Concentra Operating Corporation Reports Fourth Quarter and Year-end Results.Business Editors BOSTON--(BUSINESS WIRE)--Feb. 8, 2000 Concentra Operating Corporation (&uot;Concentra&uot;) today announced a 15% increase in fourth quarter revenues and a 9% increase in 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 over the same period in the prior year. These gains were driven by solid growth in the Company's Health Services health services Managed care The benefits covered under a health contract , Concentra Preferred Systems and First Notice Systems lines of business compared with the same quarter last year. Revenues for the fourth quarter increased to $175,255,000 from $151,911,000 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 increased to $12,157,000 versus a loss of $6,328,000 last year. Concentra reported a net loss for the fourth quarter of 1999 of $2,029,000 compared with a net loss of $4,967,000 in the fourth quarter of 1998. For the year ended December December: see month. 31, 1999, revenues increased 12% to $681,412,000 from $611,056,000 for 1998. Operating income for the year declined to $14,253,000 compared with $55,200,000 last year. The net loss for the year ended December 31, 1999, was $26,504,000 compared with net income of $22,486,000 in 1998. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Net income for the full year ended December 31, 1999, includes a non-recurring charge of $54,419,000 ($45,884,000 after tax) incurred in the third quarter of 1999 primarily 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. associated with the August 1999 acquisition of Concentra by Welsh Carson Carson, city (1990 pop. 83,995), Los Angeles co., S Calif., an industrial and residential suburb of Los Angeles; inc. 1968. Oil refining is the major industry; fabricated metals, paper, and other products are manufactured. The California State Univ. Dominguez Hills is there. Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic &Stowe Stowe (stō), resort town (1990 pop. 2,450), Lamoille co., N central Vt.; settled 1794, inc. 1896. It is surrounded by mountains, including Mt. Mansfield, Vermont's highest. and its equity partners. Similarly, results for the fourth quarter and full year ended December 31, 1998, include non-recurring charges of $20,514,000 ($12,103,000 after tax) and $33,114,000 ($21,703,000 after tax), respectively. The fourth quarter charge primarily reflected expenses related to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , facility closings and consolidation, as well as the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of certain assets. The Company's results for the full year of 1998 include a charge taken in the first quarter, which reflected fees, expenses and restructuring charges primarily associated with its acquisition of Preferred Payment Systems. &uot;We are pleased to note continued progress and growth in the Company's core business lines during the fourth quarter,&uot; 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 Chief Executive Officer of Concentra. &uot;The Company's top-line growth and stronger cash flows reflected a re-acceleration in revenue growth following our transition to a private company during the third quarter. This growth occurred most notably in our Concentra Health Services unit, which comprised 50% of total fourth quarter revenues and continued to post attractive gains in same-market revenues during the quarter. We are also pleased to report that Concentra Health Services completed a total of 19 transactions in 1999, which added a record 53 occupational health centers to our market-leading national network. Additionally, the fourth quarter reflected a continuation of strong year-over-year growth in our Concentra Preferred Systems and our First Notice Systems businesses. Our business development and new sales pipeline remain very strong in each of our core businesses. &uot;Of course, some aspects of our operations, such as our field case management business, have not yet met our near-term near-term adj. Of, for, or involving a short period of time in the near future. objectives for growth and cash flow,&uot; he continued. &uot;Recently, we have added several seasoned professionals to our senior management team in order to address these challenges more aggressively. New positions within our organization include a new Chief Information Officer, a new President of case management services, a new Vice President of Sales for our managed care services, and a Senior Vice President to coordinate and promote our sales and marketing efforts company-wide. Considering these steps, the ongoing progress of our core operations, and a new business pipeline that is the strongest we have seen in years, we are entering 2000 with solid momentum and the opportunity to improve our performance in the coming year.&uot; Thomas also noted that the Company's results for the quarter included the effects of $3.3 million in &uot;one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. or transitory TRANSITORY. That which lasts but a short time, as transitory facts that which may be laid in different places, as a transitory action. charges,&uot; the absence of which would have resulted in EBITDA of approximately $25.7 million during the quarter. These charges included operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. associated with the deliberate acceleration of the planned acquisition of an occupational health center development corporation, expenses associated with the start-up Start-up The earliest stage of a new business venture. of a drug-screening laboratory in Memphis, Tennessee For the ancient Egyptian capital, see . Memphis is a city in the southwest corner of Tennessee, and the county seat of Shelby County. Memphis rises above the Mississippi River on the 4th Chickasaw Bluff just below the mouth of the Wolf River. , and certain other administrative and consulting costs. &uot;While these costs do not constitute 'non-recurring' charges for accounting purposes, their exclusion does contribute to a better understanding of the Company's underlying fourth quarter performance,&uot; said Thomas. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Thomas, Concentra ended 1999 with $4 million of revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to borrowings under its $100 million bank line of credit, reflecting lower-than-expected borrowings at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . He noted that the Company was in full compliance with its covenants under its senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities at December 31, 1999. However, with respect to its compliance in future quarters, the Company is considering meeting with its lenders to review whether a change in certain financial covenants may be necessary. Concentra Operating Corporation is the successor to and a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Concentra Managed Care, Inc. Concentra 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 loss, 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 injury markets. Currently, the Company operates the nation's largest network of occupational healthcare facilities, with 210 centers located in 63 markets in 32 states. The Company has approximately 1,050 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, first notice of loss reporting, and retrospective bill review. 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, completion of the Company's annual audit, 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.
