US Oncology Reports Fourth Quarter and Year-end Results for 2001; Net Patient Revenue for the Quarter Up 10 Percent From Same Period in 2000.Business Editors/Health & Medical Writers HOUSTON--(BUSINESS WIRE)--Feb. 28, 2002 Editor's note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : The press release issued Feb. 27 by US Oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. incorrectly in·cor·rect adj. 1. Not correct; erroneous or wrong: an incorrect answer. 2. Defective; faulty: incorrect programming of the computer. 3. stated the Company's tax benefit for 2000, resulting in incorrect Incorrect means to not be correct and may also refer to:
2. Discrepancies are material and immaterial. was due to a clerical error an error made in copying or writing. See also: Clerical in the preparation of the document. There are no changes to the results for the fourth quarter of 2001 or full-year 2001. The following version of the press release has been corrected. US Oncology Inc. (Nasdaq:USON) today announced results for the fourth quarter ended Dec. 31, 2001. Net patient revenue for the quarter was $498.0 million, an increase of 4.6 percent over the third quarter and up 10.2 percent year-over-year. The Company's revenue (net patient revenue less amounts retained by physicians) for the quarter was $385.8 million, an increase of 3.5 percent over the third quarter and up 8.4 percent year-over-year. Net income for the fourth quarter was $12.8 million, or $0.13 per 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. share, compared to $12.9 million, or $0.13 per diluted share, in the third quarter and $11.9 million, or $0.12 per diluted share, for the same period in 2000, excluding unusual charges. Including unusual charges, net loss for the fourth quarter of 2000 was $123.3 million or ($1.25) per diluted share. "US Oncology's fourth-quarter results demonstrated a clear focus on our three core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
British physiologist. He shared a 1936 Nobel Prize for work on the chemical transmission of nerve impulses, particularly for the isolation and study of acetylcholine (1914). Ross Ross , Sir Ronald 1857-1932. British physician. He won a 1902 Nobel Prize for proving that malaria is transmitted to humans by the bite of the mosquito. , chairman and chief executive officer. "We also continued the conversion of existing practices to the earnings model. The percentage of the Company's net patient revenue from earnings-model practices has increased significantly, from 41 percent at the beginning of 2001 to the current level of 63 percent." Additional key results since the third quarter that contributed to US Oncology's strong financial position included: -- An increase in operating cash flow to $55.1 million for the fourth quarter, compared to $53.4 million for the third quarter and $16 million for the same period in 2000. -- A decrease in accounts receivable days outstanding to 50 as of Dec. 31, 2001, down from 56 at the end of the third quarter and 67 at the end of 2000. -- An increase in field EBITDA to $169.1 million during the fourth quarter, up from $158.5 million for the third quarter of 2001 and $156.9 million for the fourth quarter of 2000. -- Relatively flat EBITDA for the fourth quarter at $44.6 million, compared to $43.4 million sequentially, and $44.8 million for the fourth quarter of 2000. -- The opening of five cancer centers and the installation of eight Positron Emission Tomography (PET) imaging units in 2001. -- The completion of a private placement of $175 million aggregate principal amount of unsecured senior subordinated notes in the first quarter of 2002. Net proceeds of the offering were used to repay existing senior debt and for general business purposes. The Company also entered into a new $100 million revolving credit facility during the first quarter of 2002. Full Year 2001 Results Net patient revenue for the year ended Dec. 31, 2001, totaled $1,935 million, an increase of 12.6 percent from 2000. The Company's revenue for 2001 was $1,505 million -- a 13.7 percent increase from $1,324 million in 2000. Net income was $46.3 million -- or $0.46 per diluted share -- in 2001, with a net loss in 2000 of $72.6 million -- or ($0.72) per diluted share. Results for 2001 included 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. of $5.9 million or ($0.04) per diluted share. Year-ending Year-Ending (or "12-months-ending") is a 12 month period used for financial and other seasonal reporting. In the context of finance, "Year-ending" is often provided in monthly financial statements detailing the performance of a business entity. 2000 results included a gain on investment in common stock of $27.6 million and 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. , restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other charges of $201.8 million and bad debt expense of $10.2 million -- or ($1.19) per diluted share. Net income, excluding unusual charges, increased 4.9 percent to $50.0 million in 2001 -- or $0.50 per diluted share; compared to $47.6 million -- or $0.47 per diluted share -- for 2000, excluding unusual charges. "We began 2001 with a focus on solidifying so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our operations, and we achieved significant results in creating an efficient and cohesive cohesive, n the capability to cohere or stick together to form a mass. network of cancer care providers," said Ross. "In 2001, the network had more than 2.5 million patient visits and provided care to over 500,000 patients nationwide, including over 15 percent of all newly diagnosed U.S. cancer cases." Business Outlook The Company's development activities have been greatly curtailed over the past 18 months due to the focus on operational excellence and the conversion of practices to the earnings model. In 2002, the Company expects to invest significantly in business development initiatives and aggressively market its core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. to oncology practices under its new service line model. "We are building a solid foundation for growth, and initial response to the new service line model has been very positive," said Ross. "We anticipate making announcements in the near term about service line agreements in new markets for the Company." While the Company expects the results of renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. development