Concentra Managed Care Reports Third Quarter Results; Board of Directors Forms Special Committee to Evaluate Strategic Alternatives.BOSTON--(BUSINESS WIRE)--Oct. 29, 1998--Concentra Managed Care, Inc. (Nasdaq/NM: CCMC CCMC Commission for Case Manager Certification CCMC Communications Consortium Media Center CCMC Certified Career Management Coach CCMC Community Coordinated Modeling Center (NASA) ) today announced higher revenues and improved earnings for the third quarter and first nine months of 1998, compared with year-earlier periods. Revenues for the third quarter ended September September: see month. 30, 1998, increased 21% to $158,902,000 from $131,212,000 in the same period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter totaled $25,029,000 compared with $22,202,000 last year. Net income for the third quarter was $12,445,000 or $0.26 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share versus 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 net income of $11,492,000 or $0.25 per diluted share in the year-earlier period. For the nine months of 1998, revenues increased 29% to $463,330,000 from $359,082,000 for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period in 1997. Operating income for the first nine months increased 38% to $74,621,000 compared with $53,897,000 last year. Net income for the year-to-date period grew 32% to $37,053,000 or $0.78 per diluted share versus pro forma net income of $28,012,000 or $0.61 per diluted share in the same period last year. The results described above for the first nine months of 1998 do not include a non-recurring charge of $12,600,000 ($9,600,000 after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. or $0.20 per diluted share) taken in the first quarter of 1998 for fees, expenses and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. primarily associated with the February February: see month. 1998 acquisition of Preferred Payment Systems. Similarly, the results for the third quarter and first nine months of 1997 do not include a non-recurring charge of $38,625,000 ($29,040,000 after-tax) related to the August 1997 merger of Concentra's predecessor companies. "While Concentra's financial results for the third quarter demonstrate an improvement over the comparable period last year, we are disappointed that the Company fell short of management's expectations for revenues and profitability in the third quarter," said Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. J. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs , President and Interim Chief Executive Officer of the Company. "Since announcing in early September that revenues and earnings would be lower than expected for the third and fourth quarters of 1998, the rate of growth in our managed care division, and particularly our field case management services, has slowed more than anticipated. Start-up Start-up The earliest stage of a new business venture. costs associated with bringing certain customers online have been greater than expected, which further affected our net income for the quarter. "We are in the process of evaluating opportunities to reorganize re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. our managed care division to improve efficiency, and we intend to take the necessary actions to strengthen the Company's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. performance and improve shareholder value," Thomas continued. "In connection with this review, we expect to record a non-recurring charge of approximately $15 to $25 million in the fourth quarter. We have also revised our earnings forecast for the final quarter of 1998 and now expect to report between $0.15 and $0.18 per diluted share before the non-recurring charge. Furthermore, the Company is currently performing a thorough analysis of all its business lines, as part of its 1999 budget process, to reflect current market conditions and opportunities and determine the most efficient allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of its resources that will maximize the long-term profitability of its operations. Following the completion of these activities in late November November: see month. , Concentra plans to issue revised guidance for 1999. "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the issues we have encountered recently, I am very excited about Concentra's future prospects," he added. "We have many opportunities to enhance the efficiency of our operations through greater investments in technology. These technological improvements, primarily affecting our first notice of loss reporting capabilities, along with our telephonic and field case management information systems, will help us seamlessly integrate the information systems of our various lines of business, improve the level of service and outcomes for our customers, and generate higher revenues and profits in the future." Concentra also announced that it has received several unsolicited un·so·lic·it·ed adj. Not looked for or requested; unsought: an unsolicited manuscript; unsolicited opinions. unsolicited Adjective expressions of interest regarding the possible acquisition of some or all of the Company's common stock. Accordingly, the Company has formed a special committee of the Board of Directors for the purpose of evaluating various strategic alternatives available to the Company, including remaining independent and pursuing its existing or a modified strategy. The special committee has engaged BT Alex (language) Alex - 1. A polymorphic language being developed by Stephen Crawley <sxc@itd.dtso.oz.au> of Defence Science & Tech Org, Australia. Alex has abstract data types, type inference and inheritance. 2. Concentra Managed Care is the leading provider and comprehensive outsource solution for 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. and fully integrated care management in the occupational, auto, and group healthcare markets. Concentra offers prospective and retrospective LAW, RETROSPECTIVE. A retrospective law is one that is to take effect, in point of time, before it was passed. 