Pacific Health Care Organizatio (PFHO) research, news, and more from GeoInvesting

Company description

Fri, 06 Jun 2008 04:00:00 GMT

Pacific Health Care Organization, Inc., through its subsidiaries, engages in managing and administering health care organizations (HCOs) and managed provider networks in the state of California. The HCOs are networks of medical providers established to serve the workers’ compensation industry. Pacific Health Care Organization, through its two HCOs, offers injured workers a choice of enrolling in an HCO with a network managed by primary care providers requiring a referral to specialists; or a second HCO, where injured workers do not need any prior authorization to be seen and treated by specialists. The company was formerly known as Clear Air, Inc. and changed its name to Pacific Health Care Organization, Inc. in January 2001. Pacific Health Care Organization, Inc. was incorporated in 1970 and is based in Newport Beach, California.

Research

Mon, 01 Apr 2019 16:15:15 GMT

Pacific Health Care (OOTC:PFHO) ($4.80, $15.3M market cap), a specialty workers' compensation managed care company, announced Q4 2018 results:

Sales of $1.8 million vs $1.7 million in the prior year
EPS of $0.09 vs $0.08 in the prior year
Full year 2018 sales of $6.7 million vs $6.5 million in the prior year
EPS of $0.42 vs $0.30 in the prior year

The press release offers no commentary from management (which is the norm). We have had a long history with PFHO and added the stock to our Mock Takeover Portfolio in May 2018. To see our full history of coverage on PFHO, please go here.

Research

Tue, 25 Sep 2018 15:48:56 GMT

Pacific Health Care (OOTC:PFHO) ($5.75, $18.4M market cap) a specialty workers' compensation managed care company, announced it has begun a strategic acquisition search. The Company is looking for an insurance company to add to its suite of comprehensive workers’ compensation solutions. This release came yesterday pre-market:

"We are extremely motivated to move forward with our acquisition search," says Tom Kubota, PHCO's board chairman and CEO. "Workers’ compensation costs continue to increase due to rising medical costs, inflation, fraud and other factors. In the state of California, billions of dollars are spent annually to cover medical and indemnity costs associated with workers’ compensation. With a broad perspective of the entire industry and a collective commitment to become renowned as one of the leaders in the California workers' comp industry, we are positioned as few are to take on what we believe will be a game-changing endeavor."

"We have demonstrated proven success in increasing margins and strengthening balance sheets," Kubota adds. "Our plans for a strategic acquisition of an insurance company will help us realize our vision to shape an entirely new workers' compensation industry — from insurance coverage and offerings to safety and wellness programs and beyond."

We have had a long history with PFHO and recently added the stock to our Mock Takeover Portfolio. To see a full recap of our PFHO history, go here.

Research

Fri, 17 Aug 2018 15:01:51 GMT

Pacific Health Care (OOTC:PFHO) ($5.75, $18.4M market cap) yesterday filed a Form NT10-Q amendment, notifying the Securities and Exchange Commission that it intends to file its quarterly report late. The filing may have included some interesting information arbitrage, as it noted what we estimate to be 25% growth in EPS, among other things. The full text of the filing is below, with our emphasis in bold:

On August 15, 2018 the Company filed a Form 12b-25 (the “Form 12b-25”) with the Securities and Exchange Commission (“SEC”). In the Form 12b-25 due to an inadvertent error the Company incorrectly compared anticipated results of operations for the three-month period ended June 30, 2018 to the three-month period ended June 30, 2016 rather than June 30, 2017. As a result, the Company disclosed in the Form 12b-25 that it anticipated certain significant changes in its operating results during the three-month period ended June 30, 2018, which the Company now anticipates will not be the case. The Company is filing this amendment to amend and restate the Form 12b-25.

The Company anticipates realizing approximately a 57% increase in net income during the six-month period ended June 30, 2018 compared to the six-month period ended June 30, 2017. This anticipated increase is largely expected to be the result of an estimated 27% increase in income from operations and approximately a 14% reduction in income tax provision as a result of new tax laws.

We will try to reach out to the company for further information.

