NU Online News Service, Nov. 11, 2003, 12:49 p.m. EST – PlanVista Corp., Tampa, Fla., generated a profit during the third quarter, but Phillip Dingle, the company’s chairman, says PlanVista still needs to find financing to keep preferred shareholders from gaining control of 51% of the outstanding common shares in May 2004.
PlanVista, a company that sells network management services and other support services to managed care companies, is reporting $1.5 million in net income on $8 million in revenue for the latest quarter, compared with $1.9 million in net income on $8.3 million in revenue for the third quarter of 2002.
Net cash provided by operating activities increased to $3.8 million, from $705,000.
But PlanVista ended up refinancing debt in March 2002, at a time when credit was scarce. About $38.5 million in debt will mature in May 2004, and $20.5 million of that debt is helped by an affiliate of Commonwealth Associates L.P., New York, PlanVista says.
The lenders, which hold preferred stock, have the right to convert the shares into so much common stock that they would end up owning 51% of PlanVista’s common shares.
“We will continue to explore alternatives to reduce our obligations, recapitalize the company and provide additional liquidity,” Dingle says in a statement accompanying his company’s earnings release. “Through these efforts, we will seek to place our company in a position to prosper. However, if a refinancing is consummated, it may cause substantial dilution to common shareholders.”
Although the need to find refinancing remains a challenge, business was good during the third quarter, PlanVista says.
PlanVista began handling network services for 13 new payers during the third quarter and increased revenue from providing other types of business services 250%.
The company processed a total of 929,000 health insurance claims during the quarter, up from 883,000 during the third quarter of 2002, and the number of claims it processed through the Internet increased to 147,000, from 133,000.