CareInsite Legend
Filed by: CareInsite, Inc.
This communication is filed
pursuant to Rules 165 and
425 promulgated under the
Securities Act of 1933, as
amended.
Subject Company: CareInsite, Inc.
Commission File Number: 000-26345
Investors are urged to read the various filings of CareInsite, Inc., Medical
Manager Corporation and Healtheon/WebMD Corporation that have been filed and
will be filed with the Securities and Exchange Commission with respect to the
acquisitions of Medical Manager and CareInsite by Healtheon/WebMD, including the
proxy statement/registration statement that is required to be filed with respect
to the pending acquisitions. The Securities and Exchange Commission filings are
available to the public at the Securities and Exchange Commission's web site at
http://www.sec.gov. Investors can also obtain free copies of the documents
relating to CareInsite by contacting the CareInsite Investor Relations
department at CareInsite, Inc., 669 River Drive, Center 2, Elmwood Park, New
Jersey 07407, (201) 703-3400, http://www.careinsite.com.
SET FORTH BELOW ARE (I) A PRESS RELEASE ISSUED BY CAREINSITE RELATING
TO CAREINSITE'S THIRD QUARTER 2000 RESULTS AND (II) A SCRIPT PREPARED FOR USE AT
A CONFERENCE CALL WITH ANALYSTS ON MAY 2, 2000 IN CONNECTION WITH THE RELEASE OF
CAREINSITE'S AND MEDICAL MANAGER'S THIRD QUARTER 2000 RESULTS:
<PAGE>
Contact: James R. Love
Executive Vice President and
Chief Financial Officer
(201) 703-3400
CAREINSITE ANNOUNCES THIRD QUARTER RESULTS
ELMWOOD PARK, NEW JERSEY, May 2, 2000 - CareInsite, Inc. (NASDAQ:
CARI), a subsidiary of Medical Manager Corporation (NASDAQ: MMGR) announced
today financial results for the quarter ended March 31, 2000. Revenues for the
period were $1,651,000 as compared to $213,000 in the prior year. Excluding the
effect of certain non-recurring items discussed below, net loss available to
common shareholders for the quarter was $(24,360,000), or $(0.33) per share, as
compared to $(4,174,000) or $(0.07) per share in the prior year. Non-recurring
items include a charge relating to certain litigation with Merck & Co., Inc. of
$350,000 and $2,500,000 for the current and prior year period, respectively. Net
loss available to common shareholders for the period was $(24,710,000) or
$(0.34) per share compared with $(6,674,000) or $(0.11) per share in the prior
year.
As previously announced on February 14, 2000, CareInsite and its parent
company, Medical Manager Corporation, have signed definitive agreements to be
acquired by Healtheon/WebMD Corporation. Martin J. Wygod, Chairman of
CareInsite, said, "In light of our pending transaction with Healtheon/WebMD, we
made certain strategic decisions, including the delay of the rollout of certain
of CareInsite's services, which impacted our quarterly results. In addition,
certain acquisitions closed at the end of the quarter and therefore had limited
impact on our financial results."
Commenting on the quarterly results, Marvin P. Rich, CEO of CareInsite,
said, "Rather than aggressively roll out certain of our services, we have
continued to focus on increasing our presence in certain key geographic areas.
During the quarter, CareInsite completed its acquisition of Provider Technology
Group, the e-commerce network of Blue Cross and Blue Shield of Massachusetts. At
the end of the quarter, there were approximately 30,000 physicians submitting
transactions."
On March 31, 2000, the Company had approximately $69,000,000 in cash
and marketable securities to be used for general corporate purposes, as well as
acquisitions and other strategic transactions.
About CareInsite
CareInsite, Inc. provides innovative healthcare network and e-commerce services
that leverage Internet technology to enable the confidential exchange of
clinical, administrative and financial information among physicians and their
patients, and affiliated health plans, providers and suppliers. The Company's
services are designed to improve the quality of patient care and reduce the
administrative and clinical costs of healthcare. CareInsite is a 68% owned
subsidiary of Medical Manager Corporation (NASDAQ: MMGR).