2. Whenever a law of this kind impairs the obligation of contracts, it is void. 3 Dall. 391. services to employers and insurers of all sizes, providing pre-employment testing, loss prevention services, first report of injury, injury care, specialist networks and specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. cost containment to the disability and automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of injury markets. The Company has 117 field case management offices, with approximately 1,400 field case managers who provide medical management and return to work services in 49 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . The Company also has 86 service locations that provide specialized cost containment services including utilization management Utilization management is the evaluation of the appropriateness, medical need and efficiency of health care services procedures and facilities according to established criteria or guidelines and under the provisions of an applicable health benefits plan. , telephonic case management, and retrospective bill review. Under the name Concentra Medical Centers, the Company operates the nation's largest network of occupational healthcare centers, currently managing the practices of 276 physicians located in 151 centers in 42 markets in 23 states. This press release contains certain 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. , which the Company is making in reliance on the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, and interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. in its data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a capabilities, operational financing and strategic risks related to the company's growth strategy, possible fluctuations in quarterly and annual operations, and 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. -0-
CONCENTRA MANAGED CARE, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
REVENUES: Restated Restated
Field case
management $42,067,000 $35,150,000 $128,265,000 $102,171,000
Specialized cost
containment 45,687,000 40,094,000 137,190,000 101,895,000
----------- ----------- ----------- -----------
Managed care
services 87,754,000 75,244,000 265,455,000 204,066,000
Health services 71,148,000 55,968,000 197,875,000 155,016,000
----------- ----------- ----------- -----------
Total revenues 158,902,000 131,212,000 463,330,000 359,082,000
=========== =========== =========== ===========
COST OF SERVICES:
Managed care
services 67,458,000 57,114,000 199,988,000 157,660,000
Health services 52,469,000 40,009,000 148,707,000 114,225,000
----------- ----------- ----------- -----------
Total cost of
services 119,927,000 97,123,000 348,695,000 271,885,000
----------- ----------- ----------- -----------
Total gross profit 38,975,000 34,089,000 114,635,000 87,197,000
General and
administrative
expenses 11,883,000 10,311,000 33,876,000 29,324,000
Amortization of
intangibles 2,063,000 1,576,000 6,138,000 3,976,000
Non-recurring
charge -- 38,625,000 12,600,000 38,625,000
----------- ----------- ----------- -----------
Operating income
(loss) 25,029,000 (16,423,000) 62,021,000 15,272,000
Interest expense 4,653,000 3,702,000 13,123,000 8,894,000
Interest income (1,277,000) (582,000) (2,939,000) (2,214,000)
Other, net 208,000 226,000 581,000 1,035,000
----------- ----------- ----------- -----------
Income (loss)
before income
taxes 21,445,000 (19,769,000) 51,256,000 7,557,000
Provision for
income taxes 9,000,000 (3,342,000) 23,803,000 6,159,000
----------- ----------- ----------- -----------
Net income (loss) $12,445,000 $(16,427,000) $27,453,000 $1,398,000
=========== =========== =========== ===========
Pro forma net
loss (1) $(17,548,000) $(1,028,000)
============ ===========
Basic pro forma
and actual
earnings (loss)
per share (1) $0.26 $(0.41) $0.59 $(0.02)
=========== =========== =========== ===========
Weighted average
common shares
outstanding 47,027,000 42,876,000 46,237,000 42,584,000
=========== =========== =========== ===========
Diluted pro forma
and actual
earnings (loss)
per share (1) $0.26 $(0.41) $0.58 $(0.02)
=========== =========== =========== ===========
Weighted average
common shares
and equivalents
outstanding 47,896,000 42,876,000 47,828,000 42,584,000
=========== =========== =========== ===========
(1) Net income and earnings per share for the three and nine months
ended September 30, 1997, have been calculated as if Preferred
Payment Systems, Inc. ("PPS") had been subject to federal and
state income taxes for the entire period, based upon an effective
tax rate indicative of the statutory rates in effect. Prior to
its acquisition by the company during the first quarter of 1998,
PPS elected to be taxed as an S Corporation and, accordingly, was
not subject to federal and state income taxes in certain
jurisdictions.
CONCENTRA MANAGED CARE, INC.
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
1998 1997
----------- -----------
Restated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $106,066,000 $12,576,000
Marketable securities 1,966,000 --
Accounts receivable, net 127,579,000 106,963,000
Prepaid expenses, tax assets and
other current assets 31,128,000 26,212,000
----------- -----------
Total current assets 266,739,000 145,751,000
PROPERTY AND EQUIPMENT, AT COST 131,938,000 104,054,000
Less: Accumulated depreciation and
amortization (48,742,000) (38,351,000)
----------- -----------
NET PROPERTY AND EQUIPMENT 83,196,000 65,703,000
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 279,944,000 262,592,000
MARKETABLE SECURITIES 12,530,000 --
OTHER ASSETS 16,784,000 8,925,000
----------- -----------
$659,193,000 $482,971,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ -- $49,000,000
Current portion of long-term debt 129,000 7,497,000
Accounts payable, accrued income
tax and expenses 72,045,000 52,136,000
----------- -----------
Total current liabilities 72,174,000 108,633,000
LONG-TERM DEBT, NET OF CURRENT PORTION 327,769,000 150,103,000
DEFERRED INCOME TAXES AND OTHER LIABILITIES 16,069,000 17,794,000
STOCKHOLDERS' EQUITY:
Common stock 471,000 436,000
Paid-in capital 269,058,000 257,022,000
Retained deficit (26,348,000) (51,017,000)
----------- -----------
Total stockholders' equity 243,181,000 206,441,000
----------- -----------
$659,193,000 $482,971,00
=========== ===========
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