EX-99.1 3 exh99-1.txt PRESS RELEASE FINANCIAL RESULTS QUARTER ENDED MARCH 31, 2003 EXHIBIT 99.1 FIRST HEALTH 3200 Highland Avenue Downers Grove, IL 60515-1282 (630) 737-7900 www.firsthealth.com FOR IMMEDIATE RELEASE Contact: Edward L. Wristen, President and CEO Or Joseph E. Whitters, CFO 630-737-7511 FIRST HEALTH REPORTS RECORD RESULTS: 23% EPS GROWTH FOR QUARTER ---------------------------------------------------------------------------- DOWNERS GROVE, IL - April 28, 2003 - Edward L. Wristen, President and Chief Executive Officer of First Health Group Corp. (NASDAQ: FHCC), announced today the results of operations for the first quarter ended March 31, 2003. Highlights for the quarter include: * Record revenue of $213.8 million, up 26% from 1Q 2002 * Record net income of $36.8 million, up 19% from 1Q 2002 * Record EPS of $.37, up 23% from 1Q 2002 In a quarter that produced record results, diluted earnings per share (EPS) and net income for the three months ended March 31, 2003 increased 23% to $.37 or $36,841,000 compared with $.30 or $31,014,000 during the same period last year. Revenues for the three months ended March 31, 2003 increased 26% to $213,753,000 from $169,361,000 during the same period last year. "We had a strong first quarter which positions us well for a fourth consecutive year of approximately 20 percent EPS growth," said Wristen. "The addition of numerous new clients, including the administration business of the Mail Handlers Benefit Plan, effective July 1, 2002, contributed to the successful first quarter." Additionally, Mr. Wristen commented that he expects continued strong growth in 2003 revenue to approximately $870 million and EPS in the range of $1.50 to $1.55. Conference Call and Webcast --------------------------- First Health Group Corp. will be hosting a conference call and webcast on Monday, April 28 at 9 a.m. Central Standard Time to discuss the Company's first quarter 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 who listen to the call will be presumed to have read First Health's annual report or Form 10-K for the year ended December 31, 2002, and Quarterly Report on Form 10-Q for the three months ended March 31, June 30, and September 30, 2002. 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 2003 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, or (iv) successfully integrate the recently acquired Mail Handlers Benefit Plan administrative assets. 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 March 31 ------------------------------------ % Increase 2003 2002 (Decrease) ------- ------- ---------- ---------------------------------------------------------------------------- Revenues $213,753 $169,361 26% ---------------------------------------------------------------------------- Operating Expenses: Cost of Services 96,177 72,972 32% Selling and Marketing 21,036 17,078 23% General and Administrative 15,207 11,393 33% Health Care Benefits 5,162 3,781 37% ------- ------- -- 137,582 105,224 31% ---------------------------------------------------------------------------- Operating Income 76,171 64,137 19% ---------------------------------------------------------------------------- Depreciation and Amortization 15,126 12,972 17% Interest Income (1,368) (1,628) (16)% Interest Expense 1,267 1,316 (4)% ------- ------- -- Income Before Income Taxes 61,146 51,477 19% Income Taxes (24,305) (20,463) 19% ------- ------- -- Net Income $ 36,841 $ 31,014 19% ======= ======= == Share Information: ------------------ Weighted Average Shares Outstanding - Basic 96,866 100,257 (3)% ======= ======= == Net Income Per Common Share - Basic $ .38 $ .31 23% ======= ======= == Weighted Average Shares Outstanding - Diluted 99,456 104,443 (5)% ======= ======= == ---------------------------------------------------------------------------- Net Income Per Common Share - Diluted $ .37 $ .30 23% ======= ======= == ---------------------------------------------------------------------------- First Health Group Corp. (000's Omitted Except Percentages) (Unaudited) Three Months Ended March 31 ------------------------------------ % Increase Revenue Information: 2003 2002 (Decrease) ---------------------------------------------------------------------------- Commercial Revenue Group Health: PPO Services $ 40,859 $ 62,859 (35)% PPO + Administration Services 88,941 33,992 162% Premiums 4,235 4,010 6% ------- ------- -- Total Group Health 134,035 100,861 33% Workers' Compensation: PPO Services 15,152 13,117 16% PPO + Administration Services 24,985 26,083 (4)% ------- ------- -- Total Workers' Compensation 40,137 39,200 2% Total Commercial Revenue 174,172 140,061 24% ------- ------- -- Public Sector 39,581 29,300 35% ------- ------- -- Total Revenue $213,753 $169,361 26% ======= ======= == ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Operating Margins ---------------------------------------------------------------------------- Commercial 41% 44% Public Sector 12% 9% ============================================================================ March 31, December 31, Summary Balance Sheet Information: 2003 2002 --------------------------------- ------- ------- Assets: -------------------------------------------------------------------- Cash and Investments $155,449 $152,712 Accounts Receivable 83,971 69,981 Reinsurance Recoverable 26,727 27,582 Fixed Assets 205,124 205,503 Goodwill 282,781 279,447 Intangible Assets 53,036 54,086 Deferred Taxes 35,240 35,255 Other Assets 20,034 18,795 ------- ------- Total Assets $862,362 $843,361 ======= ======= Liabilities: -------------------------------------------------------------------- Claims Reserves $ 38,545 $ 40,420 Debt Outstanding 185,000 120,000 Deferred Taxes 114,608 114,692 Purchase Reserve 5,293 5,795 Accounts Payable 52,401 50,841 Accrued Expenses 43,728 47,740 Other Liabilities 56,520 49,727 ------- ------- Total Liabilities 496,095 429,215 Stockholders' Equity: 366,267 414,146 ------- ------- Total Liabilities and Stockholders' Equity $862,362 $843,361 ======= =======