<PAGE>
INNOVATIVE CLINICAL SOLUTIONS ANNOUNCES COMPLETION
OF BOND RESTRUCTURING AND SECOND QUARTER RESULTS
-SECURES $10 MILLION LINE OF CREDIT-
PROVIDENCE, RHODE ISLAND - SEPTEMBER 21, 2000 - Innovative Clinical Solutions,
Ltd. (OTC Bulletin Board: ICSL.OB) today announced the completion of its
financial restructuring plan and the results for the second quarter and six
months ended July 31, 2000.
The Company has successfully completed the recapitalization of its $100 million
dollar debt into common equity, following confirmation of its restructuring plan
by the U.S. Bankruptcy Court on August 25, 2000. The Company has also secured
$10 million of exit financing through Ableco Finance LLC. The Company intends to
capitalize on its strengthened financial position by expanding and integrating
its 3 core businesses, clinical studies, network management and healthcare
research. The Company believes that it now has the established capital structure
necessary to allow the expansion of its operations and further integration of
its business lines. The recapitalization, a key step in the Company's aggressive
restructuring plan, should also improve the Company's ability to access capital,
and to use its equity for targeted acquisitions and to attract and retain key
personnel.
Michael Heffernan, President and CEO, commented, "We have made significant
progress in completing our restructuring plan over the past 18 months. We are
now able to focus all of our energy and attention on executing our growth
strategy. We believe we can continue to improve the profitability of our core
businesses by growing revenue, integrating our divisions and continuing to
aggressively manage overhead expenses." Mr. Heffernan continued, "Our improved
financial position will allow us to aggressively implement our growth plans
which include expanding service offerings and executing industry consolidation
initiatives."
Net loss for the quarter ended July 31, 2000 was ($14) million or ($.38) per
share as compared to net loss for the quarter ended July 31, 1999 (prior to the
extraordinary item) of ($30) million or ($.89) per share. Revenues for the
quarter ended July 31, 2000 were $26 million, compared to $50 million during the
quarter ended July 31, 1999. Revenue for the Company's continuing operations in
its three core businesses increased 14% in the second quarter versus last year.
Operating costs and administrative expenses for the quarter ended July 31, 2000
were $38 million (which included $8 million of nonrecurring charges), compared
to $77 million during the quarter ended July 31, 1999 (which included $16
million of non recurring charges).
Reduced revenue, operating costs and administrative expenses for the current
quarter reflect the impact of divestitures of non-core assets and businesses as
part of the Company's restructuring plan and improved margins in the core
business units.
Net loss for the six months ended July 31, 2000 was $(22) million or $(.60) per
share as compared to net loss for the six months ended July 31, 1999 (prior to
the extraordinary item) of $(41) million, or $(1.22) per share. For the six
months ended July 31, 2000, revenues were $51 million, compared to $111 million
during the six
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months ended July 31, 1999. For the six months ended July 31, 2000, operating
costs and administrative expenses were $69 million, compared to $146 million
during the six months ended July 31, 1999. Again, reductions in revenue,
operating costs and administrative expenses reflect the impact of the
divestitures of non-core assets and businesses.
The second quarter 1999 results included an extraordinary item of $50 million
which represents a non-cash charge to write-down the carrying amount of the
businesses that were designated as assets held for sale, to their current
estimated fair value.
Innovative Clinical Solutions, Ltd., headquartered in Providence, Rhode Island,
provides services that support the needs of the pharmaceutical and managed care
industries. The Company integrates its pharmaceutical services division with its
provider network management division to create innovative solutions for its
customers. The Company's services include clinical and economic research and
disease management, as well as managed care functions for specialty and
multi-specialty provider networks including more than 5,000 providers and close
to 10 million patients nationwide. The Company's components include ICSL
Clinical Studies, ICSL Healthcare Research and ICSL Network Management.
This press release contains forward-looking statements regarding future events
and the future performance of the Company that involve risks and uncertainties
that could cause actual results to differ materially. These risks are described
in further detail in the Company's reports filed with the Securities and
Exchange Commission.
-Financial Tables Follow-
Note that the attached Consolidated Statement of Operations and Consolidated
Balance Sheet are contained in the Company's 10-Q which was filed on September
19, 2000. The financial statements footnotes contained in the 10-Q are an
integral part of the accompanying consolidated financial statements, and are
incorporated herein by reference. The Company's 10-Q can be found in its
entirety by visiting the investor section of the Company's web site at
HTTP://WWW.ICSLTD.NET/INVESTOR.
