Medical Manager Legend
Filed by: Medical Manager Corporation
This communication is filed pursuant to
Rules 165 and 425 promulgated under the
Securities Act of 1933, as amended.
Subject Company: Medical Manager Corporation
Commission File Number: 000-17822
Investors are urged to read the various filings of Medical Manager Corporation,
CareInsite, Inc. and Healtheon/WebMD Corporation that have been filed and will
be filed with the Securities and Exchange Commission with respect to the pending
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 Medical Manager by contacting the Medical Manager Investor Relations
department at Medical Manager Corporation, 669 River Drive, Center 2, Elmwood
Park, New Jersey 07407, (201) 703-3400, http://www.medicalmanager.com
SET FORTH BELOW ARE (I) A PRESS RELEASE ISSUED BY MEDICAL MANAGER
RELATING TO MEDICAL MANAGER'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 MEDICAL MANAGER'S AND CAREINSITE'S THIRD QUARTER 2000
RESULTS:
<PAGE>
Contact: James R. Love
Executive Vice President and
Chief Financial Officer
(201) 703-3400
MEDICAL MANAGER ANNOUNCES THIRD QUARTER RESULTS
ELMWOOD PARK, NEW JERSEY, May 2, 2000 - Medical Manager Corporation
(NASDAQ: MMGR) announced today financial results for the quarter ended March 31,
2000. Revenues for the period were $88,401,000 as compared to $73,547,000 in the
prior year, an increase of 20%. Excluding the impact of CareInsite (NASDAQ:
CARI) and the non-recurring items discussed below, net income this quarter would
have been $8,805,000 or $0.21 per share as compared to $7,861,000 or $0.21 per
share in the prior year. The consolidated results include a net loss of
$(15,953,000) this quarter as compared to $(1,946,000) in the prior year
attributable to CareInsite. Non-recurring pre-tax items for the current period
include charges related to litigation with Merck & Co., Inc. of $350,000,
charges related to the realignment of Porex BioProducts Group of $1,950,000,
charges related to the call of convertible debentures of $3,404,000 and a gain
related to the termination of the pension plan at Porex Corporation of
$2,246,000. Non-recurring items for the prior year period include a pre-tax
charge related to litigation with Merck & Co., Inc. of $2,500,000. Net loss,
inclusive of the items discussed above, for the period was $(9,456,000) or
$(0.25) per share compared with net income of $4,287,000 or $0.11 per share in
the prior year.
As previously announced on February 14, 2000, Medical Manager and
CareInsite have signed definitive agreements to be acquired by Healtheon/WebMD
Corporation. Martin J. Wygod, Chairman of Medical Manager and CareInsite, said,
"In light of our pending transaction with Healtheon/WebMD, 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 addition,
although profitability at Medical Manager Health Systems 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." Mr. Wygod added,
"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."
Revenues at Medical Manager Health Systems for the quarter were
$55,600,000, an increase of 15% over prior year. EBITDA increased 26% to
$8,420,000, as compared to $6,658,000 in the prior year. John Kang, Co-CEO of
Medical Manager, said, "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. Our newest clinical products, OmniChart, OmniDocs
and the Document and Image Management System, as well as Medical Manager Network
Services continued to show significant growth. We experienced a decrease in
consecutive quarter profitability as a result of last quarter's pre-Y2K surge in
high-margin upgrade sales and the natural post-Y2K reduction. In addition, 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." He
continued, "We continue our strategy of acquiring both Medical Manager and
Physician Computer Network dealerships to enhance our distribution and service
capabilities. We are confident that these investments in our market leading
franchise will create future opportunities as we bring both new Medical Manager
and CareInsite products to our installed base as well as those of other
value-added vendors to the medical community."
<PAGE>
On March 30, 2000, Medical Manager 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.
Revenues at CareInsite for the quarter were $1,651,000, as compared to
$213,000 in the prior year. EBITDA was $(16,537,000) as compared to $(3,918,000)
in the prior year. 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."
Revenues at Porex Corporation, the Company's plastic and filtration
technologies subsidiary, for the quarter were $31,150,000, an increase of 24%
over prior year. EBITDA increased 15% to $9,061,000, as compared to $7,898,000
in the prior year. Kim Davis, CEO and President of Porex Corporation, said
"During the quarter, Porex continued to focus on productivity improvement
programs including the consolidation of all BioProducts Group operations into
our newly expanded facilities in California and the closure of the Newnan,
Georgia plant. In addition, Porex has several exciting new product initiatives
underway including the development and manufacture of critical specification
components for microelectronics applications. In connection with these efforts,
we have signed an exclusive long-term agreement with a leading supplier to the
microelectronics industry."
