
     March 31, 2001.  In conjunction with the reorganization and merger, the
     minority stockholders exchanged their 3.7 million shares of  RightCHOICE
     common stock for an equal number of new RightCHOICE common shares.
 
     As a result of this reorganization and merger, the results of operations
     for the first quarter of 2000 reflect a charge against earnings for the
     minority stockholders' interest in RightCHOICE.  For the purpose of
     computing basic earnings per share for the first quarter of 2000, weighted
     average common shares were reduced by the minority stockholders' 3.7
     million shares of RightCHOICE.
 
 

SOURCE RightCHOICE Managed Care, Inc.
    ST. LOUIS, April 16 /PRNewswire/ -- RightCHOICE Managed Care, Inc.
 (NYSE:   RIT) today reported first quarter net income of $12.8 million, a
 63 percent increase, compared with $7.8 million for the first quarter 2000.
 This is the 12th consecutive comparable quarter of improved profitability for
 the company.  RightCHOICE's revenues were $282 million, an increase of
 $32 million, or 12.8 percent, compared with the first quarter of 2000.
     "RightCHOICE again delivered strong operating results this quarter, which
 we believe demonstrates our ability to consistently execute on our business
 strategy," said John O'Rourke, chairman and chief executive officer of
 RightCHOICE.  "Our demonstrated success in retaining members and attracting
 new ones validates the value of our focus on excellent service and broad
 choices in health benefit plans."
     For the first quarter 2001, the company reported 67 cents diluted earnings
 per share, a 29 percent increase, compared with 52 cents diluted earnings per
 share for first quarter 2000.  [See note 2 in the financial tables for
 information regarding the calculation of earnings per share (EPS)].
     For the three months ended March 31, 2001, compared with the same period
 in 2000:
 
     -- Revenues were $281.6 million compared to $249.6 million, a 12.8 percent
        increase.
     -- Operating income was $17.0 million, compared to $12.5 million, a
        36.1 percent increase.
     -- Earnings before interest expense, taxes, depreciation and amortization
        (EBITDA), excluding the charge for minority interest in 2000, grew
        27.3 percent to $27.5 million compared to $21.6 million.
     -- Medical margin per member per month (PMPM) increased 11.2 percent to
        $28.97 PMPM from $26.06 PMPM.
     -- The Medical Cost Ratio (MCR) improved to 81.3 percent, compared with
        81.4 percent, and the general and administrative (G&A) expense ratio
        improved to 18.9 percent compared with 19.6 percent.
     -- Total membership increased to 2.8 million members as of March 31, 2001,
        a 9.1 percent increase. Underwritten membership increased to more than
        530,000 members despite the intentional exit by RightCHOICE on
        December 31, 2000, from the Missouri Consolidated Health Care Program
        and Medicare risk product, which accounted for about 46,000 members.
        Excluding this membership in 2000, underwritten membership increased
        10.5 percent. Total self-funded membership, including HealthLink Inc.,
        our wholly-owned network rental subsidiary, increased to 2.3 million
        members as of March 31, 2001, an 11.3 percent increase.
 
     The company attributes this increase in membership to continued strong
 service levels and its ability to offer employers and their members a flexible
 range of benefit plan options and services.  This includes access to the
 BlueCard(R) PPO national network available in 48 states and more than 200
 countries.
     "Customer preference in our market is driven by their desire for choice in
 health networks and benefits in addition to service.  We target our business
 practices to be consistent with these preferences in our focus to attract and
 retain membership," O'Rourke added.
     The company expects net income of approximately $50 million in 2001, an
 increase of approximately 40 percent over net income for 2000, resulting in a
 diluted EPS of approximately $2.55.  This EPS is based on approximately 19.7
 million diluted shares, which gives effect to the issuance of 750,000
 additional shares as contemplated in the registration statement filed with the
 Securities and Exchange Commission on March 28, 2001.  Additional information
 about the company's outlook will be discussed during the April 17, 2001
 teleconference.
     RightCHOICE Managed Care, Inc. is the largest provider of health care
 benefits in Missouri in terms of members.  Its HealthLink subsidiary provides
 network rental, administrative services, workers' compensation and other non-
 underwritten health benefit programs in Missouri and six neighboring states.
 
     Caution Concerning Forward-Looking Statements
     This press release includes financial estimates and other forward-looking
 statements that involve risks and uncertainties.  RightCHOICE intends that
 these forward-looking statements be covered by the safe harbor provisions for
 forward-looking statements contained in the Private Securities Litigation
 Reform Act of 1995.  These forward-looking statements are accompanied in this
 press release by words such as "believe," "expect," "anticipate," "estimate"
 and similar expressions.  These forward-looking statements are based on
 management's current expectations and are naturally subject to risks,
 uncertainties and changes in circumstances.  These forward-looking statements
 are not guarantees of future performance.  Actual results may differ
 materially from the expectations described in this press release due to, among
 other things, the factors detailed under the caption "Factors That May Affect
 Future Results of Operations" in RightCHOICE's Annual Report on Form 10-K for
 the year ended December 31, 2000, as on file with the Securities and Exchange
 Commission, to which readers are referred.  RightCHOICE is under no
 obligation, and expressly disclaim any obligation, to update or alter these
 forward-looking statements whether as a result of new information, future
 events or otherwise.
 
