CRC Health Corporation Reports Operating Results for the First Quarter Ended March 31, 2009.CUPERTINO, Calif. -- CRC (Cyclical Redundancy Checking) An error checking technique used to ensure the accuracy of transmitting digital data. The transmitted messages are divided into predetermined lengths which, used as dividends, are divided by a fixed divisor. Health Corporation ("CRC" or the "Company"), a leading provider of substance abuse treatment and youth services through its wholly owned consolidated subsidiaries, announced its results for the first quarter ended March 31, 2009. Effective January 1, 2009, the Company realigned its operations and internal organization structure by combining its "youth division" with its "healthy living division." The healthy living division was previously included as a component of "corporate/other." There were no organizational changes to the Company's recovery division. Subsequent to changes within its organization structure effective January 1, 2009, the Company has two operating divisions: recovery division and healthy living division. The recovery division provides substance abuse and behavioral disorder behavioral disorder Psychiatry A disorder characterized by displayed behaviors over a long period of time which significantly deviate from socially acceptable norms for a person's age and situation treatment services through residential treatment facilities and outpatient treatment clinics. The healthy living segment includes programs and treatment services for adolescent youth as well as treatment services for eating disorders eating disorders, in psychology, disorders in eating patterns that comprise four categories: anorexia nervosa, bulimia, rumination disorder, and pica. Anorexia nervosa is characterized by self-starvation to avoid obesity. , obesity, and weight management serving all age groups. Adolescent and youth treatment services include therapeutic boarding schools It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. and educational outdoor programs for children and adolescents struggling with academic, emotional, and behavioral issues. Consolidated net revenue for the first quarter ended March 31, 2009 decreased $8.1 million or 7.1% to $105.9 million compared to the same period in 2008. For the first quarter of 2009, consolidated operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased $3.6 million to $96.3 million, or 3.6% compared to the same period in 2008. First quarter 2009 adjusted pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. before interest, taxes, depreciation and amortization ("EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ") decreased $3.1 million, or 14.2%, to $18.8 million compared to $21.9 million during the same period in 2008. During the first quarter of 2009, management continued execution of the restructuring plan initiated in fiscal 2008 (the "FY08 Plan"). The purpose of the plan is to further align the Company's resources with its strategic business plan through workforce reductions, facility consolidations, and facility exit actions. Actions under the FY08 Plan are focused on facilities which have been negatively impacted by the economic crisis and the depressed credit markets. Approximately 240 full-time positions, impacting all divisions, have been eliminated under the FY08 Plan with approximately 140 of those positions eliminated during the three months ended March 31, 2009. For the three months ended March 31, 2009, facility exit activities consist of one outdoor program in the Company's healthy living division. Facility exit activities from prior periods consist of one therapeutic boarding school and one eating disorder eat·ing disorder n. Any of several patterns of severely disturbed eating behavior, especially anorexia nervosa and bulimia, seen mainly in female teenagers and young women. start-up in the Company's healthy living division and eight outpatient treatment clinics in its recovery division. The closure, sale, or disposal of these facilities are expected to be substantially complete by the end of 2009. At March 31, 2009, the Company had incurred approximately $4.1 million in liabilities related to the FY08 Plan. Remaining restructuring actions may include further division consolidations and facility exit actions in future periods. Facilities which have been held for sale, or otherwise disposed as of March 31, 2009 are reflected as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in the Company's unaudited consolidated statements of operations and in its unaudited consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . Historical Financial Results First Quarter Ended March 31, 2009 Consolidated Financial Results: [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] The unaudited adjusted pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma revenue and EBITDA for the periods presented give effect to all acquisitions as if they had occurred on January 1, 2008. The pro forma adjustments are based upon available information and certain assumptions that CRC believes are reasonable. The pro forma adjusted EBITDA is for informational purposes only and does not purport to represent what CRC's result of operations or financial position would have been if the acquisitions in 2008 occurred at any date, nor does such information purport to project the results of operations for any future period. In order to supplement its condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , CRC is providing a summary to show the computation of EBITDA, as well as adjusted pro forma EBITDA. Adjusted pro forma EBITDA takes into account certain adjustments which are excluded from EBITDA for purposes of various covenants in the indenture governing CRC's 10th% senior subordinated notes due 2016 and its senior secured credit facility, as amended to date. CRC believes that the adjusted pro forma EBITDA information presented provides useful information to both management and investors concerning its ability to meet its future debt obligations and to comply with certain covenants in its borrowing arrangements that are tied to these measures. CRC also believes that including the effect of these items allows management and investors to better compare CRC's financial performance from period-to-period, and to better compare CRC's financial performance with that of its competitors. The presentation of this additional information is not meant to be considered in isolation of, or as a substitute for, results prepared in accordance with GAAP. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] Conference Call CRC Health Corporation will host a conference call, open to all interested parties, on Wednesday, May 20, 2009 beginning at 12:00 PM Pacific Time (3:00 PM Eastern Time). The number to call within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. is (800) 753-0343. Participants outside the United States should call 913-312-1507. The conference ID is 8949604. A replay of the conference call will be available starting at 3:00 PM Pacific Time (6:00 PM Eastern Time) on Wednesday May 20, 2009 until 3:00 PM Pacific Time (6:00 PM Eastern Time) Wednesday May 27, 2009. The replay number for callers within the United States is 888-203-1112 or 719-457-0820 from outside the United States and the conference ID for all callers is 8949604. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release includes or may include "forward-looking statements." All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Although CRC believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among others, the following factors: changes in government reimbursement for CRC's services; CRC's substantial indebtedness; changes in applicable regulations or a government investigation or assertion that CRC has violated applicable regulations; attempts by local residents to force our closure or relocation; the potentially difficult, unsuccessful or costly integration of recently acquired operations and future acquisitions; the potentially difficult, unsuccessful or costly opening and operating of new treatment facilities; the possibility that commercial payors for CRC's services may undertake future cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. initiatives; the limited number of national suppliers of methadone methadone (mĕth`ədōn', –dŏn'), synthetic narcotic similar in effect to morphine. Synthesized in Germany, it came into clinical use after World War II. It is sometimes used as an analgesic and to suppress the cough reflex. used in CRC's outpatient treatment clinics; the failure to maintain established relationships or cultivate new relationships with patient referral sources; shortages in qualified healthcare workers; natural disasters such as hurricanes, earthquakes and floods; competition that limits CRC's ability to grow; the potentially costly implementation of new information systems to comply with federal and state initiatives relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc patient privacy, security of medical information and electronic transactions; the potentially costly implementation of accounting and other management systems and resources in response to financial reporting and other requirements; the loss of key members of CRC's management; claims asserted against CRC or lack of adequate available insurance; and certain restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. in CRC's debt documents. |
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