Attached files
| file | filename |
|---|---|
| 8-K - FORM 8K DATED AUGUST 2, 2012 - INTEGRAMED AMERICA INC | form8k08022012.htm |
IntegraMed® Q2 Revenue Grew 10.3% to $76.2M;
EPS Rose to $0.04 from $0.03 Last Year
PURCHASE, NEW YORK — August 2, 2012 -- IntegraMed America, Inc. (NASDAQ: INMD), a leader in developing, marketing and managing specialty healthcare facilities in the fertility and vein care markets, announced today results for the second quarter and the six months ended June 30, 2012. Second quarter and six months 2012 results include pre-tax costs of approximately $1.5 million (approximately $1.1 million after tax) associated with the pending acquisition of IntegraMed by affiliates of Sagard Capital Partners, L.P. Results in the year-ago periods include a pre-tax medical malpractice settlement of $1.65 million (approximately $1.0 million after tax).
|
Summary Financial Results
(in thousands, except per share data)
|
||||||||||||||||||||||||
|
Three Months Ended 6/30/12
|
Three Months Ended 6/30/11
|
%
Change
|
Six Months Ended 6/30/12
|
Six Months Ended 6/30/11
|
%
Change
|
|||||||||||||||||||
|
Revenues:
Attain Fertility Centers
|
$ | 53,131 | $ | 49,653 | 7.0 | % | $ | 104,388 | $ | 98,251 | 6.3 | % | ||||||||||||
|
Vein Clinics
|
23,060 | 19,398 | 18.9 | % | 42,629 | 35,059 | 21.6 | % | ||||||||||||||||
|
Total Revenues
|
$ | 76,191 | $ | 69,051 | 10.3 | % | $ | 147,017 | $ | 133,310 | 10.3 | % | ||||||||||||
|
Operating Income:
Attain Fertility Centers
|
4,594 | 4,172 | 10.1 | % | 8,863 | 8,606 | 3.0 | % | ||||||||||||||||
|
Vein Clinics
|
1,068 | 1,192 | (10.4 | )% | 1,919 | 1,441 | 33.2 | % | ||||||||||||||||
|
Total Operating Income
|
$ | 5,662 | $ | 5,364 | 5.6 | % | $ | 10,782 | $ | 10,047 | 7.3 | % | ||||||||||||
|
Corporate G&A Costs (1)
|
$ | 4,537 | $ | 3,001 | 51.2 | % | $ | 7,422 | $ | 6,042 | 22.8 | % | ||||||||||||
|
Legal Settlement (2)
|
$ | 0.0 | $ | 1,650 |
nm
|
$ | 0.0 | $ | 1,650 |
nm
|
||||||||||||||
|
Net Interest Expense
|
60 | 83 | (27.7 | )% | 123 | 177 | (30.5 | )% | ||||||||||||||||
|
Income before Inc. Taxes
|
1,065 | 630 | 69.1 | % | 3,238 | 2,178 | 48.7 | % | ||||||||||||||||
|
Income Taxes
|
589 | 282 | 108.9 | % | 1,454 | 872 | 66.7 | % | ||||||||||||||||
|
Net income
|
$ | 476 | $ | 348 | 36.8 | % | $ | 1,784 | $ | 1,306 | 36.6 | % | ||||||||||||
|
Diluted EPS
|
$ | 0.04 | $ | 0.03 | 33.3 | % | $ | 0.15 | $ | 0.11 | 36.4 | % | ||||||||||||
|
Diluted Shares
|
12,053 | 11,878 | 1.5 | % | 12,037 | 11,873 | 1.4 | % | ||||||||||||||||
|
Adjusted EBITDA (3)
|
$ | 3,682 | $ | 3,211 | 14.7 | % | $ | 8,337 | $ | 7,166 | 16.3 | % | ||||||||||||
(1) Included in the 2012 Q2 and six months G&A expenses are approximately $1.5 million in pre-tax costs related to the pending acquisition of IntegraMed by affiliates of Sagard Capital Partners, L.P.
(2) Pre-tax provision reflects IntegraMed’s portion of a medical malpractice settlement, net of insurance coverage and Partner physician contributions.
(3) IntegraMed uses the term "Adjusted EBITDA" when reporting financial results in accordance with SEC rules regarding the use of financial measures not calculated in accordance with generally accepted accounting principles (GAAP). Adjusted EBITDA is used as a management tool to measure and monitor financial performance, and certain of covenants in the Company’s credit facility are tied to Adjusted EBITDA. While providing useful information, Adjusted EBITDA should not be considered in isolation as a measure of financial performance under GAAP. Investors should be aware that Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies and comparisons could be misleading unless all companies and analysts calculate this measure in the same fashion. A reconciliation to Adjusted EBITDA is provided below.
