IntegraMed America, Inc. (NASDAQ: INMD):

Conference Call:   Today, Thursday, February 16, 2012 at 10:00 a.m. EST
Dial-in Numbers: 866-395-2657 or 706-902-0717 (International)
Webcast / Replay URL:

www.integramed.com or www.earnings.com

Phone Replay: 855-859-2056 or 404-537-3406 through February 23, 2012
Conference ID #:   45090476
 

IntegraMed America, Inc. (NASDAQ: INMD), a leader in developing, marketing and managing specialty healthcare facilities in the fertility and vein care markets, announced today record revenues for the fourth quarter and year ended December 31, 2011.

Summary Financial Results

(in thousands, except per share data)

(Unaudited)

   

Three Months Ended

      

Year Ended

    
   

Dec. 31,
2011

  

Dec. 31,
2010

  

%
Change

  

Dec. 31,
2011

  

Dec. 31,
2010

  

%
Change

Revenues:            

Attain Fertility Centers(1)

  $50,896   $46,920   8.5%   $199,963   $182,443   9.6%
Vein Clinics   19,979   16,900   18.2%   73,619   60,726   21.2%
Total Revenues   $70,875   $63,820   11.1%   $273,582   $243,169   12.5%
Operating Income:

Attain Fertility Centers

  4,685   4,255   10.1%   17,947   17,725   1.3%
Vein Clinics   1,160   556   108.6%   3,144   3,491   (9.9%)
Total Operating Income   $5,845   $4,811   21.5%   $21,091   $21,216   (0.6%)

G&A Costs

  $2,794  

$3,265

   (14.4%)   $11,551  

$12,668

   (8.8%)
Legal Settlement 1   -   -   na   $1,650   -   na
Net Interest Expense   77   113   (31.9%)   335   695   (51.8%)
Income Before Income Taxes   2,974   1,433   107.5%   7,555   7,853   (3.8%)
Income Taxes   1,122   543   106.6%   2,955   3,128   (5.5%)
Net Income   $1,852   $890   108.1%   $4,600   $4,725   (2.7%)
Diluted EPS   $0.16   $0.08   100.0%   $0.39   $0.41   (4.9%)
Diluted Shares   11,871   11,774   0.8%   11,869   11,429   3.9%
Adjusted EBITDA 2   5,745   3,875   48.3%   18,043   17,185   5.0%
 

(1) IntegraMed's 2011 results include a onetime, non-recurring $1.65 million pre-tax provision ($1.0 million after tax) for the settlement of a medical malpractice suit. The provision is IntegraMed's portion of the settlement, net of insurance coverage and Partner physician contributions.

(2) IntegraMed uses the term "Adjusted EBITDA" when reporting financial results in accordance with Securities and Exchange Commission rules regarding the use of financial measures not calculated in accordance with generally accepted accounting principles (GAAP). The Company uses Adjusted EBITDA as a management tool to measure and monitor financial performance. The definition of Adjusted EBITDA contained herein corresponds to the definition of Adjusted EBITDA contained in the Company's credit facility; certain of the covenants contained therein are tied to Adjusted EBITDA. While providing useful information, Adjusted EBITDA should not be considered in isolation as a measure of financial performance under GAAP. Investors should be aware that Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies and comparisons could be misleading unless all companies and analysts calculate this measure in the same fashion. A reconciliation to Adjusted EBITDA is provided as supplemental data for this release.

Jay Higham, President and CEO of IntegraMed, commented, "Our fourth quarter and full year earnings per share and adjusted EBITDA results demonstrate the strength of our business and the benefits of our investments in its growth. Excluding the impact of a $1.65 million pre-tax provision for a legal settlement, IntegraMed would have reported earnings of $0.47 per share in 2011, a 15% improvement over 2010. Importantly, our Q4 performance demonstrated strong top and bottom-line contributions from both our fertility and vein care businesses. Given the health of our balance sheet and our proven business model, we are very confident about IntegraMed's ability to deliver further operating improvements in 2012 and beyond.

"Going forward, we believe our growth will come from both organic and new business development, as we grow revenue, implement operational improvements and maintain the highest levels of patient care across our fertility and vein care businesses. IntegraMed remains committed to growing our fertility business through the financial and operational support of our existing operations, through acquisitions of management contracts in small and large fertility practices, and through the expansion of our Attain IVF fertility treatment finance program. Similarly, we will continue to expand the scope of our vein clinic business through the opening of new clinics and the expansion of existing clinics as well as our array of treatment capabilities. Though the value of the investments we have made in the business over the past two years have not yet been fully realized, we are confident that IntegraMed is on the right track and that there remains substantial opportunity for growth and improved financial performance."

