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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 5, 1997
OXFORD HEALTH PLANS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19442 06-1118515
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
800 Connecticut Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
(203) 852-1442
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
Registrant's Press Release, dated August 5, 1997, is attached as an
Exhibit hereto and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
(99) Press Release dated August 5, 1997
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 5, 1997 By: /s/ ANDREW B. CASSIDY
-------------------------
ANDREW B. CASSIDY
Executive Vice President
Chief Financial Officer
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
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Exhibit Page
Number Description of Document Number
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<S> <C> <C>
(99) Press Release dated August 5, 1997 4
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EXHIBIT (99)
OXFORD LETTERHEAD
Re: Oxford Health Plans, Inc.
800 Connecticut Avenue
Norwalk, CT 06854
For Further Information:
Stephen F. Wiggins
Chairman
(203) 852-1442
FOR IMMEDIATE RELEASE
August 5, 1997
OXFORD HEALTH PLANS REPORTS 66 PERCENT EARNINGS INCREASE IN SECOND QUARTER
WILLIAM M. SULLIVAN PROMOTED TO CHIEF EXECUTIVE OFFICER; WIGGINS TO REMAIN
OFFICER AND CHAIRMAN
NORWALK, CONNECTICUT, AUGUST 5, 1997--Oxford Health Plans, Inc.
(NASDAQ:OXHP) today reported that second quarter 1997 net earnings rose 66
percent on a revenue increase of 46 percent when compared with the second
quarter of 1996. The earnings growth was driven by increased enrollment in the
Company's fully insured programs and stable medical expense trends.
Total revenues for the second quarter ended June 30, 1997 reached $1.06
billion, a 46 percent increase from $725.3 million a year ago. Operating
earnings jumped 59 percent to $63.2 million compared with $39.8 million in the
second quarter of 1996. Net earnings increased 66 percent to $37.2 million, or
$.45 per share, from $22.5 million, or $.28 per share, in the prior year's
second quarter.
For the six months ended June 30, 1997, the Company's revenues totaled
$2.05 billion, a 48 percent increase from $1.38 billion for the first six months
of 1996. Operating earnings rose to $123.0 million, an increase of 69 percent
from the $72.9 million earned in the first six months of 1996, while net
earnings for the first six months of 1997 increased 75 percent to $71.6 million,
or $.87 per share, from $41.0 million, or $.53 per share, for the first six
months of 1996.
Oxford's enrollment totaled approximately 1,833,500 members at June 30,
1997, an increase of almost 95,000 during the second quarter of 1997 and almost
39 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 1997. More than 80,000 net new members
have enrolled since the end of June 1997, bringing total membership to
approximately 1,915,000 as of August 1, 1997. The strong earnings and enrollment
growth continue to reflect the popularity and quality of Oxford's products.
The Company's medical-loss ratio for second quarter of 1997 was 79.7%
compared with 80.3% in the second quarter of 1996 and 80.2% for the first
quarter of 1997. The Company believes that it continues to benefit from better
provider contracts and strengthened medical management programs.
-more-
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Oxford Health Plans, Inc.
August 5, 1997
Administrative expenses were 15.8% of operating revenue for the second
quarter of 1997, compared with 15.9% for the second quarter of 1996.
The Company's balance sheet continues to show high levels of premiums
receivable resulting from delays earlier this year in billing associated with
the conversion of certain of the Company's operations to a new computer system,
but receivables have slightly decreased measured by days in operating revenues
outstanding as the Company's billing has returned to normal cycles. Medical cost
payable have decreased by $125.6 million from March 31, 1997 as the result of
more rapid claims payments by the Company and advances made against provider
claims aggregating approximately $271 million at June 30, 1997.
Oxford also announced the promotion of William Sullivan to the position
of Chief Executive Officer. Stephen F. Wiggins, the Company's founder, will
remain an officer of the Company as Oxford's Chairman. "Bill has filled the role
of CEO for the past twelve months, so this promotion is really just a reflection
of the status quo" said Mr. Wiggins. "He's a great leader and his success in
guiding the Company through the problems created by our recent computer
conversion shows he has the qualities we need to propel Oxford to the next
level. He has been a part of our team for ten years and is well-known both
inside and outside of the Company."
