NWIR Nwh (MM)

NWH Announces First Quarter Results and Continued Substantial Growth from ENS in Fiscal 2005 NEW YORK, March 17 /PRNewswire-FirstCall/ -- NWH, Inc. (NASDAQ:NWIR), the parent company of Electronic Network Systems, Inc. ("ENS"), today reported financial results for its fiscal first quarter ended January 31, 2005. NWH owns and operates ENS (http://www.enshealth.com/), a payer services organization that connects healthcare payers and providers using state of the art proprietary software and telecommunications services for most healthcare payment and insurance validation transactions. The Company focuses its efforts on the development of ENS' business and continues its business of acquiring and disposing of interests in healthcare and other business areas. NWH's net revenues for the first quarter of fiscal 2005 were $4.65 million, compared to $4.19 million in the first quarter of fiscal 2004. NWH's reported net income for the first quarter of fiscal 2005 was $184,397, or $.06 per share basic and diluted, as compared to net (loss) of ($116,486) or ($.04) basic and diluted per share, in the first quarter of fiscal 2004. There were 2,924,631 shares outstanding, which were used for computing basic earnings per share, for the fiscal quarters ended January 31, 2005 and 2004. "NWH continued to post strong results in the first quarter of fiscal 2005, reflecting continued ENS revenue growth which improved profitability. After giving effect to dividends paid, NWH had a cash and short-term investments position of $25.5 million at the end of January," said Terrence S. Cassidy, NWH's President and CEO. "Over 42,000 providers are connected to ENS' e-commerce and Internet services which represents a 14.2% increase over the prior year. Through payer arrangements, ENS also currently conducts daily paper to e-commerce claim conversion for another 185,000 healthcare providers. ENS also experienced a 31.8% increase in contracted billable provider sites over the prior year. All of ENS' growth was obtained through internal sales versus acquisition. As of March 10, 2005, ENS was connected to over 1,200 payers, including commercial healthcare plans, managed care organizations, Blue Cross/Blue Shield plans, Medicare, Medicaid and CHAMPUS. Over 90% of all electronic claims received by ENS are directly submitted to contracted payers. We are confident that ENS' results (and consequently NWH's results) will continue to improve, reflecting the quality of its products and services, in fiscal 2005." About NWH and ENS ENS is a payer services organization that connects payers (i.e., insurance companies and third party administrators) and providers (i.e., doctors, group practices and other healthcare providers) using state of the art proprietary software and telecommunications services for most healthcare payment and insurance validation transactions. ENS provides a state of the art technology platform for web based graphical user interfaces on a national basis, which enables its clients, both payers and providers, to comply fully with applicable regulatory requirements such as those imposed by HIPAA. ENS' service offerings address the full array of evolving industry needs in this focused area with a complete cycle of services from a single point of entry (a personal computer in the client's office) for both providers and payers, compatible with multiple system and database operating environments. These services include an Internet transactions portal, payer transactions hosting, electronic data interchange, Pre-adjudication software services (PASS(TM)), scanning, optical character recognition and data entry of paper claims and correspondence and mailroom services. ENS generates revenue through recurring subscriptions, flat or per transaction fees and revenue sharing. Safe Harbor Statement Certain statements contained in this press release, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases, regarding the Company's financial and business prospects and capital requirements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: the limited nature of the Company's operations and the risk of the Company's failure to acquire additional businesses; the uncertain acceptance of Health-e Network(R); competition; existing government regulations and changes in, or the failure to comply with, government regulations; the ability of the Company to sustain, manage or forecast its growth; dependence on significant customers and the potential loss thereof; the ability to attract and retain qualified personnel; risk of technological obsolescence, and other factors referenced in this Quarterly Report on Form 10-Q including, without limitation, in "Management's Discussion and Analysis of Financial Condition and Results of Operations". Certain of these factors are discussed in more detail in the Company's Annual Report on Form 10-K for the year ended October 31, 2004, including, without limitation, under the caption "Business" and Exhibit 99.1 thereto. Given these uncertainties, undue reliance should not be placed on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward- looking statements contained or incorporated by reference herein to reflect future events or developments. Additional information on these and other factors are contained in NWH's