-----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, WWFnr4E9x5sRSZPyxhVsKLFmXm+nVSC6TqknZgKF5jrJWUwN5DNNNpSOuU+x6rMu txQPEepWeSpWy6Z7R6jbzg== 0000930661-02-001530.txt : 20020509 0000930661-02-001530.hdr.sgml : 20020509 ACCESSION NUMBER: 0000930661-02-001530 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020506 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCENTRA OPERATING CORP CENTRAL INDEX KEY: 0001098690 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 752822620 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15699 FILM NUMBER: 02639926 BUSINESS ADDRESS: STREET 1: 5080 SPECTRUM DRIVE STREET 2: SUITE-400 WEST TOWER CITY: ADDISON STATE: TX ZIP: 75001 BUSINESS PHONE: 9723648000 MAIL ADDRESS: STREET 1: 5080 SPECTRUM DRIVE STREET 2: SUITE-400 WEST TOWER CITY: ADDISON STATE: TX ZIP: 75001 8-K 1 d8k.txt 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): May 6, 2002 ------------------- CONCENTRA OPERATING CORPORATION (Exact name of Registrant as specified in its charter) Nevada 001-15699 75-2822620 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification Number) 5080 Spectrum Drive Suite 400 - West Tower 75001 Addison, Texas (Zip code) (Address of principal executive offices) Registrant's telephone number, including area code: (972) 364-8000 Not Applicable (former address if changed since last report) Item 5. Other Events See the press release attached hereto as Exhibit 99.1 dated May 6, 2002, announcing Concentra Operating Corporation's financial results for the quarter ended March 31, 2002. Item 7. Financial Statements and Exhibits (c) Exhibits 99.1 Press Release of the Registrant dated May 6, 2002 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 OPERATING CORPORATION (Registrant) By: /s/ Richard A. Parr II -------------------------------------------- Name: Richard A. Parr II Title: Executive Vice President, General Counsel & Secretary Date: May 9, 2002 INDEX TO EXHIBITS EXHIBIT NUMBER 99.1 Press Release of the Registrant dated May 6, 2002 EX-99.1 3 dex991.txt PRESS RELEASE 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 FIRST QUARTER RESULTS ADDISON, Texas, May 6, 2002 - Concentra Operating Corporation ("Concentra") today announced results for the first quarter ended March 31, 2002. The Company reported Consolidated Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA") of $30,084,000 in the first quarter of 2002 versus $29,024,000 in the same quarter last year. Revenue for the first quarter increased 19% to $238,380,000 from $200,758,000 in the year-earlier quarter. Operating income increased 8% to $20,313,000 from $18,767,000 in the same period last year. Net income for the quarter totaled $5,145,000 compared with a net loss of $5,438,000 for the first quarter of 2001. Results for the first quarter included one-time revenue and expense adjustments related to a change in accounting estimate for accounts receivable reserves. Following an extensive review of the Company's accounts receivable history and collection experience, utilizing new data provided by recently implemented information systems, Concentra determined that additional sales allowances and bad debt reserves of $7,106,000 were required as of March 31, 2002. This reserve increase related primarily to the Company's Health Services segment, offset by reserve reductions in other segments. This analysis also indicated that the reserve amounts being provided for current billings are sufficient and need no adjustment at this time. These additional allowances were the primary contributing factors to a decrease in the Company's days sales outstanding ("DSO") from 73 days at the conclusion of 2001 to 66 days at March 31, 2002, which reflects the lowest level in the Company's history since its formation in 1997. Through an increased focus on collections and working capital management, the Company's DSO has been declining from a peak of 83 days in September of 1999 to its new level. This net addition to receivables allowances was partially offset by a one-time $3,867,000 reduction in employee benefits during the quarter. Excluding these adjustments, the Company's EBITDA for the first quarter of 2002 would have been $33,323,000. Commenting on the results, Daniel J. Thomas, President and Chief Executive Officer of Concentra, said, "We are pleased to report that Concentra has continued to turn in a solid operational and financial performance in spite of the generally challenging national economic conditions that have restrained employment growth and hiring activities, which are key drivers for our Health Services and other workers' compensation-related businesses. Nevertheless, we saw good overall operating results during the quarter, despite the one-time adjustments which affected the quarter. This relatively strong operating performance relates both to year-over-year growth in our Care Management Services segment and to the initial effects of the synergies which we are realizing from our acquisition of National Healthcare Resources, Inc." -MORE- Concentra Announces First Quarter Results Page 2 May 6, 2002 Commenting specifically about the Company's Health Services segment, Thomas noted that visit trends continued to reflect a year-over-year decline in the first quarter due to the ongoing effects of lower nationwide employment and related injury trends. "Even though we remained largely on track for revenue and EBITDA growth in the first quarter, we currently believe the economic slowdown we have faced during the quarter has been deeper and more protracted than we originally expected," said Thomas. However, Thomas also stated that the Company has been seeing improvement in these trends during the second quarter and believes that the Company's performance will benefit from this apparent recovery in job growth. At March 31, 2002, due primarily to seasonal working