Attain Fertility Centers

    Q4 2011   Q4 2010   $ Change   % Change       2011   2010   $ Change   % Change
Revenue:   $50.9M   $46.9M   $4.0M   8.5%       $200.0M   $182.4M   $17.6M   9.6%
Operating Income:   $4.7M   $4.3M   $0.4M   10.1%       $17.9M   $17.7M   $0.2M   1.3%
Fertility Partner Data:                                    
New Patient Visits:   7,041   6,787   254   3.7%       29,567   27,922   1,645   5.9%
IVF Cycles:   3,743   3,082   661   21.4%       15,346   13,631   1,715   12.6%
IUI Cycles:   6,486   5,621   865   15.4%       25,158   23,706   1,452   6.1%
Attain IVF Program Data:                                    
Applications:   618   693   (75)   (10.8%)       2,816   2,930   (114)   (3.9%)
Enrollments:   349   391   (42)   (10.7%)       1,663   1,633   30   1.8%
Pregnancies:   278   305   (27)   (8.9%)       1,062   1,072   (10)   (0.9%)
                   

The improvements in the Attain Fertility Centers Division revenue and operating income were principally driven by continued growth across IntegraMed's partner centers, including previously challenged markets such as Florida that achieved double digit growth in Q4. In vitro fertilization (IVF) and Intra Uterine Insemination (IUI) cycles reflected strong demand with combined growth on a quarterly and full-year basis of 17.5% and 8.4%, respectively. However, revenue from the Attain IVF family of fertility treatment financing programs has been relatively flat versus the prior year as the benefit of new program launches in 2010 were annualized. IntegraMed is undertaking a number of initiatives to improve results, including adding new Partners and Affiliates and continuing to improve efficiency.

IntegraMed partner and affiliate centers benefitted from the Company's substantial investment in a visible online presence to support patients' information needs while also building awareness and generating patient leads for Attain Fertility Centers. IntegraMed's online initiatives have become popular and trusted portals for families looking to learn more about fertility, treatment options and the wide array of services provided by IntegraMed.

Mr. Higham, commented, "With approximately 100K visitors per month and over 14K people following us via social media outlets, The Attain Fertility Center brand and online presence have reached a new level of visibility and degree of interaction. This presence is not only a great asset and patient recruitment tool for our fertility partners and affiliates, but should also prove valuable in helping us attract new fertility groups to IntegraMed."

Vein Clinics (VCA)

(In millions, except

patient & clinic data)

   Q4 2011   Q4 2010   Change   % Change       2011   2010   Change   % Change
Revenue Mature Clinics (1)   $15.1   $16.0   $(0.9)   (5.6%)       $58.6   $58.7   $(0.1)   (0.1%)
Revenue New Clinics (2)   $4.9   $0.9   $4.0   444.4%       $15.0   $2.0   $13.0   650.0%
Total Revenue:   $20.0   $16.9   $3.1   18.2%       $73.6   $60.7   $12.9   21.2%
Contribution Mature Clinics   $3.1   $3.2   $(0.1)   (3.1%)       $12.1   $11.6   $0.5   4.3%
Contribution New Clinics   $(0.2)   $(1.4)   $1.2   n/a       $(2.3)   $(2.1)   $(0.2)   n/a
Division Overhead Expenses   $1.7   $1.2   $0.5   41.7%       $6.7   $6.0   $0.7   11.7%
Total Operating Income:   $1.2   $0.6   $0.6   108.6%       $3.1   $3.5   ($0.4%)   (9.9%)
Inquiries:   3,332   3,024   308   10.2%       24,360   20,846   3,514   16.9%
New Consultations:   3,018   2,811   207   7.4%       17,323   14,553   2,770   19.0%
First Leg Starts:   2,305   2,017   288   14.3%       9,763   8,303   1,460   17.6%
Total Clinics (net):   45   41   4   9.8%       45   41   4   9.8%

(1) Clinics opened prior to January 1, 2010.

(2) Clinics opened after January 1, 2010.

Our Vein Clinics Division was supported by strong growth by its new clinics - those clinics which opened after January 2010. New clinics accounted for approximately $4.9 million in revenue in Q4 '11 compared to $0.9 million a year ago. As in previous quarters, approximately 98% of the segment's revenue came from third party payors (15% of which is Medicare).

IntegraMed did not open any vein clinics in Q4, which is not a favorable time for clinic openings. The Company finished the year with a total of 45 clinics, having opened 6 new clinics during 2011 and closed two clinics - Madison, WI and West Palm, FL (a second Florida vein clinic is slated to close during the first quarter of 2012). IntegraMed plans to open approximately 10 new clinics in 2012, with three clinics planned to open during the first quarter and the remainder expected in the second and third quarters.