Research

Tue, 22 May 2018 15:49:04 GMT

Adding PFHO To Our Mock Takeover Candidate Portfolio

Pacific Health Care (OOTC:PFHO) ($4.95, $15.8M market cap) - We are adding PFHO, a specialty workers' compensation managed care company, to our mock takeover portfolio. With most of the assets represented as cash, we feel there is safety net if business momentum is interrupted. Per the last quarter, the company reported EPS of $0.11 vs $0.07 in the prior year on slightly higher sales. Company stats:

Cash per share: $1.91
Current ratio: 11.6
Forward P/E: 11.2
No long term debt

Our first run with PFHO turned into a huge multibagger success for Geo. Unfortunately for the company, positive business momentum stalled after the loss of some major customers in 2015. However, the company has started gaining some momentum once again in the past year. While the past two quarters saw flat to modest top line growth, EPS has improved in four of the last five quarters.

79 year-old CEO Tom Kubota continues to buy shares at open market prices. He currently has a 60% stake in the Company, and has consistently bought shares over the last 4-5 years, regardless of price. At his age, it is not unreasonable to think he may be looking to sell the Company or place it in the hands of new management who would be willing to more aggressively expand geographically, ultimately leading to stronger sales.

Caveats:

Customer concentration: The company has two customers that make up 43% of total sales
It is possible that its customers handle the worker’s compensation needs in house.
Regulatory changes from government or health insurers could have adverse effect on the company.
We have not interviewed management

Research

Tue, 14 Nov 2017 15:42:10 GMT

PFHO ($15.00, $12M market cap) a specialty workers' compensation managed care company,PFHOfiled its 10-Q this morning. The company reported $1.6 million in revenue versus $1.44 million in the prior year period. The company reported basic earnings per share of $0.30 versus $0.22 in the quarter prior. After entering several quarters of decline after losing one of its main customers, the company has put together a couple of decent quarters over the last year, but customer concentration risk seems to remain. The company has a trailing twelve month PE of 13.

Research

Fri, 13 Nov 2015 15:33:25 GMT

After a Long Run and Loss of Largest Customer, Parting Ways with PFHO ($10.80)

After a great run and one of the best Tier One Pinks/GeoInvesting selections, it's time to remove PFHO from the GeoBargain on the radar list.

We had mentioned PFHO in a number of our premium emails dating back to 2012, and it was first mentioned on our Tier One Pink Sheet screen on March 19, 2012 when the stock was trading at $1.81. We announced we were looking to take a long position in our May 16, 2012 email and added PFHO to our Open Long Positions blog the same day. The stock reached as high as $73 in August of 2014.

On May 14, 2014 we announced that were beginning to unwind our position:

"Shares are trading at what we feel is fair value now. Although, given that the company has grown EPS for 13 straight quarters we think the stock could see an expansion in its valuation multiple. We also see the stock as as or possible acquisition target.. Still, we may begin to unwind some our position."

Beginning in September of 2014, the stock began a prolonged retreat amid negative news on a similar business (BBSI) and the disclosure that the company lost a major customer. We attempted a few small trades as the stock fell, but we now think it's time to remove PFHO from our radar screens. We were less than pleased that the company announced materially negative news regarding its largest customer via their 10-Q, but did not include the language in its press release.

The company released its quarterly results yesterday, posting $0.57 in net income per share and revenue of $2.0 million. Both of these numbers were down year over year, but the real story is the language that was excluded from the press release and introduced in the MD&A of the company's 10-Q, denoting that the company is going to be losing its largest customer which accounts for about half of revenues:

As discussed in the notes to our condensed consolidated financial statements, in a letter dated October 23, 2015, AmTrust, our largest customer, notified us that it will be terminating the services we provide them effective 60 days from the date of the letter. The loss of this customer and our third-party partner will have a significant negative impact on our revenue, profitability and liquidity until such time as we are able to replace the revenue generated from these customers. With the impending loss of AmTrust business in December 2015, we anticipate UR fees and total revenues will be significantly impacted as early as our fourth fiscal quarter of 2015 and throughout 2016. During the three-month periods ended September 30, 2015 and 2014 UR fees generated from AmTrust were approximately $794,235 and $440,225, respectively.

Comments & Business Outlook

Mon, 01 Jun 2015 04:00:00 GMT

NEWPORT BEACH, California, May 29, 2015 (GLOBE NEWSWIRE) -- Pacific Health Care Organization, Inc., (the "Company") (OTCQB: PFHO), a specialty workers' compensation managed care company providing a range of services primarily to California employers and claims administrators announced today that its board of directors has voted to extend the duration of the Company's existing share repurchase program an additional six months, through November 30, 2015. This is the only change to the share repurchase program. The Company has correspondingly extended its 10b5-1 plan with Alpine Securities Corporation.

