-----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, RcSpYsSGGwvTPZw5k9r3mWAzqsi1V4a1/+C7AuVRoK7r6UKV4F+c1TjgSPIu5cUK NkQzpQ//IVzeccJad+ZvaQ== 0000899243-01-000180.txt : 20010205 0000899243-01-000180.hdr.sgml : 20010205 ACCESSION NUMBER: 0000899243-01-000180 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010201 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US ONCOLOGY INC CENTRAL INDEX KEY: 0000943061 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 841213501 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26190 FILM NUMBER: 1521829 BUSINESS ADDRESS: STREET 1: 16825 NORTHCHASE DR STREET 2: STE 1300 CITY: HOUSTON STATE: TX ZIP: 77060 BUSINESS PHONE: 2818732674 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN ONCOLOGY RESOURCES INC /DE/ DATE OF NAME CHANGE: 19950327 8-K 1 0001.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: February 1, 2001 US ONCOLOGY, INC. ----------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 0-26190 84-1213501 - -------------- ---------- ------------ (State or Other (Commission (I.R.S.Employer Jurisdiction of File Number) Identification No.) Incorporation or Organization) 16825 Northchase Drive, Suite 1300 Houston, Texas 77060 -------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (832) 601-8766 Item 9. REGULATION FD DISCLOSURE On February 1, 2001, representatives of US Oncology, Inc. will begin making presentations at analyst and investor conferences using slides containing the information attached to this Form 8-K as Exhibit 99.2. In the press release attached to this Form 8-K as Exhibit 99.1, we have announced our intention to appear at such a conference on February 1, 2001. We expect to use these slides, in whole or in part and possibly with modifications, in connection with presentations to investors, analysts and others during the first quarter of 2001. We are furnishing the text of these slides pursuant to the Securities and Exchange Commission's Regulation FD. This information is furnished pursuant to Item 9 of Form 8-K and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. By filing this report on Form 8-K and furnishing this information, we make no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD. The information contained in the slides is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this report, although we may do so from time to time as our management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. The text of the slides included with this report omits various graphic images included in the actual slides. We expect to make copies of the actual slides, including such graphic images, available for viewing at the "Investor Relations" section of our website located at www.usoncology.com, although we reserve the right to discontinue that availability at any time. CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS The following types of statements included in Exhibit 99.2 are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (i)statements regarding possible or assumed future results of operations of US Oncology and any statements contained therein regarding the prospects for any of the Company's services; (ii) any statements preceded by, followed by or that include the words "believes," "expects," "anticipates", "intends", "estimates", "plans" or similar expressions; and (iii) other statements contained therein regarding matters that are not historical facts. US Oncology's business and results of operations are subject to risks and uncertainties, many of which are beyond the Company's ability to control or predict. Because of these risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements, and US Oncology stockholders are cautioned not to place undue reliance on such statements, which speak only as of the date thereof. Factors that could cause actual results to differ materially include, but are not limited to, government regulation and enforcement, reimbursement for healthcare services, particularly including reimbursement for pharmaceuticals, integration of formerly separate operations in connection with the AOR/PRN merger, changes in cancer therapy or the manner in which cancer care is delivered, drug utilization, and the operations of the Company's affiliated physician groups. