<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from ________ to ________
Commission file number 0-15846
-------
HealthCare COMPARE Corp.
------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3307583
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
3200 Highland Avenue, Downers Grove, Illinois 60515
---------------------------------------------------
(Address of principal executive offices, Zip Code)
(630) 241-7900
--------------
(Registrant's phone number, including area code)
__________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
The number of shares of Common Stock, par value $.01 per share, outstanding on
November 8, 1996 was 33,652,667.
<PAGE> 2
HealthCare COMPARE Corp. and Subsidiaries
INDEX
Part I. Financial Information Page Number
-----------
Item 1. Financial Statements
Consolidated Balance Sheets - Assets at September 30, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets - Liabilities and Stockholders'
Equity at September 30, 1996 and December 31, 1995. . . . . . 4
Consolidated Statements of Operations for the three months
ended September 30, 1996 and 1995 . . . . . . . . . . . . . 5
Consolidated Statements of Operations for the nine months
ended September 30, 1996 and 1995 . . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1996 and 1995 . . . . . . . . . . . . . 7-8
Notes to Consolidated Financial Statements . . . . . . . . . . 9-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 11-13
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exhibit 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-17
2
<PAGE> 3
PART 1. FINANCIAL INFORMATION
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents................ $ 47,403,000 $ 74,599,000
Short-term investments................... 73,064,000 70,634,000
Accounts receivable, less allowances for
doubtful accounts of $2,887,000
and $2,807,000, respectively........... 25,746,000 22,255,000
Other current assets..................... 11,528,000 6,434,000
------------ ------------
Total current assets..................... 157,741,000 173,922,000
------------ ------------
Long-Term Investments:
Marketable securities.................... 100,741,000 58,051,000
Other.................................... 18,206,000 18,086,000
------------ ------------
118,947,000 76,137,000
------------ ------------
Property and Equipment:
Buildings and improvements............... 36,356,000 32,885,000
Computer equipment and software.......... 36,605,000 29,358,000
Office furniture and equipment........... 18,623,000 17,643,000
------------ ------------
91,584,000 79,886,000
Less accumulated depreciation and
amortization........................... (44,982,000) (36,472,000)
------------ ------------
Net property and equipment............... 46,602,000 43,414,000
------------ ------------
Other Assets................................ 9,130,000 3,721,000
------------ ------------
$332,420,000 $297,194,000
============ ============
</TABLE>
3
<PAGE> 4
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Current Liabilities:
Accounts payable..................... $ 8,556,000 $ 7,149,000
Accrued expenses..................... 11,265,000 9,649,000
Claims reserves...................... 8,758,000 --
Income taxes payable................. 3,974,000 --
------------ ------------
Total current liabilities............ 32,553,000 16,798,000
Non-Current Liabilities................. 74,000 126,000
------------ ------------
Total liabilities.................... 32,627,000 16,924,000
------------ ------------
Commitments and Contingencies........... -- --
Stockholders' Equity:
Common stock......................... 371,000 366,000
Additional paid-in capital........... 126,795,000 104,961,000
Retained earnings.................... 268,841,000 210,070,000
Unrealized holding gain on marketable
securities......................... 289,000 242,000
Treasury stock, at cost.............. (96,503,000) (35,369,000)
------------ ------------
Total stockholders' equity........... 299,793,000 280,270,000
------------ ------------
$332,420,000 $297,194,000
============ ============
</TABLE>
4
<PAGE> 5
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1995
--------------------------------
<S> <C> <C>
Revenues . . . . . . . . . . . . . $ 62,428,000 $ 54,238,000
------------ ------------
Operating expenses:
Cost of services . . . . . . . . 18,034,000 15,650,000
Selling and marketing . . . . . 7,216,000 6,616,000
General and administrative . . . 3,495,000 2,734,000
Healthcare benefits . . . . . . 1,359,000 --
Depreciation and amortization . 2,937,000 2,479,000
Interest income, net . . . . . . (3,412,000) (1,993,000)
------------ ------------
29,629,000 25,486,000
------------ ------------
Income before income taxes . . . . 32,799,000 28,752,000
Income taxes . . . . . . . . . . . (12,710,000) (11,500,000)
------------ ------------
Net income . . . . . . . . . . . . $ 20,089,000 $ 17,252,000
============ ============
Weighted average common and