activities to provide a solid growth platform for fiscal year 2003, those activities are expected to have a limited impact in 2002. During 2002, predicting quarter-to-quarter operating results will be difficult because of the implementation of the service line model and conversion of practices to either the service line or the earnings model. Conversions to the service line model will result in intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. impairment charges, the timing and magnitude magnitude, in astronomy, measure of the brightness of a star or other celestial object. The stars cataloged by Ptolemy (2d cent. A.D.), all visible with the unaided eye, were ranked on a brightness scale such that the brightest stars were of 1st magnitude and the of which are not predictable. In the first quarter of 2002, the Company expects to record approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $20 million, including $6 million non-cash, in unusual charges associated with the costs of refinancing Refinancing An extension and/or increase in amount of existing debt. 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. , anticipated transitions to the service line model, 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 and reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. costs. This is consistent with the Company's prior disclosures announcing anticipated charges of approximately $480 million in implementing the service line structure. In addition, the Company's business continues to be subject to numerous other risks and uncertainties. These include the continued trend of practices using a greater percentage of higher priced single-source drugs, rising insurance costs, reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. pressures and other factors discussed by the Company in its prior announcements and Securities and Exchange Commission (SEC) filings. These factors contribute to difficulties in providing guidance for future earnings. Earnings Conference Call US Oncology will host a conference call for investors Thursday Thursday: see week. , Feb. 28, at 9 a.m., CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. . Investors are invited to access the conference by calling 888/552-9191 and referencing password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. "fourth quarter earnings." A replay of the call will be accessible through March 6, 2002 at 800/925-4808. A live audio broadcast of the call via Web cast also will be available. Details of the Web cast are available under the Investor Relations Investor relations The process by which the corporation communicates with its investors. link at www.usoncology.com. About US Oncology Inc. US Oncology, headquartered in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , is America's premier cancer care services company. The Company supports the cancer care community by providing oncology pharmaceutical services, cancer center services, and cancer research services to community-based practices. US Oncology is affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: with over 850 physicians operating in over 450 locations, including 77 outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed. out·pa·tient n. cancer centers, in 27 states. This press release contains 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. , including statements that include the words "believes," "expects," "anticipates," "estimates," "intends," "plans," "projects," or similar expressions and statements regarding our prospects. All statements concerning expected financial results, the benefits of the service line structure and all other statements other than statements of historical fact included in this press release are forward-looking statements. Although the company believes that the expectations reflected in such statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Matters that could further impact future results and financial condition include the success of the service line structure, transition of existing practices, expansion into new markets, reimbursement for healthcare services, government regulation and enforcement, continued relationships with pharmaceutical companies and other vendors, increases in the cost of providing cancer treatment services and the operations of the company's affiliated physician groups. Please refer to the company's filings with the Securities and Exchange Commission, including 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. for 2000 and subsequent SEC filings, for a more extensive discussion of factors that could cause actual results to differ materially from the company's expectations.
US ONCOLOGY INC.
Income Statement
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
--------------------- ------------------------
2001 2000 2001 2000
--------- ---------- ---------- -----------
Revenue $385,803 $355,836 $1,505,024 $1,324,154
Operating expenses:
Pharmaceuticals and
supplies 202,925 171,050 780,072 651,214
Field compensation
and benefits 82,490 76,756 322,473 277,962
Other field costs 43,488 47,359 179,479 161,510
General and
administrative 12,319 15,823 47,988 54,723
Depreciation and
amortization 20,003 19,344 71,929 75,148
Restructuring and
other costs, net 0 208,672 5,868 212,044
--------- ---------- ---------- -----------
361,225 539,004 1,407,809 1,432,601
Income (loss)
from operations 24,578 (183,168) 97,215 (108,447)
Other income (expense):
Interest expense,
net (3,915) (6,294) (22,511) (26,809)
Gain on investment
in common stock 0 0 0 27,566
--------- ---------- ---------- ----------
Income (loss) before
income taxes 20,663 (189,462) 74,704 (107,690)
Income taxes
(benefit) 7,852 (66,120) 28,388 (35,047)
--------- --------- ---------- -----------
Net income (loss) $12,811 $(123,342) $46,316 $(72,643)
========= ========== ========== ===========
Net income (loss)
per share - diluted $0.13 ($1.25) $0.46 ($0.72)
========= ========== ========== ===========
Excluding unusual
charges (1) $0.13 $0.12 $0.50 $0.47
========= ========== ========== ===========
Shares used in per
share calculations
- diluted 100,570 98,568 100,319 100,589
EBITDA (1), excluding
unusual charges $44,581 $44,848 $175,012 $178,745
Field EBITDA (1),
excluding unusual
charges $169,116 $156,889 $652,622 $627,934
Cash earnings per
share, excluding
unusual charges (1) $0.16 $0.17 $0.64 $0.66
(1) See Reconciliation of Selected Financial Data below.