Vein clinic contribution continued to be impacted by the net new clinic start-up losses, which amounted to $0.2 million in Q4 '11, a level consistent with management's expectations. The Company anticipates start-up losses of $0.6 to $0.9 million for Q1 2012, in-line with anticipated start-up losses of approximately $3.5 million for 2012, with the balance equally spread across the remainder of the year.

Mr. Higham, commented, "Our vein care expansion program has progressed well, as our new clinic development team has become more adept in the areas of planning, logistics and recruiting. Of course, we have faced unavoidable delays related to permitting and construction, but in general, the process is becoming more fluid and predictable. In addition to growth via new clinic development, we are equally focused on driving growth and profit in our more mature clinics, and are pleased to report that clinic contribution across clinics opened prior to January 1st, 2010 increased by 4.3% on a full year basis."

Cash Flow and Balance Sheet

IntegraMed's cash flow from operating activities rose 6.7% to approximately $23.0 million in 2011 and full year adjusted EBITDA rose 5% to $18.0 million. Reflecting a cash flow increase, net of approximately $5.0 million in capital investments for its new vein clinic development, the Company's cash and cash equivalents increased 15% to $57.9 million, compared to year-end 2010. Additionally, the company was able to reduce long-term debt by 34.1% to $7.2 million, and shareholders' equity rose 7.2% to $89.5 million during 2011.

IntegraMed CFO, Tim Sheehan, added, "IntegraMed delivered a very solid performance in Q4 and for the full year 2011, delivering strong cash flows that further strengthened our cash position. As a result, the Company remains very well positioned to execute on growth opportunities in both the fertility and vein care segments.

"Together, our fertility business and vein clinic segments have contributed to double-digit growth in revenue and have helped to mitigate the impact of vein clinic expansion costs. Going forward, given our planned pace of new vein clinic development, we now anticipate that start up costs for future clinics will be more than offset by increased contribution from existing facilities."

About IntegraMed America, Inc.

IntegraMed is a leader in developing, marketing and managing specialty outpatient healthcare facilities, with a current focus on the fertility and vein care markets. IntegraMed supports its provider networks with clinical and business information systems, marketing and sales, facilities and operations management, finance and accounting, human resources, legal, risk management, quality assurance, and fertility treatment financing programs.

Attain Fertility Centers, an IntegraMed Specialty, is the nation's largest fertility center network, with 15 company-managed partner centers and 23 affiliate centers, comprising over 130 locations across 34 states and the District of Columbia. Nearly one of every four IVF procedures in the U.S. is performed in an Attain Fertility Centers network practice.

Vein Clinics of America, an IntegraMed Specialty, is the leading provider of specialty vein care services in the U.S. The IntegraMed Vein Clinic network operates 45 centers across 14 states, principally in the Midwest and Southeast.

For more information about IntegraMed please visit: www.integramed.com for investor background, www.attainfertility.com for fertility, or www.veinclinics.com for vein care.

Statements contained in this press release that are not based on historical fact, including statements concerning future results, performance, expectations and expansion of IntegraMed are forward-looking statements that may involve a number of risks and uncertainties. Actual results may differ materially from the statements made as a result of various factors, including, but not limited to, the risks associated with IntegraMed's ability to identify, consummate and finance future growth, changes in insurance coverage, government laws and regulations regarding health care or managed care contracting; and other risks, including those identified in the company's most recent Form 10-K and in other documents filed by IntegraMed with the U.S. Securities and Exchange Commission. All information in this press release is as of February 16, 2012 and IntegraMed undertakes no duty to update this information.

INTEGRAMED AMERICA, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(all amounts in thousands, except per share amounts)

   

Three months ended

December 31,

Year ended

December 31,

2011

  

2010

2011

  

2010

(unaudited)
Revenue
Attain Fertility Centers $ 50,896 $ 46,920 $ 199,963 $ 182,443
Vein Clinics   19,979       16,900       73,619       60,726  
Total Revenues   70,875       63,820       273,582       243,169  
 
Costs of services
Attain Fertility Centers 46,211 42,665 182,016 164,718
Vein Clinics   18,819       16,344       70,475       57,235  
Total Cost of Services   65,030       59,009       252,491       221,953  
 
Operating Income
Attain Fertility Centers 4,685 4,255 17,947 17,725
Vein Clinics   1,160       556       3,144       3,491  
Total Operating Income   5,845       4,811       21,091       21,216  
 
General and administrative expenses 2,794 3,265 11,551 12,668
Legal Settlement 1,650
Interest income (39 ) (42 ) (181 ) (202 )
Interest expense   116       155       516       897  
Total other expenses   2,871       3,378       13,536       13,363  
 
