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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): NOVEMBER 4, 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.
On November 5, 1997, the Company received from the Office of the Attorney
General of the State of New York a SUBPEONA DUCES TECUM requiring the
production of various documents, records and materials "in regard to matters
relating to the practices of [the Company] and others in offering, issuance,
sale, promotion, negotiation, advertisement, distribution or purchase of
securities in or from the State of New York." The Company intends to cooperate
fully with the Attorney General's inquiry.
The Company's Press Releases dated November 4, 1997 and November 5, 1997
are attached as Exhibits hereto and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99(a) Press Release dated November 4, 1997
99(b) Press Release dated November 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: November 6, 1997 By: /s/ BRENDAN R. SHANAHAN
---------------------------
Brendan R. Shanahan
Vice President and
Controller
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
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<CAPTION>
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
<S> <C> <C>
99(a) Press Release dated November 4, 1997 4
99(b) Press Release dated November 5, 1997 8
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EXHIBIT 99(a)
OXFORD LETTERHEAD
Re: Oxford Health Plans, Inc.
800 Connecticut Avenue
Norwalk, CT 06854
For Information:
Stephen F. Wiggins
Chairman
(203) 852-1442
FOR IMMEDIATE RELEASE
OXFORD HEALTH PLANS REPORTS NET LOSS FOR THIRD QUARTER
NORWALK, CONNECTICUT, NOVEMBER 4, 1997 - Oxford Health Plans, Inc.
(NASDAQ:OXHP) today reported a third quarter 1997 net loss of $78.2 million, or
99 cents per share, compared with net earnings of $26.7 million, or 33 cents per
share, in the third quarter of 1996. Total revenues for the third quarter ended
September 30, 1997 reached $1.06 billion, a 31 percent increase from $811.2
million a year ago.
For the nine months ended September 30, 1997, the Company's revenues
totaled $3.1 billion, a 42 percent increase from $2.2 billion for the first nine
months of 1996. The net loss for the first nine months of 1997 was $6.6 million,
or 8 cents per share, compared with net earnings of $67.6 million, or $.86 per
share, for the first nine months of 1996.
The earnings decline was attributed to several factors. Third quarter
results reflect accounts receivable write-offs due to clean-ups of delayed group
bills and terminations of non-paying individual and group customers. Additions
were also made to accounts receivable reserves. These accounts receivable
write-offs and additions to reserves reduced quarterly revenues, leading to a
$42.2 million after tax impact. These adjustments are a consequence of
information recently learned as a result of reviewing and reconciling previously
delayed premium bills.
The Company also increased reserves for medical costs payable, recording
an after tax charge of $51.9 million for the quarter, as the process of
reviewing and reconciling previously delayed claims revealed payment obligations
which exceeded the Company's original estimates.
Oxford's enrollment totaled approximately 1,942,600 members at September
30, 1997, an increase of more than 109,000 during the third quarter of 1997
(which includes 29,700 members added in the acquisition of Compass PPA, Inc. in
Chicago) and almost 35 percent higher than membership at the end of last year's
third quarter. The majority of this new membership has come from fully insured
enrollment which has continued to grow in the fourth quarter of 1997. More than
47,400 net new members have enrolled since the end of September 1997, reflecting
the popularity and quality of Oxford's products and bringing total membership to
approximately 1,990,000 as of November 1, 1997.
Administrative expenses were 16.8% of operating revenue for the third
quarter of 1997, compared with 15.4% for the third quarter of 1996. The
percentage increase is primarily attributable to increases in administrative
spending and lower than expected revenue for the third quarter of 1997.
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"The fundamentals of our business remain strong and these adjustments
create more reserves for the benefit of our customers," said Stephen F. Wiggins,
Chairman of Oxford. "We are reporting continued membership growth and our
business remains profitable. Our customers can take comfort in a strong balance
sheet with no indebtedness, and with cash and marketable securities, and
shareholders' equity, each exceeding $645 million."
*********
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 it health plans to employers in New York, New Jersey, Pennsylvania,
Connecticut, Illinois and New Hampshire through its direct sales force and
independent insurance agents and brokers.
