Concentra Operating Corporation Reports Year-End Results; Announces Plan to Prepay $32 Million in Senior Term Debt.ADDISON, Texas Addison is a city in Dallas County, Texas (USA). The population was 14,166 at the 2000 census. Addison is a northern suburb of Dallas. The city calls itself the Town of Addison but it is incorporated as a city. -- Concentra Operating Corporation ("Concentra" or the "Company") today announced results for the fourth quarter ended December December: see month. 31, 2005. The Company reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Adjusted Earnings Before Interest Taxes Depreciation and Amortization Noun 1. Earnings Before Interest Taxes Depreciation and Amortization - income before interest and taxes and depreciation and amortization have been subtracted; an indicator of a company's profitability that is watched by investors (especially in leveraged buyouts) ("Adjusted 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 ") of $34,160,000 for the quarter. This represented an increase of 18% over the $29,005,000 in Adjusted EBITDA reported for the same period in 2004. Concentra computes Adjusted EBITDA in the manner prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by its bond indentures Bond indenture Contract that sets forth the promises of a bond issuer and the rights of investors. bond indenture See indenture. , and a reconciliation of Adjusted EBITDA to net income is provided within this press release. The Company also reported strong increases in its cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and its retained cash balances. Due to its strong fourth quarter cash flow trends, the Company currently intends to prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $31,623,000 in senior term indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421.2. at the conclusion of the first quarter. Revenue for the fourth quarter of 2005 increased 16% to $303,396,000 from $261,022,000 in the year-earlier period. 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. was $20,945,000 in the fourth quarter, an increase of 5% from $19,880,000 in the same period last year. Growth in operating income during the quarter was affected by increases in general and administrative expenses related primarily to a $3,286,000 increase in the Company's non-cash equity compensation expenses, as well as other increases related to Concentra's fourth quarter acquisitions, legal expenses and other compensation costs. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2,500,000 of the non-cash equity compensation expenses related to the Company's fourth quarter appointment of its new Chairman and were non-recurring in nature. Net income for the quarter was $212,000, which included a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss on early retirement of debt totaling $6,029,000, versus net income of $4,557,000 in the year-earlier quarter. Concentra's revenue for 2005 increased 5% to $1,155,069,000 from $1,095,849,000 in 2004. Operating income increased to $127,586,000, up 72% from $74,118,000 for 2004. The Company's growth in operating income reflected the impact of a non-cash impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $41,682,000 reported in the third quarter of 2004 related to the write down of goodwill and other long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets of the Company's Care Management Services segment. Net income for 2005 was $53,801,000 as compared to a net loss of $9,975,000 in 2004. In addition to the impairment charge described above, the Company's net loss for 2004 included a loss on early retirement of debt totaling $14,105,000. For 2005, Adjusted EBITDA was $165,022,000, representing a 7% increase from $154,755,000 in 2004. "We are pleased to have finished the year on such positive notes," 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. 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. "During the fourth quarter, we were able to complete the acquisition of Beech beech, common name for the Fagaceae, a family of trees and shrubs mainly of temperate and subtropical regions in the Northern Hemisphere. The principal genera—Castanea (chestnut and chinquapin), Fagus (beech), and Quercus Street Corporation and commence our integration process. By combining the strengths of Beech Street with our existing group health and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. network operations, we are well positioned to deliver new services that will assist payors and employers in achieving broader provider access and in lowering their healthcare and disability costs. With these expanded services, I