1
IntegraMed President and CEO, Jay Higham, commented, “Our Q2 and first half results continue to reflect overall strength across the business on both the top and bottom line. The Q2 revenue improvement was fueled by contributions from both mature and new vein clinics as well as from a solid performance in our Attain Fertility Centers segment, which achieved a modest increase in IVF Cycles volume and a double-digit increase in pregnancies in our Attain IVF Program. Excluding non-recurring acquisition-related costs, we were able to hold corporate G&A expenses roughly in line with the year ago period. Excluding deal and litigation costs in the second quarters of 2012 and 2011, respectively, we achieved solid net income and EPS gains year over year.”
Attain Fertility Centers Division
| Q2 2012 | Q2 2011 |
Change
|
% Change
|
|||||||||||||
|
Revenue:
|
$ | 53.1M | $ | 49.7M | $ | 3.4M | 7.0 | % | ||||||||
|
Operating Income:
|
$ | 4.6M | $ | 4.2M | $ | 0.4M | 10.1 | % | ||||||||
|
Fertility Partner Data:
|
||||||||||||||||
|
New Patient Visits:
|
7,340 | 7,458 | (118 | ) | (1.6 | )% | ||||||||||
|
IVF Cycles:
|
4,013 | 3,886 | 127 | 3.3 | % | |||||||||||
|
IUI Cycles:
|
6,445 | 6,410 | 35 | 0.5 | % | |||||||||||
|
Attain IVF Program Data:
|
||||||||||||||||
|
Applications:
|
603 | 719 | (116 | ) | (16.1 | )% | ||||||||||
|
Enrollments:
|
403 | 457 | (54 | ) | (11.8 | )% | ||||||||||
|
Pregnancies:
|
311 | 269 | 42 | 15.6 | % | |||||||||||
Fertility Centers’ revenue reflected the benefit of new partner center agreements in North Carolina and Florida that were completed in the first half of 2012. Key fertility center performance metrics (including New Patient visits and the number of IUI and IVF procedures) have held relatively steady in an overall fertility market that has experienced slight declines largely due to overall demographic trends.
The Attain IVF program saw a decline in applications and enrollments during the quarter, while, pregnancies, which are a marker for revenue recognition in the Attain IVF program, rose 15.6% versus the prior year. IntegraMed is undertaking a number of initiatives to increase the number of applications and enrollments going forward, both on an individual customer basis, but also by seeking to increase the number of facilities that offer the Attain Program.
An example of these new business development initiatives was the July launch of the “Attain Rx Discount Card” that will provide up to 75% in fertility medication savings for those enrolled in an Attain IVF Program. The program was created based on patient feedback and is designed to help patients with the costs of an array of fertility medications. To promote the launch Attain is giving away 100 cards in a contest running through August 17, 2012.
Vein Clinics (VCA)
| Q2 2012 | Q2 2011 |
Change
|
% Change
|
|||||||||||||
|
Revenue Mature Clinics (1)
|
$ | 20.1M | $ | 18.0M | $ | 2.1M | 11.7 | % | ||||||||
|
Revenue New Clinics (2)
|
$ | 3.0M | $ | 1.3M | $ | 1.7M | 130.8 | % | ||||||||
|
Total Vein Clinics Revenue:
|
$ | 23.1M | $ | 19.4M | $ | 3.7M | 18.9 | % | ||||||||
|
Operating Income Mature Clinics
|
$ | 4.0M | $ | 3.1M | $ | 0.9M | 29.0 | % | ||||||||
|
Operating Income New Clinics
|
$ | (1.0M | ) | $ | (0.3M | ) | $ | (0.7M | ) | n/a | ||||||
|
Division Overhead Expenses
|
$ | (2.0M | ) | $ | (1.8M | ) | $ | (0.2M | ) | n/a | ||||||
|
Total Vein Clinics Operating Income:
|
$ | 1.1M | $ | 1.2M | $ | (0.1M | ) | (10.4 | )% | |||||||
|
Inquiries:
|
9,667 | 8,912 | 755 | 8.5 | % | |||||||||||
|
New Consultations:
|
6,382 | 5,604 | 778 | 13.9 | % | |||||||||||
|
First Leg Starts:
|
3,096 | 2,759 | 337 | 12.2 | % | |||||||||||
|
Total Clinics (net):
|
50 | 44 | 6 | 13.6 | % | |||||||||||
|
(1)
|
Defined as clinics opened prior to January 1, 2011.
|
|
(2)
|
Defined as clinics opened after January 1, 2011.
|
2
Continued strength in vein clinic revenue growth reflected solid demand at mature clinics, complemented by revenues from new clinics. The revenue improvement was achieved despite the impact of higher than usual physician turnover during Q2 2012. Total division operating income declined modestly versus the prior year as a result of a higher level of new clinic development activity and related start up expenses in Q2 2012 which more than offset solid improvement in mature clinic operating income.
