Transworld Healthcare Reports Fiscal 2000 Third Quarter and Nine Months Ended June 30, 2000 Results.Business EditorsNEW YORK--(BUSINESS WIRE)--August 14, 2000 Transworld Healthcare, Inc. (AMEX AMEX See: American Stock Exchange : TWH TWh TeraWatt Hour(s) TWH Toronto Western Hospital (Toronto, ON Canada) TWH Tennessee Walking Horse TWH Town House TWH Technical Warrant Holder (organization of technical authority) ) announced today the results for its fiscal 2000 third quarter and nine months ended June 30, 2000. As announced, on August 4, 2000 the Company reached a civil settlement with the United States Department of Justice “Justice Department” redirects here. For other uses, see Department of Justice. The United States Department of Justice (DOJ) is a Cabinet department in the United States government designed to enforce the law and defend the interests of the United States related to an investigation commenced in July 1997 of two of its U.S. operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. as well as a related qui tam QUI TAM, remedies. Who as well. When a statute imposes a penalty, for the doing or not doing an act, and gives that penalty in part to whosoever will sue for the same, and the other part to the commonwealth, or some charitable, literary, or other institution, and makes it recoverable by civil whistleblower whis·tle·blow·er or whis·tle-blow·er or whistle blower n. One who reveals wrongdoing within an organization to the public or to those in positions of authority: "The Pentagon's most famous whistleblower is . . case. Transworld denies any wrongdoing wrong·do·er n. One who does wrong, especially morally or ethically. wrong  do or liability and has agreed to settle
the matter solely in an effort to avoid the delay, uncertainty,
inconvenience and expense of protracted pro·tract tr.v. pro·tract·ed, pro·tract·ing, pro·tracts 1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations. 2. 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. in the matter. In addition to its settlement with the federal government, Transworld also reached a final settlement with the prior owners of Respiflow, Inc., MK Diabetic Support Services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services Inc. and related subsidiaries in connection with an ongoing dispute with such persons. As a result of these settlements the Company recorded a one-time charge of $5,082,000 in the third quarter of fiscal 2000. As previously announced, on December 20, 1999 the Company's United Kingdom (U.K.) subsidiaries obtained an aggregate of $125,700,000 in new financing. Effective with the new financing, the investment in the U.K. was accounted for under the equity method, retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a to October 1, 1999. The Company has since amended and modified certain agreements related to the refinancing Refinancing An extension and/or increase in amount of existing debt. which enables the Company to consolidate the U.K. subsidiaries as of the beginning of the fiscal 2000 second quarter ended March 31, 2000. Total revenues for the third quarter of fiscal 2000 increased by 13.9% to $42,758,000 compared with $37,534,000 for the prior year's third quarter. Total revenues for the nine months ended June 30, 2000 were $94,901,000 compared to $116,539,000 for the nine months ended June 30, 1999. The decrease relates primarily to the revised accounting for the U.K. subsidiaries from consolidation to the equity method ($24,489,000) during the first quarter of fiscal 2000. Had the U.K. subsidiaries been consolidated, revenues on a 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 basis for the nine months ended June 30, 2000 would have been $123,748,000 which represents an increase of $7,209,000 or 6.2%. The Company's U.K. operations had an increase in revenue of $7,513,000 for the three month period ended June 30, 2000 and $15,596,000 on a pro forma basis for the nine months ended June 30, 2000 as compared to the prior year's comparable periods primarily due to acquisitions, including $5,003,000 from Nightingale nightingale, common name for a migratory Old World bird of the family Turdidae (thrush family), celebrated for its vocal powers. The common nightingale of England and Western Europe, Luscinia megarhynchos, is about 6 1-2 in. (16. Nursing Bureau Ltd. which was acquired on April 6, 2000, and strong performance of the nursing operations. The Company's U.S. operations had a decrease in revenue of $2,289,000 for the three month period and $8,387,000 for the nine months ended June 30, 2000 as compared to the prior year's comparable periods. For the third quarter of fiscal 2000, the Company incurred an operating loss 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. of $6,190,000. Excluding the legal settlements, the Company would have recorded an operating loss of $1,108,000 compared to $5,290,000 in the third quarter of fiscal 1999. The