-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OR14VmUt/S9jPduB/2bNErlm5lNRe67UIzOxXpTJTgNBUCXRjcJH/hkOHbjIoyU0 bAMum55KnLYDriIOL6wF9g== 0001047469-99-003295.txt : 19990205 0001047469-99-003295.hdr.sgml : 19990205 ACCESSION NUMBER: 0001047469-99-003295 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990204 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCENTRA MANAGED CARE INC CENTRAL INDEX KEY: 0001038528 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 043363415 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22751 FILM NUMBER: 99520999 BUSINESS ADDRESS: STREET 1: 312 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173672163 MAIL ADDRESS: STREET 1: 312 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 4, 1999 ------------------- CONCENTRA MANAGED CARE, INC. (Exact name of Registrant as specified in its charter) DELAWARE 000-22751 04-3363415 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification Number) 312 UNION WHARF BOSTON, MASSACHUSETTS 02109 (Address of principal (Zip code) executive offices) Registrant's telephone number, including area code: (617) 367-2163 NOT APPLICABLE (former address if changed since last report) -MORE- ITEM 5. OTHER EVENTS See the press release attached hereto as Exhibit 99.1 dated February 4, 1999 announcing revenues and earnings for the quarter and year ended December 31, 1998 for Concentra Managed Care, Inc. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) EXHIBITS 99.1 Press Release of the Registrant dated February 4, 1999. -MORE- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONCENTRA MANAGED CARE, INC. (Registrant) By: /s/ Richard A. Parr ------------------- Name: Richard A. Parr II Title: Executive Vice President and General Counsel Date: February 4, 1999 -MORE- INDEX TO EXHIBITS
EXHIBIT NUMBER PAGE - ------- ---- 99.1 Press Release of Registrant dated February 4, 1999
-MORE- EX-99.1 2 EX. 99.1 EXHIBIT 99.1 Contact: Joseph F. Pesce, CFO Concentra Managed Care, Inc. (617) 367-2163, Ext. 5101 CONCENTRA MANAGED CARE REPORTS FOURTH QUARTER AND YEAR-END RESULTS BOSTON, Mass. (February 4, 1999) - Concentra Managed Care, Inc. (Nasdaq/NM: CCMC) today announced revenues and earnings for the fourth quarter and year ended December 31, 1998. Revenues for the fourth quarter increased 14% to $153,450,000 from $134,797,000 in the same period last year. Operating income for the quarter totaled $14,360,000 compared with $17,779,000 last year. Net income for the fourth quarter was $7,136,000 or $0.15 per diluted share versus pro forma net income of $8,217,000 or $0.17 per diluted share a year ago. For the year ended December 31, 1998, revenues increased 25% to $616,780,000 from $493,879,000 for 1997. Operating income for 1998 was $88,981,000 compared with $71,676,000 last year. Net income for 1998 totaled $44,189,000 or $0.93 per diluted share versus pro forma net income of $36,229,000 or $0.78 per diluted share last year. The results described above for the fourth quarter of 1998 exclude a non-recurring charge of $20,514,000 ($12,103,000 after-tax or $0.26 per diluted share), which primarily consists of expenses related to severance, facility closings and consolidation, and the write-off of certain assets. Similarly, results for the full year ended December 31, 1998, exclude non-recurring charges totaling $33,114,000 ($21,703,000 after-tax), reflecting both the fourth quarter charge as well as a charge of $12,600,000 reported in the first quarter of 1998 related to fees and expenses primarily associated with the February 1998 acquisition of Preferred Payment Systems. The results for the year ended December 31, 1997, exclude a non-recurring charge of $38,625,000 ($29,040,000 after-tax) related to the August 1997 merger of Concentra's predecessor companies. "The past several months have marked a distinct transition for our Company as Concentra has shifted its focus from achieving top-line growth to a goal of stable and consistent profitability over the long-term," said Daniel J. Thomas, President and Chief Executive Officer of the Company. "Some of the business we added in late 1997 and early 1998, particularly for field case management and cost containment services, provided substantial additions to our revenues. Yet, because of discounted pricing and start-up costs, this new business generated minimal incremental earnings. Moreover, our focus on revenue expansion distracted our attention from issues concerning the implementation of new technology and the integration of our services, both of which we believe will ultimately lead to more efficient and effective business processes and, in turn, better information and outcomes for our customers. -MORE- "As the expenses associated with workplace safety and injury care continue to mount, there is no question that the markets we serve, including workers' compensation, auto and disability insurance, remain strong," he continued. "Concentra continues to be well-positioned to serve these growing markets with a full continuum of services that address the entire injury episode. Based on this continuum, Concentra has the unique ability to bundle service solutions to minimize the cost of injury care, speed recovery, and get people back to work as quickly as possible. "While the industry backdrop is positive, however, we know there is significant work still to be done in redefining our business model to meet the needs and expectations of our customers and stockholders. We have made headway in renegotiating certain underperforming contracts and reallocating our resources in light of current business conditions. Also, we have commenced a number of new technology initiatives that will allow us to integrate our people, services and systems more effectively, manage our business better, and improve the outcomes of the services we offer to customers. While these efforts will not begin to benefit our operations in any substantial way until 2000 and beyond, we believe they will ultimately enable us to expand the Company's revenue base and achieve higher profit margins. "As we continue to focus on profitability and investment in new technologies and processes, we expect to see overall revenue growth slow to about 15% for 1999. Additionally, many of these new initiatives will have a near-term adverse impact on margins and earnings. Consequently, we project earnings per diluted share of approximately $0.90 to $0.95 for 1999. These expectations should be viewed in the context of the results for the second half of 1998 following the initiation of these changes. Beyond 1999, we anticipate that total revenues will grow in the 12% to 15% range and annual earnings growth will re-accelerate to a range of approximately 15% to 18%," he concluded. Thomas noted that the Company has completed a number of transactions since September 30, 1998, which have added 18 occupational medicine centers to Concentra's health services division. Several of these transactions, which increased the number of centers in the Company's nationwide network to 156 at year end and 169 at the present date, involved joint ventures with hospital systems and entry into new markets. Concentra believes it will be able to continue its expansion strategy in 1999 by adding approximately 15 to 20 more centers during the balance of the year. Separately, the Company announced that as a result of the non-recurring charge taken in the fourth quarter of 1998, it was not in compliance with certain leverage ratio covenants of the Senior Credit Facility. The Company has requested, and received, a temporary waiver from all of its lenders of any such default. Currently, there are no borrowings outstanding under this facility. Concentra also reported that the Special Committee of the Board of Directors continues to work with its advisor, BT Alex. Brown, to evaluate the various strategic alternatives available to the Company. The Board formed this committee late last year to consider a range of options, including remaining independent and pursuing its existing or a modified strategy, or pursuing one of the expressions of interest received by the Company regarding the possible acquisition of some -MORE- CCMC Reports Year-end Results Page 7 February 4, 1999 or all of the Company's common stock. The Special Committee plans to complete its evaluation and make a recommendation to the full Board of Directors by the end of the first quarter of 1999. Concentra Managed Care is the leading provider and comprehensive outsource solution for cost containment and fully integrated care management in the occupational, auto, and group healthcare markets. Concentra offers prospective and retrospective services to employers and insurers of all sizes, providing pre-employment testing, loss prevention services, first report of injury, injury care, specialist networks and specialized cost containment to the disability and automobile injury markets. At December 31, 1998, the Company had 89 field case management offices, with approximately 1,100 field case managers who provide medical management and return to work services in 49 states, the District of Columbia, and Canada. The Company also had 85 service locations that provide specialized cost containment services including utilization management, telephonic case management, and retrospective bill review. The Company operates the nation's largest network of occupational healthcare centers, managing the practices of 278 physicians located in 156 centers in 45 markets in 24 states as of December 31, 1998. This press release contains certain forward-looking statements, which the Company is making in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that the Company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the potential adverse impact of governmental regulation on the Company's operations, consummation of transactions involving the acquisition of some or all of the Company's common stock and related financing transactions, and interruption in its data processing capabilities, operational financing and strategic risks related to the Company's growth strategy, possible fluctuations in quarterly and annual operations, and possible legal liability for adverse medical consequences, competitive pressures, adverse changes in market conditions for the Company's services, and dependence on key management personnel. Additional factors include those described in the Company's filings with the Securities and Exchange Commission. -MORE- CCMC Reports Year-end Results Page 8 February 4, 1999 CONCENTRA MANAGED CARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ------------------------------ ------------------------------ 1998 1997 1998 1997 ------------- ------------- ------------- ------------- RESTATED RESTATED REVENUES: Field case management $ 39,576,000 $ 36,552,000 $ 167,841,000 $ 138,723,000 Specialized cost containment 46,544,000 41,024,000 183,734,000 142,919,000 ------------- ------------- ------------- ------------- Managed care services 86,120,000 77,576,000 351,575,000 281,642,000 Health services 67,330,000 57,221,000 265,205,000 212,237,000 ------------- ------------- ------------- ------------- Total revenues 153,450,000 134,797,000 616,780,000 493,879,000 ------------- ------------- ------------- ------------- COST OF SERVICES: Managed care services 68,128,000 59,603,000 268,116,000 217,263,000 Health services 57,279,000 44,762,000 205,986,000 158,987,000 ------------- ------------- ------------- ------------- Total cost of services 125,407,000 104,365,000 474,102,000 376,250,000 ------------- ------------- ------------- ------------- Total gross profit 28,043,000 30,432,000 142,678,000 117,629,000 General and administrative expenses 11,654,000 10,684,000 45,530,000 40,008,000 Amortization of intangibles 2,029,000 1,969,000 8,167,000 5,945,000 Non-recurring charge 20,514,000 -- 33,114,000 38,625,000 ------------- ------------- ------------- ------------- Operating (loss) income (6,154,000) 17,779,000 55,867,000 33,051,000 Interest expense 4,898,000 3,773,000 18,021,000 12,667,000 Interest income (1,720,000) (83,000) (4,659,000) (2,297,000) Other, net 130,000 584,000 711,000 1,619,000 ------------- ------------- ------------- ------------- (Loss) income before income taxes (9,462,000) 13,505,000 41,794,000 21,062,000 (Benefit) provision for income taxes (4,495,000) 4,903,000 19,308,000 11,062,000 ------------- ------------- ------------- ------------- Net (loss) income $ (4,967,000) $ 8,602,000 $ 22,486,000 $ 10,000,000 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Pro forma net income* $ 8,217,000 $ 7,189,000 ------------- ------------- ------------- ------------- Basic pro forma and actual (loss) earnings per share* $ (0.11) $ 0.19 $ 0.48 $ 0.17 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Weighted average common shares outstanding 47,092,000 43,346,000 46,451,000 42,774,000 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Diluted pro forma and actual (loss) earnings per share* $ (0.11) $ 0.17 $ 0.47 $ 0.16 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Weighted average common shares and equivalents outstanding 47,092,000 47,793,000 47,827,000 46,895,000 ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
* Net income and earnings per share for the three and twelve months ended December 31, 1997, have been calculated as if Preferred Payment Systems, Inc. ("PPS") had been subject to federal and state income taxes for the entire period, based upon an effective tax rate indicative of the statutory rates in effect. Prior to its acquisition by the Company during the first quarter of 1998, PPS elected to be taxed as an S Corporation and, accordingly, was not subject to federal and state income taxes in certain jurisdictions. -MORE- CCMC Reports Year-end Results Page 9 February 4, 1999 CONCENTRA MANAGED CARE, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
DECEMBER 31, DECEMBER 31, 1998 1997 ------------- ------------- RESTATED ASSETS CURRENT ASSETS: Cash and cash equivalents $ 104,478,000 $ 12,576,000 Marketable securities 5,000,000 -- Accounts receivable, net 128,522,000 106,963,000 Prepaid expenses, tax assets and other current assets 29,706,000 26,212,000 ------------- ------------- Total current assets 267,706,000 145,751,000 PROPERTY AND EQUIPMENT, AT COST 139,414,000 104,054,000 Less: Accumulated depreciation and amortization (52,478,000) (38,351,000) ------------- ------------- NET PROPERTY AND EQUIPMENT 86,936,000 65,703,000 GOODWILL AND OTHER INTANGIBLE ASSETS, NET 280,377,000 262,592,000 MARKETABLE SECURITIES 10,583,000 -- OTHER ASSETS 11,561,000 8,925,000 ------------- ------------- $ 657,163,000 $ 482,971,000 ------------- ------------- ------------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Revolving credit facilities $ -- $ 49,000,000 Current portion of long-term debt 55,000 7,497,000 Accounts payable, accrued income tax and expenses 65,281,000 52,136,000 ------------- ------------- Total current liabilities 65,336,000 108,633,000 LONG-TERM DEBT, NET OF CURRENT PORTION 327,870,000 150,103,000 DEFERRED INCOME TAXES AND OTHER LIABILITIES 24,082,000 17,794,000 STOCKHOLDERS' EQUITY: Common stock 471,000 436,000 Paid-in capital 270,654,000 257,022,000 Unrealized gain on marketable securities 60,000 -- Retained deficit (31,310,000) (51,017,000) ------------- ------------- Total stockholders' equity 239,875,000 206,441,000 ------------- ------------- $ 657,163,000 $ 482,971,000 ------------- ------------- ------------- -------------
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