EATONTOWN, N.J., Oct. 10 /PRNewswire-FirstCall/ -- QMed, Inc.
(NASDAQ: QMED) today announced financial results for the third
quarter ending August 31, 2006. Revenue for the three-month period
decreased to $2,202,270 from $5,504,634 in the prior year's
quarter. Net loss for the quarter was $(3,317,401) or ($.20) per
share, compared to net income of $992,237 or $.05 per share on a
diluted basis, for the same period a year ago. The Company has been
notified by HealthSuite Partners, a joint venture with Alere
Medical, AirLogix and the Company that the HealthSuite Partners
contract with HealthPartners, a Minnesota managed care
organization, would not be extended beyond April 5, 2007. In the
third quarter, the joint venture contributed $841,000 in revenue.
This development does not affect the Company's previously announced
revenue guidance of $38 - $44.5 million for its QMedCare Medicare
Special Needs Plan subsidiary. Michael W. Cox, QMed president and
CEO said, "Third quarter results reflect continued investments in
our Medicare Special Needs Plans (SNPs) for New Jersey and South
Dakota. We expect that such investments will increase in the fourth
quarter as we complete our infrastructure and begin our SNP
marketing program, but we are pleased to report that our strategic
transition into a Medicare SNP insurer is now nearly complete." "As
the year has unfolded, we have become increasingly encouraged about
prospects for 2007 Medicare Special Needs Plan business for several
reasons and, consequently, we are comfortable once more to
reiterate our revenue guidance for SNPs. Among the reasons for this
encouragement are: * Enrollment in South Dakota has continued to
grow since the non-SNP Medicare plan marketing periods ended in
May, and as more and more Medicare beneficiaries with chronic
illnesses hit the prescription drug Part D coverage gap, or
"doughnut hole" * The response to our test marketing campaign in
New Jersey has been very positive * Our new benefit design and
pricing has been well received by brokers of the independent senior
products community * Successful contracting with two of the largest
hospital/health systems in New Jersey * The New Jersey market
includes gated communities that have a significant concentration of
Medicare beneficiaries, a marketing feature not available in South
Dakota." "Medicare Advantage Special Needs Plans are new and
exciting and we are convinced that our strategic focus on them
represents a superior approach to the Medicare market. Our systems
fully integrate improved medical management for physicians, coupled
with patient directed disease management, robust reporting and
other tools designed to achieve overall medical best practices that
in turn produce improved health for patients and positive financial
outcomes for our SNPs. We believe that Medicare SNPs are a
meaningful part of Medicare Reform and expect that our successful
future in that arena is now," Cox concluded. About QMed, Inc. QMed
provides evidence-based clinical information management systems
around the country to its health plan customers. The system
incorporates Disease Management services to patients and decision
support to physicians. The Company's QMedCare subsidiary
specializes in serving high-risk populations of Medicare
beneficiaries with its first project commencing in South Dakota in
January 2006. Forward Health is QMed's subsidiary offering weight,
obesity and health promotion programs. The Company has been
selected in Demonstrations in the vast Medicare fee-for-service
program. More information on QMed, Inc. can be obtained at
http://www.qmedinc.com/, by calling (732) 544-5544 or by emailing .
QMED, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET
August 31, 2006 November 30, 2005 ASSETS (unaudited) Current assets
Cash and cash equivalents $2,726,196 $4,051,046 Investments
14,481,052 19,348,503 Accounts receivable, net of allowances of
$44,844 and $76,518, respectively 1,878,714 3,377,495 Inventory,
net of reserve 30,230 30,887 Prepaid expenses and other current
assets 416,310 411,608 19,532,502 27,219,539 Property and
equipment, net of accumulated depreciation 1,055,563 1,058,295
Product software development costs, net 1,896,162 1,161,083
Restricted cash and cash equivalents, non-current 705,881 --
Accounts receivable, non-current 337,239 271,809 Acquired
intangibles, net 663,036 795,848 Other assets 127,760 128,794
Investment in joint ventures 27,193 37,998 $24,345,336 $30,673,366
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable and accrued expenses $2,071,247 $1,577,385 Medical claims
reserve 165,755 -- Leases payable, current portion 93,106 146,483
Accrued salaries and commissions 413,700 721,792 Fees reimbursable
to health plans 126,560 39,000 Contract billings in excess of
revenue 1,448,361 744,743 Deferred warranty revenue 9,600 12,253
Income taxes payable -- 62,610 4,328,329 3,304,266 Leases payable -
long term 20,141 76,005 Contract billings in excess of revenue,
long term 337,239 271,809 4,685,709 3,652,080 Commitments and
Contingencies -- -- Stockholders' equity Common stock $.001 par
value; 40,000,000 shares authorized; 16,851,265 and 16,804,846
shares issued and 16,829,265 and 16,782,846 outstanding,
respectively 16,851 16,805 Paid-in capital 52,766,121 51,219,617
Accumulated deficit (33,043,418) (24,118,472) Accumulated other
comprehensive loss Unrealized loss on securities available for sale
(4,302) (21,039) 19,735,252 27,096,911 Less treasury stock at cost,
22,000 common shares (75,625) (75,625) Total stockholders' equity
19,659,627 27,021,286 $24,345,336 $30,673,366 QMED, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended August 31,
August 31, August 31, August 31, 2006 2005 2006 2005 Revenue
$2,202,270 $5,504,634 $7,306,588 $15,723,017 Cost of revenue
1,371,709 1,827,313 4,951,164 5,499,320 Gross profit 830,561
3,677,321 2,355,424 10,223,697 Selling, general and administrative
expenses 4,025,951 2,062,529 11,099,815 5,853,627 Research and
development expenses 298,836 347,434 1,180,866 924,286 (Loss)
income from operations (3,494,226) 1,267,358 (9,925,257) 3,445,784
Interest expense (4,337) (6,967) (15,146) (21,052) Interest income
201,833 140,371 577,152 261,653 Loss in operations of joint
ventures (18,927) (334,825) (57,365) (792,103) Other income -- --
450,000 2,849 (Loss) income before income tax provision (3,315,657)
1,065,937 (8,970,616) 2,897,131 (Provision) benefit for income
taxes (1,744) (73,000) 45,670 (158,400) Net (loss) income
$(3,317,401) $992,937 $(8,924,946) $2,738,731 Basic (loss) earnings
per share Weighted average shares outstanding 16,823,885 16,687,769
16,804,457 16,370,175 Basic (loss) earnings per share $(.20) $.06
$(.53) $.17 Diluted (loss) earnings income per share Weighted
average shares outstanding 16,823,885 18,559,698 16,804,457
18,343,191 Diluted (loss) earnings per share $(.20) $.05 $(.53)
$.15 Except for historical information contained herein, matters
discussed in this news release are forward-looking statements that
involve risks and uncertainties. They include but are not limited
to those relating to the timely implementation of programs, the
impact of competitive product introductions, acceptance and
pricing, and those risks detailed in the Company's filings with the
Securities and Exchange Commission (SEC). Actual results may differ
materially from any forward-looking statements due to these risks
and uncertainties. DATASOURCE: QMed, Inc. CONTACT: Robert Mosby,
QMed, Inc., +1-732-544-5544 x1107 Web site: http://www.qmedinc.com/
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