capital requirements, Concentra had borrowings of $21,500,000 outstanding under its $100,000,000 revolving credit facility. This compares with borrowings of $17,000,000 at the year-earlier date. The Company stated that higher year-over-year borrowings relate primarily to the Company's use of approximately $20 million in revolver borrowings as a part of its financing for its acquisition of National Healthcare Resources, Inc. in November of 2001. Concentra's first quarter net income was positively affected by a $5,190,000 gain in the value of the Company's interest rate hedging arrangements as compared to a decrease in value of $6,726,000 during the first quarter of 2001. The increase in fair value of the Company's fixed-rate hedging arrangements was primarily the result of a general increase in interest rate expectations during the quarter. Changes in the fair value of the Company's hedging arrangements are non-cash in nature and will ultimately offset each other on a cumulative basis if Concentra holds the underlying instruments to maturity. Additionally, Concentra's net income benefited from the effects of adopting Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangibles," as of December 31, 2001. Under this new accounting standard, Concentra is required to discontinue its amortization of goodwill for periods subsequent to 2001. During the first quarter, the Company had amortization expense of $929,000 as compared to $3,677,000 during the same period last year. On a pro-forma basis, the Company would have amortized $69,000 during the first quarter of 2001 had this new accounting standard been in effect during that comparative period. 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 First Quarter Results Page 3 May 6, 2002 A public, listen-only simulcast of Concentra's first quarter conference call will begin at 9:00 a.m. Eastern Daylight Time tomorrow (May 7, 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. An online replay will be available shortly after the conclusion of the live broadcast using the same link and will continue through June 7, 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, changes in nationwide employment and workplace injury trends, 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 Announces First Quarter Results Page 4 May 6, 2002 CONCENTRA OPERATING CORPORATION a wholly owned subsidiary of CONCENTRA INC. Unaudited Consolidated Statements of Operations (in thousands)
Three Months Ended March 31, ------------------------------- 2002 2001 ------------- ------------- REVENUE: Health Services $ 101,676 $ 106,352 Network Services 57,229 42,345 Care Management Services 79,475 52,061 ------------- ------------- Total revenue 238,380 200,758 COST OF SERVICES: Health Services 93,826 88,101 Network Services 33,551 26,247 Care Management Services 67,372 45,295 ------------- ------------- Total cost of services 194,749 159,643 ------------- ------------- Total gross profit 43,631 41,115 General and administrative expenses 22,389 18,671 Amortization of intangibles 929 3,677 ------------- ------------- Operating income 20,313 18,767 Interest expense, net 16,421 16,910 (Gain) loss on fair value of hedging arrangements (5,190) 6,726 Loss of acquired affiliate, net of tax - 1,116 Other, net 368 7 ------------- ------------- Income (loss) before income taxes 8,714 (5,992) Provision (benefit) for income taxes 3,569 (554) ------------- ------------- Net income (loss) $ 5,145 $ (5,438) ============= =============
Concentra's first quarter 2001 bad debt expense of $2.7 million has been reclassified from a reduction to revenue to cost of services to conform to the classifications used in 2002. This reclassification resulted from a change in Concentra's process and methodology for estimating bad debt and sales allowances. -MORE- Concentra Announces First Quarter Results Page 5 May 6, 2002 CONCENTRA OPERATING CORPORATION a wholly owned subsidiary of CONCENTRA INC. Unaudited Consolidated Balance Sheets (in thousands)
March 31, December 31, 2002 2001 ------------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 8,327 $ 7,308 Accounts receivable, net 175,677 181,023 Prepaid expenses and other current assets 37,509 38,760 ------------- ------------- Total current assets 221,513 227,091 PROPERTY AND EQUIPMENT, NET 131,293 132,302 GOODWILL AND OTHER INTANGIBLE ASSETS, NET 478,489 475,500 OTHER ASSETS 32,312 32,072 ------------- ------------- $ 863,607 $ 866,965 ============= ============= LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Revolving credit facility $ 21,500 $ 6,000 Current portion of long-term debt 5,106 4,211 Accounts payable and accrued expenses 113,485 133,908 ------------- ------------- Total current liabilities 140,091 144,119 LONG-TERM PORTION OF DEBT 551,242 552,270 DEFERRED INCOME TAXES AND OTHER LIABILITIES 67,156 67,094 FAIR VALUE OF HEDGING ARRANGEMENTS 20,694 25,883 STOCKHOLDER'S EQUITY 84,424 77,599 ------------- ------------- $ 863,607 $ 866,965 ============= =============
-MORE- Concentra Announces First Quarter Results Page 6 May 6, 2002 CONCENTRA OPERATING CORPORATION a wholly owned subsidiary of CONCENTRA INC. Reconciliation of Net Income (Loss) to EBITDA (in thousands)
Three Months Ended March 31, ------------------------------- 2002 2001 ------------- ------------- Net (income) loss $ 5,145 $ (5,438) Provision (benefit) for income taxes 3,569 (554) Interest expense, net 16,421 16,910 (Gain) loss on fair value of hedging arrangements (5,190) 6,726 Equity in loss of acquired affiliate, net of tax -- 1,116 Other, net 368 7 ------------- ------------- Operating income 20,313 18,767 Depreciation expense 9,195 6,576 Amortization of intangibles 929 3,677 Minority interest (353) 4 ------------- ------------- EBITDA $ 30,084 $ 29,024 ============ ============
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