prior year's results reflect 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. of $395,000 prior to $2.0 million of special charges and a $3.7 million charge for additional bad debts. For the nine months ended June 30, 2000, the Company reported an operating loss of $5,566,000 ($484,000 operating loss before the legal settlements) as compared to $3,572,000 ($2,113,000 of operating income before special charges and additional bad debt reserves) for the nine months ended June 30, 1999. The decrease relates primarily to the revised accounting for the U.K. subsidiaries under the equity method ($2,468,000) during the first quarter of fiscal 2000. Had the U.K. subsidiaries been consolidated, the operating loss on a pro forma basis for the nine months ended June 30, 2000 would have been $3,124,000. Excluding the legal settlements, on a pro forma basis the Company would have recorded operating income of $1,958,000. The Company reported a net loss for the third quarter of fiscal 2000 amounting to $7,030,000 versus a net loss of $4,467,000 for the third quarter of fiscal 1999. Net loss per share for the third quarter of 2000 was $0.40 compared with net loss per share of $0.25 in the third quarter of fiscal 1999 based upon 17,551,000 weighted average shares outstanding under both the basic and 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. methods in both periods. The Company recorded a $759,000 or $0.04 per share, non-cash, extraordinary charge related to the write-off of the deferred financing costs associated with the previously reported refinancing of the Company's former credit facility. This extraordinary charge contributed to the Company's net loss for the nine months ended June 30, 2000 of $7,841,000 or $0.45 per share based upon 17,551,000 weighted average shares outstanding for both the basic and diluted computations. Net loss for the nine months ended June 30, 1999 was $5,417,000 or $0.31 per share based upon 17,545,000 weighted average shares outstanding for both the basic and diluted computations. Transworld Healthcare is a regional provider of a broad range of alternate site healthcare services and products. It also operates a specialized mail-order pharmacy and provides medical supplies to patients nationwide. The Company's United Kingdom-based subsidiary, Transworld Healthcare (UK) Limited with 80 locations, provides respiratory therapy respiratory therapy Medical profession concerned with assisting the respiratory function of individuals who have severe lung disorders. Practices include suctioning to clear secretions from the airway, use of aerosol mists (sometimes medicated) or gases to ease breathing, , medical supplies and nursing services throughout the U.K. Certain statements contained herein are 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. that have been made pursuant to 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. Forward-looking statements involve known and unknown risks and uncertainties which may cause actual results in future periods or plans for future periods to differ materially from those described herein as anticipated, believed or estimated.
TRANSWORLD HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------- ---------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- --------- ---------- ----------
Total revenues $ 42,758 $ 37,534 $ 94,901 $ 116,539
Gross profit 13,945 13,351 33,661 42,028
Selling, general and
administrative expenses 15,053 18,641 34,145 45,600
Legal settlements, net 5,082 5,082
---------- --------- ---------- ----------
Operating loss (6,190) (5,290) (5,566) (3,572)
Interest income (449) (49) (1,048) (191)
Interest expense 1,926 1,287 4,882 4,016
---------- --------- ---------- ----------
Loss before income
taxes, equity income,
minority interest
and extraordinary loss (7,667) (6,528) (9,400) (7,397)
Benefit for income taxes (638) (2,061) (1,126) (1,980)
Equity in income of
and interest income earned
from U.K. subsidiaries 1,193
---------- --------- ---------- ----------
Loss before minority
interest and
extraordinary loss (7,029) (4,467) (7,081) (5,417)
Minority interest 1 1
---------- --------- ---------- ----------
Loss before
extraordinary loss (7,030) (4,467) (7,082) (5,417)
Extraordinary loss
on early extinguishment
of debt (net of income
tax benefit of $408) (759)
---------- --------- ---------- ----------
Net loss $ (7,030) $ (4,467) $ (7,841) $ (5,417)
========== ========= ========== ==========
Basic and diluted
loss per share of
common stock before
extraordinary loss $ (0.40) $ (0.25) $ (0.40) $ (0.31)
========== ========= ========== ==========
Basic and diluted
net loss per
share of common stock $ (0.40) $ (0.25) $ (0.45) $ (0.31)
========== ========= ========== ==========
Basic and diluted
weighted average
number of common
shares outstanding 17,551 17,551 17,551 17,545
========== ========= ========== ==========
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