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA MANAGED CARE, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
December 31,
1999 1998
(restated)
REVENUE:
Health services $ 87,643,000 $ 65,791,000
Managed care services:
Specialized cost containment 52,454,000 46,544,000
Field case management 35,158,000 39,576,000
------------- -------------
Total managed care services 87,612,000 86,120,000
------------- -------------
Total revenue 175,255,000 151,911,000
COST OF SERVICES:
Health services 73,326,000 55,978,000
Managed care services 68,234,000 68,128,000
------------- -------------
Total cost of services 141,560,000 124,106,000
------------- -------------
Total gross profit 33,695,000 27,805,000
General and administrative expenses 18,073,000 11,602,000
Amortization of intangibles 3,465,000 2,017,000
Non-recurring charge -- 20,514,000
------------- -------------
Operating (loss) income 12,157,000 (6,328,000)
Interest expense 16,165,000 4,898,000
Interest income (176,000) (1,720,000)
Other, net (244,000) (44,000)
------------- -------------
(Loss) income before income taxes (3,588,000) (9,462,000)
(Benefit) provision for income taxes (1,559,000) (4,495,000)
------------- -------------
Net (loss) income $ (2,029,000) $ (4,967,000)
============= =============
Year Ended
December 31,
1999 1998
(restated)
REVENUE:
Health services $ 330,064,000 $ 259,481,000
Managed care services:
Specialized cost containment 204,084,000 183,734,000
Field case management 147,264,000 167,841,000
------------- -------------
Total managed care services 351,348,000 351,575,000
------------- -------------
Total revenue 681,412,000 611,056,000
COST OF SERVICES:
Health services 265,083,000 201,181,000
Managed care services 269,406,000 268,116,000
------------- -------------
Total cost of services 534,489,000 469,297,000
------------- -------------
Total gross profit 146,923,000 141,759,000
General and administrative expenses 65,291,000 45,326,000
Amortization of intangibles 12,960,000 8,119,000
Non-recurring charge 54,419,000 33,114,000
------------- -------------
Operating (loss) income 14,253,000 55,200,000
Interest expense 35,779,000 18,021,000
Interest income (2,900,000) (4,659,000)
Other, net (391,000) 44,000
------------- -------------
(Loss) income before income taxes (18,235,000) 41,794,000
(Benefit) provision for income taxes 8,269,000 19,308,000
------------- -------------
Net (loss) income $ (26,504,000) $ 22,486,000
============= =============
The consolidated statements of operations above include the
post-recapitalization transaction operating results of Concentra
Operating Corporation, a wholly owned subsidiary of Concentra Managed
Care, Inc. and the pre-recapitalization transaction operating results
of Concentra Managed Care, Inc. The recapitalization transaction was
completed on August 17, 1999. The consolidated statements of
operations also include all non-recurring charges related to the
recapitalization transaction.
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA MANAGED CARE, INC.
Consolidated Balance Sheets
December 31, December 31,
1999 1998
ASSETS Unaudited
CURRENT ASSETS:
Cash and cash equivalents $ 14,371,000 $ 101,128,000
Marketable securities -- 5,000,000
Accounts receivable, net 156,239,000 127,615,000
Prepaid expenses, tax assets
and other current assets 28,674,000 33,094,000
------------- -------------
Total current assets 199,284,000 266,837,000
PROPERTY AND EQUIPMENT, NET 104,068,000 85,926,000
GOODWILL AND OTHER INTANGIBLE
ASSETS, NET 324,984,000 277,953,000
MARKETABLE SECURITIES -- 10,583,000
OTHER ASSETS 25,768,000 15,495,000
------------- -------------
$ 654,104,000 $ 656,794,000
============= =============
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ 4,000,000 $ --
Current portion of long-term debt 3,805,000 55,000
Accounts payable, accrued income
tax and expenses 89,109,000 64,912,000
------------- -------------
Total current liabilities 96,914,000 64,967,000
LONG-TERM DEBT 559,942,000 327,870,000
DEFERRED INCOME TAXES AND OTHER
LIABILITIES 36,521,000 24,082,000
STOCKHOLDERS' (DEFICIT) EQUITY (39,273,000) 239,875,000
------------- -------------
$ 654,104,000 $ 656,794,000
============= =============
The consolidated balance sheet as of December 31, 1999 represents
the financial position of Concentra Operating Corporation, including
all non-recurring charges related to the August 17, 1999
recapitalization transaction. The consolidated balance sheet as of
December 31, 1998 represents the financial position of Concentra
Managed Care, Inc.
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