IntegraMed continues to pursue its expansion strategy in the vein clinics division, with plans to open an additional 3 clinics prior to year-end.
Cash Flow and Balance Sheet
Net cash and cash equivalents declined to $56.7 million from $57.9 million at year-end 2011. Net cash provided by operating activities declined nearly 37% in the first six months of 2012 versus the same period a year ago due primarily to a substantial decrease in accrued liabilities coupled with a decrease in patient deposits related to Attain IVF Refund program (as higher pregnancy rates in the quarter resulted in more revenue being recognized). The outstanding balance of the Company’s credit facility was reclassified to current during the quarter as it is scheduled to expire in the second quarter of 2013, if not extinguished sooner. The 2013 maturity date resulted in the current portion of long-term notes rising to $9.1 million during the quarter.
IntegraMed CFO, Tim Sheehan, said, “Operationally, Q2 was another solid quarter where we continued to drive top-line growth across our fertility and vein clinic businesses. At the same time, we continued to closely manage corporate G&A expenses, which, when excluding deal-related costs were roughly in line with the year ago period and represented a smaller percentage of a growing base of revenue. IntegraMed remains well funded to support the growth of its businesses at the same time we seek to achieve further operating improvements in the business going forward.”
About IntegraMed America, Inc.
IntegraMed is a leader in developing, marketing and managing specialty outpatient healthcare facilities, with a current focus on the fertility and vein care markets. IntegraMed supports its provider networks with clinical and business information systems, marketing and sales, facilities and operations management, finance and accounting, human resources, legal, risk management, quality assurance, and fertility treatment financing programs.
Attain Fertility Centers, an IntegraMed Specialty, is the nation’s largest fertility center network, with 15 company-managed partner centers and 20 affiliate centers, comprising over 130 locations across 34 states and the District of Columbia. Nearly one of every four IVF procedures in the U.S. is performed in an Attain Fertility Centers network practice.
Vein Clinics of America, an IntegraMed Specialty, is the leading provider of specialty vein care services in the U.S. The IntegraMed Vein Clinic network operates 50 centers across 14 states, principally in the Midwest and Southeast.
For more information about IntegraMed please visit: www.integramed.com for investor background, www.attainfertility.com for fertility, or www.veinclinics.com for vein care.
Statements contained in this press release that are not based on historical fact, including statements concerning future results, performance, expectations and expansion of IntegraMed are forward-looking statements that may involve a number of risks and uncertainties. Actual results may differ materially from the statements made as a result of various factors, including, but not limited to, the risks associated with IntegraMed's ability to identify, consummate and finance future growth, changes in insurance coverage, government laws and regulations regarding health care or managed care contracting; and other risks, including those identified in the company's most recent Form 10-K and in other documents filed by IntegraMed with the U.S. Securities and Exchange Commission. All information in this press release is as of August 2, 2012 and IntegraMed undertakes no duty to update this information.
CONTACT:
Media/Investors:
David Collins, Antonia Trigiani
Catalyst Global
inmd@catalyst-ir.com
212-924-9800 or 917 734 0339 after hours
(tables follow)
3
INTEGRAMED AMERICA, INC.