On March 31, 2000, the Company had approximately $386,000,000 in cash
and marketable securities to be used for general corporate purposes, as well as
acquisitions and other strategic transactions. This amount includes
approximately $69,000,000 in cash and marketable securities at CareInsite.
About Medical Manager Corporation
Medical Manager Corporation is publicly traded on NASDAQ and operates
three lines of business. Medical Manager Health Systems is a leading provider of
physician practice management systems. Porex Corporation is a leader in the
development, manufacturing and distribution of porous and solid plastic
products. 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. CareInsite is a
68% owned subsidiary of Medical Manager Corporation.
<PAGE>
A report of Medical Manager's financial results for the three and nine months
ended March 31, 2000 is as follows:
MEDICAL MANAGER CORPORATION
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:
Medical Manager Health Systems $55,600 $48,265 $169,194 $144,064
Porex 31,150 25,069 90,805 68,730
CareInsite 1,651 213 4,809 213
------------- -------------- -------------- ------------
88,401 73,547 264,808 213,007
Income/(loss) before interest, taxes, depreciation and
amortization (EBITDA):
Medical Manager Health Systems 8,420 6,658 28,189 22,689
Porex 9,061 7,898 27,970 22,625
CareInsite, before minority interest (16,537) (3,918) (36,244) (9,548)
Corporate and other (1,969) (1,424) (5,625) (4,244)
------------- -------------- -------------- ------------
(1,025) 9,214 14,290 31,522
Depreciation and amortization (14,002) (3,818) (25,610) (10,530)
Interest income, net 5,780 2,663 14,702 8,515
Gain on sale of investments, net - - 24,887 -
Merger and other non-recurring items (3,458) (2,500) (22,549) (7,247)
Minority interest in CareInsite 7,202 764 5,416 764
------------- -------------- -------------- ------------
Income (loss) before provision for income taxes (5,503) 6,323 11,136 23,024
Provision for income taxes 3,953 2,036 12,742 8,661
------------- -------------- -------------- ------------
Net income (loss) $(9,456) $4,287 $(1,606) $14,363
============= ============== ============== ============
Income (loss) per share - basic $(0.25) $0.12 $(0.04) $0.42
Income (loss) per share - diluted $(0.25) $0.11 $(0.04) $0.39
Weighted average shares outstanding - basic 37,981 34,946 36,713 34,033
Weighted average shares outstanding - diluted 37,981(e) 37,675 36,713 (e) 36,696
</TABLE>
(a) Includes pre-tax charges related to certain non-recurring items, including
litigation with Merck & Co., Inc. of $350, realignment of Porex BioProducts
Group of $1,950 and expenses related to the call of convertible debentures
of $3,404. Also includes a pre-tax one-time gain related to the termination
of pension plan at Porex Corporation of $2,246. Excluding these items, net
loss would have been $(7,148) or $(0.19) per share (basic and diluted).
(b) Includes pre-tax charge related to litigation with Merck & Co., Inc. of
$2,500. Excluding this item, net income would have been $5,915 or $0.17 per
share (basic) and $0.16 per share (diluted).
<PAGE>
(c) Includes pre-tax charges related to certain non-recurring items, including
litigation with Merck & Co., Inc. of $1,450, realignment of Porex
BioProducts Group of $1,950, expenses related to the call of convertible
debentures of $3,404 and charges related to the acquisition of Medical
Manager Health Systems of $17,991. Also includes a pre-tax one-time gain
related to the termination of the pension plan at Porex Corporation of
$2,246 and a net gain on the sale of investments of $24,887. Excluding
these items, net loss would have been $(843) or $(0.02) per share (basic
and diluted).
(d) Includes pre-tax charges related to certain non-recurring items including,
charges related to certain litigation of $4,866 and charges related to the
write-off of capitalized software of $2,381. Excluding these items, net
income would have been $18,935 or $0.56 per share (basic) and $0.52 per
share (diluted).
(e) The three and nine months ended March 31, 2000 exclude 4,115 and 3,790,
respectively, of common stock equivalents related to stock options and
warrants as required by GAAP due to the net loss reported during the
period.
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>
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 existing 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.