This press release contains certain forward looking statements relating to
the Company's future operations, dealings with customers and partners and
potential customers and partners, development and deployment of its
products and services, and external transactions. These statements are
based on the Company's current plans and expectations and involve risks
and uncertainties that could cause actual future activities and results of
operations to be different from those described or implied by such forward
looking statements. The risks and uncertainties of the Company's
businesses include, but are not limited to, product demand and market
acceptance risks, the feasibility of developing and deploying commercially
profitable products and services, the effect of economic conditions, user
acceptance, the impact of competitive products or services, and pricing,
product development, commercialization and technological difficulties,
risks associated with the integration and management of acquired
businesses, risks associated with the Company's pending merger with
Healtheon/WebMD Corporation and other risks detailed in the Company's
Securities and Exchange Commission filings. Further information about
these matters can be found in the Company's Securities and Exchange
Commission filings. The Company expressly disclaims any intent or
obligation to update these forward looking statements.
<PAGE>
A report of CareInsite's financial results for the three and nine months ended
March 31, 2000 is as follows:
CAREINSITE, INC.
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
2000(a) 1999(b) 2000(c) 1999(d)
------------ ------------ ------------ ---------
<S> <C> <C> <C> <C>
Net revenues $ 1,651 $ 213 $ 4,809 $ 213
======== ======= ======== ========
Income (loss) before interest, taxes, depreciation
and amortization (16,887) (6,418) (37,694) (14,429)
Depreciation and amortization (8,924) (275) (11,609) (1,162)
Interest income, net 1,534 19 4,801 110
Gain on sale of investment - - 25,511 -
-------- ------- -------- --------
Net loss $(24,277) $(6,674) $(18,991) $(15,481)
======== ======= ======== ========
Net loss available to common shareholders $(24,710) $(6,674) $(19,857) $(15,481)
======== ======= ======== ========
Net loss per share - basic and diluted $(0.34) $ (0.11) $ (0.28) $(0.29)
Weighted average shares outstanding
- basic and diluted 73,489 62,500 71,436 54,208
</TABLE>
(a) The three months ended March 31, 2000 include charges related to certain
litigation with Merck & Co., Inc. of $350. Excluding this item, net loss
available to common shareholders would have been $(24,360) or $(0.33) per
share.
(b) The three months ended March 31, 1999 include charges related to certain
litigation with Merck & Co., Inc. of $2,500. Excluding this item, net loss
available to common shareholders would have been $(4,174) or $(0.07) per
share.
(c) The nine months ended March 31, 2000 include charges related to certain
litigation with Merck & Co., Inc. of $1,450 and a gain on the sale of
investments of $25,511. Excluding these items, net loss available to
common shareholders would have been $(43,918) or $(0.61) per share.
(d) The nine months ended March 31, 1999 include charges of $2,381 related to
the write-off of capitalized software and charges related to certain
litigation with Merck & Co., Inc. of $2,500. Excluding these items, net
loss available to common shareholders would have been $(10,600) or $(0.20)
per share.
<PAGE>
Medical Manager Corporation and CareInsite, Inc.
Conference Call for the Quarter Ended March 31, 2000
MARTY WYGOD:
- ------------
Good afternoon everybody. Thanks for joining us today. This is the third quarter
conference call to review the results of Medical Manager Corporation and
CareInsite, Inc. With me on the call today are John Kang, Co-CEO of Medical
Manager; Marv Rich, CEO of CareInsite and President of Medical Manager, and Jim
Love, Executive VP and Chief Financial Officer of Medical Manager and
CareInsite. On the call today, Jim Love will walk you through the financial
results and review Porex, John Kang will review Medical Manager Health Systems
and Marv Rich will review CareInsite.
As a result of the situation we are in with a merger pending, unfortunately we
will be unable to be responsive to your questions. I know this will be a source
of frustration to you, and as you know, it is not my usual practice. However, on
advice of our counsel, we will not be able to hold a Q&A session after our
prepared remarks.