SUPPLEMENTARY DATA
(all amounts in thousands)
(unaudited)
Adjusted EBITDA Reconciliation
Adjusted EBITDA represents net income plus interest, taxes, depreciation, amortization and amortization of deferred compensation. The Company believes that the most directly comparable financial measure to Adjusted EBITDA in accordance with GAAP is net income. The following table provides a reconciliation of Adjusted EBITDA to net income for the periods presented:
|
Three months ended,
June 30,
|
Six months ended,
June 30,
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Net Income
|
$ | 476 | $ | 348 | $ | 1,784 | $ | 1,306 | ||||||||
|
Adjustments:
|
||||||||||||||||
|
Interest Expense
|
96 | 131 | 200 | 273 | ||||||||||||
|
Income Tax Expense
|
589 | 282 | 1,454 | 872 | ||||||||||||
|
Depreciation & Amortization
|
2,227 | 2,023 | 4,313 | 3,935 | ||||||||||||
|
Amortization of Deferred Compensation
|
294 | 427 | 586 | 780 | ||||||||||||
|
Adjusted EBITDA
|
$ | 3,682 | $ | 3,211 | $ | 8,337 | $ | 7,166 | ||||||||
Normalized Earnings Reconciliation
Normalized Earnings represents Income before taxes plus the add-back of certain expenses. In Q2 2012 the expenses consist of those relating to the pending acquisition of the Company, and in Q2 2011 the expenses related to the settlement of a medical malpractice claim. The Company believes that by excluding these expenses from earnings investors will have an understanding of the earnings associated with the Company’s on-going business. The Company believes that the most directly comparable financial measure to Normalized Earnings in accordance with GAAP is Income before taxes. The following table provides a reconciliation of Normalized Earnings to Income before taxes for the periods presented:
|
Three months ended,
June 30,
|
Six months ended,
June 30,
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Income before income taxes
|
$ | 1,065 | $ | 630 | $ | 3,238 | $ | 2,178 | ||||||||
|
Adjustments:
Acquisition Expenses
|
1,495 | 0 | 1,495 | 0 | ||||||||||||
|
Legal Settlement
|
0 | 1,650 | 0 | 1,650 | ||||||||||||
|
Adjusted income before taxes
|
2,560 | 2,280 | 4,733 | 3,828 | ||||||||||||
|
Less estimated taxes
|
(1,037 | ) | (912 | ) | (1,917 | ) | (1,531 | ) | ||||||||
|
Normalized Earnings
|
$ | 1,523 | $ | 1,368 | $ | 2,816 | $ | 2,297 | ||||||||
|
Diluted Shares
|
12,053 | 11,878 | 12,037 | 11,873 | ||||||||||||
|
Normalized Diluted EPS
|
$ | 0.13 | $ | 0.12 | $ | 0.23 | $ | 0.19 | ||||||||
4
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(all amounts in thousands, except per share amounts)
(unaudited)
|
For the
Three-month period
Ended June 30,
|
For the
Six-month period
Ended June 30,
|
|||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Revenue
|
||||||||||||||||
|
Attain Fertility Centers
|
$ | 53,131 | $ | 49,653 | $ | 104,388 | $ | 98,251 | ||||||||
|
Vein Clinics
|
23,060 | 19,398 | 42,629 | 35,059 | ||||||||||||
|
Total Revenues
|
76,191 | 69,051 | 147,017 | 133,310 | ||||||||||||
|
Costs of services and sales
|
||||||||||||||||
|
Attain Fertility Centers
|
48,537 | 45,481 | 95,525 | 89,645 | ||||||||||||
|
Vein Clinics
|
21,992 | 18,206 | 40,710 | 33,618 | ||||||||||||
|
Total Cost of Services and Sales
|
70,529 | 63,687 | 136,235 | 123,263 | ||||||||||||
|
Contribution
|
||||||||||||||||
|
Attain Fertility Centers
|
4,594 | 4,172 | 8,863 | 8,606 | ||||||||||||
|
Vein Clinics
|
1,068 | 1,192 | 1,919 | 1,441 | ||||||||||||
|
Total Contribution
|
5,662 | 5,364 | 10,782 | 10,047 | ||||||||||||
|
General and administrative expenses
|
4,537 | 3,001 | 7,422 | 6,042 | ||||||||||||
|
Legal Settlement
|
- | 1,650 | - | 1,650 | ||||||||||||
|
Interest income
|
(36 | ) | (48 | ) | (78 | ) | (96 | ) | ||||||||
|
Interest expense
|
96 | 131 | 200 | 273 | ||||||||||||
|
Total other expenses
|
4,597 | 4,734 | 7,544 | 7,869 | ||||||||||||
|
Income before income taxes
|
1,065 | 630 | 3,238 | 2,178 | ||||||||||||
|
Income tax provision
|
589 | 282 | 1,454 | 872 | ||||||||||||
|
Net income
|
$ | 476 | $ | 348 | $ | 1,784 | $ | 1,306 | ||||||||
|
Basic and diluted earnings per share of Common Stock:
|
||||||||||||||||
|
Basic earnings per share
|
$ | 0.04 | $ | 0.03 | $ | 0.15 | $ | 0.11 | ||||||||
|
Diluted earnings per share
|
$ | 0.04 | $ | 0.03 | $ | 0.15 | $ | 0.11 | ||||||||
|
Weighted average shares – basic
|
11,987 | 11,836 | 11,981 | 11,825 | ||||||||||||
|
Weighted average shares – diluted
|
12,053 | 11,878 | 12,037 | 11,873 | ||||||||||||
(more)
5
INTEGRAMED AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(all amounts in thousands)
(unaudited)
| June 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 56,669 | $ | 57,909 | ||||
|
Patient and other receivables, net
|
7,233 | 6,372 | ||||||
|
Other current assets
|
10,277 | 8,602 | ||||||
|
Deferred taxes
|
2,523 | 2,222 | ||||||
| 76,702 | 75,105 | |||||||
|
Total current assets
|
||||||||
|
Fixed assets, net
|
24,482 | 21,288 | ||||||
|
Intangible assets, Business Service Rights, net
|
24,845 | 24,114 | ||||||
|
Goodwill
|
30,334 | 30,334 | ||||||
|
Trademarks
|
4,442 | 4,442 | ||||||
|
Other assets
|
2,375 | 2,221 | ||||||
|
Total assets
|
$ | 163,180 | $ | 157,504 | ||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
2,573 | 4,037 | ||||||
|
Accrued liabilities
|
18,530 | 17,074 | ||||||
|
Current portion of long-term notes payable & other obligations
|
9,070 | 3,816 | ||||||
|
Due to Fertility Medical Practices, net
|
19,483 | 14,229 | ||||||
|
Attain IVF Refund Program and other patient deposits
|
16,960 | 16,342 | ||||||
|
Total current liabilities
|
66,616 | 55,498 | ||||||
|
Deferred tax liabilities
|
4,587 | 5,277 | ||||||
|
Long-term notes payable and other obligations
|
-- | 7,187 | ||||||
|
Total liabilities
|
71,203 | 67,962 | ||||||
|
Commitments and Contingencies
|
||||||||
|
Shareholders' equity:
|
||||||||
|
Common stock
|
120 | 119 | ||||||
|
Capital in excess of par
|
78,794 | 78,156 | ||||||
|
Other comprehensive (loss)
|
(30 | ) | (42 | ) | ||||
|
Treasury stock
|
(330 | ) | (330 | ) | ||||
|
Retained Earnings
|
13,423 | 11,639 | ||||||
|
Total shareholders' equity
|
91,977 | 89,542 | ||||||
|
Total liabilities and shareholders' equity
|
$ | 163,180 | $ | 157,504 | ||||
(more)
6
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all amounts in thousands)
(unaudited)
|
For the
Six-month period
Ended June 30,
|
||||||
|
2012
|
2011
|
|||||
|
Cash flows from operating activities:
|
||||||
|
Net income
|
$ | 1,784 | $ | 1,306 | ||
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
||||||
|
Depreciation and amortization
|
4,313 | 3,935 | ||||
|
Deferred income tax provision
|
(998 | ) | 223 | |||
|
Stock based compensation
|
586 | 780 | ||||
|
Changes in assets and liabilities
|
||||||
|
(Decrease) increase in assets:
|
||||||
|
Patient and other accounts receivable
|
(861 | ) | (927 | ) | ||
|
Other current assets
|
(1,675 | ) | (763 | ) | ||
|
Other assets
|
(154 | ) | (174 | ) | ||
|
(Decrease) increase in liabilities:
|
||||||
|
Accounts payable
|
(1,463 | ) | (1,327 | ) | ||
|
Accrued liabilities
|
1,456 | 5,752 | ||||
|
Due to medical practices
|
5,254 | 2,911 | ||||
|
Attain IVF Refund patient deposits
|
618 | 2,325 | ||||
|
Net cash provided by operating activities
|
8,860 | 14,041 | ||||
|
Cash flows used in investing activities:
|
||||||
|
Purchase of business service rights
|
(1,380 | ) | (2,395 | ) | ||
|
Purchase of fixed assets and leasehold improvements
|
(6,858 | ) | (6,212 | ) | ||
|
Net cash used in investing activities
|
(8,238 | ) | (8,607 | ) | ||
|
Cash flows used in financing activities:
|
||||||
|
Principle repayments on debt
|
(1,914 | ) | (1,834 | ) | ||
|
Proceeds from stock option exercises
|
52 | 92 | ||||
|
Net cash used in financing activities
|
(1,862 | ) | (1,742 | ) | ||
|
Net increase (decrease) in cash
|
(1,240 | ) | 3,692 | |||
|
Cash and cash equivalents at beginning of period
|
57,909 | 50,183 | ||||
|
Cash and cash equivalents at end of period
|
$ | 56,669 | $ | 53,875 | ||
|
Supplemental Information:
|
||||||
|
Interest paid
|
$ | 188 | $ | 285 | ||
|
Income taxes paid
|
$ | 1,584 | $ | 211 | ||
# # # #
7