<PAGE> 1
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): APRIL 29, 1999
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)
<PAGE> 2
ITEM 5. OTHER EVENTS.
The Company's earnings Press Release dated April 29, 1999 is attached
as an Exhibit hereto and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release dated April 29, 1999
2
<PAGE> 3
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: April 29, 1999 By: /s/ YON Y. JORDEN
------------------------------
YON Y. JORDEN
Chief Financial Officer
3
<PAGE> 4
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
99 Press Release dated April 29, 1999 5
4
<PAGE> 1
EXHIBIT 99
For Further Information:
Investor Contact: Deborah Abraham
(203) 851-2636
Media Contact: Nicole Russell/Richard Wool
(212) 885-0338/0523
NORWALK, CONNECTICUT, APRIL 29, 1999 - Oxford Health Plans, Inc.
(NASDAQ:OXHP) announced today net earnings of $3.2 million, or $0.04 per common
share, for the quarter ended March 31, 1999. The first quarter results were
favorably affected by a one-time after tax gain of $7.8 million associated with
the disposition of its New York Medicaid business. Excluding the impact of the
one-time gain, Oxford posted a loss of $4.6 million, or $0.06 per common share.
"The Company's first quarter operating results are better than previously
expected and reflect Oxford's improved premium pricing and initiatives to
control medical and administrative spending," said Oxford Health Plans' Chief
Executive Officer, Norman C. Payson, M.D.
"Based on our first quarter results, we now believe Oxford can report
positive earnings per share for 1999, although we continue to expect losses in
the second quarter, principally due to seasonal increases in health care costs
and small increases in administrative spending as a percentage of operating
revenue," stated Dr. Payson.
5
<PAGE> 2
Revenues for the quarter ended March 31, 1999 were $1.06 billion, down
6.0% from the fourth quarter of 1998. As of March 31, 1999, Oxford's total
membership was approximately 1,691,000 compared to 1,881,400 at December 31,
1998. This reduction resulted from withdrawals from the New York and
Pennsylvania Medicaid programs (97,800 members), decreases in Medicare
membership (42,700 members) and reductions in commercial membership (49,900
members).
Health care services expense for the first quarter was $871.9 million,
representing a medical loss ratio (health care services as a percentage of
premium revenue) of 84.9% compared with 89.4% for the fourth quarter of 1998.
Marketing, general and administrative expenses, including related depreciation
and amortization, were $149.7 million for the first quarter or 14.5% of
operating revenues, compared to $201.0 million for the same period last year or
16.5% of operating revenues and $170.1 million or 15.4% of operating revenues
for the fourth quarter of 1998.
"As expected, cash flow in the first quarter was negatively impacted by
receipt of January's $68 million Medicare premium in December 1998 and a
reduction in medical costs payable of $59 million associated with runoff of
reserves for sold or discontinued businesses," said Yon. Y. Jorden, Oxford's
Chief Financial Officer. The Company reported cash used by operations of $127.7
million for the quarter ended March 31, 1999. As of March 31, 1999, the Company
had over $1.02 billion in current cash and marketable securities. Oxford's
parent company cash and marketable securities were approximately $186 million,
ahead of the Company's previous expectations. "Oxford's parent company liquidity
has benefited from Oxford's improved financial results," added Jorden.
Founded in 1984, Oxford Health Plans, Inc. provides health plans to
employers and individuals in New York, New Jersey and Connecticut, through its
direct sales force, independent insurance agents and brokers. Oxford's services
include traditional health maintenance organizations, point-of-service plans,
third-party administration of employer-funded benefits plans and Medicare plans.
6
<PAGE> 3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this press release, including statements concerning
future results of operations or financial position, future healthcare and
administrative costs, and other statements contained herein regarding matters
that are not historical facts, are forward-looking statements (as such term is
defined in the Securities Exchange Act of 1934, as amended); and because such
statements involve risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially include, but are not limited to:
- - The Company's ability to develop processes and systems to support its
operations and to improve its service levels.
- - Changes in Federal or State regulation relating to health care and
health benefit plans.
- - Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point of service
plans.
- - Competition from health benefit plan providers and competitive pressure
on pricing Oxford products, including acceptance of premium rate
increases by the Company's commercial groups.
- - High administrative costs in operating the Company's business and the
cost and impact on service of changing technologies.
- - The ability of the Company to complete and operationalize risk transfer
and other provider arrangements and to successfully and timely dispose
of certain assets and businesses.
- - The effect, if any, of recent events at the Company (including any
adverse publicity) on future enrollment in the Company's health benefit
plans.
- - Any changes in the Company's estimates of its medical costs and
expected cost trends as a result of information gained in the process
of continuing to reconcile delayed claims or claims paid or denied in
error and to pay down backlogged claims.
- - The impact of litigation (including purported class and derivative
actions filed against the Company and certain officers and directors
and proceedings commenced against the Company and several employees by
certain healthcare providers), regulatory proceedings and other
governmental action (including the ongoing examination, investigation
and review of the Company by various Federal and State authorities).
- - Those factors included in the discussion under the caption "Business -
Cautionary Statement Regarding Forward-Looking Statements" in the
Company's Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1998.