believe we will re-establish re-establish Verb to create or set up (an organization, link, etc.) again re-establishment n growth in the Network Services segment of our business during the coming year. "Another positive note during the quarter was that our Health Services health services Managed care The benefits covered under a health contract division continued to provide us with the solid growth trends that we have been experiencing all year," Thomas added. "Our same-center patient visits grew at a rate of 4.1%, and we continued to achieve strong growth in the diversified diversified (di·verˑ·s services portion of this business segment. With the acquisition of Occupational Health + Rehabilitation rehabilitation: see physical therapy. Inc, we now have 300 health centers nationwide." Due primarily to positive accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying collection trends, the Company also achieved significant increases in its operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. and cash balances. At the conclusion of the fourth quarter, the Company's Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). decreased to 51 days, which represented the lowest level achieved in Concentra's history. As a result of these working capital trends and the Company's underlying operating growth, Concentra's net cash provided by operating activities for the year grew to $141,799,000, an increase of $42,926,000 as compared to the year ended December 31, 2004. At December 31, 2005, Concentra had $65,057,000 in unrestricted cash and investments. As a result of its strong fourth quarter cash flow performance and growing cash balances, the Company currently intends to prepay $31,623,000 in senior term indebtedness at the conclusion of the first quarter, in addition to its normal scheduled principal payments. Of this amount, $14,123,000 is being prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay ment n. in compliance with the excess cash
flow covenants of the Company's Senior Credit Facility. The
remaining $17,500,000 is being made as an optional prepayment Prepayment1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. . Concentra Operating Corporation, 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 Inc., is dedicated to improving the quality of life by making healthcare accessible and affordable. Serving the occupational, auto and group healthcare markets, Concentra provides employers, insurers and payors with a series of integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. that include employment-related injury and occupational healthcare, in-network and out-of-network out-of-network Managed care adjective Referring to a provider/service that is not part of an MCO's network of contracted providers/services. See Managed care organization. medical claims review and repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing , access to preferred provider organizations pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. , first notice of loss services, case management and other 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. services. Concentra provides its services to approximately 136,000 employer locations and 3,700 insurance companies, group health plans, third-party administrators and other healthcare payors. The Company has 300 health centers located in 40 states. It also operates the Beech Street and FOCUS networks. These provider networks include 544,000 providers, 52,000 ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. providers and 4,400 acute-care hospitals nationwide. A public, listen-only simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. of Concentra's fourth quarter conference call will begin at 9:00 a.m. Eastern Standard Time tomorrow (February February: see month. 15, 2006) and may be accessed via the Company's website, www.concentra.com. Investors are requested to access the call at least 15 minutes before the scheduled start time in order to complete a brief registration. An online replay using the same link will be available shortly after the conclusion of the live broadcast and will continue through March 15, 2006. 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, changes in nationwide employment and injury rate trends, 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 capital structure, acquisitions and growth strategy, possible fluctuations in quarterly and annual operations, 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 INC.
Unaudited Consolidated Statements of Operations
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
------------------ ----------------------
