Coram Healthcare Announces Second Quarter 1999 Results.DENVER--(BUSINESS WIRE)--Aug. 16, 1999-- Company Reports Continuing Top-Line Revenue Growth at 30 Percent for Q2; $34 Million Negative Impact Related to Master Agreement with Aetna Coram Healthcare Corporation (NYSE NYSE See: New York Stock Exchange :CRH CRH corticotropin-releasing hormone. CRH abbr. corticotropin-releasing hormone CRH corticotropin releasing hormone. ) reported financial results today for the second quarter ended June 30, 1999. As previously announced, the Company's results for the quarter reflect the financial impact related to the Master Agreement the Company had with Aetna U.S. Healthcare U.S. Healthcare is a now-defunct healthcare company. The logo had an apple. The merger with Aetna In 1996, the company merged with Aetna, calling it Aetna U.S. Healthcare. The U.S. Healthcare apple logo was next to the Aetna name, and U.S. Healthcare under it. U.S. , Inc. (Aetna), which was terminated effective June 30, 1999. The $34 million impact represents the reduction of revenue and the increase in cost of service for the second quarter of 1999 compared to the first quarter of 1999, totaling approximately $15.1 million and $18.9 million respectively. The Company is in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with Aetna regarding the matter, including the breaches of the Master Agreement committed by Aetna that led to the negative financial impact. The Company also announced that it had received waivers of non-compliance with certain covenants under its principal debt agreements. Comparing the Company's second quarter 1999 results, including the impact of the terminated contract with Aetna, to the same period last year: o Revenue grew to $152.7 million from $117.2 million, an increase of 30.3%. o Patient census for the infusion business increased by about 8.7% to approximately 56,100 from 51,600. Therapy days increased by 13.2%. o 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 was $(24.6) million compared to $7.7 million. o Net loss was $(38.0) million compared to $(4.5) million. o The loss per share was $(0.77) compared with a loss per share of $(.09). In addition, during the quarter the Company incurred increased interest expense primarily as a result of changes in the interest rate applicable to its Series A notes from 9.875% to 11.5% effective in April 1999 and increased 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 borrowing on the Company's Senior Credit Facility. Coram's infusion division sales increased 10.1% from the same period last year, and 2.7% over the first quarter of 1999. The Coram Prescription Services (CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ) revenue grew by 93.5% over the same period last year, and 12.6% quarter over quarter. In addition, CPS grew its EBITDA by 29.7% since the first quarter of 1999. Coram President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Richard M. Smith, commented, "As we previously disclosed, we terminated the Aetna contract and sued Aetna for misrepresentation misrepresentation In law, any false or misleading expression of fact, usually with the intent to deceive or defraud. It most commonly occurs in insurance and real-estate contracts. False advertising may also constitute misrepresentation. , breach of contract and rescission The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed. By Agreement related to a Master Agreement between Coram and Aetna. We are seeking over $50 million in damages. We believe that the legal actions taken are necessary to protect shareholder value and the long-term interests of the Company. "Despite the lawsuit, we are pleased with our continuing top-line growth, at 30 percent for the quarter. We remain focused on our strategic plan, as evidenced by our increased patient census in our key therapies, growth in our prescription business and improved cash flow. Our ability to now direct our attention to our core business will give us increased opportunities to achieve our growth and profitability objectives." Mr. Smith continued, "In order to maintain our sales momentum, we intend to market aggressively on all fronts including infusion therapy, the Resource Network, Clinical Research and Medical Informatics medical informatics, n the field of information science concerned with the analysis and dissemination of medical data through the application of computers to various aspects of health care and medicine. , and Coram Prescription Services. Our goal will be to take advantage of the numerous cross-selling opportunities these core businesses create. And, we remain focused on the key therapies that are not only profitable for the Company, but also tend to be the clinically complex therapies where Coram has the most clinical management expertise. The positive results of our enhanced sales focus are now evident--our profitable therapies in the infusion division have increased year over year and our therapy days have increased indicating an increase in long-term patients. The same is true in our Coram Prescription Services. We believe Coram's commitment to quality, and our greatest asset - our employees, who are committed to patients and clinical expertise - will continue to be the foundations for success. "With this sales growth, we will move forward with our plan to improve our base business operational efficiency. Our clinical and strategic operations teams are reviewing all key operational indicators and implementing process re-design programs aiming for improved efficiency and technology. We believe that we can lead the industry in this regard, and improve our base business' profitability." The Clinical Research and Medical Informatics Division, launched earlier this year, signed significant new contracts in the quarter. Coram is among the first of the home medical services companies to integrate this business with its core business. "We are the most logical and qualified company to assist with this research given our clinical expertise - more than 1,000 highly skilled nurses and pharmacists This is a list of notable pharmacists.
