EX-99.1 3 dex991.txt PRESS RELEASE DATED 2/11/2002 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 fourth quarter results ADDISON, Texas, February 11, 2002 - Concentra Operating Corporation ("Concentra") today announced results for the fourth quarter and year ended December 31, 2001. Excluding charges incurred in connection with its acquisition of National Healthcare Resources, Inc. ("NHR"), Concentra reported $27,693,000 in EBITDA for the quarter and $131,095,000 for the year. Revenue for the fourth quarter was $223,675,000 as compared to $187,953,000 in the prior year. Including charges of $6,065,000 associated with the acquisition of NHR, operating income was $8,981,000 compared with $15,518,000 for the same period last year. Net loss for the quarter was $6,685,000 compared with $9,777,000 for the fourth quarter of 2000. Revenue for the full year was $842,908,000 as compared to $752,161,000 for 2000. Including charges associated with the NHR acquisition, for the year, operating income was $80,884,000 as compared to $77,618,000 in 2000. Net loss for the year was $9,720,000 compared with $6,813,000 for the prior year. In November of 2001, through an exchange of common stock, Concentra completed its acquisition of NHR, a New York City-based provider of care management and network services to the workers' compensation and auto industries. Due to the fact that Concentra's largest shareholder, Welsh, Carson, Anderson & Stowe, also owned 48% of the equity of NHR, to comply with accounting rules related to the treatment of acquisitions of "entities under common control," Concentra was required to expense 48% of the severance expenses, facilities consolidation costs and asset write-downs that normally would have been capitalized as "goodwill" in the case of an acquisition accounted for under the "purchase method" of accounting. During the quarter, Concentra incurred a charge of $5,519,000 associated with this accounting standard. Additionally, Concentra incurred a charge of $546,000 in non-recurring expenses related to severance expenses and facilities consolidation costs associated with the acquisition that would have been charged to earnings irrespective of the "common control" nature of the acquisition. Under "common control" accounting rules, Concentra has also reflected a non-operating share of 48% of the after-tax net income of NHR for periods prior to the date of the acquisition. In November of 2001, the Company also completed its acquisition of Health Network Systems, Inc. ("HNS"), a provider of network services. For the two months following the completion of the transactions, Concentra consolidated $25,927,000 in combined revenues and $2,459,000 in EBITDA from its NHR and HNS acquisitions. -MORE- Concentra Announces Fourth Quarter Results Page 2 February 11, 2002 Consolidated Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA"), excluding charges incurred in connection with the acquisition of NHR, increased to $27,693,000 in the fourth quarter of 2001 versus $26,532,000 in the same quarter last year. For the year, EBITDA increased to $131,095,000 from $119,300,000 during the prior year. Commenting on the results, Daniel J. Thomas, President and Chief Executive Officer of Concentra, said, "We're pleased to have concluded another year of strong revenue and EBITDA growth. During the past year, our network and care management businesses contributed greatly to the Company's performance. Despite the dampening effects that the downturn in the nation's economy has had on our occupational health services, we were able to compensate for these pressures through an exceptional performance in our two other primary lines of service. "We're well positioned to continue our track record of growth in 2002," said Thomas. "Despite the economic slow-down, we were able to sustain essentially the same earnings performance in our Health Services segment and to expand the reach of our centers. With the economy showing preliminary signs of stabilizing, we should be in a position to re-establish the growth we've traditionally seen in this strategic part of our business. Additionally, with the revenue and EBITDA growth trends we've been able to establish in our network and care management services businesses, and the acquisition of NHR, we should be able to achieve significant growth in our earnings from these other key business segments in the coming year." As has been the case throughout 2001, Concentra's growing EBITDA and focus on working capital management continued to be key drivers in the Company's ability to achieve increasing cash flows from operations. For the year ended December 31, 2001, Concentra produced $89,334,000 in positive cash flow from operations as compared to $38,849,000 generated during 2000. As a result of these stronger operating cash flows, Concentra had borrowings of only $6 million outstanding under its $100,000,000 revolving credit facility at the end of the year, despite its use of $21 million in revolver borrowings in November as a source for the retirement of pre-existing NHR indebtedness. Concentra Operating Corporation, the successor to and a wholly owned subsidiary of Concentra 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. Concentra provides its services to over 130,000 employers and 3,000 insurance companies, health plans and third party administrators nationwide. -MORE- Concentra Announces Fourth Quarter Results Page 3 February 11, 2002 A public, listen-only simulcast of Concentra's third quarter conference call will begin at 9:00 a.m. Eastern Daylight Time tomorrow (February 12, 2002) and may be accessed via the Company's web site, http://www.concentra.com. Investors are requested to access the call at least 15 minutes before the scheduled start time in order to complete a brief registration form and receive an access password. Listening via the Internet requires Windows Media Player Version 7, which may be downloaded free of charge from the Company's website. An online replay will be available shortly after the conclusion of the live broadcast using the same link and will continue through March 12, 2002. 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 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 Fourth Quarter Results Page 4 February 11, 2002