Since inception of the share repurchase program in December 2014, the Company has repurchased 4,710 shares, or approximately 6 percent of the outstanding common stock of the Company, for $169,118. The Company has $330,882 left in the plan for future purchases of common stock under the current authorization.

Under the share repurchase program the Company is authorized to repurchase outstanding shares in open market or privately negotiated transactions. The share repurchase program may be modified, suspended or discontinued at any time without prior notice.

Comments & Business Outlook

Wed, 13 May 2015 04:00:00 GMT

Reported Q1 2015 Results

The Company reported total revenue of $2,369,098 for the firstquarter ended March 31, 2015 as compared with $2,028,669 of totalrevenue for the quarter ended March 31, 2014.
The Company reported net income of $508,241 or $0.64 per basicand fully diluted share for the quarter ended March 31, 2015 ascompared to net income of $446,561 or $0.56 per basic and fullydiluted share for the first quarter ended March 31, 2014.

Comments & Business Outlook

Tue, 31 Mar 2015 04:00:00 GMT

$PFHO ($37.00) - GeoBargain PFHO reported Q4 2014 financial results:

Revenues for Q4 2014 were $2.39 million vs $1.89 million in the prior year period.

EPS for Q4 2014 were $0.58 vs $0.51 in the prior year period.

Notable Share Transactions

Wed, 26 Nov 2014 05:00:00 GMT

NEWPORT BEACH, California, Nov. 26, 2014 (GLOBE NEWSWIRE) -- Pacific Health Care Organization, Inc., (the "Company") (OTCQB: PFHO), a specialty workers' compensation managed care company providing a range of services primarily to California employers and claims administrators, today announced that its board of directors has approved the repurchase of up to $500,000 of the Company's outstanding common stock. The Company expects the shares of common stock will be repurchased from time to time in either open market or private transactions in accordance with applicable insider trading and other securities laws and regulations at then-prevailing market prices.

The Company is repurchasing shares principally to offset potential dilution to shareholders in connection with possible future equity security grants to Company employees and consultants it wishes to reward for their performance or to provide additional incentive for future employee performance, as well as to enhance the Company's ability to attract and retain employees in the future through grants of equity interests in the Company. The repurchase program will be funded primarily from existing cash balances and working capital.

On November 25, 2014, the Company adopted a 10b5-1 plan (the "Plan") with Alpine Securities Corporation, under which the Company may repurchase its shares at times when the Company might otherwise be precluded from doing so under insider trading laws. This Plan has been established pursuant to, and as part of, the Company's share repurchase program. The timing and extent of repurchases under the Rule 10b5-1 plan are subject to Securities and Exchange Commission regulations as well as certain price, market volume and timing constraints specified in the Plan. The term of the Plan commences on December 1, 2014 and is expected to continue for a period of six months, although the Plan may be modified, suspended or terminated at any time without prior notice.

The Company also announced today that its board of directors approved 12% pay increases for certain company employees and a consultant including its Chief Executive Officer and Chief Financial Officer. These pay increases will become effective January 1, 2015.

Comments & Business Outlook

Wed, 12 Nov 2014 05:00:00 GMT

Pacific Health Care Organization, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For three months ended September 30,						For nine months ended September 30,
	2014			2013			2014			2013

Revenues:
UR fees	$	1,362,283		$	577,876		$	3,063,833		$	1,347,255
MBR fees		526,341			345,253			1,444,524			1,060,519
HCO fees		260,069			210,039			778,869			689,575
MPN fees		285,415			223,625			797,449			638,841
NCM fees		242,376			309,272			753,839			815,987
Other		76,032			37,505			240,882			128,111
Total revenues		2,752,516			1,703,570			7,079,396			4,680,288

Expenses:
Depreciation and amortization		12,642			10,918			35,408			32,623
Bad debt provision		15,851			10,000			24,991			10,000
Consulting fees		76,790			81,871			229,010			267,125
Salaries and wages		699,096			517,400			1,878,041			1,547,197
Professional fees		109,871			131,157			338,403			324,014
Insurance		82,155			68,858			225,035			189,455
Outsource service fees		658,233			202,960			1,324,248			511,374
Data maintenance		12,953			9,355			53,685			46,178
General and administrative		133,449			108,759			396,156			359,985
Total expenses		1,801,040			1,141,278			4,504,977			3,287,951