common share equivalents . . . . 35,208,000 35,057,000
============ ============
Net income per common share . . . . $ .57 $ .49
============ ============
</TABLE>
5
<PAGE> 6
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------
1996 1995
--------------------------------
<S> <C> <C>
Revenues . . . . . . . . . . . . . $184,613,000 $158,677,000
----------- -----------
Operating expenses:
Cost of services . . . . . . . . 54,242,000 47,777,000
Selling and marketing . . . . . 21,775,000 19,279,000
General and administrative . . . 10,209,000 8,204,000
Healthcare benefits . . . . . . 3,587,000 --
Depreciation and amortization . 8,635,000 7,845,000
Interest income, net . . . . . . (9,317,000) (5,713,000)
------------ ------------
89,131,000 77,392,000
------------ ------------
Income before income taxes . . . . 95,482,000 81,285,000
Income taxes . . . . . . . . . . . (36,711,000) (32,803,000)
------------ ------------
Net income . . . . . . . . . . . . $ 58,771,000 $ 48,482,000
============ ============
Weighted average common and
common share equivalents . . . . 35,501,000 35,020,000
============ ============
Net income per common share . . . . $ 1.66 $ 1.38
============ ============
</TABLE>
6
<PAGE> 7
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers . . . . . . . . . . . . . $181,044,000 $155,985,000
Cash paid to suppliers and employees . . . . . . . . . (86,523,000) (72,370,000)
Healthcare benefits paid . . . . . . . . . . . . . . . (3,489,000) --
Interest received, net . . . . . . . . . . . . . . . . 9,429,000 5,997,000
Income taxes paid, net . . . . . . . . . . . . . . . . (29,567,000) (34,388,000)
------------ ------------
Net cash provided by operating activities . . . . . . 70,894,000 55,224,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments . . . . . . . . . . . . . . (148,486,000) (133,970,000)
Sales of investments . . . . . . . . . . . . . . . . 114,779,000 94,503,000
Acquisition of businesses, net of cash acquired . . . (10,090,000) --
Purchase of property and equipment . . . . . . . . . (10,937,000) (5,821,000)
------------ ------------
Net cash used in investing activities . . . . . . . . (54,734,000) (45,288,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock . . . . . . . . . . . . . . (61,134,000) (2,170,000)
Proceeds from issuance of common stock . . . . . . . . 11,050,000 8,839,000
Proceeds from sale of put options on common stock . . 6,728,000 --
------------ ------------
Net cash provided by (used in) financing activities . . (43,356,000) 6,669,000
------------ -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . (27,196,000) 16,605,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . 74,599,000 29,412,000
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . $ 47,403,000 $ 46,017,000
============ ============
SUPPLEMENTAL CASH FLOW DATA:
Acquisition of businesses:
Fair value of assets acquired . . . . . . . . . . . $ 19,246,000
Cost in excess of net assets acquired . . . . . . . 3,048,000
Fair value of liabilities assumed . . . . . . . . . (11,204,000)
Future payments on acquisition . . . . . . . . . . (1,000,000)
------------
Net cash paid . . . . . . . . . . . . . . . . . . . $ 10,090,000
============
</TABLE>
7
<PAGE> 8
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------
1996 1995
------------ ------------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . $58,771,000 $48,482,000
----------- -----------
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization . . . . . . . . . . . . . . 8,635,000 7,845,000
Change in provision for uncollectible receivables . . . . 80,000 (683,000)
Amortization of bond premiums . . . . . . . . . . . . . 1,308,000 1,061,000
Tax benefit from stock options exercised . . . . . . . . 4,061,000 3,752,000
Other, net . . . . . . . . . . . . . . . . . . . . . . . (423,000) (773,000)
Changes in Assets and Liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . (3,571,000) (2,459,000)
Other current assets . . . . . . . . . . . . . . . . . . (717,000) (3,075,000)
Accounts payable and accrued expenses . . . . . . . . . . (593,000) 3,759,000
Claims reserves . . . . . . . . . . . . . . . . . . . . 170,000 --
Income taxes payable . . . . . . . . . . . . . . . . . . 3,974,000 (806,000)
Non-current assets and liabilities . . . . . . . . . . . (801,000) (1,879,000)
----------- ------------
TOTAL ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . 12,123,000 6,742,000
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . $ 70,894,000 $ 55,224,000
============ ============
</TABLE>
8
<PAGE> 9
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
1. The unaudited financial statements herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. The accompanying interim financial statements have been
prepared under the presumption that users of the interim financial
information have either read or have access to the audited financial
statements for the latest fiscal year ended December 31, 1995.