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 1999, particularly the section entitled "Risk Factors," and its quarterly reports on Form 10-Q for the first three quarters of 2000 for a more detailed discussion of certain of these risks and uncertainties. The cautionary statements contained or referred to herein or in the Exhibits hereto should be considered in connection with any written or oral forward-looking statements that may be issued by US Oncology or persons acting on its behalf. US Oncology does not undertake any obligation to release any revisions to or to update publicly any forward-looking statements to reflect events or circumstances after date thereof or to reflect the occurrence of unanticipated events. Item 7. FINANCIAL STATEMENTS AND EXHIBITS c) Exhibits 99.1 Press Release dated January 31, 2001 99.2 Text of analyst presentation and investor relations slideshow in use beginning February 1, 2001. 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. Date: February 1, 2001 US ONCOLOGY, INC. By/s/ Phillip H. Watts -------------------------------------- Phillip H. Watts Vice President and General Counsel EX-99.1 2 0002.txt PRESS RELEASE EXHIBIT 99.1 US ONCOLOGY ANNOUNCES PRESENTATION AT UPCOMING HEALTHCARE CONFERENCES HOUSTON, Jan. 31 /PRNewswire/ -- US Oncology, Inc. (Nasdaq: USON) today announced its plans to present at the upcoming U.S. Bancorp Piper Jaffray and UBS Warburg healthcare conferences. USON will present at the U.S. Bancorp Piper Jaffray Healthcare Conference, held at the Pierre Hotel in New York, on Thursday, February 1, at 5:00 PM Eastern Time. USON will also present at the UBS Warburg Global Healthcare Services Conference, held at The Plaza Hotel in New York, on Thursday, February 8, at 9:00 AM Eastern Time. Contact the USON company website at http://www.usoncology.com for more information regarding webcast and presentation materials. US Oncology represents the nation's most extensive oncology network, including cancer research, diagnostic and radiation centers, outpatient blood and marrow stem cell transplant, and pharmaceutical management services. The US Oncology network operates in 26 states with over 850 affiliated physicians in 450 locations, including 72 integrated cancer centers. These presentations may contain forward-looking statements, including statements that include the words "believes," "expects," "anticipates," "intends," "projects," or similar expressions and statements regarding our prospects. All statements other than statements of historical fact included in this press release are forward-looking statements. Although the Company believes that the expectations reflected in such statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Matters that could further impact future results and financial condition include reimbursement for healthcare services, particularly reimbursement for chemotherapy agents, integration of formerly separate operations in connection with the AOR-PRN merger, government regulation and the operations of the Company's affiliated physician groups. Please refer to the Company's 1999 Annual Report and Form 10-K and its Forms 10-Q for the first, second and third quarters of 2000 for factors that could cause actual results to differ materially from the Company's expectations. CONTACT: Bruce Broussard, Chief Financial Officer, 832-601-8766 of US Oncology, Inc.; Investors - Pete Holmberg or Theresa Vogt, or Media - Stacy Nield or Dan Budwick, all of Morgen-Walke Associates, 212-850-5600, for US Oncology, Inc. EX-99.2 3 0003.txt TEXT OF PRESENTATION AND SLIDE SHOW EXHIBIT 99.2 THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS THAT INCLUDE THE WORDS "BELIEVES," "EXPECTS," "ANTICIPATES," "INTENDS," "PROJECTS," OR SIMILAR EXPRESSIONS AND STATEMENTS REGARDING OUR PROSPECTS. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS PRESENTATION ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. MATTERS THAT COULD FURTHER IMPACT FUTURE RESULTS AND FINANCIAL CONDITION INCLUDE REIMBURSEMENT FOR HEALTHCARE SERVICES, PARTICULARLY REIMBURSEMENT FOR CHEMOTHERAPY AGENTS, INTEGRATION OF FORMERLY SEPARATE OPERATIONS IN CONNECTION WITH THE AOR-PRN MERGER, GOVERNMENT REGULATION AND THE OPERATIONS OF THE COMPANY'S AFFILIATED PHYSICIAN GROUPS. PLEASE REFER TO THE COMPANY'S 1999 ANNUAL REPORT AND FORM 10-K AND ITS FORMS 10-Q FOR THE FIRST, SECOND AND THIRD QUARTERS OF 2000 FOR FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATIONS. 1 Agenda . Mission, Vision, Challenge . US Oncology Today . Strategy . Financial Review . Outlook [US ONCOLOGY LOGO] 2 "Our mission is to increase access to and advance the delivery of high quality cancer care in America" [US ONCOLOGY LOGO] 3 Premier cancer treatment and research network . Network of "premier" oncologists . Focused outpatient delivery system . Significant local and national market share . Vast ancillary opportunities . Significant market opportunities . Operating growth in excess of 28% [US ONCOLOGY LOGO] 4 The cancer challenge . . . . Second leading cause of death . $37 billion for direct medical costs . 