Med Diversified Reports Fourth Quarter and Fiscal Year 2003 Financial Results.Business Editors/Health/Medical Writers ANDOVER, Mass.--(BUSINESS WIRE)--July 1, 2003 Med Diversified, Inc., (PINK SHEETS: MDDVQ, "the Company"), a leading provider of home and alternate site health care services, today announced its fourth quarter and fiscal year financial results for the period ended March 31, 2003 ("FY03"), as reported in its annual report on 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. , to be filed today. Net loss for the fourth quarter of FY03 was $38.9 million or $0.26 per share, including $40.8 million in 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. charges. Excluding the effect of impairment charges, 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 for the fourth quarter would have been $1.9 million. In comparison, excluding impairment charges, pro forma net loss for the fourth quarter of the fiscal year ended March 31, 2002 ("FY02") would have been $50.1 million, and pro forma net loss for the third quarter of FY03 would have been $4.7 million. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter of FY03 was $85.7 million, a decrease of 14 percent compared to $99.5 million for the fourth quarter of FY02 and a decrease of 5 percent compared to $89.8 million in the third quarter of FY03. The decrease occurred as the Company closed unprofitable locations while preparing 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. under the provisions of the Bankruptcy Code Bankruptcy Code may refer to:
The Company's 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 for the fourth quarter of FY03, including equity of the Company's joint ventures, was ($32.2) million. Excluding impairment charges, the adjusted EBITDA would have been $8.6 million. In comparison, excluding impairment charges, the adjusted EBITDA would have been ($39.1) million for the fourth quarter of FY02 and $2.2 million for the third quarter of FY03. (EBITDA is a non-GAAP financial measurement calculated as 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 loss for FY03 was $71.3 million or $0.48 per share, compared to $326.8 million or $3.26 per share in FY02. Excluding impairment charges, net loss for FY03 was $30.1 million, compared to $151.7 million in FY02. Net sales for FY03 was $369.5 million, a 78 percent increase over $207.4 million in FY02. The sharp increase primarily is due to a full year's inclusion of net sales from the acquired companies Tender Loving Care Health Care Services, Inc. ("TLCS TLCS Television Licensable Content Service TLCS Torpedo Launch Canister System ") and Chartwell Diversified Services, Inc. ("CDSI CDSI Comisión de Estudio para el Desarrollo de la Sociedad de la Información CDSI Cross Domain Semantic Integration CDSI Credit Default Swap Index "). The Company's adjusted EBITDA for FY03, including equity of the Company's joint ventures and excluding impairment charges, was $5.7 million, compared to ($107.0) million for FY02. "In the fourth quarter of FY03, the Company delivered its most successful financial performance since its inception in January 1999," said Frank P. Magliochetti, Jr., chairman and chief executive officer. "Strict expense controls throughout the year primarily drove this fourth quarter performance, including significant cuts to administrative expenses at TLCS and at the headquarters of Med. Additionally, we assessed the performance of each of our branches and closed those deemed under-performing, which contributed to this quarter's improvement in operating performance despite the decline in net sales. "We are proud of this performance, which we delivered despite the adversity ad·ver·si·ty n. pl. ad·ver·si·ties 1. A state of hardship or affliction; misfortune. 2. A calamitous event. our company faced this past fiscal year," Magliochetti continued. "I would like to commend com·mend tr.v. com·mend·ed, com·mend·ing, com·mends 1. To represent as worthy, qualified, or desirable; recommend. 2. To express approval of; praise. See Synonyms at praise. 3. all our care givers, administrative staff and managers for their hard work and determination."
