-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LdrmJRwjpM4TcEaINpystcmU9tFZo9CAtDi+nXMN9x4RUgjou5SddctTvMWX26Dy CRC5QKcx7ilZJDkLpcP9ag== 0000926236-04-000022.txt : 20040217 0000926236-04-000022.hdr.sgml : 20040216 20040217084614 ACCESSION NUMBER: 0000926236-04-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040217 ITEM INFORMATION: FILED AS OF DATE: 20040217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST HEALTH GROUP CORP CENTRAL INDEX KEY: 0000812910 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 363307583 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15846 FILM NUMBER: 04602603 BUSINESS ADDRESS: STREET 1: 3200 HIGHLAND AVE STREET 2: HEALTH COMPARE CORP CITY: DOWNERS GROVE STATE: IL ZIP: 60515 BUSINESS PHONE: 6302417900 MAIL ADDRESS: STREET 1: 3200 HIGHLAND AVENUE STREET 2: 3200 HIGHLAND AVENUE CITY: DOWNERS GROVE STATE: IL ZIP: 60515 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHCARE COMPARE CORP/DE/ DATE OF NAME CHANGE: 19920703 8-K 1 fhg03q4-8k.txt FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2003 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 17, 2004 First Health Group Corp. (Exact name of registrant as specified in its charter) Delaware 0-15846 36-3307583 (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 3200 Highland Avenue, Downers Grove, IL 60515 (Address of principal executive offices, including zip code) (630) 737-7900 (Registrant's telephone number including area code) Item 12: Results of Operations and Financial Condition The following information is furnished pursuant to Item 12, "Results of Operations and Financial Condition." The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. On February 17, 2004, First Health Group Corp. issued a press release announcing financial results for the quarter and year ended December 31, 2003. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. First Health Group Corp. February 17, 2004 /s/ Joseph E. Whitters ----------------------- Joseph E. Whitters Executive Vice President, Treasurer and Chief Financial Officer EX-99.1 3 exh99-1.txt PRESS RELEASE FOURTH QUARTER AND YEAR END RESULTS 2003 EXHIBIT 99.1 FIRST HEALTH 3200 Highland Avenue Downers Grove, IL 60515-1223 (630) 737-7900 www.firsthealth.com Investor Contact: Joseph E. Whitters, CFO, (630) 737-7511 Media Contact: Erin Gardiner, (630) 737-5016 FOR IMMEDIATE RELEASE --------------------- FIRST HEALTH REPORTS FOURTH QUARTER AND YEAR END RESULTS ---------------------------------------------------------------------------- DOWNERS GROVE, IL - February 17, 2004 - Edward L. Wristen, President and Chief Executive Officer of First Health Group Corp. (NASDAQ: FHCC), announced today the results of operations for the fourth quarter and year ended December 31, 2003. Diluted earnings per share (EPS) and net income for the three months and year ended December 31, 2003, increased 14% to $.40 or $38,066,000 and 23% to $1.57 or $152,734,000 respectively, compared with $.35 or $35,697,000 and $1.28 or $132,938,000 respectively, during the same periods last year. Revenues for the three months and year ended December 31, 2003, increased 14% to $238,786,000 from $209,754,000 and 17% to $890,926,000 from $759,966,000, respectively, during the same periods last year. Mr. Wristen commented that the fourth quarter results include two months of activity for the recent acquisitions of Health Net Employer Services, Inc., which increased the Company's revenue in the workers' compensation area, and PPO Oklahoma, which increased the Company's group health revenue, particularly in Oklahoma. Wristen noted that he looks to build sales momentum throughout 2004. Mr. Wristen noted that 2004 is a transition year as the Company aggressively looks to reduce expenses while focusing on streamlining operations to produce a more efficient and effective organization, which is expected to re-energize growth for 2005 and beyond. Additionally, Mr. Wristen commented that he continues to expect revenue to grow to approximately $950 million and EPS to be in the $1.55 range for 2004 before share repurchases. Conference Call and Webcast --------------------------- First Health Group Corp. will be hosting a conference call and webcast on Tuesday, February 17 at 8 a.m. Central Standard Time to discuss the Company's fourth quarter and full year results. The quarterly conference call will be available on a live webcast from the Company's website (www.firsthealth.com). The webcast is open to all interested parties on a listen-only basis. Individuals unable to participate in the scheduled call may listen to a