CONCENTRA OPERATING CORPORATION a wholly owned subsidiary of CONCENTRA INC. Unaudited Consolidated Statements of Operations (in thousands) Three Months Ended Year Ended December 31, December 31, ------------------------------- ------------------------------- 2001 2000 2001 2000 ------------- ------------- ------------- ------------- REVENUE: Health Services $ 101,746 $ 96,700 $ 429,326 $ 399,660 Network Services 52,422 43,737 185,267 162,596 Care Management Services 69,507 47,516 228,315 189,905 ------------ ------------- ------------- ------------- Total revenue 223,675 187,953 842,908 752,161 COST OF SERVICES: Health Services 88,497 82,377 348,767 321,784 Network Services 30,904 24,561 110,187 100,741 Care Management Services 60,856 44,605 200,166 170,899 ------------ --------------- ------------- ------------- Total cost of services 180,257 151,543 659,120 593,424 ------------ ------------- ------------- ------------- Total gross profit 43,418 36,410 183,788 158,737 General and administrative expenses 23,946 17,177 81,098 66,491 Amortization of intangibles 4,426 3,715 15,741 14,628 Non-recurring charge 546 - 546 - Charges for acquisition of affiliate 5,519 - 5,519 - ------------ ------------- ------------- ------------- Operating income 8,981 15,518 80,884 77,618 Interest expense, net 16,442 16,640 66,669 68,129 (Gain) loss on fair value of hedging arrangements (2,951) 6,822 13,602 9,586 Loss of acquired affiliate, net of tax 3,224 209 5,833 262 Other, net 133 (462) 743 (725) ------------ ------------- ------------- ------------- Income (loss) before income taxes (7,867) (7,691) (5,963) 366 Provision (benefit) for income taxes (1,182) (731) 3,757 4,362 ------------ -------------- ------------- ------------- Loss before effect of accounting change (6,685) (6,960) (9,720) (3,996) Cumulative effect of accounting change, net of tax - 2,817 - 2,817 ------------ ------------- ------------- ------------- Net loss $ (6,685) $ (9,777) $ (9,720) $ (6,813) ============ ============== ============== ==============
Prior-year revenue and cost of services have been reclassified to conform to the Company's current reporting of business segments. -MORE- Concentra Reports Fourth Quarter Results Page 5 February 11, 2002
CONCENTRA OPERATING CORPORATION a wholly owned subsidiary of CONCENTRA INC. Unaudited Consolidated Balance Sheets (in thousands) December 31, December 31, 2001 2000 ------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 7,308 $ 6,549 Accounts receivable, net 181,023 160,418 Prepaid expenses and other current assets 38,760 24,679 ------------- ------------- Total current assets 227,091 191,646 PROPERTY AND EQUIPMENT, NET 132,302 109,110 GOODWILL AND OTHER INTANGIBLE ASSETS, NET 475,500 323,162 OTHER ASSETS 32,072 58,751 ------------- ------------- $ 866,965 $ 682,669 ============= ============= LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Revolving credit facility $ 6,000 $ -- Current portion of long-term debt 4,211 5,228 Accounts payable and accrued expenses 133,908 70,189 ------------- ------------- Total current liabilities 144,119 75,417 LONG-TERM DEBT, NET 552,270 556,334 LONG-TERM DEFERRED TAX AND OTHER LIABILITIES 67,094 51,589 FAIR VALUE OF HEDGING ARRANGEMENTS 25,883 9,586 STOCKHOLDER'S EQUITY (DEFICIT) 77,599 (10,257) -------------- ------------- $ 866,965 $ 682,669 ============= =============
-MORE- Concentra Reports Fourth Quarter Results Page 6 February 11, 2002
CONCENTRA OPERATING CORPORATION a wholly owned subsidiary of CONCENTRA INC. Reconciliation of Net Loss to EBITDA, Excluding Acquisition Charges (in thousands) Three Months Ended Year Ended December 31, December 31, ------------------------------- ------------------------------- 2001 2000 2001 2000 ------------- ------------- ------------- ------------- Net loss $ (6,685) $ (9,777) $ (9,720) $ (6,813) Cumulative effect of accounting change, net of tax - 2,817 - 2,817 Provision (benefit) for income taxes (1,182) (731) 3,757 4,362 Interest expense, net 16,442 16,640 66,669 68,129 (Gain) loss on fair value of hedging arrangements (2,951) 6,822 13,602 9,586 Loss of acquired affiliate, net of tax 3,224 209 5,833 262 Other, net 133 (462) 743 (725) ------------- ------------- ------------- ------------- Operating income 8,981 15,518 80,884 77,618 Charges for acquisition of affiliate 5,519 - 5,519 - Non-recurring charge 546 - 546 - Depreciation expense 8,268 6,881 29,086 26,193 Amortization of intangibles 4,426 3,715 15,741 14,628 Minority interest (47) 418 (681) 861 ------------- ------------- ------------- ------------- EBITDA, excluding acquisition charges $ 27,693 $ 26,532 $ 131,095 $ 119,300 ============= ============= ============= =============
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