SUNRISE, Fla., Nov. 8 /PRNewswire-FirstCall/ -- NationsHealth, Inc.
(Nasdaq: NHRX; NHRXW; NHRXU) today announced its financial results
for the three and nine months ended September 30, 2005. Revenue for
the three months ended September 30, 2005 increased 6% to $21.3
million from $20.1 million for the same period in 2004. Net income
for the three months ended September 30, 2005 was $11.8 million, or
$0.40 per diluted share, compared to a net loss of $0.9 million, or
$0.03 per share, for the same period in 2004. For the nine months
ended September 30, 2005, revenue increased 20% to $62.4 million
versus $52.0 million for the same period in 2004. Net loss for the
nine months was $1.9 million, or $0.07 per share, compared to a net
loss of $8.2 million, or $0.31 per share, for the same period in
2004. As previously announced, the company sold its respiratory
division effective September 2, 2005. Results for the three and
nine months ended September 30, 2005 include revenue from shipments
of respiratory supplies up to September 2, 2005, as well as a $15.5
million gain on the sale of the division. Costs continue to reflect
NationsHealth's efforts with CIGNA to launch a national
Prescription Drug Plan under Medicare Part D. NationsHealth's sale
of its respiratory business enabled it to shift its resources into
the emerging Medicare Part D business and avoid the future impact
of recent and potential continued reductions in Medicare
reimbursement rates for certain respiratory supplies and
medications. NationsHealth's CEO, Glenn M. Parker, M.D. commented,
"We have made great progress with the launch of our Part D business
in association with CIGNA. We began our advertising campaign on
October 3rd and have secured a significant amount of additional
capacity to handle anticipated call volume. Furthermore, we have
developed key exclusive retail pharmacy relationships with Kmart,
Publix, Giant and Duane Reade, to expand our reach to the estimated
20 million seniors who represent this market over the next five
years. Our relationship with CIGNA, together with our 118,000
Medicare Part B patients and more than three million cardholders,
uniquely positions us to be a leader in providing prescription drug
insurance to Medicare seniors." About NationsHealth, Inc.
NationsHealth improves the delivery of healthcare to Medicare and
managed care beneficiaries by providing medical products and
prescription related services. NationsHealth will offer a national
prescription drug plan under Medicare Part D in a strategic
alliance with CIGNA beginning November 15, 2005. NationsHealth
currently has more than 3.1 million discount prescription
cardholders, with cards accepted at over 50,000 pharmacies
nationwide. In addition, NationsHealth provides home delivery of
diabetes and ostomy medical products to more than 108,000 patients.
NationsHealth is also the provider of diabetes supplies to more
than 10,000 Medicare beneficiaries at over 1,100 Kmart pharmacies.
For more information please visit http://www.nationshealth.com/.
This press release contains forward-looking statements about
NationsHealth, including statements regarding anticipated
enrollment and private sector market opportunities in Medicare Part
D and specialty pharmaceutical programs and the potential success
of our strategic partnerships and joint ventures, none of which
should be construed in any manner as a guarantee that such results
will in fact occur. In addition, other written or oral statements
that constitute forward-looking statements may be made by us or on
our behalf. Forward-looking statements are statements that are not
historical facts. Such forward-looking statements, based upon the
current beliefs and expectations of NationsHealth's management, are
subject to risks and uncertainties, which could cause actual
results to differ from the forward-looking statements. The
following factors, among others, could cause actual results to
differ from those set forth in the forward- looking statements:
projections with respect to enrollment and market opportunities for
Part D and specialty pharmacy programs; our ability to maintain our
existing customer base; our customers' desire to take advantage of
our Part D and specialty pharmacy services; uncertainty in our
costs incurred in administering the Part D program; changes in
Medicare, Medicaid, Tricare, Champus and any other state or
national-based reimbursement program; changing interpretations of
generally accepted accounting principles; outcomes of government
reviews of NationsHealth's business practices; inquiries and
investigations and related litigation; continued compliance with
government regulations; legislation or regulatory requirements or
changes adversely affecting the businesses in which NationsHealth
is engaged; fluctuations in customer demand; management of rapid
growth; our ability to compete effectively; timing and market
acceptance of new products sold by NationsHealth; general economic
conditions; and geopolitical events and regulatory changes. For a
further list and description of such risks and uncertainties, see
the reports filed by NationsHealth with the Securities and Exchange
Commission. The information set forth herein should be read in
light of such risks. NationsHealth cautions investors not to place
undue reliance on the forward-looking statements contained herein.