Before we begin the call, I'd like Jim to read the forward looking statement
disclosure:
JIM LOVE:
- ---------
During this call, we will be making certain forward looking statements relating
to Medical Manager's and CareInsite's future operations, dealings with current
and potential customers and partners, development and deployment of its products
and services, and external transactions. These statements are based on the
Company's current plans and expectations and involve risks and uncertainties
described in our SEC filings that could cause actual future activities and
results of operations to be different from those described or implied by such
forward looking statements.
Now - I'd like to turn the call over to Marty Wygod.
<PAGE>
MARTY WYGOD:
- ------------
Thanks Jim.
As you all know, during the quarter, we announced that Healtheon/WebMD
Corporation entered into an agreement to acquire Medical Manager and CareInsite.
In light of this transaction, we made certain strategic decisions which impacted
the financial results across our business lines, including the delay of the
rollout of certain of CareInsite's services and the decision not to pursue a
certain acquisition at Porex in February. In addition, although profitability at
Medical Manager Health System's was up significantly year over year, it was
negatively impacted as a result of a post-Y2K industry wide slowdown of
higher-margin new system sales and upgrades. At Medical Manager Health Systems,
as well as at CareInsite, certain acquisitions closed at the end of the quarter
and therefore had limited impact on the quarterly results. As I've said on a
number of prior occasions, accomplishing the goals we've set for ourselves will
take longer and cost more than originally anticipated. However, we remain
totally committed to the vision of CareInsite and Medical Manager.
Let me turn the call over to Jim Love to review this with you in more detail.
JIM LOVE:
- ---------
First I will review the consolidated third quarter results for Medical Manager
Corporation, then each of our three subsidiaries.
MEDICAL MANAGER CORPORATION
- ---------------------------
o Consolidated revenues for the quarter were up 20% to $88 million,
reflecting increases across each of our lines of business.
o Excluding non-recurring items, we had a consolidated net loss of $7.1
million or $0.19 a share versus consolidated net income of $5.9 million or
$0.16 per share. This loss is totally a result of our continued investment
in CareInsite, our 68% owned public subsidiary, which has been totally
self-funded.
o If CareInsite is excluded from our consolidated results, we would have
reported net income of $8.8 million or $0.21 a share, versus net income of
$7.9 million also $0.21 a share.
o Our balance sheet remains very strong, we ended the quarter with
consolidated cash and cash equivalents of $386 million, including about
$69 million at CareInsite, with only $15 million in debt.
<PAGE>
MEDICAL MANAGER HEALTH SYSTEMS
- ------------------------------
o Revenues were up 15%, year over year to $56 million. The growth reflected
continued acceptance of our new clinical products such as OmniChart,
OmniDocs and the Document and Image Management System as well as growth
from Medical Manager Network Services and the continued acquisition of
Medical Manager and PCN dealers. This growth was partially offset by the
natural post-Y2K reduction in upgrade and new systems sales of version 9
of The Medical Manager software.
o EBITDA was up 26%, year over year, to $8.4 million, but was down from the
December quarter level, due to the change in product mix just mentioned.
POREX
- -----
o Revenues were up 24%, year over year to $31 million.
o EBITDA was up 15%, year over year, to $9.1 million. The lower margins
reflected continued stronger growth in the Bio and Medical Products
Groups, which carry lower margins than the Porous and Surgical Products
Groups.
CAREINSITE
- ----------
o Revenues were $1.7 million as compared with $213,000 last year. Revenues
were limited by the decision to delay the rollout of certain of our
services as a result of the announced merger with Healtheon/WebMD and by
the closing of the acquisition at the very end of the quarter of Provider
Technology Group. In addition, we recorded no management services revenue
for the quarter as a result of purchasing the remainder of THINC in
January in anticipation of the rollout.
o The EBITDA loss widened to $16.9 million from $6.4 million, reflecting
continued investment in the business, as well as, the impact from the
acquisition of THINC in January and The Provider Technology Group in
March.
o Depreciation and amortization increased to $8.9 million from $0.3 million,
primarily reflected the acquisitions mentioned earlier and amortization of
our capitalized software development costs. The net loss widened to $24.7
million, or $0.34 a share, from $6.7 million, or $0.11 a share.
