United American Healthcare Corporation Announces Fiscal 2010 Second Quarter Results
DETROIT, Feb. 16 /PRNewswire-FirstCall/ -- United American Healthcare Corporation (Nasdaq: UAHC) today announced financial results for the Company's fiscal second quarter ended Dec. 31, 2009.
Revenues for the second quarter were $1.7 million, down $2.8 million, or 62 percent, compared with revenues of $4.5 million for the second quarter of the prior fiscal year. The decline was primarily the result of the complete transfer of TennCare enrollees served by the Company's subsidiary, UAHC Health Plan of Tennessee (UAHC-TN), to other managed care organizations on Nov. 1, 2008, and the discontinuance of UAHC-TN's Medicaid managed care services as a TennCare contractor. The decrease in revenues was also attributable to the decrease in enrollment and associated revenue from the wind down of the Company's Medicare Advantage Special Needs Plan (MA-SNP), as the Medicare Advantage contract expired at the end of calendar 2009.
Total expenses decreased $3.3 million, or 53 percent, to $2.9 million in the fiscal 2010 second quarter, compared with total expenses of $6.2 million in the prior fiscal year's second quarter. The decrease was primarily related to reduced medical expenses, as well as lower marketing, general and administrative expenses in the quarter. For the second quarter of fiscal 2010, the Company reported a net loss of $1.1 million, or ($0.14) per share, compared with a net loss of $1.4 million, or ($0.16) per share, in the second quarter of fiscal 2009. The net loss in the most recent quarter was primarily the result of the loss of TennCare revenue and the wind down of the MA-SNP, partially offset by the reduction in expenses.
"United American Healthcare continues to move through a transitional period characterized by the end of our Medicare Advantage business at the end of the fiscal second quarter," said William C. Brooks, President and CEO of United American Healthcare. "As these operations come to an end, our revenues will no doubt be adversely affected. Moreover, the contraction of our revenue base is occurring even as we face the remaining medical expenses associated with our obligations as a Medicare provider. In light of these challenges, we continue to maintain tight control on all remaining expenses in our current lean operational structure."As of Dec. 31, 2009, United American Healthcare reported cash, cash equivalents, short-term marketable securities and restricted marketable securities of $14.2 million, compared to $19.9 million as of June 30, 2009. The decrease in cash was primarily the result of the operating loss generated in the first half of fiscal 2010 as well as the payment in September 2009 of approximately $3.3 million in settlement of a lawsuit. The Company remains free of debt. United American Healthcare continued to take actions to reduce expenses and conserve cash during the second quarter of fiscal 2010. The Company significantly reduced the number of employees to fit its lower level of operating activity. At Dec. 31, 2009, the total number of employees was reduced to 12 from 29 employees a year earlier, representing a year-over-year cost reduction of approximately $1.9 million. With the expiration of the MA-SNP contract on Dec. 31, 2009, the total number of employees was further reduced by 4 following the end of the second quarter. The expiration of the TennCare and Medicare contracts has served as a primary impetus for the Company's Board of Directors and management team to continue their review of a variety of long-term strategic alternatives. The review process continues to be guided by the goal of pursuing a strategic alternative that satisfies three primary objectives: providing significant revenues, providing immediate positive EBITDA and having long-term growth opportunities. During this review, all feasible options are being considered, including pursuing a joint venture or other strategic partnership, completing a strategic acquisition or merger, or liquidating the Company's assets.
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