American CareSource Holdings (NASDAQ: ANCI), the leading national network of ancillary healthcare providers, today reported revenue of $9.4 million for the first quarter of 2012, compared to $13.1 million for the same period in 2011. Net loss for the quarter was $558,000 compared to a net loss of $222,000 for the prior-year period.
Today, approximately 60 percent of employees with health insurance are covered by an employer’s self-funded plan. The growth among self-insured employers, as well as the ongoing implementations of recent healthcare reforms, has emphasized the need for healthcare cost containment, which is a primary function of third-party administrators (TPAs). During the first quarter, the company continued to focus on meeting the needs of TPAs and the direct payor market, primarily through its network of ancillary service providers. This strategy is supported by the size of the market.
During the first quarter, revenue from the company’s TPA clients grew $924,000 or 24 percent, and ACS added another new TPA client, as well as significantly increased its pipeline of prospects within the market. The company continued to focus on controlling costs and preserving its cash reserves. It reduced its non-variable cost structure 6 percent, despite significant investments in its sales function, and generated approximately $168,000 of positive cash flow.
Kenn S. George, CEO and Chairman of the Board, stated, ”While I continue to be disappointed in the decline in our overall top-line revenue due to continued pressures on our legacy PPO clients, and the length of our sales cycle, I am very encouraged by the growth from clients in our target market. We continue to focus on bringing value to a sizable market for our core business, primarily through our ancillary network, but also through DiaSource, our new solution for controlling dialysis costs.”First Quarter Highlights
- Revenue from TPA clients grew $924,000, or 24 percent, compared to first quarter of 2011.
- As previously announced, ACS engaged JMG Management Group to consult on the process of transforming ACS' sales function. In addition, two new sales representatives were added early in the quarter.
- As previously announced, as part of the company’s new DiaSource program, a participating provider hosted its first patient. The relationship was facilitated by a benefits broker, which was identified as an additional sales channel.
- ACS completed development of a proprietary software connection to a major claims adjudication system that will simplify and accelerate implementations with clients and prospects that utilize that system.
- ACS continued to control headcount through natural attrition; headcount at March 31, 2012 was 54 employees, compared to 57 employees at December 31, 2011 and 64 employees at March 31, 2011.
- ACS generated positive cash flow and ended the quarter with $11.5 million of cash and cash equivalents.