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HC Innovations Reports First Quarter 2008 Revenue Increased 142% Over First Quarter of 2007

Posted on: Tuesday, 20 May 2008, 09:01 CDT

HC Innovations, Inc. (OTCBB: HCNV), a specialty care management company providing high-touch, relationship-based, services to patients with complex medical needs, while creating significant cost savings for HMOs, nursing homes, and insurance companies, reports financial results for its 2008 first quarter.

First Quarter Highlights:

-- Revenue growth of 142% compared to the first quarter of 2007

-- Existing contracts nearing profitability through growth and scalability

-- Significant patient expansion through new and existing contracts with Aetna, HIP, and Amerigroup

-- Increased demand for Easy Care and NP Care contributed significant results

-- Expansion into Alabama, increasing total footprint to 10 states

First Quarter Overview:

For the three months ended March 31, 2008, net revenue was $5,318,350, representing an increase of $3,120,379, or 142%, compared with net revenue of $2,197,971 for the three months ended March 31, 2007. The increase is a result of 45% growth from existing operations in the amount of $992,694, compared with the first quarter of 2007, as well as $2,127,685 of revenue from new operations in the first quarter of 2008.

For the three months ended March 31, 2008, we incurred a loss from operations of $2,262,135, representing an increase of $964,263, or 74%, compared with $1,297,872 for the three months ended March 31, 2007. We expect improvement in our results of operations as revenues increase and we begin to absorb the incremental fixed costs associated with our expansion. Revenues and operating results are expected to fluctuate from period to period as a result of the timing of new contracts and additional start-up costs associated with additional planned new markets.

Management Comment:

"Our first quarter results clearly reflect the increased demand for our services," commented Dr. David Chess, Chief Executive Officer. "The dramatic outcomes that our programs are having on the quality of life of our patients are producing cost savings for our clients. Since our inception, we identified three pillars which were essential to our being able to deliver relationship-based, outcome-driven care management on a scalable platform. First, the ability to effectively recruit superior clinical staff, second, our education and training programs, which drive excellence, and third, our IT infrastructure, which streamlines our business and significantly improves workflow for our staff. We have succeeded in building this scalable platform. To further accelerate and strengthen our growth, we have recruited top talent to our Board of Directors and executive management team, which we believe will make a considerable impact as we move forward."

Dr. Chess concludes, "We believe the investments that we made will allow us to effectively execute our business model, which should allow us to sustain the current levels of high revenue growth and market expansion. Although the start-up costs have been high through this transition, we believe the model that we have created is highly scalable and will reach profitability in the near future as we increase our patient-base. I look forward to updating our shareholders on our success as we move forward."

About HC Innovations, Inc.

HC Innovations is the holding company for Enhanced Care Initiatives (ECI), which provides complex care management services for medically unstable, complex patients. These services which leverage patient relationships are performed through a program of 24/7 clinical support and intensive interventions based on care plans guided by a proprietary electronic health record (EHR) system. HCI's corporate strategy is to care for the most costly and needy patients in order to reduce clinical morbidity, prevent unnecessary hospitalizations, increase quality of life and create cost savings. The Company targets its offering to HMOs, other risk-bearing managed care organizations, state Medicaid departments, and as an on-site subcontractor for disease management companies.

The Company's services are offered through three programs: Easy Care(TM), NP Care, and Quality of Life Care(TM). All of its hands-on operations have the ability to drive down medical costs while improving the quality of life, health and experience for participating members. This holistic approach focuses on the entire patient, not just health conditions. ECI programs provide complex interventions, utilizing specialized training of nurses and nurse practitioners along with proprietary software and integration capabilities. For more information, visit http://www.hcinnovationsinc.com.

Forward-Looking Statements

The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include the Company's entry into new commercial businesses, the risk of obtaining financing, recruiting and retaining qualified personnel, and other risks described in the Company's Securities and Exchange Commission filings. The forward looking statements in this press release speak only as of the date hereof, and the Company disclaims any obligation to provide updates, revisions or amendments to any forward-looking statement to reflect changes in the Company's expectations or future events.

Source: Business Wire

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