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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 1996
OXFORD HEALTH PLANS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-19442 06-1118515
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(State or other jurisdiction) (Commission (IRS Employer
of incorporation) File Number) Identification No.)
800 Connecticut Avenue, Norwalk, Connecticut 06854
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(Address of principal executive offices) (Zip Code)
(203) 852-1442
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
Registrant's Press Release, dated August 6, 1996, is attached
as an Exhibit hereto and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(99) Press Release dated August 6, 1996
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.
OXFORD HEALTH PLANS, INC.
Date: August 6, 1996 By: /s/ ANDREW B. CASSIDY
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Andrew B. Cassidy
Chief Financial Officer
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Page
Number Description of Document Number
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(99) Press Release dated August 6, 1996 4
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Exhibit 99
[Oxford Health Plans Letterhead]
Re: Oxford Health Plans, Inc.
800 Connecticut Avenue
Norwalk, CT 06854
For Further Information:
Stephen F. Wiggins
Chairman and CEO
(203) 852-1442
FOR IMMEDIATE RELEASE
August 6, 1996
OXFORD HEALTH PLANS REPORTS 98 PERCENT EARNINGS INCREASE IN SECOND QUARTER
NORWALK, CONNECTICUT, AUGUST 6, 1996--Oxford Health Plans,
Inc. (NASDAQ:OXHP) today reported that second quarter 1996 net earnings rose 98
percent on a revenue increase of 75 percent when compared with the second
quarter of 1995. The earnings growth was driven by increased enrollment in the
Company's fully insured programs, stable medical expense trends and a
significant improvement in the ratio of administrative expenses to operating
revenues.
Total revenues for the second quarter ended June 30, 1996
reached $725.3 million, a 75 percent increase from $413.4 million a year ago.
Operating earnings jumped 88 percent to $39.7 million compared with $21.1
million in the second quarter of 1995. Net earnings increased 98 percent to
$22.5 million, or $.28 per share, from $11.3 million, or $.16 per share, in the
prior year's second quarter. The increase in second quarter 1996 earnings per
share represented a 75% improvement over the second quarter of 1995 .
For the six months ended June 30, 1996, the Company's revenues
totaled $1.38 billion, an 85 percent increase from $747.8 million for the first
six months of 1995. Operating earnings rose to $72.8 million, an increase of 81
percent from the $40.1 million earned in the first six months of 1995, while net
earnings for the first six months of 1996 increased 89 percent to $41.0 million,
or $.53 per share, from $21.7 million, or $.30 per share, for the first six
months of 1995.
Per share amounts have been restated to reflect the
two-for-one stock split effectuated as a dividend declared in March 1996 and
distributed to stockholders in April 1996.
Oxford's enrollment totaled approximately 1,321,100 members at
June 30, 1996, an increase of over 120,000 during the second quarter of 1996 and
almost 64 percent higher than membership at the end of last year's second
quarter. All of this new membership has come from fully insured enrollment which
has continued to grow in the third quarter of 1996. Approximately 85,000 net new
members have enrolled since the end of June 1996, bringing total membership to
over 1,406,000 as of August 1, 1996. The strong earnings and enrollment growth
continue to reflect the popularity and quality of the Company's products.
-more-
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Oxford Health Plans, Inc.
August 6, 1996
The Company's medical-loss ratio for second quarter of 1996
was 80.3%, slightly better than expectations. The Company believes that it is
benefiting from better provider contracts and strengthened medical management
programs.
Administrative expenses were 15.9% of operating revenue for
the second quarter of 1996, compared with 18.2% for the second quarter of 1995
and 18.7% for the full year of 1995.
"We are pleased to see expansion of our margins in the second
quarter," said Stephen F. Wiggins, Oxford's Chairman and Chief Executive
Officer. "We believe our products are becoming more price competitive, as we are
beginning to see premium rate increases by many of our competitors. In addition,
we benefited during the second quarter from our continuing efforts to better
manage both medical and administrative expenses."
In April 1996, the Company completed a registered public
offering of 5,227,272 shares of newly issued post split shares of common stock
from which the Company realized net proceeds of approximately $220 million.
