-----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, SLc9iL03u5mv4IqDxCQ9R4POwy/jV9YIGRp9S7xlbXi56rdLVJWHR9ozMArFWVo6 dMubHZ0WEGdmvyJLCQfGLw== 0000930661-97-002430.txt : 19971023 0000930661-97-002430.hdr.sgml : 19971023 ACCESSION NUMBER: 0000930661-97-002430 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971022 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971022 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VENCOR INC CENTRAL INDEX KEY: 0000740260 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 611055020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 033-30212 FILM NUMBER: 97698917 BUSINESS ADDRESS: STREET 1: 3300 PROVIDIAN CENTER STREET 2: 400 WEST MARKET STREET CITY: LOUISVILLE STATE: KY ZIP: 40202 BUSINESS PHONE: 5025967300 MAIL ADDRESS: STREET 1: 3300 PROVIDIAN CENTER STREET 2: 400 WEST MARKET ST CITY: LOUISVILLE STATE: KY ZIP: 40202 8-K 1 FORM 8-K ================================================================================ UNITED STATES 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): October 22, 1997 ---------------------------- VENCOR, INC. (Exact name of registrant as specified in its charter) Delaware 1-10989 61-1055020 (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation or organization) Identification No.) 400 West Market Street Louisville, Kentucky (Address of principal executive offices) 40202 (Zip Code) Registrant's telephone number, including area code: (502) 596-7300 Not Applicable (Former name or former address, if changed since last report.) ================================================================================ ITEMS 1-4. NOT APPLICABLE. ITEM 5. OTHER INFORMATION. On October 22, 1997, in connection with the third quarter earnings release, Vencor, Inc. (the "Company") announced that it expects fourth quarter earnings to approximate $0.40 to $0.45 per share. Excluding the effect of non-recurring charges, the Company reported earnings per share of $0.51 in the fourth quarter of 1996. A copy of the press release is included as an exhibit to this filing and is incorporated herein by reference. The above statements include forward-looking statements. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. Numerous factors exist which, in some cases have affected, and in the future could cause results to differ materially from these expectations. These statements involve risks and uncertainties concerning the implementation and interpretation of the healthcare reform legislation and other factors as detailed from time to time in the Company's filings with the Securities and Exchange Commission, including its Current Report on Form 8-K dated October 21, 1997. ITEM 6. NOT APPLICABLE. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. Exhibit 99.1 Press Release dated October 22, 1997 relating to downward earnings estimate for the fourth quarter of 1997. ITEMS 8-9. NOT APPLICABLE. 2 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 hereunto duly authorized. VENCOR, INC. Dated: October 22, 1997 By: /s/ W. Bruce Lunsford ------------------------- W. Bruce Lunsford Chairman of the Board, President and Chief Executive Officer 3 EX-99.1 2 PRESS RELEASE DATED OCT. 22, 1997 Exhibit 99.1 [LOGO OF VENCOR, INC. APPEARS HERE] Contact: W. Earl Reed, III Executive Vice President and Chief Financial Officer (502) 596-7380 VENCOR REPORTS THIRD QUARTER EARNINGS EXPECTS TO REPORT LOWER EARNINGS IN FOURTH QUARTER LOUISVILLE, Kentucky (October 22, 1997) Vencor, Inc. (NYSE: VC) today announced higher revenues and net income for the third quarter and nine months ended September 30, 1997. For the quarter, revenues totaled $844.7 million, up 30% from $650.6 million in the year-earlier period. Excluding an extraordinary charge, income from operations for the quarter totaled $36.9 million, or $0.52 per fully diluted share, up 10% from income from operations of $33.6 million, or $0.48 per fully diluted share, a year ago. For the quarter, Vencor recorded an extraordinary charge of $346,000, or $0.01 per share, related to the early extinguishment of debt. For the nine months, revenues totaled $2.30 billion, up 21% from $1.91 billion in the year-earlier period. Excluding an extraordinary charge, income from operations for the first nine months of 1997 totaled $107.9 million, or $1.52 per fully diluted share, up 17% from income from operations of $92.0 million, or $1.30 per fully diluted share, a year ago. For the nine month period, Vencor recorded an extraordinary charge of $4.2 million, or $0.06 per share, related to the early extinguishment of debt. The Company also announced today that it expects fourth quarter earnings to approximate $0.40 to $0.45 per share. Excluding the effect of non- recurring charges, the Company reported earnings per share of $0.51 in the fourth quarter of 1996. The downward revision in the earnings estimate is based primarily on management's recently completed analysis of the Balanced Budget Act of 1997 (the "Budget Act") and the expected impact of such legislation on both its business and the long-term healthcare industry in general. As the long-term industry transitions to the new Medicare prospective payment system (scheduled to be implemented on July 1, 1998), management believes that the volume of ancillary services provided per patient day to nursing center patients could decline and that sales of new contracts are likely to slow from historical levels. Accordingly, management expects that revenue growth rates in its Vencare contract services business may moderate, which could result in declining operating margins in the short term. In addition, in an effort to more rapidly execute its integrated network strategy, the Company expects to accelerate expenditures for marketing its full-service Vencare ancillary service products and implementing its clinical and financial information systems beyond previously anticipated levels. Costs associated with these actions are expected to negatively impact earnings for the remainder of this year and into 1998. 