Accordingly, footnote disclosures which would substantially duplicate the
disclosures contained in the December 31, 1995 audited financial statements
have been omitted from these interim financial statements. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Although the Company believes that the disclosures are
adequate to make the information presented not misleading, it is suggested
that these interim financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
Annual Report on Form 10-K.
2. On February 1, 1996, the Company acquired American Life and Health
Insurance Company and its subsidiary Cambridge Life Insurance Company for
approximately $11.2 million in cash of which $7.1 million was paid at
closing, $3.1 million was paid in the second quarter of 1996 and $1.0
million will be paid when certain contingencies are resolved. The
acquisition was accounted for by the purchase method and, accordingly, the
results of operations of the acquired businesses have been included in the
accompanying consolidated financial statements from the date of
acquisition. The estimated fair market value of net assets acquired was
$8,042,000, net of cash acquired. The excess of purchase price over
estimated fair market value has been allocated to goodwill which is being
amortized over 20 years. The pro forma effect of the acquisition on the
consolidated results of the Company is not material.
3. The Company's investments in marketable securities which are classified as
available for sale had a net unrealized gain in market value of $47,000,
net of deferred income taxes, for the nine months ended September 30, 1996.
The net unrealized gain at September 30, 1996, included as a component of
stockholders' equity, was $289,000, net of deferred income taxes. The
Company's $10,000,000 investment in a limited partnership is carried at
cost. The current value of the Company's interest in the limited
partnership at September 30, 1996, as reported by the partnership, was
$11,455,000. In the third quarter of 1995, the Company invested in another
limited partnership which invests in equipment which is leased to third
parties. This investment is accounted for on the equity method since the
Company owns 20% of the limited partnership's assets. The Company's
proportionate share of the partnership's income was $274,000 for the nine
months ended September 30, 1996 and is included in interest income.
4. On August 8, 1996, the Company announced that the Board of Directors had
approved the repurchase of up to 5,000,000 shares, or approximately 15% of
the Company's then outstanding Common Stock. Purchases may be made from
time to time, depending on market conditions and other relevant factors.
The Company had previously repurchased 1,655,000 shares under a previous
stock repurchase plan. During 1996, the Company has repurchased
approximately 1,412,000 shares for a total cost of approximately $56.1
million
9
<PAGE> 10
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
or an average of $39.74 per share. Such shares are recorded as treasury
shares, at cost, and can be used for general corporate purposes. In
connection with this stock repurchase program, in the third quarter of 1996,
the Company sold put options which obligate the Company, at the election of
the option holders, to repurchase up to two million shares of Common Stock at
prices ranging from $40.25 to $42.875 per share. These options expire at
various dates from December 31, 1996 through September 30, 1997. The
proceeds from the sale of these options in the amount of $6,728,000 was
recorded as additional paid-in-capital.
10
<PAGE> 11
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Revenues for the three and nine months ended September 30, 1996 increased
15% and 16% or $8,190,000 and $25,936,000, respectively, from the comparable
periods of 1995. The Company's revenues consist of fees for cost management
services provided under contracts which typically require clients to pay based
upon a percentage of savings or on a predetermined contractual basis (fee-based
revenue). The Company also derives revenues based on a fixed monthly fee for
each participant, excluding covered dependents, in a client-sponsored health
care plan (capitated revenue). As a result of the Company's acquisition of a
life and health insurance company, the Company also derives an immaterial
amount of premium revenue on life and health insurance contracts.
The following table sets forth information with respect to the sources of
the Company's revenues for the three and nine months ended September 30, 1996
and 1995:
SOURCES OF REVENUE
($ in thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------------ -----------------------------------
1996 % 1995 % 1996 % 1995 %
---- - ---- - ---- - ---- -
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PPO Services $48,611 78% $42,421 78% $142,736 77% $122,513 77%
Fee Schedule Services 6,819 11% 3,960 7% 19,493 11% 12,418 8%
Clinical Cost Management
Services 5,047 8% 6,389 12% 15,821 8% 19,458 12%
Premiums, Net 1,951 3% -- -- 5,203 3% -- --
Government Contract
Services -- -- 1,468 3% 1,360 1% 4,288 3%
------- --- ------ --- ------- --- ------- ---
Total $62,428 100% $54,238 100% $184,613 100% $158,677 100%
======= === ====== ==== ======= === ======= ===
</TABLE>
The growth in revenue during the three and nine months ended September 30,
1996 from the comparable periods of 1995 is primarily attributable to the
expansion and development of the Company's PPO services and fee schedule
services. PPO revenue increased $6,190,000 (15%) and $20,223,000 (17%),
respectively, from the same periods of 1995. This growth is the result of new
client additions and increased utilization of the PPO network by existing
clients. Revenue from fee schedule services increased $2,859,000 (72%) and
$7,075,000 (57%), respectively, for the three and nine months ended September
30, 1996 from the comparable periods in 1995 due to new client additions and
increased revenue from several existing clients, the most notable of which was
Liberty Mutual Insurance Company.