Income from operations		951,476			562,292			2,574,419			1,392,337

Other income (expense):
Interest income		-			1			-			460
Interest (expense)		(258	)		(549	)		(956	)		(1,909	)
Total other income (expense)		(258	)		(548	)		(956	)		(1,449	)


Income before taxes		951,218			561,744			2,573,463			1,390,888

Income tax provision		395,803			228,702			1,070,822			565,418

Net income	$	555,415		$	333,042		$	1,502,641		$	825,470

Basic and fully diluted earnings per share:
Earnings per share amount	$	.69		$	.42		$	1.87		$	1.03
Weighted average common shares outstanding		802,424			802,424			802,424			802,424

Comments & Business Outlook

Tue, 12 Aug 2014 04:00:00 GMT

Second Quarter 2014 Results

Pacific Health Care Organization, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For three months ended June 30,						For six months ended June 30,
	2014			2013			2014			2013

Revenues:
UR fees	$	975,695		$	437,110		$	1,701,550		$	769,379
MBR fees		442,963			383,685			918,183			715,266
HCO fees		259,316			232,847			518,800			479,536
MPN fees		258,605			209,475			512,034			415,216
NCM fees		257,334			291,598			511,463			506,715
Other		104,298			37,893			164,850			90,606
Total revenues		2,298,211			1,592,608			4,326,880			2,976,718

Expenses:
Depreciation and amortization		11,611			10,897			22,766			21,705
Consulting fees		76,321			85,773			152,220			185,254
Bad debt provision		887			-			9,140			-
Salaries and wages		592,118			529,461			1,178,945			1,029,797
Professional fees		122,920			117,079			228,532			192,857
Insurance		74,232			62,417			142,880			120,597
Outsource service fees		401,447			169,157			666,015			308,414
Data maintenance		21,561			9,086			40,732			36,823
General and administrative		139,346			122,253			262,707			251,226
Total expenses		1,440,443			1,106,123			2,703,937			2,146,673

Income from operations		857,768			486,485			1,622,943			830,045

Other income (expense):
Interest income		-			-			-			459
Interest (expense)		(319	)		(637	)		(698	)		(1,360	)
Total other income (expense)		(319	)		(637	)		(698	)		(901	)

Income before taxes		857,449			485,848			1,622,245			829,144

Income tax provision		356,784			197,305			675,019			336,716

Net income	$	500,665		$	288,543		$	947,226		$	492,428

Basic and fully diluted earnings per share:
Earnings per share amount	$	.62		$	.36		$	1.18		$	.61
Weighted average common shares outstanding		802,424			802,424			802,424			802,424

Comments & Business Outlook

Wed, 14 May 2014 04:00:00 GMT

First Quarter 2014 Results

Total revenues for the first quarter 2014 were $2,028,669, compared to $1,384,110 for the same period in 2013, an increase of $644,559 or 47 percent.
Net income was $446,561, or $0.56 per basic and fully diluted share for the first quarter ended March 31, 2014 compared to net income of $203,885, or $0.25 per basic and fully diluted share for the same quarter last year.

Comments & Business Outlook

Mon, 31 Mar 2014 04:00:00 GMT

Fourth Quarter 2013 Results

The company reported revenue of $1.9 million compared to $1.3 million for the same quarter 2012.
The company reported EPS of $0.51 compared to $0.23 for the same quarter 2012.

Comments & Business Outlook

Fri, 15 Nov 2013 05:00:00 GMT

Third Quarter 2013 Results

Total revenues for the third quarter 2013 were $1,703,570, compared to $1,326,801 for the same period in 2012, an increase of $376,769 or 28 percent.

The Company reported net income of $333,042, or $0.42 per basic and fully diluted share for the third quarter ended September 30, 2013 compared to net income of $186,573, or $0.23 per basic and fully diluted share, for the third quarter ended September 30, 2012.

Research

Wed, 13 Nov 2013 05:00:00 GMT

11/13/2013 Alert Update

GeoBargain on the Radar PFHO engages in managing and administering health care organizations and managed provider networks in the state of California. Shares of PFHO hit a new 52 week high of $17.70 in today's trading session. We have mentioned PFHO in a number of our premium emails. We first made note of the company on our Tier 1 Pink Sheet Screen on 3/19/12 when the stock was trading at $1.81, and added to our open long positions on 5/16/2012 when the stock was trading at $3.77. We are still long this name. PFHO is another multi-bagger for GeoInvesting, at current prices near a 9-bagger.

To be among the first to receive alerts like this, subscribe to our premium service!