JOHN KANG:
- ----------
o We are pleased with the strength of Medical Manager's performance this
quarter in light of the overall softness in the market, especially at the
high-end.
o The strength of the quarter's growth was driven by several factors. Medical
Manager Network Services continues to have good acceptance among our
physicians. We ended the quarter with over 29,000 physicians signed up for
Network Services, and we continue to see strong interest in this area.
o We have also seen a strong interest in our new clinical products -
OmniChart, OmniDocs and Document and Image Management System. Showing
tremendous success for a new product launch (especially for an electronic
medical record product)
o While we saw the strong demand in these areas, our margins were hurt by
several areas. This quarter, being the first post-Y2K quarter, we saw a
natural slowdown in our high margin upgrade business. While the diversified
revenue streams from the new clinical products and network services have
supplemented the slowdown in new system sales and upgrade sales, due to the
early stage in the product life cycle of our clinical products, margins are
not yet at the level of our market leading product, The Medical Manager,
resulting in the decrease in consecutive quarter profitability.
<PAGE>
o On March 30th, we also completed the previously announced acquisition of
Physician Computer Network, a leading provider of physician practice
management systems. With this acquisition, Medical Manager's installed
base is approximately 185,000 physicians in 33,000 sites across the
country. We believe this combined base of 185,000 with its concentration
among the high prescribing local physicians will continue to help in
executing our strategy to connect the payers to the physicians and to
patients. We will be focused on the next several quarters in integrating
PCN into our structure and expect this acquisition to enhance our ability
to implement our overall strategy as well as allowing us to leverage our
technology and new offerings to this new base of customers.
o Pleased with the development of Intergy - on schedule for a late calendar
2000 introduction
MARV RICH:
- ----------
o Increasing our partnerships with strong payers in key geographic areas
o As you know, in the New York/New Jersey market, we have agreements
with Horizon Blue Cross Blue Shield of New Jersey, Empire - Blue
Cross and Blue Shield of New York, Health Insurance Plan of New York
and Group Health Incorporated totaling more than 9 million lives.
During the quarter, we completed our transaction with Blue Cross and
Blue Shield of Massachusetts representing 1.9 million members.
o Increase in connected physicians
o Including the acquisitions mentioned previously, nationwide
connected physicians increased to approximately 30,000
o Continued product development/deployment
o While we have delayed an aggressive rollout of our services due to
our announced merger with Healtheon/WebMD, we continue to develop
and enhance our services. Our experience with physicians tells us
that the prudent decision is to minimize the amount of
re-installation. We do not want to burn bridges with physicians by
selling them one set of services only to have to train and install
them on another system a short time later.
o In the interim, we continue to develop our product line. We received
enthusiastic support for our initial implementations of the
physician portal and our lab application. Integration of the Medical
Manager software with the physician portal, allowing physicians to
see his/her day lists, schedule and charts from his/her home or
hospital, has been well received. Administrative and managed care
transactions continue to increase as more physicians are connected,
more products are introduced and new acquisitions are added to the
mix.
o Service levels continue to improve at our 3 service centers
o Answer rate for the call centers reached our goal of 90%. Next month
we will finish the consolidation of our New York service center into
our Kansas City service center improving service levels and reducing
expenses.
While a great deal of work lies ahead of us, we have experienced a productive
3rd quarter.
JIM LOVE:
- ---------
o 24% sales growth
o Decision not to pursue a key acquisition in February as a result of the
pending merger
o Porex has several exciting new product initiatives underway including the
development and manufacture of critical specification components for
microelectronics applications
o Continued to focus on productivity improvement programs including the
consolidation of all bioproducts group operations into our newly expanded
facilities in California
o Initiated a significant marketing and sales presence in Asia/Pacific.