1 W. Bruce Lunsford, Chief Executive Officer, commented that, "Regulatory changes in the long-term care industry are increasingly requiring providers to develop cost-effective approaches of providing quality healthcare services. To meet these changes, our full service Vencare strategy must replace the fragmented industry practices of the past. Our commitment to accelerate the integrated network and enhance the systems supporting the network confirms our belief that this strategy positions us to respond to regulatory and competitive changes in the industry, including those caused by the Budget Act. While our profitability within Vencare will be adversely impacted in the short term, I am confident that changes resulting from the Budget Act have increased our growth potential over the long term. In addition, the current environment also provides us with significant opportunities to excel in the nursing center business. As patient acuity levels in nursing centers rise and our ability to manage costs becomes more critical, I believe that our nursing center margins could show considerable improvement." The above statements include forward-looking statements. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. Numerous factors exist which, in some cases have affected, and in the future could cause results to differ materially from these expectations. These statements involve risks and uncertainties concerning the implementation and interpretation of the healthcare reform legislation and other factors as detailed from time to time in the Company's filings with the Securities and Exchange Commission, including its Current Report on Form 8-K dated October 21, 1997. Vencor, a long-term healthcare company with over $3 billion in annual revenues, owns and operates a national network of hospitals, nursing centers and contract service providers in 46 states. 2 VENCOR, INC. FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------------- 1997 1996 1997 1996 --------- -------- ----------- ---------- Revenues...................................... $844,740 $650,551 $2,303,731 $1,911,442 Net income: Income from operations..................... $ 36,902 $ 33,558 $ 107,894 $ 92,033 Extraordinary loss on debt refinancing..... (346) - (4,195) - -------- -------- ---------- ---------- Net income........................... $ 36,556 $ 33,558 $ 103,699 $ 92,033 ======== ======== ========== ========== Earnings per common share: Primary: Income from operations.................. $ 0.52 $ 0.48 $ 1.52 $ 1.30 Extraordinary loss on debt refinancing.. (0.01) - (0.06) - -------- -------- ---------- ---------- Net income........................... $ 0.51 $ 0.48 $ 1.46 $ 1.30 ======== ======== ========== ========== Fully diluted: Income from operations.................. $ 0.52 $ 0.48 $ 1.52 $ 1.30 Extraordinary loss on debt refinancing.. (0.01) - (0.06) - -------- -------- ---------- ---------- Net income........................... $ 0.51 $ 0.48 $ 1.46 $ 1.30 ======== ======== ========== ========== Shares used in computing earnings per common share: Primary................................. 71,266 70,028 70,857 70,800 Fully diluted........................... 71,277 70,028 71,043 70,800
3 VENCOR, INC. CONDENSED CONSOLIDATED STATEMENT OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, -------------------- ------------------------ 1997 1996 1997 1996 --------- --------- ----------- ----------- Revenues......................................... $844,740 $650,551 $2,303,731 $1,911,442 -------- -------- ---------- ---------- Salaries, wages and benefits..................... 479,962 372,524 1,326,341 1,111,547 Supplies......................................... 81,148 64,967 224,509 191,150 Rent............................................. 23,954 19,681 64,685 57,950 Other operating expenses......................... 131,977 105,275 360,698 300,227 Depreciation and amortization.................... 33,385 24,787 87,236 74,426 Interest expense................................. 34,773 11,884 66,107 36,505 Investment income................................ (1,759) (3,132) (5,072) (10,010) -------- -------- ---------- ---------- 783,440 595,986 2,124,504 1,761,795 -------- -------- ---------- ---------- Income from operations before income taxes....... 61,300 54,565 179,227 149,647 Provision for income taxes....................... 24,398 21,007 71,333 57,614 -------- -------- ---------- ---------- Income from operations........................... 36,902 33,558 107,894 92,033 Extraordinary loss on extinguishment of debt, net of income tax benefit............... (346) - (4,195) - -------- -------- ---------- ---------- Net income........................... $ 36,556 $ 33,558 $ 103,699 $ 92,033 ======== ======== ========== ========== Earnings per common share and common equivalent share: Primary: Income from operations.................. $ 0.52 $ 0.48 $ 1.52 $ 1.30 Extraordinary loss on extinguishment of debt................................. (0.01) - (0.06) - -------- -------- ---------- ---------- Net income........................... $ 0.51 $ 0.48 $ 1.46 $ 1.30 ======== ======== ========== ========== Fully diluted: Income from operations.................. $ 0.52 $ 0.48 $ 1.52 $ 1.30 Extraordinary loss on extinguishment of debt................................. (0.01) - (0.06) - -------- -------- ---------- ---------- Net income........................... $ 0.51 $ 0.48 $ 1.46 $ 1.30 ======== ======== ========== ========== Shares used in computing earnings per common and common equivalent share: Primary.................................... 71,266 70,028 70,857 70,800 Fully diluted.............................. 71,277 70,028 71,043 70,800
Note: Certain prior year amounts have been reclassified to conform with the current year presentation. 4 -----END PRIVACY-ENHANCED MESSAGE-----