Mr. Sullivan joined Oxford in 1987 from Lincoln National Corporation
and has worked in all facets of the Company over the past ten years. "Steve and
I are neighbors and we've grown up in the business together. We get along and
compliment each other very well. We will continue working as a team to build
Oxford", said Mr. Sullivan.
Mr. Wiggins will continue to focus on strategy, new business
opportunities, new markets, government relations and employee development. He
will also take a more active role in building Oxford's specialty business, which
the Company believes can become a major contributor to revenue and earnings
growth.
#####
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 AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE AND MEMBERSHIP DATA)
(UNAUDITED)
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THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
------------------------- -------------------------
1997 1996 1997 1996
----------- ------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Premiums earned $ 1,044,510 712,768 2,014,625 1,360,950
Third-party administration, net 3,040 2,346 6,116 5,528
Investment and other income, net 14,374 10,214 28,498 16,990
----------- ------- --------- ---------
Total revenues 1,061,924 725,328 2,049,239 1,383,468
----------- ------- --------- ---------
Expenses:
Health care services 832,790 572,016 1,610,526 1,090,232
Marketing, general and administrative 165,922 113,553 315,706 220,313
----------- ------- --------- ---------
Total expenses 998,712 685,569 1,926,232 1,310,545
----------- ------- --------- ---------
Operating earnings 63,212 39,759 123,007 72,923
Equity in loss of affiliate (120) (1,000) (1,020) (2,050)
----------- ------- --------- ---------
Earnings before income taxes 63,092 38,759 121,987 70,873
Provision for income taxes 25,917 16,301 50,433 29,898
----------- ------- --------- ---------
Net earnings $ 37,175 22,458 71,554 40,975
=========== ======= ========= =========
Earnings per common and common
equivalent share:
Primary $ .45 .28 .87 .53
Fully diluted $ .45 .28 .87 .53
Weighted average common stock and
common stock equivalents outstanding:
Primary 82,674 80,791 82,513 77,988
Fully diluted 82,818 80,791 82,683 77,988
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Membership at
June 30
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MEMBERSHIP HIGHLIGHTS 1997 1996 Increase
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<S> <C> <C> <C>
Freedom Plan 1,218,300 882,000 336,300
HMO 235,900 165,500 70,400
Medicare 145,600 98,000 47,600
Medicaid 187,600 136,000 51,600
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Total Fully Insured 1,787,400 1,281,500 505,900
Self-funded 46,100 39,600 6,500
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Total Membership 1,833,500 1,321,100 512,400
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
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ASSETS
JUN. 30, DEC. 31,
1997 1996
----------- ---------
Current assets: (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 23,809 72,160
Short-term investments-available for sale, at market value 664,846 767,312
Premiums receivable 421,828 315,126
Other receivables 19,323 26,343
Prepaid expenses and other current assets 5,076 5,814
Deferred income taxes 7,127 13,771
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Total current assets 1,142,009 1,200,526
Property and equipment, at cost, net of accumulated depreciation and
amortization of $95,838 in 1997 and $69,739 in 1996 121,279 104,954
Deferred income taxes 7,320 5,700
Other noncurrent assets 58,647 35,559
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Total assets $1,329,255 1,346,739
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Medical costs payable $ 532,237 624,359
Trade accounts payable and accrued expenses 71,491 51,256
Income taxes payable 19,000 9,902
Unearned premiums 16,480 63,052
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Total liabilities 639,208 748,569
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Shareholders' equity:
Preferred stock, $.01 par value, authorized 2,000,000 shares -- --
Common stock, $.01 par value, authorized 400,000,000
shares; issued and outstanding 78,284,932 in 1997
and 77,376,282 in 1996 783 774
Additional paid-in capital 410,247 391,602
Retained earnings 267,344 195,790
Unrealized net appreciation of investments 11,673 10,004
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Total shareholders' equity 690,047 598,170
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Total liabilities and shareholders' equity $1,329,255 1,346,739
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