Comments & Business Outlook

Wed, 14 Aug 2013 04:00:00 GMT

Second Quarter 2013 Results

The Company reported net income of $288,543, or $0.36 per basic and fully diluted share for the second quarter ended June 30, 2013 compared to net income of $186,382, or $0.23 per basic and fully diluted share, for the second quarter ended June 30, 2012.
Total revenues for the second quarter 2013 were $1,592,608, compared to $1,123,911 for the same period in 2012, an increase of $468,597 or 42 percent.

"We are encouraged by the effects of our strategic planning and believe that we are now beginning to reap the benefits of expanding our marketing efforts in the form of solid growth in revenues. With our achievements in our second quarter we should yield satisfactory results in the remaining quarters of the year. Of course, we cannot be certain that our growth rate will continue at the current rate and we continue to simplify and align our operations to better adapt to market fluctuations," commented Tom Kubota, chief executive officer.

Comments & Business Outlook

Wed, 15 May 2013 04:00:00 GMT

Pacific Health Care Organization, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For three months ended March 31,
	2013			2012
Revenues:
HCO fees	$	246,689		$	198,257
MPN fees		205,741			183,036
Other		931,680			684,164
Total revenues		1,384,110			1,065,457


Expenses:
Depreciation		10,808			5,793
Consulting fees		99,481			95,816
Salaries & wages		500,336			425,594
Professional fees		75,778			49,088
Insurance		58,180			45,737
Outsource service fees		139,257			64,051
Data maintenance		27,737			6,831
General & administrative		128,973			105,773

Total expenses		1,040,550			798,683

Income from operations		343,560			266,774

Other income (expense)
Interest income		459			190
Rental income		-			750
Interest (expense)		(723	)		(230	)
Total other income (expense)		(264	)		710

Income before taxes		343,296			267,484

Income tax provision		139,411			111,113

Net income	$	203,885		$	156,371

Basic and fully diluted earnings per share:
Earnings per share amount	$	.25		$	.19
Weighted average common shares outstanding		802,424			802,424

Comments & Business Outlook

Tue, 14 Aug 2012 04:00:00 GMT

Pacific Health Care Organization, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For three months ended June 30,						For six months ended June 30,
	2012			2011			2012			2011

Revenues:
HCO fees	$	192,240		$	187,213		$	390,497		$	360,469
MPN fees		181,310			147,363			364,346			284,670
Other		750,361			279,101			1,434,525			518,364
Total revenues		1,123,911			613,677			2,189,368			1,163,503

Expenses:
Depreciation & amortization		6,659			3,682			12,452			5,788
Consulting fees		114,877			105,882			210,693			185,227
Salaries & wages		369,604			219,974			795,198			428,636
Professional fees		69,187			50,770			118,275			96,952
Insurance		52,170			38,212			97,907			67,181
Outsource service fees		81,371			30,965			145,422			63,626
Data maintenance		13,853			9,249			20,684			17,093
General & administrative		107,291			87,223			213,064			193,525
Total expenses		815,012			545,957			1,613,695			1,058,028

Income from operations		308,899			67,720			575,673			105,475

Other income (expense):
Loss on disposal of assets		-			-			-			(1,564)
Interest income		191			252			381			536
Rental income		750			-			1,500
Interest (expense)		(201	)		(311	)		(431	)		(649	)
Total other income (expense)		740			(59)			1,450			(1,677)

Income before taxes		309,639			67,661			577,123			103,798

Income tax provision		123,257			22,283			234,370			31,511

Net income	$	186,382		$	45,378		$	342,753		$	72,287

Basic and fully diluted earnings per share:
Earnings per share amount	$	.23		$	.06		$	.43		$	.09
Weighted average common shares outstanding		802,424			802,424			802,424			802,424

Revenue

The total number of employee enrollees increased 27% during three months ended June 30, 2012 compared to June 30, 2011 Total revenues increased 81% to $1,123,911. As of June 30, 2012, we had approximately 403,000 total enrollees. Enrollment consisted of approximately 64,000 HCO enrollees and 339,000 MPN enrollees. By comparison as of June 30, 2011 we had approximately 318,000 total enrollees, including approximately 49,300 HCO enrollees and approximately 268,700 MPN enrollees.