Revenue from clinical cost management services decreased $1,342,000 (21%)
and $3,637,000 (19%), respectively, for the three and nine months ended
September 30, 1996 from the comparable periods in 1995. Premium revenue was
generated by the small health and life insurance company acquired by the
Company during the first quarter of 1996. Government contract revenue decreased
11
<PAGE> 12
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
$1,468,000 (100%) and $2,928,000 (68%), respectively, from the same periods in
1995 due to the completion of the Company's CHAMPUS contract with the
Department of Defense.
Cost of services increased $2,384,000 (15%) and $6,465,000 (14%) for the
three and nine months ended September 30, 1996 from the comparable periods of
1995. Cost of services consists primarily of salaries for personnel involved
in PPO administration, development and expansion, utilization management
programs, fee schedule and other cost management services offered by the
Company. To a lesser extent, cost of services includes telephone expenses,
facility expenses and information processing costs. The increase in these
costs is primarily attributable to expenses associated with the growth of the
Company's fee schedule business and to a lesser extent expenses incurred in the
development of the Company's risk-based products.
Selling and marketing costs increased $600,000 (9%) and $2,496,000 (13%),
respectively, for the three and nine months ended September 30, 1996 from the
same periods of 1995, primarily as a result of the hiring of additional sales
personnel. To a lesser extent, the increase relates to commissions paid to
agents and third party administrators by the Company's insurance entity.
General and administrative costs for the three and nine months ended
September 30, 1996 increased $761,000 (28%) and $2,005,000 (24%), respectively,
from the comparable periods of 1995. This increase is primarily attributable
to the general insurance expenses incurred by the Company's insurance entity.
To a lesser extent, the increase relates to salaries and benefits incurred in
the executive and administrative areas of the Company.
Healthcare benefits represent losses incurred by insureds of the Company's
insurance entity. The loss ratio (losses as a percent of premiums) was 70% and
69%, respectively, for the three and nine months ended September 30, 1996. Due
to the small size of the insurance business, this expense is expected to be
volatile until the Company is able to institute all of its managed care
services and controls and increase the size of it's insurance business.
Depreciation and amortization expenses increased $458,000 (18%) and $790,000
(10%), respectively, for the three and nine months ended September 30, 1996
from the comparable periods of 1995. Depreciation expense as a percent of
revenue remained constant at 5%.
Interest income for the three and nine months ended September 30, 1996
increased $1,419,000 (71%) and $3,604,000 (63%) from the same periods in 1995
although the amount of cash equivalents and investments has only increased 22%
since September 30, 1995. The cash equivalents and short term investments have
been reduced by $56,095,000 paid to repurchase Company common stock in the
third quarter of 1996.
Net income for the three and nine months ended September 30, 1996, increased
$2,837,000 (16%) and $10,289,000 (21%), respectively, from the comparable
periods of 1995. This increase is due primarily to the revenue growth as well
as efficiencies achieved in the Company's operations.
12
<PAGE> 13
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The Company had $125,188,000 in working capital at September 30, 1996
compared with working capital of $157,124,000 at December 31, 1995. The
decrease is primarily attributable to the purchase of the insurance entity
which had negative working capital of approximately $5,500,000 at date of
purchase as well as the repurchase of 1,412,000 shares of Company Common Stock
for a total cost of $56,095,000 in the third quarter of 1996. Investment
activities used $54,734,000 of cash representing net purchases of investments
of $33,707,000, purchases of fixed assets of $10,937,000 and acquisition of
insurance company of $10,090,000. Financing activities used $43,356,000 of
cash representing $61,134,000 in purchases of treasury stock during the nine
months ended September 30, 1996 partially offset by $11,050,000 in proceeds
from issuance of common stock and $6,728,000 in proceeds from sale of put
options. Through the first nine months of the year, operating activities
provided $70,894,000 of cash.
The Company believes that its working capital, long-term investments, and
cash generated from future operations will be sufficient to fund the Company's
anticipated operations and expansion plans.