FINANCIAL TABLES TO FOLLOW
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<TABLE>
<CAPTION>
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE AND MEMBERSHIP DATA)
(UNAUDITED)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
----------------------------------------------------------------------------------
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenues:
Premiums earned $1,045,185 797,623 3,059,810 2,158,573
Third-party administration, net 3,975 2,347 10,091 7,875
Investment and other income, net 14,854 11,213 43,352 28,203
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 1,064,014 811,183 3,113,253 2,194,651
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Expenses:
Health care services 1,019,557 639,917 2,630,083 1,730,149
Marketing, general and administrative 176,641 123,554 492,347 343,867
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Total expenses 1,196,198 763,471 3,122,430 2,074,016
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Operating earnings (loss) (132,184) 47,712 (9,177) 120,635
Equity in net loss of affiliate (120) (1,500) (1,140) (3,550)
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Earnings (loss) before income taxes (132,304) 46,212 (10,317) 117,085
Provision (credit) for income taxes (54,147) 19,562 (3,714) 49,460
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Net earnings (loss) $ (78,157) 26,650 (6,603) 67,625
====================================================================================================================================
Earnings (loss) per common and common equivalent share:
Primary $ (.99) .33 (.08) .86
Fully diluted $ (.99) .33 (.08) .85
Weighted average common stock and common stock
equivalents outstanding:
Primary 79,059 80,880 78,363 79,089
Fully diluted 79,059 81,362 78,363 79,459
</TABLE>
<TABLE>
<CAPTION>
Membership at
September 30
- --------------------------------------------------------------------------------------
MEMBERSHIP HIGHLIGHTS 1997 1996 Increase
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Freedom Plan 1,286,600 958,300 328,300
HMO 256,600 181,800 74,800
Medicare 154,800 113,400 41,400
Medicaid 187,900 147,600 40,300
- -----------------------------------------------------------------------------------------------------------
Total Fully Insured 1,885,900 1,401,100 484,800
Self-funded 56,700 41,100 15,600
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Total Membership 1,942,600 1,442,200 500,400
===========================================================================================================
</TABLE>
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<TABLE>
<CAPTION>
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
SEP. 30, DEC. 31,
1997 1996
------------------------- ------------------------
Current assets: (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 7,072 72,160
Short-term investments - available-for-sale, at market value 652,684 767,312
Premiums receivable 354,091 315,126
Other receivables 37,782 26,343
Prepaid expenses and other current assets 8,503 5,814
Refundable income taxes 83,181 -
Deferred income taxes 5,223 13,771
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Total current assets 1,148,536 1,200,526
Property and equipment, at cost, net of accumulated depreciation and
amortization of $110,652 in 1997 and $69,739 in 1996 120,478 104,954
Deferred income taxes 8,100 5,700
Other noncurrent assets 70,010 35,559
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Total assets $ 1,347,124 1,346,739
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Medical costs payable $ 567,834 624,359
Trade accounts payable and accrued expenses 97,386 51,256
Income taxes payable - 9,902
Unearned premiums 36,312 63,052
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Total current liabilities 701,532 748,569
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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 79,298,190 in 1997
and 77,376,282 in 1996 793 774
Additional paid-in capital 438,800 391,602
Retained earnings 189,187 195,790
Unrealized net appreciation of investments 16,812 10,004
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Total shareholders' equity 645,592 598,170
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Total liabilities and shareholders' equity $ 1,347,124 1,346,739
====================================================================================================================================
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EXHIBIT 99(b)
OXFORD LETTERHEAD
FOR IMMEDIATE RELEASE
contact:
Oxford Health Plans
203-851-1020
Andrew B. Cassidy to Resign
as Oxford Health Plans'
Chief Financial Officer
November 5, 1997, Norwalk, CT--Oxford Health Plans, Inc. (NASDAQ:OXHP)
announced today that Andrew B. Cassidy, its chief financial officer, had
notified the Company of his intention to resign to pursue other interests. To
assure an orderly transition, Mr. Cassidy will continue to act as CFO of the
Company until a new CFO is identified. Oxford's auditors, KPMG Peat Marwick
LLP, has also been asked to devote more resources to Oxford through the
transition period. Oxford has retained a professional search firm to locate a
new chief financial officer.
Oxford Health Plans' 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, Illinois and New Hampshire through its direct sales force and
independent insurance agents and brokers.
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