IntegraMed America, Inc. (INMD) Q1 2011 Earnings Call May 03, 2011 10:00 am ET Executives Norberto Aja - IR Jay Higham - President and CEO Tim Sheehan - VP and Interim CFO Analysts Deepak Chaulagai - Dougherty & Company Frank Dilorenzo - Singular Research Presentation Operator At this time, I would like to welcome everyone to the IntegraMed America first quarter investor conference call. (Operator Instructions) Norberto Aja, you may begin. Norberto Aja
Both our divisions achieved solid growth in revenue during the first quarter. And on a pro forma basis, the company would have shown strong growth in operating income after removing the impact of the new clinic startup losses.Our Attain Fertility Centers achieved solid topline growth, driven by healthy results across our partner centers and by a significant improvement in the results from our Attain IVF Program. New patient traffic grew at a healthy pace as did year-over-year IVF and IVF procedures. Our 14 partner centers and their many satellite locations continue to outperform the overall IVF market, especially those in the West Coast and Mid-Atlantic region. Other markets such as Florida and the south continue to experience challenges largely due to the slower economic recovery in those regions. There are centers that still perform better than general fertility market. Supporting our centers' ability to outperform in their markets are our hosted capabilities we bring to physicians in addition to their medical expertise that enable the optimal performance of each center. Areas of IntegraMed support include patient acquisition where we provide cutting-edge patient recruitment capabilities such as direct marketing and advertising, as well as helping to form referral relationships. Care coordination involves the implementation of our proprietary electronic medical record system, which enables physicians to improve clinical outcomes. Revenue cycle management addresses the critical issues of actively managing accounts receivable and collections across all payers. This discipline is clearly seen in our ongoing progress, lowering DSOs at our centers. A host of other services such as administrative support, volume purchasing efficiencies and growth capital also help our centers achieve industry-leading performance. Through the partnership between the centers and IntegraMed, they were able to penetrate markets in a more efficient manner and help centers optimize their performance despite ongoing demographic and economic challenges.
To address changes in the market, we have expanded the ways we can encourage fertility center prospects and bring them on board as partners. For example, earlier this year, we executed what we refer to as an in-market merger, in which we acquired Northwest Center for Reproductive Sciences and folded that operation into our existing Seattle-based practice, Seattle Reproductive Medicine.By doing so, we're able to achieve economies of scale across all administrative, marketing and treatment functions. At the same time, we expanded our market share in that area. Seattle Reproductive Medicine is now the largest fertility center west of the Mississippi. In-market merges are an attractive and efficient means for IntegraMed to expand its footprint through an immediately accretive investment. This type of transaction coupled with new business development efforts and the potential to launch new products and services across our Fertility division are all avenues to support our growth objectives. As an example of a new initiative, we are looking at the potential to introduce a fertility drug financing program in conjunction with our Attain IVF financing program. Drug costs are a significant part of overall fertility treatment expenses. An option to include these costs in a broader fertility treatment financing program would present a very attractive option for patients and for our contracted provider network as this reduces the barrier to treatment and helps enable more patients who could benefit from treatment to actually access that treatment. While on the topic of the Attain IVF program, let me point out that the first quarter results benefited from a strong rise in pregnancies during the period in addition to achieving a 22% increase in program enrollments in Q1 with a modest increase in applications, underscoring the improving efficiencies in these programs' patient marketing efforts. In summary, our Attain Fertility Center segment continues to perform well and we are optimistic about its future given our history, scale and leadership position. Fertility remains a healthcare segment that's sufficiently large to offer substantial opportunities for growth while also having meaningful barriers to entry. Read the rest of this transcript for free on seekingalpha.com