SOURCE: Alliance HealthCard, Inc.

August 13, 2009 07:30 ET

Alliance HealthCard Reports Fiscal 2009 Third Quarter Results

Successfully Integrates Acquired Access Plans USA Operations

NORMAN, OK--(Marketwire - August 13, 2009) - Alliance HealthCard, Inc. (OTCBB: ALHC), a leading membership and insurance marketing company, today announced financial results for its fiscal third quarter ended June 30, 2009. The Company's acquisition of Access Plans USA, completed on April 1, 2009, was a positive contributor to operating income in the fiscal 2009 third quarter.

As a result of the acquisition and the Company's significantly larger base of operations, Alliance HealthCard will now segment its reporting along three divisions: Wholesale Plans, Retail Plans, and Insurance Marketing.

For the fiscal 2009 third quarter, revenues increased to $14.0 million compared to $5.4 million in the prior-year period primarily as a result of the acquired Access Plans USA operations. Operating income was unchanged versus the prior-year at $1.3 million which reflected the impact of the acquired Access Plans USA operations, higher claims expense in Wholesale Plans, and a one-time $350,000 benefit related to a non-recurring transaction in April 2009. During the quarter, the Company made significant progress in the integration of the acquired operations including elimination of redundant costs, consolidation of back-office operations, and improved network purchasing economies, which is expected to benefit operating performance in future periods. Net income for the fiscal 2009 third quarter was $862,000, or $0.04 per diluted share, compared to net income in the prior-year period of $530,000, or $0.04 per diluted share. As a result of the Access Plans USA acquisition, Alliance HealthCard had 21.6 million shares outstanding at June 30, 2009, versus 14.8 million shares outstanding at the end of last year's third quarter.

"In the third quarter, we made significant progress integrating the acquired Access Plans businesses with our operations," commented Danny Wright, Chief Executive Officer. "As a result, we turned a previously unprofitable business into a positive contributor to our operating performance. We expect to further improve operating performance in the acquired operations which should favorably impact our Retail and Insurance Marketing Divisions. In addition, we plan to expand Wholesale Plans into additional markets and further develop relationships with new and existing clients in our Retail Plans."

Mr. Wright continued, "We believe that, regardless of the outcome, the current national debate on healthcare reform will provide us with ample markets for membership programs and insurance marketing of both standard health insurance and supplemental insurance plans."

Wholesale Plans

In the fiscal 2009 third quarter, revenues for the Wholesale Plans Division increased 7.9% to $5.0 million, or 36% of total revenues, compared to $4.7 million in the prior-year period. The revenue increase was attributable to growth of an existing client relationship and the addition of new rent-to-own locations which represent the division's primary distribution channel. Profitability for the division was impacted by higher claims expense on certain product protection programs related primarily to increases in the national unemployment rate. As a result, operating income for the division declined to $508,000 from $1.1 million in the prior-year period.

Retail Plans

Revenues for the Retail Plans Division more than doubled to $4.5 million, or 32%, of total revenues, prior to inter-company eliminations, versus $1.9 million in the prior-year period. The increase was attributable primarily to the acquired Access Plans USA operations which expanded the Company's discount health membership offerings. Operating income for the division increased to $860,000 compared to $417,000 in the prior-year period.

Insurance Marketing

Insurance Marketing Division revenues were $5.7 million, or 41% of total revenues. Operating income was $114,000. The Insurance Marketing Division comprises the America's Health Care Plans (AHCP) operations acquired as part of the Access Plans USA acquisition. As a result, there are no comparable results from the prior-year period.

Mr. Wright concluded, "With the integration of the Access Plan USA operations largely complete, we will focus on driving top-line growth and margin expansion through several organic initiatives that leverage our existing assets including our installed client base and distribution capabilities. We will also look to further our successful track record of acquiring complementary businesses that meet our stringent criteria."

Conference Call and Webcast Information

Alliance HealthCard will host a conference call today, August 13, 2009, at 9:00 a.m. ET. To access the conference call, please dial 877-869-3847 (U.S.) or 201-689-8261 (international) approximately 10 minutes prior to the start of the call. The conference call will also be available via live webcast under the "About Alliance" section of the Company's website, www.alliancehealthcard.com. Or, click here to access the webcast directly.

If you are unable to listen to the live call, a replay will be available through August 20, 2009, and can be accessed by dialing 877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted for replay account number 355# followed by conference ID number 330443#. An archived version of the webcast will also be available under the "About Alliance" section of the Company's website, www.alliancehealthcard.com.

About Alliance HealthCard

Alliance HealthCard, Inc. (OTCBB: ALHC) is a leading membership and insurance marketing company with three complementary distribution channels offering multiple opportunities for growth. The Wholesale Plans Division specializes in turnkey, private label membership benefit plans offered through retail outlets including rent-to-own centers. The Retail Plans Division markets healthcare-related discount products and services to consumers through third party marketers. Program components in both membership plan divisions range from medical, dental and pharmacy discounts to grocery, restaurant, automotive, travel and other consumer discounts. The Insurance Marketing Division comprises America's Health Care Plans (AHCP), one of the nation's largest independent agent networks for distributing individual major medical health insurance. For more information, please visit: www.alliancehealthcard.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act:

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended and pursuant to the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may relate to financial results and plans for future business activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are competitive pressures, loss of significant customers, the mix of revenue, changes in pricing policies, delays in revenue recognition, lower-than-expected demand for the Company's products and services, general economic conditions, and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such speak only as of the date made.