     Live Webcast of Conference Call
     A live webcast of RightCHOICE's first quarter earnings conference call
 will be available on April 17, 2001, starting at 8:30 a.m. Central Daylight
 time (9:30 a.m. Eastern Daylight Time).  Log on at www.ritusa.com .
 
     RightCHOICE Managed Care, Inc.
     Consolidated Financial and Operating Results
     (Unaudited; amounts in thousands except shares, per share and operating
      data)
 
     THREE MONTHS ENDED
     March 31,                                         2001           2000
 
     Underwritten premium revenue:
       PPO                                           $106,019        $79,666
       POS                                             59,689         46,486
       HMO (includes other POS)                        37,690         56,320
       Medicare supplement                             21,996         22,796
       Managed indemnity                                  689            685
       Other specialty services                        20,738         14,389
         Total premium revenue                        246,821        220,342
     Self-funded PPO/POS, HMO and ASO
      (includes HealthLink and other income)           33,933         28,632
     Non-affiliated real estate rental income             832            653
         Total fees and other income                   34,765         29,285
         Total revenues                               281,586        249,627
     Operating expenses:
       Health care services                           200,753        179,318
       Commissions                                     10,474          8,948
       General and administrative (excludes
        depreciation and amortization)                 47,890         43,826
       Depreciation and amortization                    5,469          5,047
         Total operating expenses                     264,586        237,139
     Operating income                                  17,000         12,488
     Investment income:
       Interest and dividends                           4,362          3,958
       Realized gains, net                                739            139
         Total investment income, net                   5,101          4,097
     Interest expense                                    (782)          (913)
     Other expense, net                                   (45)           (14)
     Minority interest in consolidated subsidiary           0         (1,468)
     Income tax expense                                (8,477)        (6,348)
         Net income                                   $12,797         $7,842
     Weighted average common shares                18,719,091     14,962,500
     Potential dilutive common shares                 477,479        236,528
     Basic earnings per share                           $0.68          $0.52
     Diluted earnings per share                         $0.67          $0.52
 
     BALANCE SHEET DATA:
     Cash and investments                            $331,136       $292,854
     Medical claims payable                          $142,304       $139,630
     Debt                                             $24,063        $32,063
     Minority interest in consolidated subsidiary          $-        $32,539
     Stockholders' equity                            $317,462       $221,862
 
     Book value per share*                             $16.94         $14.83
     Tangible book value per share*                    $12.12         $10.26
     Days in Medical Claims Payable                      63.8           70.9
 
     *Book value per share calculation is based on the number of common shares
      outstanding at quarter end.
 
     OPERATING DATA:
     Medical cost ratio                                 81.3%          81.4%
     G&A ratio                                          18.9%          19.6%
     Adjusted G&A ratio (excluding
      depreciation and amortization)                    17.0%          17.6%
 
     MEMBERSHIP DATA
     Number of members at end of period
       Underwritten:
         PPO                                          247,389        210,138
         POS                                          146,958        134,051
         HMO (includes other POS)**                    86,008        128,574
         Medicare supplement                           48,350         51,863
         Managed indemnity                              1,548          1,596
           Total underwritten membership              530,253        526,222
       Self-funded:
         PPO/POS                                       57,380         44,308
         HMO                                            5,065          7,633
         ASO (includes HealthLink):
         Workers' compensation                        782,800        639,765
         Other ASO                                  1,426,794      1,350,266
         Total self-funded membership               2,272,039      2,041,972
           Total membership                         2,802,292      2,568,194
 
     ** HMO Membership at March 31, 2000 included 41,571 members and 4,880
        members of the Missouri Consolidated Health Care Plan and Blue Horizons
        Medicare HMO plan (our Medicare risk product), respectively, both of
        which terminated as anticipated on December 31, 2000.
 
     Note 1:
     Health care services expense for the quarter ending March 31, 2000, has
     been reduced for the beneficial effect of reducing the premium deficiency
     relating to losses on a single contract, which was terminated as of
     December 31, 2000.
 
     Note 2:
     The reported financial results for the first quarter of 2001, and
     comparable results for the prior period, reflect the reorganization and
     merger of RightCHOICE and its parent, Blue Cross and Blue Shield of
     Missouri.  Prior to the reorganization and merger on November 30, 2000,
     Blue Cross and Blue Shield of Missouri owned approximately 15 million
     shares, or 80 percent, of RightCHOICE's 18.7 million common shares issued
     and outstanding, with the remainder of the stock being held by the public,
     known as the minority stockholders.  The Missouri Foundation For Health
     created during the November 30, 2000 reorganization and merger owned
     approximately 80 percent of the RightCHOICE outstanding common stock as of
     March 31, 2001.  In conjunction with the reorganization and merger, the
     minority stockholders exchanged their 3.7 million shares of  RightCHOICE
     common stock for an equal number of new RightCHOICE common shares.
 
     As a result of this reorganization and merger, the results of operations
     for the first quarter of 2000 reflect a charge against earnings for the
     minority stockholders' interest in RightCHOICE.  For the purpose of
     computing basic earnings per share for the first quarter of 2000, weighted
     average common shares were reduced by the minority stockholders' 3.7
     million shares of RightCHOICE.
 
 SOURCE  RightCHOICE Managed Care, Inc.