2005 2004 2005 2004
-------- -------- ---------- ----------
REVENUE:
Health Services $171,964 $141,659 $ 667,053 $ 576,880
Network Services 82,292 64,962 286,018 281,374
Care Management
Services 49,140 54,401 201,998 237,595
-------- -------- ---------- ----------
Total revenue 303,396 261,022 1,155,069 1,095,849
COST OF SERVICES:
Health Services 149,015 123,241 550,149 474,343
Network Services 45,180 39,281 165,730 163,800
Care Management
Services 42,524 46,666 173,833 208,505
-------- -------- ---------- ----------
Total cost of
services 236,719 209,188 889,712 846,648
-------- -------- ---------- ----------
Total gross profit 66,677 51,834 265,357 249,201
General and
administrative expenses 44,056 31,357 135,773 130,263
Amortization of
intangibles 1,676 693 3,424 3,234
Loss on impairment -- -- -- 41,682
Gain on sale of assets -- -- (1,426) --
Unusual charges -- (96) -- (96)
-------- -------- ---------- ----------
Operating income 20,945 19,880 127,586 74,118
Interest expense, net 16,428 13,236 57,709 55,606
Gain on fair value of
economic hedges (218) -- (87) --
Loss on early retirement
of debt 6,029 -- 6,029 14,105
Other, net 662 332 3,264 3,047
-------- -------- ---------- ----------
Income (loss) before
income taxes (1,956) 6,312 60,671 1,360
Provision (benefit) for
income taxes (2,429) 1,706 6,061 10,627
-------- -------- ---------- ----------
Income (loss) from
continuing operations 473 4,606 54,610 (9,267)
Loss from discontinued
operations 261 49 809 708
-------- -------- ---------- ----------
Net income (loss) $ 212 $ 4,557 $ 53,801 $ (9,975)
======== ======== ========== ==========
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Consolidated Balance Sheets
(in thousands)
Dec. 31, Dec. 31,
2005 2004
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 65,057 $ 61,319
Restricted cash and short-term investments 4,723 1,250
Accounts receivable, net 171,357 175,294
Prepaid expenses and other current assets 43,773 32,011
---------- ----------
Total current assets 284,910 269,874
PROPERTY AND EQUIPMENT, NET 124,556 103,058
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 664,090 449,698
OTHER ASSETS 29,809 30,710
---------- ----------
$1,103,365 $ 853,340
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Revolving credit facility $ -- $ --
Current portion of long-term debt 20,074 34,092
Accounts payable and accrued expenses 163,774 123,387
---------- ----------
Total current liabilities 183,848 157,479
LONG-TERM DEBT, NET 840,756 700,112
DEFERRED INCOME TAXES AND OTHER LIABILITIES 72,599 58,615
STOCKHOLDER'S EQUITY (DEFICIT) 6,162 (62,866)
---------- ----------
$1,103,365 $ 853,340
========== ==========
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
Year Ended
December 31,
----------------------
2005 2004
--------- ---------
OPERATING ACTIVITIES:
Net income (loss) $ 53,801 $ (9,975)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation of property and equipment 36,485 39,799
Amortization of intangibles 3,424 3,234
Restricted stock amortization and
equity-based compensation 4,162 868
Loss on impairment of goodwill and
long-lived assets -- 41,682
Gain on sale of assets (1,426) --
Unusual charges -- (96)
Gain on change in fair value of
economic hedges (87) --
Write-off of deferred financing costs 6,029 2,505
Deferred income taxes 1,094 6,204
Write-off of fixed assets 737 160
Changes in assets and liabilities:
Accounts receivable, net 20,047 (2,972)
Prepaid expenses and other assets (575) 15,794
Accounts payable and accrued expenses 18,108 1,670
--------- ---------
Net cash provided by operating
activities 141,799 98,873
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired (220,826) (6,794)
Purchases of property, equipment and
other assets (49,143) (27,897)
Increase in restricted cash -- (1,250)
Proceeds from sale of assets 1,699 --
--------- ---------
Net cash used in investing activities (268,270) (35,941)
FINANCING ACTIVITIES:
Borrowings (payments) under revolving
credit facilities, net -- --
Proceeds from the issuance of debt 525,000 222,850
Repayments of debt (400,065) (147,926)
Dividend to parent -- (96,028)
Payment of early debt retirement costs -- (11,600)
Payment of deferred financing costs (4,063) (8,495)
Distributions to minority interests (823) (3,445)
Contribution from the issuance of common
stock by parent 10,160 410
--------- ---------
Net cash provided by (used in)
financing activities 130,209 (44,234)
NET INCREASE IN CASH 3,738 18,698
CASH, BEGINNING OF PERIOD 61,319 42,621
--------- ---------
CASH, END OF PERIOD $ 65,057 $ 61,319
========= =========
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Reconciliation of Net Income to Adjusted EBITDA