                For the Three Months Ended    For the Nine Months Ended
                         June 30,                     June 30,
               ----------------------------  ----------------------------
(Dollars in
 thousands)      2009      2008     Change     2009      2008     Change
               --------- --------  --------  --------  --------- --------
Net revenues   $  13,960 $  5,366       160% $ 25,514  $  15,422       65%
Direct costs       9,811    2,872       242%   16,785      8,296      102%
Operating
 expenses          2,892    1,201       141%    5,593      3,676       52%
               --------- --------  --------  --------  --------- --------
Operating
 income            1,257    1,294        (3%)   3,136      3,450       (9%)
Net other
 income
 (expense)           303      (35)        *       217         41        *
Provision for
 income taxes        698      728        (4%)   1,380      1,596      (14%)
Deferred
 income taxes          -        -         -      (175)         -        *
               --------- --------  --------  --------  --------- --------
Net income     $     862 $    530        63% $  2,148  $   1,895       13%
               ========= ========  ========  ========  ========= ========

*Percent not meaningful







                    For the Three Months Ended  For the Nine Months Ended
                             June 30,                    June 30,
                    --------------------------  --------------------------
Segment net
 revenues               2009          2008          2009          2008
                    ------------  ------------  ------------  ------------
    Wholesale
      Plans         $      5,021  $      4,655  $     14,707  $     13,355
      Retail Plans         4,479         1,864         8,723         5,357
      Insurance
       Marketing           5,653             -         5,653             -
      Eliminations        (1,193)       (1,153)       (3,569)       (3,290)
                    ------------  ------------  ------------  ------------
             Total  $     13,960  $      5,366  $     25,514  $         41
                    ============  ============  ============  ============

Segment operating
 income
    Wholesale
      Plans         $        508  $      1,100  $      1,856  $      3,036
      Retail Plans           860           417         1,863         1,100
      Insurance
       Marketing             114             -           114             -
      Eliminations          (225)         (223)         (697)         (686)
                    ------------  ------------  ------------  ------------
             Total  $      1,257  $      1,294  $      3,136  $      3,450
                    ============  ============  ============  ============









                        Alliance HealthCard, Inc.
                 Condensed Consolidated Balance Sheets

                                                              September 30,
                                                                  2008
                                        June 30,             (Derived From
                                          2009                   Audited
                                      (Unaudited)              Statements)
                                      ------------            ------------
Assets
Current assets:
  Cash and cash equivalents           $  4,357,984            $  3,012,683
  Restricted cash                          499,136                 156,935
  Accounts receivable, net               4,000,077               2,486,938
  Advanced agency commissions            6,890,619                       -
  Prepaid expenses                          57,995                  31,372
                                      ------------            ------------
Total current assets                    15,805,811               5,687,928
Furniture and equipment, net               410,175                 165,020
Goodwill                                 4,198,783               2,534,152
Intangibles, net                         4,228,024               1,708,883
Deferred income taxes and other          2,000,738                 427,604
                                      ------------            ------------
Total assets                          $ 26,643,531            $ 10,523,587
                                      ============            ============

Liabilities and stockholders' equity
Current liabilities:
  Accounts payable                    $    762,067            $    927,101
  Income taxes payable                     487,532                       -
  Accrued salaries and benefits            186,873                 161,732
  Accrued commissions                      867,674                       -
  Unearned commissions                   6,202,812                       -
  Claims liability                       1,155,500                 462,596
  Deferred revenue                       1,067,078                 843,868
  Current portion notes payable          2,166,840               2,289,663
  Liability for unrecognized tax
   benefit                                 166,000                 166,000
  Other accrued liabilities              2,939,234               1,468,349
                                      ------------            ------------
  Total current liabilities             16,001,610               6,319,309
Long term liabilities:
  Notes payable, net of discount and
   current portion shown above             448,420                 931,581
                                      ------------            ------------
Total liabilities                       16,450,030               7,250,890
                                      ------------            ------------

Stockholders' equity:
  Common stock, $.001 par value;
   100,000,000 shares authorized;
   21,633,705 and 14,833,127, shares
   issued and outstanding at June 30,
   2009 and September 30, 2008,
   respectively                             21,633                  14,833
  Additional paid-in-capital            11,574,922               6,808,721
  Retained deficit                      (1,403,054)             (3,550,857)
                                      ------------            ------------
  Total stockholders' equity            10,193,501               3,272,697
                                      ------------            ------------
Total liabilities and stockholders'
 equity                                $26,643,531             $10,523,587
                                      ============            ============

Contact Information

  • Contact:
    Alliance HealthCard
    Tom Kiser
    770-734-9255 ext. 206
    Email Contact