In July 1995, Oxford completed a merger with OakTree Health
Plans, Inc., a Philadelphia-based health maintenance organization. Under the
terms of the merger agreement, all of the issued and outstanding shares of
OakTree capital stock were exchanged for shares of Oxford common stock in a
pooling of interests transaction. Accordingly, all of the appropriate prior year
data shown above and in the financial tables have been restated to include
OakTree, in accordance with the pooling of interests method of accounting.
Oxford's product lines include traditional health maintenance
organizations, point-of service plans, third-party administration of employer
funded benefit plans, Medicare and Medicaid plans, and dental plans. Oxford
markets its health plans to employers in New York, New Jersey, Pennsylvania,
Connecticut and New Hampshire through its direct sales force and through
independent insurance agents and brokers.
FINANCIAL TABLES FOLLOW
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(IN THOUSANDS, EXCEPT PER SHARE AND MEMBERSHIP DATA)
(UNAUDITED)
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THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
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1996 1995 1996 1995
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Revenues:
Premiums earned $ 712,768 406,275 1,360,950 734,464
Third-party administration, net 2,346 2,828 5,528 5,694
Investment income, net 10,175 4,336 16,900 7,664
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Total revenues 725,289 413,439 1,383,378 747,822
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Expenses:
Health care services 572,016 317,968 1,090,232 570,505
Marketing, general and administrative 113,553 74,335 220,313 137,179
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Total expenses 685,569 392,303 1,310,545 707,684
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Operating earnings 39,720 21,136 72,833 40,138
Equity in loss of affiliate (1,000) (750) (2,050) (1,623)
Other income (expense), net 39 46 90 12
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Earnings before income taxes 38,759 20,432 70,873 38,527
Provision for income taxes 16,301 9,084 29,898 16,806
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Net earnings $ 22,458 11,348 40,975 21,721
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Earnings per common and common
equivalent share-primary and
fully diluted $ .28 .16 0.53 .30
Weighted average common stock and
common stock equivalents outstanding-
primary and fully diluted 80,791 72,770 77,988 72,596
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Membership at
June 30 Increase
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MEMBERSHIP HIGHLIGHTS 1996 1995 (Decrease)
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Freedom Plan 882,000 536,900 345,100
HMO 165,500 101,050 64,450
Medicare 98,000 42,000 56,000
Medicaid 136,000 84,050 51,950
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Total Fully Insured 1,281,500 764,000 517,500
Self-funded 39,600 43,000 (3,400)
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Total Membership 1,321,100 807,000 514,100
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
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<CAPTION>
JUNE 30, Dec. 31,
1996 1995
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Current assets: (Unaudited)
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Cash and cash equivalents ....................................... $108,361 58,450
Short-term investments-available for sale (at market value) ..... 587,679 310,197
Premiums receivable (net of allowance for doubtful
accounts of $2,048 in 1996 and $3,029 in 1995) ............... 123,219 96,278
Other receivables ............................................... 18,611 15,260
Prepaid expenses and other current assets ....................... 4,619 3,563
Deferred income taxes ........................................... 9,701 8,443
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Total current assets ....................................... 852,190 492,191
Property and equipment, at cost (net of accumulated depreciation and
amortization of $48,386 in 1996 and $30,074 in 1995) ......... 108,382 97,414
Other noncurrent assets ............................................ 23,916 19,171
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Total assets ............................................... $984,488 608,776
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Medical costs payable ........................................... $427,483 300,508
Trade accounts payable and accrued expenses ..................... 46,053 36,508
Income taxes payable ............................................ 10,434 1,428
Unearned premiums ............................................... 9,022 50,299
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Total liabilities .......................................... 492,992 388,743
Stockholders' equity:
Preferred stock, $.01 par value, authorized 2,000,000 shares .... -- --
Common stock, $.01 par value, authorized 200,000,000
shares; issued and outstanding 75,020,643 in 1996
and 34,390,401 in 1995 ..................................... 750 343
Additional paid-in capital ...................................... 348,790 116,639
Retained earnings ............................................... 137,142 96,167
Unrealized net appreciation of investments ...................... 4,814 6,884
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Total stockholders' equity ................................. 491,496 220,033
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Total liabilities and stockholders' equity ................. $984,488 608,776
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