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net income (loss) $ 212 $ 4,557 $ 53,801 $ (9,975)
Provision (benefit)
for income taxes (2,429) 1,706 6,061 10,627
Interest expense, net 16,428 13,236 57,709 55,606
Depreciation expense 9,699 9,329 36,485 39,799
Amortization expense 1,676 693 3,424 3,234
Amortization of
equity-based
compensation 3,067 (219) 4,162 868
--------- --------- --------- ---------
EBITDA 28,653 29,302 161,642 100,159
Gain on fair value of
economic hedges (218) -- (87) --
Loss on impairment -- -- -- 41,682
Loss on early retirement
of debt 6,029 -- 6,029 14,105
Gain on sale of assets -- -- (1,426) --
Unusual charges -- (96) -- (96)
Discontinued operations
- income tax (141) (27) (436) (381)
Minority share of
depreciation,
amortization and
interest (163) (174) (700) (714)
--------- --------- --------- ---------
Adjusted EBITDA $ 34,160 $ 29,005 $ 165,022 $ 154,755
========= ========= ========= =========
Computations of Adjusted Earnings Before Interest Taxes Depreciation
and Amortization ("Adjusted EBITDA") have been provided in this press
release due to the use of this measure by the holders of the Company's
9.5% Senior Subordinated Notes and 9.125% Senior Subordinated Notes
and other lenders, for purposes of determining the Company's
performance in light of its debt covenant requirements, which are
stated in the Company's debt agreements as measures that relate to
Adjusted EBITDA. Adjusted EBITDA is disclosed because compliance with
the liquidity covenants included in these agreements is considered
material to the Company. The Company's computations of this measure
may differ from that provided by other companies due to differences in
the inclusion or exclusion of items in its computations as compared to
that of others. The Company's measure of Adjusted EBITDA has been made
in a manner consistent with the requirements of the indenture that
relates to its 9.5% Senior Subordinated Notes and 9.125% Senior
Subordinated Notes. Adjusted EBITDA is a measure that is not
prescribed for under Generally Accepted Accounting Principles
("GAAP"). Adjusted EBITDA specifically excludes changes in working
capital, capital expenditures and other items that are set forth on a
cash flow statement presentation of a company's operating, investing
and financing activities, and it also excludes the effects of interest
expense, depreciation expense, amortization expense, taxes and other
items that are included when determining a company's net income. As
such, the Company would encourage a reader not to use this measure as
a substitute for the determination of net income, operating cash flow,
or other similar GAAP-related measures, and to use it primarily for
the debt covenant compliance purposes above.
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Supplemental Information
We use certain operating metrics to measure aspects of our operations.
Additionally, from time to time, we provide estimates of our possible
future financial performance. Our disclosure to you of this
information is conditioned in its entirety by the provisions, risk
factors and cautionary statements provided for you in the main text of
this press release. It is being provided solely to ensure full and
fair disclosure to investors in the Company's existing debt
instruments and for no other purpose.
Operating Metrics and Information:
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Health centers at period
end 300 257 300 257
Total visits to health
centers 1,621,347 1,433,455 6,570,824 5,916,170
Injury-related visits % 47.6% 48.8% 46.6% 48.1%
Center revenue
(in thousands) (a) $ 144,638 $ 124,874 $ 579,000 $ 513,601
Same-center performance (b):
Visits per business
day growth 4.1% 8.1% 4.1% 8.4%
Revenue per visit growth 1.0% (0.3%) 1.3% (0.5%)
Revenue per business
day growth 5.1% 7.8% 5.5% 7.9%
Current 2006 performance guidance:
(Subject to immediate change and no public update or notice; includes
the effects of recent acquisitions)
Revenue: $1.325 billion to $1.375 billion.
Adjusted EBITDA (c): $187 million to $194 million.
Operating Cash Flow: $90 million to $100 million.
Capital Expenditures: $45 million to $50 million.
Notes:
(a) Excludes diversified services.
(b) Our same-center comparisons represent all centers that Health
Services has operated for the previous two full years as of the
date indicated, excluding existing centers affected by the
consolidation of acquired centers.
(c) Please refer to the discussion on Page 7 of this press release
concerning the Company's computation and use of Adjusted EBITDA.
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