13
<PAGE> 14
PART II
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Exhibits:
(a) Exhibit 11 - Computation of Primary Earnings Per Common Share
(b) Exhibit 11 - Computation of Fully Diluted Earnings Per Common
Share
Reports on Form 8-K:
None
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HealthCare COMPARE Corp.
Dated: November 12, 1996 /s/James C. Smith
--------------------------------------------
James C. Smith
President and Chief Executive Officer
Dated: November 12, 1996 /s/Joseph E. Whitters
--------------------------------------------
Joseph E. Whitters
Chief Financial Officer
(Principal Financial and Accounting Officer)
15
<PAGE> 1
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES EXHIBIT 11
COMPUTATION OF PRIMARY EARNINGS PER COMMON SHARE
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1995
-------- -------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . $20,089,000 $17,252,000
========== ==========
Weighted average number of common shares
outstanding:
Shares outstanding from beginning of period. . . 34,982,000 34,253,000
Other issuances of common stock . . . . . . . . 25,000 96,000
Purchases of treasury stock . . . . . . . . . . (623,000) --
Common Stock Equivalents:
Additional equivalent shares issuable from
assumed exercise of common stock options . . . 824,000 708,000
----------- -----------
Weighted average common and common share
equivalents . . . . . . . . . . . . . . . . . . . 35,208,000 35,057,000
=========== ===========
Net income per common share . . . . . . . . . . . . $ .57 $ .49
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1996 1995
-------- -------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . $58,771,000 $48,482,000
=========== ===========
Weighted average number of common shares
outstanding:
Shares outstanding from beginning of period. . . 34,635,000 34,034,000
Other issuances of common stock . . . . . . . . 379,000 261,000
Purchases of treasury stock . . . . . . . . . . (339,000) (58,000)
Common Stock Equivalents:
Additional equivalent shares issuable from
assumed exercise of common stock options . . . 826,000 783,000
----------- -----------
Weighted average common and common share
equivalents . . . . . . . . . . . . . . . . . . . 35,501,000 35,020,000
=========== ===========
Net income per common share . . . . . . . . . . . . $ 1.66 $ 1.38
=========== ===========
</TABLE>
16
<PAGE> 2
HEALTHCARE COMPARE CORP. AND SUBSIDIARIES EXHIBIT 11
COMPUTATION OF FULLY DILUTED EARNINGS PER COMMON SHARE
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1995
------- --------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . $20,089,000 $17,252,000
=========== ===========
Weighted average number of common shares
outstanding:
Shares outstanding from beginning of period. . . 34,982,000 34,253,000
Other issuances of common stock . . . . . . . . 25,000 96,000
Purchases of treasury stock . . . . . . . . . . (623,000) --
Common Stock Equivalents:
Additional equivalent shares issuable from
assumed exercise of common stock options . . . 824,000 840,000
----------- -----------
Weighted average common and common share
equivalents . . . . . . . . . . . . . . . . . . . 35,208,000 35,189,000
=========== ===========
Net income per common share . . . . . . . . . . . . $ .57 $ .49
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1996 1995
-------- -------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . $58,771,000 $48,482,000
=========== ===========
Weighted average number of common shares
outstanding:
Shares outstanding from beginning of period. . . . 34,635,000 34,034,000
Other issuances of common stock . . . . . . . . . 379,000 261,000
Purchases of treasury stock . . . . . . . . . . . (339,000) (58,000)
Common Stock Equivalents:
Additional equivalent shares issuable from
assumed exercise of common stock options . . . . 851,000 848,000
----------- -----------
Weighted average common and common share
equivalents . . . . . . . . . . . . . . . . . . . . 35,526,000 35,085,000
=========== ===========
Net income per common share . . . . . . . . . . . . . $ 1.65 $ 1.38
=========== ===========
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 47,403
<SECURITIES> 183,805
<RECEIVABLES> 28,633
<ALLOWANCES> (2,887)
<INVENTORY> 0
<CURRENT-ASSETS> 157,741
<PP&E> 91,584
<DEPRECIATION> (44,982)
<TOTAL-ASSETS> 332,420
<CURRENT-LIABILITIES> 32,627
<BONDS> 0
<COMMON> 371
0
0
<OTHER-SE> 299,422
<TOTAL-LIABILITY-AND-EQUITY> 332,420
<SALES> 0
<TOTAL-REVENUES> 62,428
<CGS> 0
<TOTAL-COSTS> 30,104
<OTHER-EXPENSES> 2,937
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 32,799
<INCOME-TAX> 12,710
<INCOME-CONTINUING> 20,089
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,089
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
</TABLE>