reports filed with the Securities and Exchange Commission (SEC), including the Company's Quarterly Report on Form 10-Q as filed with the SEC on March 17, 2005, copies of which are available at the website maintained by the SEC at http://www.sec.gov/ . NWH assumes no obligation to update the forward-looking statements included in this press release. NWH, Inc. Condensed Consolidated Balance Sheets January 31, October 31, 2005 2004 (unaudited) Assets Current assets Cash and cash equivalents $ 10,559,828 $ 12,137,155 Marketable securities 14,988,574 14,926,737 Trade and other receivables 2,283,035 2,862,921 Prepaid expenses and other current assets 467,553 475,895 Deferred income taxes 130,000 - Refundable income taxes 249,924 - Total current assets 28,678,914 30,402,708 Property and equipment, net of accumulated depreciation of $3,163,383 and $3,054,359, respectively 706,533 750,474 Internally developed software, net of accumulated amortization of $2,447,071 and $2,195,888, respectively 2,301,198 2,313,785 Goodwill 3,762,187 3,762,187 Investments and other assets 1,066,238 1,065,453 Total assets $ 36,515,070 $ 38,294,607 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 2,049,295 $ 2,376,072 Current portion of long-term debt 7,688 11,494 Income taxes payable - 147,035 Dividends payable 1,462,316 1,462,316 Total current liabilities 3,519,299 3,996,917 Note payable 140,000 140,000 Deferred income taxes 668,792 692,792 Total liabilities 4,328,091 4,829,709 Stockholders' equity Preferred stock, $.01 par value: 1,000,000 shares authorized; no shares issued or outstanding - - Common stock, $.01 par value: 20,000,000 shares authorized; 3,342,231 shares issued 33,422 33,422 Additional paid-in capital 23,195,991 23,195,991 Retained earnings 14,049,200 15,327,119 Treasury stock, 417,600 shares (5,091,634) (5,091,634) Total stockholders' equity 32,186,979 33,464,898 Total liabilities and stockholders' equity $ 36,515,070 $ 38,294,607 NWH, Inc. Condensed Consolidated Statements of Operations (unaudited) For the Three Months Ended January 31, 2005 2004 Services revenue $ 4,647,780 $ 4,186,310 Cost of services 2,345,381 2,185,650 Professional fees 326,256 218,528 General and administrative 2,058,520 1,845,786 Depreciation and amortization 87,209 66,214 Total expenses 4,817,366 4,316,178 Loss from operations (169,586) (129,868) Other income (expense) Loss on securities transactions, net - (179,577) Dividend income - 68,536 Interest income 119,656 69,815 Interest expense (3,673) (16,412) 115,983 (57,618) Loss before benefit for income taxes (53,603) (187,486) Benefit for income taxes (238,000) (71,000) Net income (loss) $ 184,397 $ (116,486) Net income (loss) per common share Basic $ .06 $ (.04) Diluted $ .06 $ (.04) Weighted average number of common shares outstanding Basic $ 2,924,631 $ 2,924,631 Diluted $ 2,928,141 $ 2,924,631 NWH, Inc. Condensed Consolidated Statements of Comprehensive (Loss) Income (unaudited) For the Three Months Ended January 31, 2005 2004 Net income (loss) $ 184,397 $ (116,486) Other comprehensive income Net unrealized holding gain on marketable securities arising during the period, net of income taxes of $ 0 and $222,528, respectively - 430,192 Reclassification adjustment for losses recognized in net income (loss), net of income taxes of $ 0 and $(169,567), respectively - (332,604) Other comprehensive income - 97,588 Comprehensive income (loss) $ 184,397 $ (18,898) NWH, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) For the Three Months Ended January 31, 2005 2004 Cash flows from operating activities Net income (loss) $ 184,397 $ (116,486) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 406,526 383,669 Loss on securities transactions, net - 180,542 Unrealized gain on securities transactions, net - (985) Accretion of interest (61,837) - Deferred income taxes (154,000) (800,000) Bad debt expense 823 14,470 Changes in assets and liabilities Trade and other receivables 579,063 118,432 Refundable income taxes (249,924) - Prepaid expenses and other current assets 8,342 (19,092) Investments and other assets (47,104) (32,414) Accounts payable and accrued expenses (326,777) (157,456) Income taxes payable (147,035) (398,979) Net cash provided by (used in) operating activities 192,474 (828,299) Cash flows from investing activities Acquisition of property and equipment (65,083) (136,240) Increase in internally developed software (238,596) (253,660) Proceeds from sale of marketable securities 4,144,784 Acquisition of written call options - (3,097,425) Proceeds from sale of written call options - 950,600 Net cash (used in) provided by investing activities (303,679) 1,608,059 Cash flows from financing activities Dividends paid (1,462,316) (1,462,316) Principal payments of short-term and long-term debt (3,806) (8,799) Principal payments of capital leases - (46,063) Net cash used in financing activities (1,466,122) (1,517,178) Net decrease in cash and cash equivalents (1,577,327) (737,418) Cash and cash equivalents Beginning of period 12,137,155 29,309,192 End of period $ 10,559,828 $ 28,571,774 Contact: Carl Nicola 212-582-1212 DATASOURCE: NWH, Inc. CONTACT: Carl Nicola of NWH, Inc., +1-212-582-1212 Web site: http://www.nwhinc.com/ http://www.enshealth.com/

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