replay until February 19 by calling (888) 286-8010, code 11157835. The webcast will also be archived on the company's website. Individuals who listen to the call will be presumed to have read First Health's Annual Report on Form 10-K for the year ended December 31, 2002, and Quarterly Reports on Form 10-Q for the three months ended March 31, June 30 and September 30, 2003. Business Description -------------------- First Health, the premier national health-benefits services company, specializes in providing large payors with integrated managed care solutions. First Health is a unique national managed care company serving the group health, workers' compensation and state agency markets. Using technology to enable service and managed care innovations, First Health sets the bar for industry performance. For more information, visit the company website at www.firsthealth.com. Forward-Looking Statements Notice --------------------------------- Certain statements herein regarding anticipated financial results for 2004 and the Company's business prospects are forward-looking statements that involve substantial risks and uncertainties. In accordance with the Private Securities Litigation Reform Act of 1995, factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward-looking statements include, among others, the inability of the Company to continue to: (i) enter into contracts with and successfully implement programs for new clients within the time frame established by the Company and achieve the revenue growth expected to result from the addition of such clients, (ii) expand its group health, workers' compensation and public sector business, (iii) control health care benefit expenses and (iv) successfully integrate the recently completed acquisitions of Health Net Employer Services and PPO Oklahoma. All forward-looking statements herein are made as of the date hereof, and the Company undertakes no obligation to update such statements. # # # First Health Group Corp. (000's Omitted Except EPS and Percentages) (Unaudited) Three Months Ended December 31, Year Ended December 31, -------------------------------- ------------------------------- % Increase % Increase 2003 2002 (Decrease) 2003 2002 (Decrease) -------- -------- ----------- -------- -------- ---------- --------------------------------------------------------------------------------------------------- Revenues $ 238,786 $ 209,754 14% $ 890,926 $ 759,966 17% --------------------------------------------------------------------------------------------------- Operating Expenses: Cost of Services 106,368 94,564 12% 401,335 336,094 19% Selling and Marketing 27,397 21,607 27% 92,977 77,878 19% General and Administrative 19,456 15,903 22% 66,104 55,057 20% Health Care Benefits 7,433 3,888 91% 21,462 15,455 39% Depreciation and Amortization 16,699 14,928 12% 63,033 56,077 12% -------- -------- ---- -------- -------- ---- 177,353 150,890 18% 644,911 540,561 19% --------------------------------------------------------------------------------------------------- Income from operations 61,433 58,864 4% 246,015 219,405 12% --------------------------------------------------------------------------------------------------- Non-operating expenses (Income) Interest Income (1,686) (1,609) 5% (5,928) (6,698) (11)% Interest Expense 1,716 1,224 40% 5,586 5,454 2% -------- -------- ---- -------- -------- ---- Income Before Income Taxes 61,403 59,249 4% 246,357 220,649 12% Income Taxes (23,337) (23,552) (1)% (93,623) (87,711) 7% -------- -------- ---- -------- -------- ---- Net Income $ 38,066 $ 35,697 7% $ 152,734 $ 132,938 15% ======== ======== ==== ======== ======== ==== Share Information: ------------------ Weighted Average Shares Outstanding - Basic 92,644 100,204 (8)% 94,883 100,697 (6)% ======== ======== ==== ======== ======== ==== Net Income Per Common Share - Basic $ .41 $ .36 14% $ 1.61 $ 1.32 22% ======== ======== ==== ======== ======== ==== Weighted Average Shares Outstanding - Diluted 94,591 103,342 (8)% 97,199 104,258 (7)% ======== ======== ==== ======== ======== ==== --------------------------------------------------------------------------------------------------- Net Income Per Common Share - Diluted $ .40 $ .35 14% $ 1.57 $ 1.28 23% ======== ======== ==== ======== ======== ==== ---------------------------------------------------------------------------------------------------