7
<PAGE> 4
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE, PER MEMBER PER MONTH AND MEMBERSHIP HIGHLIGHTS
DATA)
<TABLE>
<CAPTION>
Revenues: 1999 1998
--------------- ---------------
<S> <C> <C>
Premiums earned $1,026,586 $1,213,085
Third-party administration, net 3,610 5,002
Investment and other income, net 30,109 11,536
- -------------------------------------------------------------------------------------------------------------------------
Total revenues 1,060,305 1,229,623
- -------------------------------------------------------------------------------------------------------------------------
Expenses:
Health care services 871,873 1,066,437
Marketing, general and administrative 149,737 201,033
Interest and other financing charges 14,050 6,849
Restructuring charges - 25,000
- -------------------------------------------------------------------------------------------------------------------------
Total expenses 1,035,660 1,299,319
- -------------------------------------------------------------------------------------------------------------------------
Operating earnings (loss) before income taxes 24,645 (69,696)
Income tax expense (benefit) 10,350 (24,394)
- -------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) 14,295 (45,302)
Less preferred stock dividends and amortization (11,082) -
=========================================================================================================================
Net earnings (loss) attributable to common stock $ 3,213 $ (45,302)
=========================================================================================================================
Earnings (loss) per common share:
Basic $ .04 $ (.57)
Diluted $ .04 $ (.57)
Weighted-average common shares outstanding-basic 80,785 79,488
Effect of dilutive securities:
Stock options 4,117 -
Preferred stock warrants 83 -
=========================================================================================================================
Weighted-average common shares outstanding-diluted 84,985 79,488
=========================================================================================================================
SELECTED INFORMATION:
Medical-loss ratio 84.9% 87.9%
Administrative-loss ratio 14.5% 16.5%
Earnings (loss) before income taxes, financing charges, depreciation
and amortization, and restructuring charges ("EBITDA") $ 52,550 $ (21,441)
PMPM premium revenue $ 204.77 $ 199.83
PMPM medical expense $ 173.91 $ 175.67
Fully insured member months 5,013.3 6,070.6
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31
-------------------------------
MEMBERSHIP HIGHLIGHTS 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Freedom Plan 1,286,600 1,400,200
HMO 245,700 280,900
Medicare 105,900 162,600
Medicaid - 183,500
- -------------------------------------------------------------------------------------------------------------------------
Total Fully Insured 1,638,200 2,027,200
Third-party administration 52,800 68,500
- -------------------------------------------------------------------------------------------------------------------------
Total Membership 1,691,000 2,095,700
=========================================================================================================================
</TABLE>
<PAGE> 5
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
MAR. 31, Dec. 31,
1999 1998
--------------- ---------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 207,801 $ 237,717
Investments - available-for-sale, at market value 813,261 922,990
Premiums receivable 133,636 110,254
Other receivables 42,503 36,540
Prepaid expenses and other current assets 9,913 9,746
Deferred income taxes 40,073 43,385
- --------------------------------------------------------------------------------------------------------------------------------
Total current assets 1,247,187 1,360,632
Property and equipment, at cost, net of accumulated depreciation and
amortization of $171,725 in 1999 and $160,431 in 1998 97,154 112,941
Deferred income taxes 87,144 94,182
Restricted investments - held-to-maturity, at amortized cost 43,376 44,798
Other noncurrent assets 30,320 25,197
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $1,505,181 $1,637,750
================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Medical costs payable $ 794,410 $ 850,197
Trade accounts payable and accrued expenses 162,911 176,833
Unearned premiums 38,388 105,993
Current portion of capital lease obligations 11,785 15,938
Deferred income taxes - 2,228
- --------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,007,494 1,151,189
Long-term debt 350,000 350,000
Obligations under capital leases 15,576 18,850
Redeemable preferred stock 309,898 298,816
Shareholder's equity (deficit):
Preferred stock, $.01 par value, authorized 2,000,000 shares - -
Common stock, $.01 par value, authorized 400,000,000
shares; issued and outstanding 80,851,245 shares in 1999
and 80,515,872 shares in 1998 808 805
Additional paid-in capital 500,769 506,243
Accumulated deficit (677,995) (692,290)
Accumulated other comprehensive earnings (loss) (1,369) 4,137
================================================================================================================================
Total liabilities and shareholders' equity (deficit) $1,505,181 $1,637,750
================================================================================================================================
</TABLE>
<PAGE> 6
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998
---------------------------
Cash flows from operating activities:
<S> <C> <C>
Net earnings (loss) $14,295 $(45,302)
Adjustments to reconcile net earnings (loss) to
net cash used by operating activities:
Depreciation and amortization 14,344 16,059
Noncash restructuring charges - 11,200
Deferred income taxes 10,350 (24,394)
Provision for doubtful accounts - 3,000
Realized gain (loss) on sale of investments 542 (1,372)
Other, net 791 -
Changes in assets and liabilities:
Premiums receivable (23,382) (16,903)
Other receivables (5,963) (8,066)
Prepaid expenses and other current assets (167) (10,752)
Medical costs payable (55,787) (23,764)
Trade accounts payable and accrued expenses (10,568) 12,910
Income taxes payable/refundable - 48,836
Unearned premiums (67,605) (77,706)
Other, net (4,505) 1,677
- --------------------------------------------------------------------------------------------------
Net cash used by operating activities (127,655) (114,577)
- --------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (1,081) (29,657)
Purchases of available-for-sale investments (259,355) (154,891)
Sales and maturities of available-for-sale investments 360,389 151,110
Other, net 393 4,597
- --------------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities 100,346 (28,841)
- --------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from exercise of stock options 4,820 330
Proceeds of notes and loans payable - 200,000
Payments under capital leases (7,427) -
- --------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities (2,607) 200,330
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (29,916) 56,912
Cash and cash equivalents at beginning of period 237,717 4,141
- --------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $207,801 $ 61,053
==================================================================================================
Supplemental cash flow information:
Cash payments (refunds) for income taxes, net $ (84) $(48,016)
Cash payments for interest expense 8,795 3,881
Supplemental schedule of noncash investing and financing activities:
Unrealized appreciation (depreciation) of
short-term investments (7,734) (5,043)
Capital lease obligations incurred - 20,309
Preferred stock dividends and amortization 11,082 -
</TABLE>
