Metropolitan Health Networks Inc. (MDF)
Q1 2010 Earnings Call
May 04, 2010 11:00 am ET
Michael Earley - Chairman and CEO
Dr. Jose Guethon - President and COO
Bob Sabo - CFO
Roberto Palenzuela - General Counsel
Mickey Schleien - Ladenburg
Bernie Harris - American Portfolio
Jeffrey Cohen - C. K. Cooper & Company
Robert Wasserman - Dawson James
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I will now like to turn the conference over to your host for today Mr. Michael Earley, Chairman and Chief Executive Officer. Please proceed.
Thank you, Peggy. Good morning, everyone. Welcome to today's call. The call is being broadcast over this conference line and his also available via the web as noted in our press release. It will be available in recorded format through the conference service on our website. With me this morning are Dr. Jose Guethon, our President and COO, Bob Sabo, our CFO and Roberto Palenzuela, our General Counsel.
The press release was issued this morning outlining are earnings for the first quarter of 2010. A quarterly report on Form 10-Q will be filled with the Securities and Exchange Commission shortly. Great to say that we are pleased with our first quarter results. 2010 is off to a terrific start. This year is characterized by a significant number of changes impacting the Medicare advantage industry both short term and long.
From base premium rates decreasing for the passage of healthcare reform is changes increased the number of variable that we must consider again both in the short run and longer term. As well we have seen important changes in our company's leadership with recent appointment of a new Board of Directors. We will discuss all of these changes this morning.
That said, it does look like 2010 will be another good year for metropolitan. Once again, we realize company best in terms of customers, revenues and earnings. Our balance sheet remains strong and our share count is down, now below 40 million shares the results of repurchasing more than 13.7 million shares since October 2008.
Beyond our great results and strong finances, we are continuing to invest in many aspects of our business comparing it to continue succeeding in the future as the demand and expectations of our customers, industry and nation growth. Although the details of healthcare reform have yet to written, we are focused on continuing to develop a business model that will provide high quality, cost effective care to our customers.
Before we go further, I would like Bob to take u through the financial performance for the quarter. Joe will then give us some additional color to our operating results and specifically discuss various initiatives underway in our business. First Roberto will cover our Safe Harbor Statement.
Thanks Mike. In order to comply with the forward-looking statements of safe harbor, I want to advice you in addition the historical information, certain comments made during this conference call, particularly those anticipating future financial performance, business prospects and gross operating strategies constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Such statements maybe identified by words such as anticipate, believe, estimate, expect, intend, predict, hope, or similar expressions. Such statements which include estimated financial information or results are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements, including without limitation, our dependence on Humana and our ability to maintain and/or renew our agreements with them on acceptable terms. The impact of potential reductions in funding for Medicare program and other healthcare reform initiatives and legislation, especially the new healthcare reform legislation passed in March 2010.
Our ability to effectively manage our medical expenses, our failure to accurately estimate incurred but not reported medical benefits expense. And the impact of Medicare Risks Adjustments on payments we receive for our managed care operation. The company is also subject to the risk and uncertainties described in its filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2009, and its quarterly report on Form 10-Q for the quarter ended March 31, 2010, which will be filed shortly.
With that said, I will turn it over to Bob.
Thank you, Roberto and good morning everyone. As Mike noted, we realized record net income in the first quarter of 2010 and our operating results substantially improved over a very good 2009.
During the quarter, we saw a significant decrease in medical costs, I'll discuss little later. Our net income in the first quarter of 2010 was $7.1 million compared to $4 million in the first quarter of 2009, this translated earnings per share of $0.18 basic and $0.17 diluted in the first quarter of 2010 compared to $0.09 basic and $0.08 diluted in 2009 first quarter.
Revenue in the quarter exceeded $93 million as compared to $90.4 million in the first quarter of 2009 an increase of 2.9%, this increase was a result of a 1.1% increase in customer months and an increase in our per customer per month payment of approximately 1.7%.