US ONCOLOGY INC.
Condensed Consolidated Balance Sheet
($ in thousands)
Dec. 31, Dec. 31,
2001 2000
---------- ----------
ASSETS
Current assets:
Cash and short term investments $20,017 $3,389
Accounts receivable 275,884 337,360
Other current assets 93,141 117,284
---------- ----------
Total current assets 389,042 458,033
Property and equipment, net
286,218 280,032
Service agreements, net and other assets 417,702 459,402
---------- ----------
Total assets $1,092,962 $1,197,467
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $278,298 $263,549
Long-term indebtedness 128,826 300,213
---------- ----------
Total liabilities 407,124 563,762
Minority interests 9,067 9,367
Stockholders' equity 676,771 624,338
---------- ----------
Total liabilities and stockholders' equity $1,092,962 $1,197,467
========== ==========
US ONCOLOGY INC.
Key Operating Statistics
($ in millions)
(unaudited)
Q4 2001 Q4 2000 % Change
------- ------- --------
Net patient revenue $498.0 $452.0 10.2%
Physician compensation 112.2 96.2 16.6%
------- -------
Company revenue $385.8 $355.8 8.4%
======= =======
Total physicians(a) 868 869 -0.1%
Days sales outstanding(a) 50 67 -25.4%
Medical Oncology/Hematology:
---------------------------
Medical oncologists(a) 673 659 2.1%
Medical oncology visits 600,708 584,078 2.8%
Radiation Oncology:
------------------
Radiation oncologists(a) 125 122 2.5%
Radiation treatments per day 2,537 2,350 8.0%
Cancer center openings 1 4 -75.0%
Total cancer centers(a) 77 72 6.9%
Imaging/Diagnostics/Other:
-------------------------
Diagnostic radiologists/other(a) 70 88 -20.5%
PET installation openings 2 3 -33.3%
Total PET installations 12 4 200.0%
(a) As of the end of the period.
US ONCOLOGY INC.
Reconciliation of Selected Financial Data
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
-------------------- --------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Net Income/EPS before
unusual charges
Income (loss) before taxes $20,663 $(189,462) $74,704 $(107,690)
Unusual charges (a) 0 208,672 5,868 184,478
--------- --------- --------- ---------
Income before taxes and
unusual charges $20,663 $19,210 $80,572 $76,788
Tax rate 38.0% 38.0% 38.0% 38.0%
Net income before
unusual charges $12,811 $11,910 $49,955 $47,609
========= ========= ========= =========
Weighted average shares
outstanding 100,570 98,568 100,319 100,589
========= ========= ========= =========
EPS before unusual charges $0.13 $0.12 $0.50 $0.47
========= ========= ========= =========
EBITDA/Field EBITDA
Income before taxes and
unusual charges $20,663 $19,210 $80,572 $76,788
Depreciation expense 13,925 11,967 48,962 44,223
Amortization expense 6,078 7,377 22,967 30,925
Interest expense 3,915 6,294 22,511 26,809
--------- --------- --------- ---------
EBITDA 44,581 44,848 175,012 178,745
General & administrative
expenses 12,319 15,823 47,988 54,723
Physician compensation 112,216 96,218 429,622 394,466
--------- --------- --------- ---------
Field EBITDA $169,116 $156,889 $652,622 $627,934
========= ========= ========= =========
Cash Earnings Per Share
Income before taxes and
unusual charges $20,663 $19,210 $80,572 $76,788
Amortization expense 6,078 7,377 22,967 30,925
--------- --------- --------- ---------
$26,741 $26,587 $103,539 $107,713
Tax rate 38.0% 38.0% 38.0% 38.0%
Cash Earnings $16,579 $16,484 $64,194 $66,782
========= ========= ========= =========
Weighted average shares
outstanding 100,570 98,568 100,319 100,589
========= ========= ========= =========
Cash earnings per share $0.16 $0.17 $0.64 $0.66
========= ========= ========= =========
(a) Unusual charges include $5,868 in restructuring and other costs in
the first quarter of 2001, and other practice separation costs
during 2001, which were immaterial on a net basis; a $27,566 gain
on investment in common stock in the first quarter of 2000; a
$3,372 charge for contract separation and legal costs in the
second quarter of 2000; and $198,474 for management service
agreement impairments and impairments of other assets and $10,198
of bad-debt expense in the fourth quarter of 2000. See Income
Statement and Condensed Consolidated Balance Sheet above.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion