EX-99.1 2 0002.txt PRESS RELEASE Concentra Reports Third Quarter Results Page 5 November 1, 2000 EXHIBIT 99.1 Contacts: Daniel J. Thomas Thomas E. Kiraly President and Executive Vice President and Chief Executive Officer Chief Financial Officer (972) 364-8111 (972) 364-8217 CONCENTRA OPERATING CORPORATION REPORTS THIRD QUARTER RESULTS ADDISON, Texas, November 1, 2000 - Concentra Operating Corporation ("Concentra") today announced financial results for the third quarter and nine- month period ended September 30, 2000. Due primarily to a strong performance by the Company's Health Services division, Concentra reported $33,104,000 in EBITDA which represented an increase of 18% over the results reported for the third quarter of the prior year. Revenues for the third quarter rose 9% to $192,764,000 from $176,658,000 in the same period last year. Operating income was $22,515,000 compared with an operating loss of $36,048,000 in the third quarter of 1999. Net income for the third quarter totaled $1,417,000 versus a net loss of $42,070,000 in the year- earlier quarter. Revenues for the nine months of 2000 rose 11% to $564,208,000 from $506,157,000 in the same period last year. Operating income was $62,100,000 compared with $2,096,000 in the first nine months of 1999. Year-to-date net income for the first nine months of 2000 totaled $4,046,000 versus a net loss of $24,476,000 in the year-earlier period. The Company's prior-year results reflected a non-recurring charge of $54,419,000 relating to Concentra's August 1999 recapitalization. Excluding this non-recurring charge, operating income and net income were $18,371,000 and $3,814,000, respectively, in the third quarter of 1999 and $56,515,000 and $21,408,000, respectively, for the first nine months of 1999. Earnings before interest, taxes, depreciation and amortization ("EBITDA"), as computed in a manner consistent with the definition set forth in the Company's $190 million Series A Senior Subordinated Notes, increased 18% to $33,104,000 in the third quarter of 2000 compared with $28,029,000 reported for the same period last year. For the first nine months of 2000, EBITDA totaled $92,768,000, representing an increase of 13% from $82,246,000 in the year- earlier period. Commenting on the results, Daniel J. Thomas, President and Chief Executive Officer of Concentra, said, "Our health services business, which set another record mark for quarterly revenues and EBITDA in the third quarter, continues to perform in an excellent manner and has contributed greatly to our overall growth. When combining this performance with the ongoing stability of our cost containment and case management services, we have been able to sustain the momentum that we have been building in our operations throughout 2000." Detailing the Company's progress in the third quarter, Thomas noted that Concentra's Health Services division continued to post solid internal growth in the third quarter, as revenues -MORE- Concentra Reports Third Quarter Results Page 6 November 1, 2000 in this business approached $106 million and increased to 55% of the Company's total revenue base. "Same-market revenues in health services have trended higher all year, rising 11% in the third quarter and 9.6% for the year to date," Thomas added. "Importantly, these gains have been primarily driven by an increase in patient visits. We are pleased by the same-market visit growth in both our injury care and non-injury related services. We continue to view non-injury care as a very positive and profitable means of attracting new business which often times leads to a broader relationship involving a more comprehensive service offering." During the third quarter, 52% of the total visits to Concentra's occupational healthcare centers related to non-injury care, unchanged from the second quarter of 2000 and up from 51% in the third quarter last year. As of September 30, 2000, Concentra had 216 centers located in 63 markets in 32 states. Thomas also noted that although he was pleased with achieving a stable performance in the Company's Specialized Cost Containment services and Field Case Management lines of business, Concentra has set firm goals for increasing the growth rate in these businesses. "As we've discussed in past quarters, our primary objective for our non-Health Services businesses as we approach 2001 is to achieve meaningful sales growth in our new service areas and to expand the base of accounts who rely upon our traditional service offerings," said Thomas. At September 30, 2000, Concentra had $19,500,000 drawn on its $100,000,000 revolving credit facility. A listen-only simulcast and replay of Concentra's third quarter conference call can be accessed at www.streetevents.com. The simulcast will begin at -------------------- approximately 8:00 a.m. Central Time tomorrow; a replay of this call will be available at approximately noon Central Time tomorrow and may be accessed until December 2, 2000. Concentra Operating Corporation, the successor to and a wholly-owned subsidiary of Concentra Managed Care, Inc., is the comprehensive outsource solution for containing healthcare and disability costs. Serving the occupational, auto, and group healthcare markets, Concentra provides employers, insurers and payors with a series of integrated services which include employment-related injury and occupational health care, in-network and out-of- network medical claims review and re-pricing, access to specialized preferred provider organizations, first notice of loss services, case management and other cost containment services. 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, interruption in its data processing capabilities, operational financing and strategic risks related to the Company's capital structure and growth strategy, possible fluctuations in quarterly and annual operations, possible legal liability for adverse medical consequences, competitive pressures, adverse changes in market conditions for -MORE- Concentra Reports Third Quarter Results Page 7 November 1, 2000 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- Concentra Reports Third Quarter Results Page 8 November 1, 2000 CONCENTRA OPERATING CORPORATION a wholly-owned subsidiary of CONCENTRA MANAGED CARE, INC. Unaudited Consolidated Statements of Operations (in thousands)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------- ------------------------------- 2000 1999 2000 1999 ------------- ------------- ------------- ------------- REVENUE: Health services $ 105,696 $ 89,857 $ 302,960 $ 242,421 Specialized cost containment 51,578 50,718 154,753 151,630 Field case management 35,490 36,083 106,495 112,106 ------------- ------------- ------------- ------------- Total revenue 192,764 176,658 564,208 506,157 COST OF SERVICES: Health services 82,299 71,371 239,407 191,757 Specialized cost containment 36,503 33,989 107,338 101,559 Field case management 31,609 33,628 95,136 99,613 ------------- ------------- ------------- ------------- Total cost of services 150,411 138,988 441,881 392,929 ------------- ------------- ------------- ------------- Gross profit 42,353 37,670 122,327 113,228 General and administrative expenses 16,149 15,957 49,314 47,218 Amortization of intangibles 3,689 3,342 10,913 9,495 Non-recurring charge - 54,419 - 54,419 ------------- ------------- ------------- ------------- Operating income (loss) 22,515 (36,048) 62,100 2,096 Interest expense 17,857 10,223 52,004 19,614 Interest income (104) (598) (515) (2,724) Other expense (income), net (140) (427) (263) (147) ------------- ------------- ------------- ------------- Income before income taxes 4,902 (45,246) 10,874 (14,647) Provision (benefit) for income taxes 3,485 (3,176) 6,828 9,829 ------------- ------------- ------------- ------------- Net income (loss) $ 1,417 $ (42,070) $ 4,046 $ (24,476) ============= ============= ============= =============
The consolidated statements of operations above include the post- recapitalization transaction operating results of Concentra Operating Corporation, a wholly-owned subsidiary of Concentra Managed Care, Inc. and the pre-recapitalization transaction operating results of Concentra Managed Care, Inc. The recapitalization transaction was completed on August 17, 1999. -MORE- CONCENTRA OPERATING CORPORATION a wholly-owned subsidiary of CONCENTRA MANAGED CARE, INC. Consolidated Balance Sheets (in thousands)
September 30, December 31, 2000 1999 --------------- -------------- ASSETS (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 5,355 $ 14,371 Accounts receivable, net 172,604 156,239 Prepaid expenses and other current assets 28,209 28,674 --------------- -------------- Total current assets 206,168 199,284 PROPERTY AND EQUIPMENT, NET 107,933 104,068 GOODWILL AND OTHER INTANGIBLE ASSETS, NET 327,926 324,984 OTHER ASSETS 26,231 25,768 --------------- -------------- $ 668,258 $ 654,104 =============== ============== LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Revolving credit facility $ 19,500 $ 4,000 Current portion of long-term debt 4,031 3,805 Accounts payable and accrued expenses 79,879 89,109 --------------- -------------- Total current liabilities 103,410 96,914 LONG-TERM DEBT, NET 557,891 559,942 DEFERRED INCOME TAXES AND OTHER LIABILITIES 41,584 36,521 STOCKHOLDER'S EQUITY (DEFICIT) (34,627) (39,273) --------------- -------------- $ 668,258 $ 654,104 =============== ==============
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