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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) SEPTEMBER 24, 1998
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UNISON HEALTHCARE CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-27374 86-0684011
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(Commission File Number) (I.R.S. Employer Identification No.)
15300 N. 90th St., Suite 100, SCOTTSDALE, ARIZONA 85260
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(Address of Principal Executive Offices) (Zip Code)
(602) 423-1954
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
PLAN OF REORGANIZATION
On August 10, 1998, Unison HealthCare Corporation (the "Company") filed
its plan of reorganization and disclosure statement with the United States
Bankruptcy Court in the District of Arizona. The plan of reorganization and
disclosure statement was filed as Exhibit 99.1 to the Company's Form 8-K filed
on August 13, 1998. The Company has revised the projected results of operations
included in the disclosure statement, due primarily to: (i) revised estimates of
the impact on the Company's revenues as a result of the Medicare prospective
payment system ("PPS") and (ii) reductions in projected occupancy levels based
on the Company's current levels. The initial projected results of operations are
included in the disclosure statement filed with the Company's Form 8-K dated
August 10, 1998.
As a result of the implementation of PPS on January 1, 1999, the
Company estimates that its Medicare rates will decline, on average, by
approximately 18.6% in 1999. The impact of PPS on earnings before interest,
taxes, depreciation and amortization ("EBITDA") for the nursing facilities is
assumed to be neutral because of reductions in ancillary costs and increased
lengths of stay for Medicare patients. However, the Company estimates that PPS
will negatively impact EBITDA from pharmacy operations as a result of lower
rates negotiated with nursing care providers.
Occupancy levels are assumed to average 83% in 1999 and increase to
88.2% by 2003. The Company's actual occupancy levels have declined throughout
fiscal 1998 as a result of the negative perception of the Company resulting from
its Chapter 11 bankruptcy filings. Although the Company believes that its
occupancy will return to acceptable levels after the Plan is implemented, it has
revised its occupancy projections for fiscal 1999 and subsequent years.
The Company's historical EBITDA for the two months and eight months
ended August 31, 1998 and its projected EBITDA for fiscal years 1999 through
2003 are set forth in Exhibit 99.1 to this Form 8-K.
The financial projections contained in this Form 8-K (including the
exhibits filed herewith) represent estimates by the Company's management of
future events based on certain assumptions which may not be realized. None of
the financial analyses contained herein are considered to be a "forecast" or
"projection" as technically defined by the American Institute of Certified
Public Accountants. The use of the word "projection" within this document
relates to the broad expectations of future events or market conditions and
quantification of the potential results of operations under those conditions.
All financial information presented herein was prepared by the Company.
Certain statements, projections of future operating results and the like
contained in this Form 8-K and the exhibit constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company to differ materially from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such risks, uncertainties and other important
factors include, among others: delays in or inability to conclude transactions;
adverse actions which may be taken by creditors; the outcome of various
bankruptcy proceedings, general economic and business conditions; competition;
loss of customers; changes in business strategy or development plans; changes in
applicable laws and regulations; availability, terms and deployment of capital
in light of recent losses, cash flow shortfalls and the
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Company's Chapter 11 bankruptcy filings; cancellation of leases or contracts;
demand fluctuations; and adverse uninsured determinations in any existing or
future litigation or regulatory proceedings.
The Company will file an amended disclosure statement with the United
States Bankruptcy Court in the District of Arizona no later than October 15,
1998, which will include more complete financial projections and a revised
discussion of the same.
NEW DIRECTORS
In accordance with Delaware General Corporation Law, the Company's
Board of Directors recently elected three new directors to fill vacancies on the
Board of Directors.
Jock Patton. Jock Patton, 52, is a private investor and consultant.
From 1982 to 1997, Mr. Patton was a co-owner and director of StockVal, Inc., a
registered investment advisor, where he served as President from 1992 to 1997.
Prior thereto Mr. Patton was an attorney in private practice. Mr. Patton
currently is a trustee of eight funds of Pilgrim America, a publicly traded
mutual fund manager.
Donald D. Finney. Donald D. Finney is the Chief Executive Officer of
HCMF Corporation, a privately held provider of post-acute and assisted living
services. He has an extensive long-term healthcare background. From 1997 to
1998, Mr. Finney was the Chief Operating Officer for Summerville Healthcare
Group, Inc., a privately held long-term care provider. From 1995 to 1997, Mr.
Finney served as President - Facilities Division for GranCare, Inc., a publicly
traded post-acute healthcare provider. From 1992 to 1995, Mr. Finney was the
Chief Operating Officer for Evergreen Healthcare, Inc., a publicly held
post-acute healthcare and pharmacy provider. For 11 years prior thereto, Mr.
Finney was an executive with ARA Living Centers, most recently as Area Vice
President. ARA Living Centers operated extended care, retirement and
intermediate care facilities. Mr. Finney is a member of the Indiana State Bar
Association.
James A. Brown. James A. Brown, 50, is a private consultant
specializing in mergers and acquisitions. From 1987 to 1994, Mr. Brown was the
President and Chief Executive Officer of Acquisition Corporation of America,
providing consultation in the acquisition and disposition of long-term health
care companies. From 1982 to 1987, Mr. Brown was Vice President - Acquisitions
for Beverly Enterprises, the nation's largest long-term care company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNISON HEALTHCARE CORPORATION
September 29, 1998 By /s/ LISA M. BEUCHE
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Lisa M. Beuche
Vice President - Financial Reporting
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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99.1 Unison HealthCare Corporation's financial results for the two
months and eight months ended August 31, 1998 and revised
projected financial results for fiscal years 1999 through
2003.
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Exhibit 99.1
UNISON HEALTHCARE CORPORATION
ACTUAL AND PROJECTED FINANCIAL RESULTS
<TABLE>
<CAPTION>
Historical
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Two months Eight months Projected
ended ended Years ended December 31,
August 31, August 31, ----------------------------------------------------------------
1998 1998 1999 2000 2001 2002 2003
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<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues $ 30,547 $133,347 $135,575 $142,479 $149,208 $154,354 $160,177
Expenses:
Wages and related 16,073 68,520 62,686 64,639 66,732 68,735 70,885
Other operating 11,343 48,519 51,135 52,940 54,710 56,507 58,410
Rent 2,292 9,958 14,870 15,209 15,504 15,913 16,231
Reorganization costs 675 1,543 -- --
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30,383 128,540 128,691 132,788 136,946 141,155 145,526
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Earnings (loss) before interest,
taxes, depreciation and
amortization (EBITDA) $ 164 $ 4,807 $ 6,884 $ 9,691 $ 12,262 $ 13,199 $ 14,651
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Average occupancy 79.6% 80.2% 83.0% 85.0% 87.0% 87.3% 88.2%
</TABLE>