These statements speak only as of the date of this press release
and, except as required by applicable law, NationsHealth assumes no
obligation to update the information contained herein. SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS DATA (unaudited) (in
thousands, except per share data) Three Months Ended September 30,
2005 2004 Revenue: Net product sales $18,167 $19,383 Prescription
card revenue 2,316 704 Service revenue 780 -- 21,263 20,087 Cost of
product sales 8,037 6,283 Cost of services 1,311 -- Gross Profit
11,915 13,804 Operating Expenses: Patient acquisition and related
costs 3,256 4,245 Patient service and fulfillment 3,593 3,148
General and administrative 5,576 3,237 Provision for doubtful
accounts 2,330 3,533 Depreciation and amortization 224 139 Gain on
sale of respiratory division (15,508) -- (529) 14,302 Income (Loss)
from Operations 12,444 (498) Other Income (Expense): Interest
income 35 -- Interest expense (687) (390) (652) (390) Net Income
(Loss) $11,792 $(888) Earnings (Loss) per share Basic $0.45 $(0.03)
Diluted $0.40 $(0.03) Weighted average common shares outstanding
Basic 26,283 26,150 Diluted 30,105 26,150 SUMMARY CONSOLIDATED
STATEMENTS OF OPERATIONS DATA (unaudited) (in thousands, except per
share data) Nine Months Ended September 30, 2005 2004 Revenue: Net
product sales $55,299 $50,078 Prescription card revenue 6,327 1,893
Service revenue 780 -- 62,406 51,971 Cost of product sales 23,448
16,291 Cost of services 1,311 -- Gross Profit 37,647 35,680
Operating Expenses: Patient acquisition and related costs 17,976
16,626 Patient service and fulfillment 11,418 9,558 General and
administrative 15,193 7,518 Provision for doubtful accounts 7,575
9,128 Depreciation and amortization 653 334 Gain on sale of
respiratory division (15,508) -- 37,307 43,164 Income (Loss) from
Operations 340 (7,484) Other Income (Expense): Interest income 55 2
Interest expense (2,277) (712) (2,222) (710) Net Loss $(1,882)
$(8,194) Loss per share (basic and diluted) $(0.07) $(0.31)
Weighted average common shares outstanding (basic and diluted)
26,211 26,150 SUMMARY CONSOLIDATED BALANCE SHEETS (unaudited) (in
thousands) September 30, December 31, 2005 2004 ASSETS Current
Assets: Cash and cash equivalents $15,107 $2,904 Restricted
certificate of deposit -- 100 Accounts receivable, net 7,140 8,708
Inventory 2,058 1,719 Costs related to billings in process, net
1,229 1,437 Other receivables 1,532 -- Investment held in trust --
2,000 Prepaid expenses and other current assets 1,335 392 Total
current assets 28,401 17,260 Property and equipment, net 2,896
1,770 Investment in joint venture 1,530 -- Other assets, net 1,525
346 Total assets $34,352 $19,376 LIABILITIES AND STOCKHOLDERS'
EQUITY / DEFICIENCY Current Liabilities: Accounts payable $3,044
$4,595 Accounts payable, related party 4,942 5,004 Accrued expenses
5,715 7,195 Deferred revenue, current portion 725 -- Line of credit
3,943 2,619 Total current liabilities 18,369 19,413 Long-Term
Liabilities: Deferred revenue 715 -- Convertible notes, net 4,926
-- Other long-term liabilities 215 -- Total long-term liabilities
5,856 -- Stockholders' Equity (Deficiency): Common stock 3 3
Additional paid-in capital 44,361 32,315 Accumulated deficit
(34,237) (32,355) Total stockholders' equity (deficiency) 10,127
(37) Total liabilities and stockholders' equity/deficiency $34,352
$19,376 At NationsHealth: Glenn Parker, MD, CEO 954-903-5000 Tim
Fairbanks, CFO 954-903-5000 At Rx Communications Group: Melody A.
Carey (investors) 917-322-2571 DATASOURCE: NationsHealth, Inc.
CONTACT: Glenn Parker, MD, CEO, or Tim Fairbanks, CFO, of
NationsHealth, +1-954-903-5000; or Investors: Melody A. Carey of Rx
Communications Group, +1-917-322-2571 Web site:
http://www.nationshealth.com/
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