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ICSL
FINANCIAL RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
2000 1999 2000 1999
----- ----- ----- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
Net revenues from services $ 11,137 36,668 22,148 80,523
Net revenues from management service agreements 14,657 12,857 29,300 29,606
Net revenues from real estate services 327 387
------ ------
Total revenues 25,794 49,852 51,448 110,516
Operating costs and administrative expenses:
Salaries, wages and benefits 6,872 16,450 14,895 35,652
Professional fees 3,448 5,146 7,388 9,422
Supplies 1,990 10,612 4,000 24,776
Utilities 603 1,204 1,040 2,346
Depreciation and amortization 755 3,184 1,497 6,813
Rent 1,539 4,223 3,382 8,699
Nonrecurring expenses 8,021 15,825 8,021 15,825
Capitation expenses and other 14,294 19,568 28,731 41,225
Total operating costs and administrative 37,667 77,242 69,272 146,422
expenses ------ ------ ------
Loss from operations (11,873) (27,390) (17,824) (35,906)
Interest expense, net 2,453 2,099 4,371 4,718
Loss before provision for income taxes and (14,326) (29,489) (22,195)
extraordinary item (40,624)
Income tax expense (benefit) (27) 50 (46) 100
------- -------
Net loss before extraordinary item (14,299) (29,539) (22,149) (40,724)
Extraordinary item, net of tax of $0 - 49,632) - 49,632
------- ------
Net loss $(14,299) $(79,171) (22,149) (90,356)
Net income (loss) per share - basic
Loss before extraordinary item $ (0.38) $ (0.89) $ $ (1.22)
(0.60)
Extraordinary item, net of tax - (1.49) - (1.48)
Net loss ( 0.38) (2.38) (0.60) (2.70)
Net income (loss) per share - diluted
Loss before extraordinary item $ (0.38) $ (0.89) $ $ (1.22)
(0.60)
Extraordinary item - (1.49) - (1.48)
Net loss (0.38) (2.38) (0.60) (2.70)
Weighted average number of shares outstanding - 37,199 33,289 37,199 33,459
------ ------ ------ ------
basic
Weighted average number of shares outstanding - 37,199 33,289 37,199 33,459
diluted ------ ------ ------ ------
</TABLE>
INNOVATIVE CLINICAL SOLUTIONS, LTD. CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
UNAUDITED JULY 31, JULY 31
2000 2000
------- -------
Current assets - -
Cash and cash equivalents $8,973 $
25,558
Receivables: - -
Accounts receivable, net 13,895 16,193
Other receivables 2,049 4,710
Notes receivable 1,849 7,222
Prepaid expenses and other current assets 687 394
- 2,419
Assets held for sale
Total current assets 27,453 56,496
Property, plant and equipment, net 6,559 9,099
Notes receivable 4,124 4,892
Goodwill, net 3,419 3,681
Management service agreements, net 8,508 8,612
Restricted cash 2,000 2,077
Other assets 2,160 2,454
Total assets $54,223 $ 87,311
LIABILITIES AND STOCKHOLDERS' EQUITY
JULY 31, JULY 31,
(IN THOUSANDS)-UNAUDITED 2000 2000
---- ----
CURRENT LIABILITIES - -
$4,317 $ 11,718
Current portion of debt and capital leases
Liabilities subject to compromise 100,000 -
Convertible subordinated debentures - 100,000
Accounts payable 8,268 11,859
Accrued compensation 1,890 2,060
Accrued and other current liabilities 19,054 23,575
Total current liabilities 133,529 149,212
Long-term debt and capital leases 4,245 4,234
Other long-term liabilities 4,249 95
Minority interest - 492
Total liabilities 142,023 154,033
Commitments and contingencies - -
- -
Stockholders' equity: - -
Common stock par value $.01, 40,000 - -
shares authorized 38,575 and 33,387
shares issued at July 31, 2000
and January 31, 2000, respectively,
37,199 and 32,011 shares outstanding
at July 31, 2000 and January 31
2000, respectively 372 320
Treasury stock (2,664) (2,664)
Additional paid in capital 225,790 224,771
Accumulated deficit (311,298) (289,149)
Total stockholders' deficit (87,800) (66,722)
Total liabilities and stockholders'
deficit $54,223 $ 87,311
