Provident American Corporation Reports Financial Results
NORRISTOWN, Pa.--(BUSINESS WIRE)--Aug. 14, 1998--Provident American Corporation (OTC Electronic Bulletin Board: PAMC), reported a net loss applicable to common stock for the second quarter ended June 30, 1998 of $2,382,000, or ($.20) per diluted share, including items detailed below, on $29,294,000 of gross revenues. For the corresponding 1997 quarter, the Company reported a net loss of $5,724,000, or $(0.57) per share, on $23,171,000 of gross revenue.
For the six-month period ending June 30, 1998, the Company reported net income applicable to common stock of $254,000 or $.02 per diluted share on gross revenue of $60,439,000. This compares to a net loss of $4,946,000 or $(0.49) per share, during the same period in 1997.
The Company's results for the second quarter include $1,587,000 of transitional costs not expected to continue into 1999 including transition costs associated with the outsourcing of various insurance administrative functions to HealthPlan Services, an adjustment to ceding allowances reflecting the Company's new reinsurance agreements and one-time accounting costs.
The Company's results also include $818,000 in start-up expenses for its new health-care Internet subsidiary. The Company also announced that it has changed the name of its Internet subsidiary to HealthAxis.com. The subsidiary's previous name was "Insurion."
Alvin H. Clemens, Chairman and Chief Executive Officer, commented, "The Company continues to make progress in reducing the policy loss ratio and lowering expenses following the implementation of managed care initiatives, including tighter front-end underwriting, price increases and policies that promote greater use of in-network health-care providers. We are continuing to move forward on the fall launch of our HealthAxis.com subsidiary, which will operate the Internet's first Web Site to offer health insurance and certain other health care related products as true online commerce products."
Provident American is an insurance company specializing in the marketing of managed-care health insurance through the underwriting of unique, affordable health care and life policies to individuals and small businesses, a $300 billion annual market.
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 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 the Company's reports filed with the Securities and Exchange Commission. -0- *T
Provident American Corporation and Subsidiaries
Consolidated Condensed Statements of Operations
(000's omitted)
Three Months Six Months
Ended June 30, Ended June 30, 1998 1997 1998 1997
Premiums earned $ 29,294 $ 23,171 $ 60,439 $ 44,314
Net investment income 1,000 775 5,919 2,696
Other income 6 5 128 26
Gross revenue 30,299 23,951 66,486 47,036
Reinsurance ceded 13,131 9,523 24,879 18,029
Net revenue 17,168 14,428 41,607 29,007
Benefits and expenses 19,551 23,821 41,276 37,441
Net income before income taxes (2,383) (9,393) 331 (8,434)
Provision for income taxes (38) (3,706) 3 (3,562)
Net income (2,345) (5,687) 328 (4,872)
Dividends on preferred stock 37 37 74 74
Net income applicable to common stock ($ 2,382) ($ 5,724) $ 254 ($ 4,946)
Net income per share of common ($ 0.20) ($ 0.57) $ 0.02 ($ 0.49)
Weighted average common shares outstanding 11,990 10,071 11,699 10,068
Provident American Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(000's omitted)
June 30, December 31, 1998 1997
Assets Investments $45,352 $47,101
Cash and cash equivalents 10,648 16,767
Other 44,971 34,497
Total assets $100,971 $98,365
Liabilities and Stockholders' Equity
Future policy benefits $45,686 $46,093
Policy claims 33,962 31,109
Other 15,884 17,154
Stockholders' equity 5,439 4,009
Total Liabilities
and Stockholders' Equity $100,971 $98,365
*T
CONTACT:
Deidre Holt
Craig Gitlitz
(610) 275-3800
or
Robinson Lerer & Montgomery
Gary Holmes
(212) 484-7736
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