1 in every 4 deaths is from cancer . Men - 1 in 2 lifetime risk, 1 in 3 women . 552,200 are expected to die of cancer this year - 1,500 per day . 1.2 million new invasive cancer cases diagnosed annually Source: American Cancer Society . . . is significant [US ONCOLOGY LOGO] 5 US Oncology Today 6 Largest Cancer Treatment And Research Network . Over 8,000 employees, with 850 oncology specialists . Providing cancer care to over 500,000 patients annually . Treats 200,000 new cases annually . 15% share of the cancer treatment market . $1.7 billion net patient revenue [US ONCOLOGY LOGO] 7 National Network [Map of United States showing US Oncology Locations appears here] DATA AS OF 1/01/01 As Of January 1, 2001 . 26 STATES . 72 Cancer Centers * 72 Cancer Centers . 4 PET Installations [ ] 4 PET Installations . 450 Sites of Service [US ONCOLOGY LOGO] 8 Comprehensive Range Of Cancer Care Services BASED ON SEPTEMBER 2000 YTD REVENUES OF $968 MILLION [pie chart showing type of service performed appears here with following data: MEDICAL ONCOLOGY 81% (Hematology, Pediatric and Gynecologic Oncology) Radiation Oncology 15% Diagnostics/Others 4%] [US ONCOLOGY LOGO] 9 Network Stability . 102 physicians added in 2000 . High barriers to entry - Significant local market share - High investment in technology and facilities . Expanded earnings opportunities [US ONCOLOGY LOGO] 10 US Oncology Strategy 11 Network Strategy . Leverage local and national size of network - Managed care contracting - Drug and equipment purchasing . Ancillary growth from existing medical and radiation oncology network - Cancer Centers - PET - Clinical research/drug development . Support rational cancer reimbursement reform [US ONCOLOGY LOGO] 12 Building On Local Market Leadership [ ] Cancer Center Sites . Aurora . Denver . Littleton . Thornton . Colorado Springs (04/01/01) [Map of local sites of service in the [ ] Practice Sites Denver Area and in Colorado statewide . Aurora appears here] . Boulder . Colorado Springs . Denver . Englewood . Fort Collins . Lakewood . Littleton . Longmont . Loveland . Pueblo . Thornton [ ] 72 Physicians [US ONCOLOGY LOGO] 13 Market share versus managed care reimbursement MARKET SHARE MEANS LEVERAGE [Graph with y-axis showing reimbursement rate for managed care as a percentage of Medicare and x-axis showing market share appears here, with the following data points: Market Share Reimbursement ------------ ------------- 10% 115% 30% 124% 40% 133% 50% 143%] Based on Actual % Paid CORRELATION COEFFICIENT = .976 [US ONCOLOGY LOGO] 14 USON Versus GPO Pricing
SUPPLIER DRUG VARIANCE FROM MARKET Alza Ethyol 500 mg 17% Alza Doxil mg/ml 25% Amgen Neupogen 80 mg 21% Aventis Anzemet 20 mg/ml 27% Aventis Taxotere 80 mg 13% BMS Taxol 300 mg 9% BMS Paraplatin 450 mg 4% Novartis Aredia 90 mg 12% Ortho Biotech Procrit 40,000 units 8% Shering Intron A 50 MIU 9% ------------ 15%
[US ONCOLOGY LOGO] 15 Cancer Center Opportunities Network Potential for Radiation Treatments (1) 1,400,000 Current Network Annual Volume (600,000) ------------- Additional Volume Available 800,000 Net Revenue Estimate (Millions) $228,000,000 (Demand Equivalent of 100 Cancer Centers) (1) Based on US Oncology medical oncology patient volume. [US ONCOLOGY LOGO] 16 Leveraging Partnerships Drug Information Practice . Aventis . Sarcom . Medic Computer . Amgen . Perot . IDX . Bristol-Meyers Squibb . MCI . WebMD . Immunex . Cisco . Enterprise Manager . Ortho-Biotech . SWB DataCom . PsiMED . Novartis . Oracle . Alza Pharmaceuticals . Microsoft Distribution . Compaq Equipment . Vignette . Cardinal Health . InfoCure . McKesson/HBOC . Varian . ISC . PET-CTI, Inc. . Siemens [US ONCOLOGY LOGO] 17 Cancer Centers [Photographs of cancer centers listed below appear here] Littleton, CO Greenville, SC 13,800 Sq. Ft. 30,924 Sq. Ft. Dallas, TX Westminster, MD 105,810 Sq. Ft. 13,250 Sq. Ft. [US ONCOLOGY LOGO] 18 Comprehensive Range Of Services [Photographs of cancer center interiors appear here] [US ONCOLOGY LOGO] 19 Positron Emission Tomography (PET) Technology . Superior diagnostic technology . Target market strategy - - One million population MSA - Estimated 35 installations . Average net reimbursement of $2,200 per procedure . Breakeven at two visits per day . Broad coverage signaled by HCFA . Private payers expected to follow [US ONCOLOGY LOGO] 20 Positron Emission Tomography (PET) . One of the world's most advanced