HealthAxis Inc. Reports Second Quarter 2000 Results
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HealthAxis Inc. Reports Second Quarter 2000 Results
EAST NORRITON, Pa., Aug 14, 2000 (BUSINESS WIRE) -- HealthAxis Inc. (NASDAQ: HAXS chart, msgs) today reported a net loss from continuing operations for the second quarter ended June 30, 2000 of $16,179,000, or ($1.24) per share on a fully diluted basis, on $10,362,000 of revenue.
For the corresponding 1999 quarter, the Company reported a net loss from continuing operation of $2,202,000, or ($ .19) per share on a fully diluted basis. Excluding merger-related costs and the minority interest, the Company's operating loss from continuing operations for the current quarter would have been $4,626,000, or ($ .35) per share.
For the six months ended June 30, 2000 the net loss from continuing operations was $33,384,000, or ($2.55) per share on a fully diluted basis, on $21,738,000 of revenue. For the corresponding 1999 period, the Company reported a net loss from continuing operations of $3,804,000, or ($ .33) per share on a fully diluted basis.
Excluding merger-related costs and the minority interest, the Company's operating loss from continuing operations for the six months would have been $8,286,000, or ($ .63) per share.
In connection with the Company's previously announced transaction with Digital Insurance on June 30, 2000, wherein the Company entered into an agreement to sell certain assets used in connection with its retail website to Digital Insurance, the Company is treating its eDistribution Group as a discontinued operation.
In that regard, an estimated loss on the sale of discontinued operations in the amount of $225,792,000 has been recorded in the second quarter, as of the date of the sale agreement. The major component of the loss is the write-down of goodwill attributable to the eDistribution Group. This goodwill was originally generated as a result of the merger with Insurdata in January 2000.
In addition, the discontinued operation had a net loss for the quarter and six months of $2,616,000 and $6,341,000 respectively. For the corresponding 1999 periods, the Company reported losses from discontinued operations of $8,302,000 and $9,567,000 respectively.
The per share loss from, plus loss on sale of, the discontinued operations was ($17.43), and ($17.76), respectively, versus ($ .69) and ($ .81) for the corresponding 1999 periods.
Combining the results from continuing operations and discontinued operations, the Company reported a net loss for the quarter and six months ended June 30, 2000 of $244,587,000 ($18.67 per share) and $265,517,000 ($20.31 per share), respectively. For the corresponding 1999 periods, the Company's total loss was $10,539,000 ($ .88 per share) and $13,440,000 ($1.14 per share), respectively.
The Company anticipates that its near-term cash burn rate will average approximately $2 million per month for Q3 and $1 million per month for Q4, trending towards positive cash flow during the first half of 2001, and anticipates that it will end the year 2000 with in excess of $22 million in cash on hand.
Michael Ashker, President and CEO of HealthAxis Inc. stated: "Our financial results this quarter have all of the appeal of a toxic waste site. However, with the write-down of goodwill and our retail business behind us, we have paved the way for releasing unadulterated financials in the future." Ashker continued, "As our business strategy continues to take hold, the leverage of our model will become readily apparent in our future quarterly reports."
In other matters of interest:
-- The Boards of Directors of both the Company and
HealthAxis.com, Inc. have held renewed discussions regarding
the proposed merger between the parties. The parties have
entered into an amendment to the original Agreement and Plan
of Reorganization, dated January 26, 2000, as amended (the
"Agreement"), to extend the date by which either party may
terminate the agreement if the transaction contemplated
thereby is not consummated, from July 31, 2000 to March 31,
2001 and to revise the exchange ratio, which was previously
1.127 to 1, to a range between 1.30 and 1.37 to 1, with the
final exchange ratio determination subject to, among other
things, the final valuation of certain assets and liabilities
and receipt of a revised fairness opinion from the Company's
investment banker. The HealthAxis.com, Inc. Board maintains
the right to terminate the merger agreement between HealthAxis
Inc. and HealthAxis.com, Inc. if certain outstanding matters
remain unresolved on Sept 15, 2000. The merger is subject to
the shareholder approvals by Company shareholders owning at
least 80% of its outstanding common stock, and by the
preferred and common shareholders of HealthAxis.com, Inc., and
is expected to close during the 4th Quarter of 2000, or the
1st Quarter of 2001.
-- The Company announced that the UICI Voting Trust, which had
been scheduled to expire on July 31, 2000, has been extended
to March 31, 2001. As a result of HealthAxis Inc. and its
affiliates having voting power with respect to a total of
54.2% of HealthAxis.com, Inc.'s common and preferred stock,
the Company will continue to report on a consolidated basis
with its subsidiary, HealthAxis.com, Inc.