First Health Group Corp. (000's Omitted Except Percentages) (Unaudited) Three Months Ended December 31, Year Ended December 31, -------------------------------- ------------------------------- % Increase % Increase Revenue Information 2003 2002 (Decrease) 2003 2002 (Decrease) -------- -------- ----------- -------- -------- ---------- --------------------------------------------------------------------------------------------------- Commercial Revenue Group Health: PPO + Administration Services $ 98,573 $ 88,298 12% $ 375,664 $ 239,800 57% PPO Services 37,310 40,391 (8)% 153,511 210,846 (27)% Premiums 8,786 3,888 126% 21,560 15,541 39% -------- -------- ---- -------- -------- ---- Total Group Health 144,669 132,577 9% 550,735 466,187 18% Workers' Compensation: PPO + Administration Services 32,034 25,942 23% 105,325 106,363 (1)% PPO Services 16,507 13,475 23% 62,785 54,961 14% -------- -------- ---- -------- -------- ---- Total Workers' Compensation 48,541 39,417 23% 168,110 161,324 4% Total Commercial Revenue 193,210 171,994 12% 718,845 627,511 15% -------- -------- ---- -------- -------- ---- Public Sector 45,576 37,760 21% 172,081 132,455 30% -------- -------- ---- -------- -------- ---- Total Revenue $ 238,786 $ 209,754 14% $ 890,926 $ 759,966 17% ======== ======== ==== ======== ======== ==== ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ Operating Income Margins* ------------------------------------------------------------------------------------------------ Commercial 31% 34% 33% 35% == == == == Public Sector 5% 1% 6% 2% ======================================================================================== *Income from operations as a percent of revenues December 31, December 31, Summary Balance Sheet Information: 2003 2002 --------------------------------- ------- ------- Assets: -------------------------------------------------------------------- Cash and Investments $139,729 $152,712 Accounts Receivable 102,895 69,981 Reinsurance Recoverable 38,852 27,582 Fixed Assets 235,890 205,503 Goodwill 324,335 279,447 Intangible Assets 82,615 54,086 Deferred Taxes 26,790 35,255 Other Assets 26,305 18,795 ------- ------- Total Assets $977,411 $843,361 ======= ======= Liabilities: -------------------------------------------------------------------- Claims Reserves $ 48,128 $ 40,420 Debt Outstanding 270,000 120,000 Deferred Taxes 126,474 114,692 Purchase Reserve 5,104 5,795 Accounts Payable 73,261 50,841 Accrued Expenses 42,674 47,740 Other Liabilities 33,292 49,727 ------- ------- Total Liabilities 598,933 429,215 Stockholders' Equity: 378,478 414,146 ------- ------- Total Liabilities and Stockholders' Equity $977,411 $843,361 ======= =======
First Health Group Corp. (000's Omitted) (Unaudited) Consolidated Statement of Cash Flows: ------------------------------------- Year Ended December 31, -------------------- 2003 2002 -------- -------- Cash flows from operating activities: Net Income $ 152,734 $ 132,938 -------- -------- Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and amortization 63,033 56,077 Change in allowance for uncollectible receivables (144) 3,455 Provision for deferred income taxes 27,677 10,448 Tax benefits from stock options exercised 8,920 16,521 Income from limited partnership (3,031) (3,096) Other, net 362 299 Changes in Assets and Liabilities (net of effects of acquired businesses): Accounts receivable (21,688) 13,495 Other current assets (20,999) 4,920 Reinsurance recoverable 1,854 (45) Accounts payable and accrued expenses 8,047 13,833 Claims reserves 7,708 1,972 Income taxes payable (16,299) 23,698 Non-current assets and liabilities 1,270 3,016 -------- -------- Net cash provided by operating activities 209,444 277,531 -------- -------- Cash flows from investing activities: Purchases of investments (50,418) (80,269) Sales of investments 49,872 75,923 Acquisition of business, net of cash acquired (91,981) (42,959) Assets held for sale -- 923 Purchase of property and equipment (84,801) (71,583) -------- -------- Net cash used in investing activities (177,328) (117,965) -------- -------- Cash flows from financing activities: Purchase of treasury stock (216,605) (109,322) Proceeds from issuance of long-term debt 317,000 240,000 Repayment of long-term debt (167,000) (317,500) Proceeds from issuance of common stock 21,397 32,243 Stock option loans to employees -- (2,272) Stock option loan repayments 287 3,761 Sales of put options on common stock -- 375 -------- -------- Net cash used in financing activities (44,921) (152,715) -------- -------- Net increase (decrease) in cash and cash equivalents (12,805) 6,851 Cash and cash equivalents, beginning of period 20,852 14,001 -------- -------- Cash and cash equivalents, end of period $ 8,047 $ 20,852 ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----