Income before income taxes 2,974 1,433 7,555 7,853
Income tax provision   1,122       543       2,955       3,128  
Net income $ 1,852     $ 890     $ 4,600     $ 4,725  
 
Basic and diluted earnings per share of Common Stock:
Basic earnings per share $ 0.16 $ 0.08 $ 0.39 $ 0.42
Diluted earnings per share $ 0.16 $ 0.08 $ 0.39 $ 0.41
 
Weighted average shares - basic 11,857 11,725 11,838 11,380
Weighted average shares - diluted 11,871 11,774 11,869 11,429
 
             

INTEGRAMED AMERICA, INC.
SUPPLEMENTARY DATA
(All amounts in thousands)
(unaudited)

 

Adjusted EBITDA Reconciliation (non GAAP)

Adjusted EBITDA represents net income plus interest, taxes, depreciation, amortization and amortization of deferred compensation. The Company believes that the most directly comparable financial measure to Adjusted EBITDA in accordance with GAAP is net income. The following table provides a reconciliation of Adjusted EBITDA to net income for the periods presented:

 
Three months ended,

December 31,

Year ended,

December 31,

2011   2010 2011   2010
 
Net Income $1,852 $890 $4,600 $4,725
 
Adjustments:
Interest Expense 116 155 516 897
Income Tax Expense 1,122 543 2,955 3,128
Depreciation & Amortization 2,210 1,767 8,494 6,846
Amortization of Deferred Compensation

445

520

1,478

1,589

Adjusted EBITDA   5,745   $3,875   18,043   $17,185
 

INTEGRAMED AMERICA, INC.

CONSOLIDATED BALANCE SHEETS

(all amounts in thousands)

 

     
December 31, December 31,
2011 2010
 
 
ASSETS
 
Current assets:
Cash and cash equivalents $ 57,909 $ 50,183
Patient and other receivables, net 6,372 7,350
Deferred tax assets 2,222 2,510
Other current assets   8,602     9,611  
 
Total current assets 75,105 69,654
 
Fixed assets, net 21,288 19,264
Intangible assets, Business Service Rights, net 24,114 22,915
Goodwill 30,334 30,334
Trademarks 4,442 4,442
Other assets   2,221     2,046  
 
Total assets $ 157,504   $ 148,655  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,037 $ 3,626
Accrued liabilities 17,074 17,265
Current portion of long-term notes payable and other obligations 3,816 3,784
Due to Fertility Medical Practices, net 14,229 11,246
Attain IVF Refund Program and other patient deposits   16,342     15,852  
 
Total current liabilities 55,498 51,773
 
Deferred tax liabilities 5,277 2,454
Long-term notes payable and other obligations   7,187     10,908  
67,962 65,135
Commitments and Contingencies
 
Shareholders' equity:
Common stock 119 117
Capital in excess of par 78,156 76,483
Other comprehensive loss (42 ) (55 )
Treasury stock (330 ) (64 )
Retained earnings   11,639     7,039  
Total shareholders' equity   89,542     83,520  
 
Total liabilities and shareholders' equity $ 157,504   $ 148,655  
 

INTEGRAMED AMERICA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(all amounts in thousands)

     

For the
Year
ended December 31,

2011

  

2010

(unaudited)
 
Cash flows from operating activities:
Net income $ 4,600 $ 4,725
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 8,494 6,846
Deferred stock based compensation 1,478 1,591
Changes in assets and liabilities
Decrease (increase) in assets:
Patient and other accounts receivable 978 (386 )
Other current assets (821 ) (1,958 )
Other assets 4,861 870
(Decrease) increase in liabilities:
Accounts payable 411 780
Accrued liabilities (456 ) 1,801
Due to medical practices 2,983 4,822
Attain IVF Refund patient deposits   490       2,490  
Net cash provided by operating activities   23,018       21,581  
 
Cash flows used in investing activities:
Purchase of business service rights (2,494 ) --
Purchase of fixed assets and leasehold improvements   (9,223 )     (8,110 )
Net cash used in investing activities   (11,717 )     (8,110 )
 
Cash flows used in financing activities:
Principle repayments on debt (3,667 ) (11,255 )
Common stock transactions, net   92       19,102  
Net cash (used in) provided by financing activities   (3,575 )     7,847  
 
Net increase (decrease) in cash 7,726 21,318
Cash and cash equivalents at beginning of period   50,183       28,865  
Cash and cash equivalents at end of period $ 57,909     $ 50,183  
 
Supplemental Information:
Interest paid 534 912
Income taxes paid 435 2,616

Media/Investors:
Jaffoni & Collins
Norberto Aja, David Collins, 212-835-8500
inmd@jcir.com