imaging techniques, showing physiologic changes before they become anatomic changes [Photographs comparing CT scan . Provides information for clinical to PET scan appear here] studies database . Enables more cost effective treatment due to earlier identification of disease [US ONCOLOGY LOGO] 21 Current And Potential PET Installations [U.S. map showing current and potential PET installations appears here] [US ONCOLOGY LOGO] 22 Sample Of Medications In Development By Therapeutic Class [Graph showing types of Medications in Development by Therapeutic Class appears here] [US ONCOLOGY LOGO] 23 Clinical Research / Drug Development . Largest Integrated Cancer Research Group . Complete Phase 1-4 Trials Capability . 250+ Practice Sites Staffed for Research . 200+ Completed Clinical Trials . Currently 90+ trials for over 20 large pharmaceutical and biotech companies [US ONCOLOGY LOGO] 24 Drug Development Capability . 300+ FTEs dedicated to research . Demand far exceeds supply . Ability to source new molecules - Existing Trials Being Conducted - Access to Wide Oncologist Network . Intellectual property to analyze and evaluate new therapies [US ONCOLOGY LOGO] 25 US Oncology Financial Review 26 GAAP Revenue Growth [Graph showing GAAP revenue growth appears here with the following data points 1997 $625 million 1998 $837 million 1999 $1,039 million 2000 Annualized $1,291 million] [US ONCOLOGY LOGO] 27 Components Of Growth [Pie chart showing components of total growth of 21% from 3rd quarter of 1999 to 3rd quarter of 2000 appears here with the following Data Points In-Market Acquisitions 3% Physician Recruitment 4% Internal Growth 14%] [US ONCOLOGY LOGO] 28 Pre-distribution EBITDA [Graph showing EBITDA pre-distribution to physicians appears here with the following data points 1997 $274 million 1998 $424 million 1999 $497 million 2000 Annualized $576 million Data excludes one time income and charges, RIT, etc.] [US ONCOLOGY LOGO] 29 Cash Flow Distribution [Graph showing cash flow distribution for Physician Compensation compared to cash flow distribution for US Oncology appears here with the following data points Physician USON Compensation Distribution 1997 58% 42% 1998 57% 43% 1999 59% 41% 2000 Annualized 63% 37%] [US ONCOLOGY LOGO] 30 EBITDA Growth [Graph showing EBITDA by year appears here with the following data points: 1997 $112.7 million 1998 $160.5 million 1999 $182.3 million 2000 Annualized $178.5 million data excludes 1999 Merger related costs of $29 million and 1997 PRN Accounts Receivable write-off of $37.8 million] [US ONCOLOGY LOGO] 31 EPS Growth [Graph showing annual earnings per share appears here, with the following data points: 1997 $0.38 1998 $0.60 1999 $0.56 2000 Annualized $0.47 data excludes gain from sale of ILEX stock, 1999 merger-related costs and 1997 PRN accounts receivable write-offs] [US ONCOLOGY LOGO] 32 Strong Operating Cash Flow ($ in 000's) YTD Annualized Per Share -------------- --------- Net Income (1) $ 47,598 $ 0.47 Dep. & Amort. 74,405 0.73 -------- ------ Operating Cash Flow 122,004 1.20 Less: Maint. Capex (25,000) (0.25) -------- ------ Total Cash Flow $ 97,004 $ 0.96 -------- ------ (1) Excludes gain from Ilex Sale [US ONCOLOGY LOGO] 33 Financial Strategy . Conversion to "profit model" . Leverage strong liquidity . Investment in facilities and technology - High returns - Increase earnings to shareholders - Leverage network [US ONCOLOGY LOGO] 34 Impact Of Model Change On Earnings Annualized Restated (1) Difference ----------- ------------ ----------- EBITDA(millions) $ 178 $ 203 $ 25 EBITDA % of Net 10.4% 11.9% 1.50% EPS $0.47 $0.62 $0.15 (1) Restated amounts reflect results as if the prior year's effective profit split %'s were maintained during the year presented. [US ONCOLOGY LOGO] 35 Liquidity 1998 1999 2000 ------ ------ ------ Debt to Capital 29.0% 35.3% 29.9% DSO's 75 80 70 Debt to EBITDA 1.6 2.3 1.8 [US ONCOLOGY LOGO] 36 High Returning Investments ($ in thousands) Cancer Center PET ------------- ------ Investment $4,200 $1,500 Annual Revenue $1,650 $2,500 Pre-tax Cash Flow $ 918 $ 400 Pre-tax Cash Flow ROI 21.9% 26.7% Breakeven Utilization 40% 33% [US ONCOLOGY LOGO] 37 US Oncology Outlook 38 Uniquely positioned . . . . Favorable demographics will drive demand . Nation's largest cancer treatment network . Local and national market leadership . Technology and clinical research partnerships . Focused management team and resources . Strong Balance Sheet and Operating Cash Flow . . . to meet the challenge! [US ONCOLOGY LOGO] 39 [US ONCOLOGY LOGO] 40 -----END PRIVACY-ENHANCED MESSAGE-----