The net increase in HCO and MPN enrollees of approximately 14,700 and 70,300, respectively from June 30, 2011 to June 30, 2012, was mainly the result of increased enrollment realized by our existing customers and the addition of four new HCO customers and three new MPN customers. Even though HCO enrollment increased approximately 22% year-on-year, compared to the quarter ended March 31, 2012, HCO enrollment decreased by 1,000 enrollees. By comparison, MPN enrollment increased by 16,000 enrollees quarter-on-quarter. While the economic slowdown impacted our revenue throughout fiscal 2011, we anticipate revenue will continue to be moderately higher throughout fiscal 2012.

In the current economic environment, we anticipate businesses will continue to seek ways to reduce their workers’ compensation program costs. As a result, we expect to experience client turnover, in the form of existing employer clients seeking to terminate or renegotiate the scope and terms of existing services. We also anticipate our market may shrink as some employers seek to reduce their costs by managing their workers’ compensation care services in-house. In response to the changing market, we have sought to expand our marketing efforts for some of the additional services we now offer our clients. As a result, during the quarter ended June 30, 2012, we realized increases in our MBR and UR services fee revenues.

Comments & Business Outlook

Mon, 02 Apr 2012 04:00:00 GMT

Please see our original premium research note from 3/19/2012 on our Tier One Pink Sheet blog.

Pacific Health Care Organization, Inc.

Consolidated Statements of Operations

	December 31, 2011			December 31, 2010
Revenues
HCO fees	$	770,303		$	607,450
MPN fees		627,341			605,238
Other		1,434,149			402,971
Total revenues		2,831,793			1,615,659

Expenses
Depreciation		13,595			5,691
Consulting fees		358,996			273,684
Salaries & wages		1,132,351			692,337
Professional fees		212,572			190,519
Insurance		151,227			105,495
Outsource service fees		190,917			24,302
Data maintenance		57,445			75,325
General & administrative		392,407			329,535

Total expenses		2,509,510			1,696,888

Income (loss) from operations		322,283			(81,229	)

Other income (expense)
Loss on disposal of assets		(1,564	)		-
Interest income		957			1,712
Rental income		250			-
Interest (expense)		(1,192	)		(1,606	)
Total other income (expense)		(1,549	)		106

Income (loss) before income tax provision		320,734			(81,123	)

Income tax provision (benefit)		122,499			(21,190	)

Net income (loss)	$	198,235		$	(59,933	)

Basic and fully diluted earnings per share:
Earnings per share amount	$	.25		$	(0.08	)
Weighted average common shares outstanding		802,424			802,424

GeoTeam® Note: 2011 vs. 2010 Fourth Quarter EPS: $0.07 vs. $0.05

The total number of employee enrollees increased 29% during 2011 compared to 2010. Total revenues during the same period increased 75% to $2,831,793. As of December 31, 2011, we had approximately 370,000 total enrollees. Enrollment consisted of approximately 65,000 HCO enrollees and 305,000 MPN enrollees. By comparison as of December 31, 2010 we had approximately 286,000 enrollees, including approximately 46,000 HCO enrollees and approximately 240,000 MPN enrollees.

The net increase in HCO and MPN enrollees of approximately 19,000 and 65,000, respectively, was mainly the result of adding three HCO and three MPN major customers during 2011. Although the economic slowdown impacted us in 2010 and 2011, there are signs that our revenues during 2012 will continue to grow.

Our business generally has a long sales cycle, typically in excess of one year. Once we have established a customer relationship, our revenue adjusts with the growth or retraction of our customers’ managed headcount volume. New customers are added throughout the year and other customers terminate from the program for a variety of reasons.

In the current economic environment, we anticipate businesses will continue to seek ways to further reduce their workers’ compensation program costs. Even though the HCO and MPN programs have been shown to create a favorable return on investment for employers (as our services are a significant component of the employers’ loss prevention programs), it is always a challenge to justify our fees to our customers, especially in this economy. In order to convince employers that HCO and/or MPN fees are well-spent, we must continue to provide a framework for expeditiously returning employees back to work at the lowest cost. As a result, we may experience some client turnover in the form of existing employer clients seeking to terminate or renegotiate the scope and terms of existing services. We also anticipate our market may shrink as some employers seek to reduce their costs by managing their workers’ compensation care services in-house.

Total revenues increased 75% during 2011 to $2,831,793. When compared to 2010, revenues for HCO, MPN and other revenues increased by 27%, 4% and 256%, respectively. The primary reason for the growth in other revenues category was the increased revenues in generated from MBR, and UR revenues resulting from MMC taking over the responsibilities of overseeing and managing the utilization review and medical bill review business previously managed by Medex.