Summary Financial Data
(in millions)
Fiscal Year Ended Quarter Ended
3/31/03 3/31/02 3/31/03 3/31/02 12/31/02
Net Sales 369.5 207.4 85.7 99.5 89.8
Net income (loss)
including impairment
charges(a) (71.3) (326.8) (38.9) (213.3) (4.7)
Net income (loss)
excluding impairment
charges, pro forma (30.1) (151.7) 1.9 (50.1) (4.7)
Gross margin 42.9% 38.7% 44.3% 44.8% 42.4%
EPS, including
impairment charges(a) (0.48) (3.26) (0.26) (1.86) (0.03)
(a) In FY03 the Company incurred asset impairment charges related to
CDSI totaling $41.1 million, of which $40.8 million was included
in fourth quarter accounting. These charges are due to the effect
of a change in accounting principles associated with the Company's
adoption of Statement of Financial Accounting Standards No. 142
("Goodwill and Other Intangible Assets"). In FY02 the Company
incurred asset impairment charges related to TLCS, Trestle Corp.
and other operations totaling $175.1 million, of which $163.1
million was included in fourth quarter accounting. These charges
are due to the provisions of Statement of Financial Accounting
Standards No. 121 ("Accounting for the Impairment of Long Lived
Assets").
Reorganization Update As previously announced, the Company and five of its wholly owned subsidiaries 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. filed for Chapter 11 bankruptcy protection on November 27, 2002, with the U.S. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. , Eastern District of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of ("the Court"). Additionally, TLCS filed separately for Chapter 11 protection on November 8, 2002. The Company's joint ventures with third parties were not part of the bankruptcy filing. The Chapter 11 filings were prompted by the abrupt halt in funding from the companies' former senior lender, National Century Financial Enterprises. The Company is developing a Plan of Reorganization (the "Plan"), which must be approved by the requisite creditors and confirmed by the Court before taking effect. Under the U.S. Bankruptcy Code, unless creditors agree otherwise, pre- and post-petition liabilities must be satisfied in full before shareholders are entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to receive any distribution or retain any property under the Plan. Recovery to the creditors and/or common shareholders, if any, will be unknown until the Plan is confirmed. The Plan could result in holders of the Company's common stock receiving no distribution on account of their interests and cancellation of their existing stock; therefore, the value of the common stock is highly speculative. A further explanation can be found in the Company's Form 10-K. About Med Diversified Med Diversified operates companies in various segments within the health care industry, including pharmacy, home infusion, management, clinical respiratory services, home medical equipment, home health services health services Managed care The benefits covered under a health contract and other functions. For more information, see http://www.meddiversified.com. Statements in this news release relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc management's expectations, intentions or beliefs concerning future plans, expectations, events and performance are "forward looking" within the meaning of the federal securities laws. These 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. include assumptions, beliefs and opinions relating to the Company's business strategy, management's ability to satisfy industry and consumer needs with its products and services, and health care industry trends. Management's forward-looking statements further assume that (i) the Company and its subsidiaries achieve their budgeted revenue, EBITDA and other financial objectives, (ii) the Company is able to enter into new managed care agreements and maintain existing managed care contracts, (iii) the Company will be able to successfully develop and execute on its strategic relationships, and (iv) the Company is able to complete, obtain approval of and consummate our Plan of Reorganization. Many known and unknown risks, uncertainties and other factors, including general economic conditions and risk factors detailed from time to time in news releases and the Company's filings with the Securities and Exchange Commission, may cause these forward-looking statements to be incorrect in whole or in part. The investor should review such public filings to get a comprehensive picture and analysis of all conditions and circumstances. The Company expressly disclaims any intent or obligation to update any forward-looking statements, including, without limitation, statements regarding potential 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. . Actual results or events could differ materially from those anticipated in the forward-looking statements due to a variety of factors set out above, including, without limitation, integration of business and management associated with the Company's business relationships and acquisitions, acceptance by customers of the Company's products and services, competition in the health care market, government regulation of health care, results of governmental performance reviews of the Company's services, potential litigation, the Company's limited operating history, the Company's bankruptcy status and outcomes in the bankruptcy case, general economic conditions, availability of capital and other factors. Similarly, these and other factors, including the terms of any reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. ultimately confirmed, can affect the value of our various pre-petition liabilities, common stock and/or other equity securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party to each of our constituencies. A plan of reorganization could result in holders of Med Diversified common stock receiving no value for their interests. Further, the Company could be adversely affected by the ongoing effects of bankruptcy on patients, payors, vendors and employees. Because of such possibilities, the value of the common stock is highly speculative. Accordingly, we urge that appropriate caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. |
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