-- The Company's previously announced sale to Digital Insurance
is tracking to close in either the 3rd or 4th quarter of 2000.
Execution highlights - During the 2nd Quarter, the Company:
-- Entered into an agreement to sell its eDistribution Group to
Digital Insurance, thus completing a strategic repositioning
away from selling insurance, and becoming a leading technology
provider for the healthcare payer community and the fast
emerging eIntermediary segment.
-- Completed Version 3 of its presentation layer software, which
is now in the final testing stage. This will enable the
Company to provide carriers with a single gateway to link up
with multiple intermediaries.
The Company's management will host a conference call to review results and answer questions. The conference call will be held today (Aug 14) at 5:00 P.M. EDT. Investors wishing to participate should call 800-815-2528, or 706-645-9291 for International callers, and request the HealthAxis IR Call. A replay will be available for 10 days at: 800-642-1687 and 706-645-9291 for International callers. The access code (for replay only) is 923087.
Additionally, today's call will be broadcast on the Internet, and remain available in archives for 30 days, by WebRadio at: webradio.com.
About HealthAxis Inc.
HealthAxis.com, Inc., a subsidiary of HealthAxis Inc., is the leading provider of Internet solutions for healthcare insurance distribution and administration for the payer community. The Company's proprietary workflow and business application software, built around an application service provider model, enables healthcare payers--carriers, third party administrators, and large, self-funded groups--to more efficiently capture, process, and share health plan data over the Internet.
HealthAxis.com, Inc. is headquartered in suburban Philadelphia, with significant operations in Dallas, as well as offices in eight additional locations both domestic and international. The Company employs over 350 IT professionals.
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995:
Certain statements made by the Company, which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to trends, management's beliefs, expectations, forecasts and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate.
Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors, which may cause actual results to differ materially from those in the forward-looking statements.
For further information, which could cause actual results to differ from the Company's expectations as well as other factors, which could affect the Company's financial statements, please refer to HealthAxis Inc.'s reports filed with the Securities and Exchange Commission.
HealthAxis Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(000's omitted)
Three Months Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
---- ---- ---- ---- ---- ---- ---- ----
Revenue $ 10,362 $ -- $ 21,738 $ --
Expenses 53,211 2,401 106,888 3,697
------------------------------------------------
Operating Loss (42,849) (2,401) (85,150) (3,697)
Interest and
other income
(expense),
net 408 (84) (177) (421)
------------------------------------------------
Loss before
minority
interest (42,441) (2,485) (85,327) (4,118)
Minority
interest in
net loss of
subsidiary 26,262 283 51,943 314
------------------------------------------------
Loss in
continuing
operations (16,179) (2,202) (33,384) (3,804)
------------------------------------------------
Loss from
discontinued
operations (2,616) (8,302) (6,341) (9,567)
Loss on sale
of
discontinued
operations (225,792) (225,792)
------------------------------------------------
Net loss (244,587) (10,504) (265,517) (13,371)
------------------------------------------------
Dividends on
preferred
stock 0 35 0 69
------------------------------------------------
Net loss
applicable to
common stock ($244,587) ($ 10,539) ($265,517) ($ 13,440)
================================================
Loss per share
of common
(basic and
diluted)
Continuing
operations ($ 1.24) ($ 0.19) ($ 2.55) ($ 0.33)
Discontinued
operations ($ 17.43) ($ 0.69) ($ 17.76) ($ 0.81)
------------------------------------------------
Net Loss ($ 18.67) ($ 0.88) ($ 20.31) ($ 1.14)
================================================
Weighted
average common
shares
outstanding 13,098 12,039 13,072 11,797
HealthAxis Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(000's omitted)
June 30, Dec. 31,
2000 1999
---- ----
Assets
Cash and cash equivalents $ 31,530 $ 58,069
Goodwill 0 7,114
Other assets 42,159 14,419
--------------------
Total assets $ 73,689 $ 79,602
====================
Liabilities and Stockholders' Equity
Current liabilities $ 10,280 $ 6,979
Convertible debentures 26,045 25,019
Other long term liabilities 7,692 7,332
Minority interest in HealthAxis.com, Inc. 46,925 27,652
Stockholders' equity (17,253) 12,620
--------------------
Total Liabilities and Stockholders' Equity $ 73,689 $ 79,602
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