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American CareSource Holdings Inc. (NASDAQ: ANCI) today reported fourth quarter 2010 net revenue of $16.1 million compared to $16.8 million for the fourth quarter of 2009. Fourth quarter 2010 net income was $142,000, or $0.01 per diluted share, compared to net income of $1.4 million, or $0.07 per diluted share reported in 2009. Fourth quarter 2010 results include an income tax benefit of $109,000. Fourth quarter 2009 results included an income tax benefit of $590,000, or $0.04 per diluted share.
“Although challenges with our key, legacy accounts placed immense pressure on the business during the year, we are beginning to see signs of stabilization,” said David Boone, Chief Executive Officer of American CareSource Holdings. “This year has been one of transition for our business as we have redirected our efforts to align closely to the clients and their member lives. The decision to shift our sales-targeting efforts away from PPOs to direct payors and TPAs is the first in a series of steps to diversify our business and get closer to the consumer by partnering with payors that can influence plan design.”
“Our provider network is the most comprehensive within ancillary care. As we move forward, the provider network will begin to reflect the depth and breadth of categories that are relevant to the care requirements of our clients’ member lives. This will ultimately allow us to leverage the provider network to develop products and services that will improve access to quality care, cost transparency and savings.”
“We see real opportunity within the mid-market TPA community. We believe that ERISA based plans will be the big winners within Healthcare reform. We are solidly positioned to add value to these clients and position them for success within this evolving market,” continued Mr. Boone.
Net Revenue for the fourth quarter of 2010 was $16.1 million compared to $16.8 million reported during the fourth quarter of 2009. Claims volumes from one of the Company’s two key client accounts decreased 52
% during the quarter compared to the corresponding prior year period. The decline was partially offset by $2.8 million of net revenue generated in the fourth quarter from 13 new clients implemented throughout 2010. Net revenue from new clients added in 2010 increased sequentially by $1.0 million over the $1.8 million generated in the third quarter of 2010.
Sequentially, fourth quarter 2010 net revenues increased 8
% to $16.1 million over $14.8 million in the third quarter of 2010.
The Company billed 82,000 claims during the fourth quarter of 2010, a decrease from the 91,000 claims it billed during the same period last year. The lower claims volume was primarily the result of decreased claims flow from one of the Company’s two key client accounts and the loss of a national laboratory service provider relationship, which occurred during the second quarter of 2010. Excluding the Company’s two key accounts, claims volume from all other accounts was up 46
% in the fourth quarter of 2010 compared to the same prior year period
, which was directly related to the Company’s new accounts added in 2010.
Net revenue per billed claim was $196 during the fourth quarter of 2010 compared to $185 during the fourth quarter of 2009.
Following are claims volumes and net revenue per claim for the periods presented:
(Claim amounts in 000’s)
Net revenue per billed claim
Contribution margin for the fourth quarter of 2010 decreased to 10.4%, compared to 14.6% reported during the fourth quarter of 2009. The decline in contribution margin was partially the result of a change in mix of services provided during the fourth quarter compared to the same period last year. As a percent of net revenue, laboratory services declined; laboratory services carry a higher margin relative to other service categories and were impacted by the loss of a laboratory service provider relationship in the second quarter of 2010.