As noted previously, the Coram Prescription Services division continued its growth strategy as demonstrated by the double-digit growth rate in its revenue for the second quarter of 1999. To accommodate this rapid growth, CPS moved into a new, high volume facility in Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. in March of this year. CPS is well positioned to move forward with plans to launch its E-Commerce presence by the end of the year. Mr. Smith stated, "We have a fantastic opportunity to serve patients through the Internet, and we will begin with our own base of patients - targeting approximately 40,000 patients that we reach each month through CPS and our base business." Denver-based Coram is a leading provider of high quality home infusion therapy home infusion therapy The IV administration of therapeutics–analgesics, antibiotics, chemotherapy, parenteral nutrition–outside of a formal healthcare environment. See Hyperalimentation, Patient-controlled analgesics, TPN. operating from 90 locations in 44 states and Ontario, Canada. Through its Resource Network division, the Company manages networks of home healthcare providers on behalf of managed care plans and other payers. Coram's Prescription Services Division provides pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. services as well as mail order prescription drugs prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, for chronically ill patients. The Clinical Research and Medical Informatics Division provides home care and product development services to pharmaceutical, biotechnology and medical device companies sponsoring clinical trials. Note: Except for historical information, all other statements provided in this press release are "forward-looking" within the meaning 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. The Company's actual results may vary materially from the 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. made above due to important factors such as the Company's history of 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. and uncertainties associated with future operating results; significant outstanding 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. ; equity conversion rights held by existing debtholders; limited liquidity; reimbursement-related risks; shifts in the mix of parties that pay for the Company's services; dependence upon relationships with third parties; uncertain future liabilities under capitation CAPITATION. A poll tax; an imposition which is yearly laid on each person according to his estate and ability. 2. The Constitution of the United States provides that "no capitation, or other direct tax, shall be laid, unless in proportion to the census, or arrangements; concentration of large payors; the intensely competitive industry; the timing of or ability to complete acquisitions; government regulation of the home health care industry; certain legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. ; dependence on key personnel; recruitment and retention of trained personnel; potential volatility of stock price; New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. listing status; and unanticipated impacts from the Year 2000 issue. These and other risk factors that could affect Coram's financial results are further described in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. Annual Report, as amended, Form 10-Q Form 10-Q See 10-Q. Quarterly Reports, and Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. Current Reports on file with the Securities and Exchange Commission. For more information, visit Coram's web site at www.coramhealthcare.com
CORAM HEALTHCARE CORPORATION
Consolidated Statements of Operations
(Unaudited)
(In Millions, Except Per Share Data)
Three Months Six Months
Ended Ended
June 30, June 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Net Revenue $152.7 $117.2 $313.7 $224.9
Cost of Service 146.8 87.9 269.7 168.4
---------- ---------- ---------- ----------
Gross Profit 5.9 29.3 44.0 56.5
Operating
Expenses:
Selling, General
& Administrative
Expenses 28.7 21.5 52.5 42.8
Provision for
Estimated
Uncollectible
Accounts 4.4 3.6 8.6 7.2
Amortization of
Goodwill 2.7 2.8 5.4 5.5
Restructuring
Costs - - 0.9 -
---------- ---------- ---------- ----------
Total Operating
Expense 35.8 27.9 67.4 55.5
Operating Income
(Loss) (29.9) 1.4 (23.4) 1.0
Interest Expense (7.5) (6.1) (14.1) (20.3)
Other Income, Net 0.2 0.9 0.4 1.7
---------- ---------- ---------- ----------
Loss
Before Income
Taxes & Minority
Interest (37.2) (3.8) (37.1) (17.6)
Income Tax
Expense 0.2 0.4 0.3 1.4
Minority Interest
in Net Income of
Consolidated
Joint Ventures 0.6 0.3 1.0 0.7
========== ========== ========== ==========
Net Loss $(38.0) $ (4.5) $(38.4) $(19.7)
========== ========== ========== ==========
Loss Per Common
Share $(0.77) $(0.09) $(0.78) $(0.40)
========== ========== ========== ==========
CORAM HEALTHCARE CORPORATION
Consolidated Balance Sheets
(In Millions)
June 30, December 31,
1999 1998
---------------- -----------------
(Unaudited)
Assets:
Cash and Cash Equivalents $ 8.0 $ 0.1
Cash Limited as to Use 1.8 1.5
Accounts Receivable, Net 120.1 113.7
Other Current Assets 28.9 32.9
---------------- -----------------
Total Current Assets 158.8 148.2
Goodwill, Net 230.6 235.7
Other Assets 51.1 53.7
---------------- -----------------
Total Assets $ 440.5 $ 437.6
================ =================
Liabilities and Stockholders'
Equity:
Current Liabilities $ 99.1 $ 83.6
Long-term Debt, including
Revolving Lines of Credit 268.6 242.2
Other Liabilities 18.2 18.9
Stockholders' Equity 54.6 92.9
---------------- -----------------
Total Liabilities and
Stockholders' Equity $ 440.5 $ 437.6
================ =================
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion