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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 Act of 1934
Date of Report (Date of earliest event reported): June 8, 1999
VISION TWENTY-ONE, INC.
-----------------------
(Exact name of registrant as specified in its charter)
FLORIDA 0-22977 59-3384581
- --------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7360 BRYAN DAIRY ROAD, SUITE 200
LARGO, FLORIDA 33777
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 727-545-4300
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ITEM 5. OTHER MATTERS.
On June 8, 1999 the Company issued a press release announcing the
Company's results for fiscal year 1998 and the completion of the reconciliation
process that resulted in the delay in filing its Form 10-K, a copy of which is
filed herewith as Exhibit 99.1 and incorporated by reference.
On June 8, 1999, the Company also issued a press release announcing
the Company's results for the first quarter ended March 31, 1999, strong
refractive surgery growth and the sale of its buying group business, a copy of
which is filed herewith as Exhibit 99.2 and incorporated by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
The Exhibits to this Report are listed in the Exhibit Index set
forth elsewhere herein.
FORWARD LOOKING STATEMENT INFORMATION
This Form 8-K, contains certain statements which constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
The terms "Vision Twenty-One," "company," "we," "our" and "us" refer to Vision
Twenty-One, Inc. The words "expect," "believe," "goal," "plan," "intend,"
"estimate," "will," and similar expressions and variations thereof are intended
to specifically identify forward-looking statements. Those statements appear in
this Form 8-K in the press releases incorporated herein by reference, and
include statements regarding the intent, belief or current expectations of the
company, its directors or its officers with respect to, among other things: (i)
the unreconciled items and other items and the lack of potential impact of such
items on our future financial results; (ii) our growth strategy and operating
strategy including expanding vision care and refractive surgery programs and
the anticipated increase in long-term shareholder value; (iii) our expected
increase in operating margins resulting from the buying group business; (iv)
our current and expected future revenue and the impact of acquisitions and the
impact the consolidation of infrastructure may have on our future performance;
(v) our strategic initiatives in vision care and special emphasis on refractive
surgery initiatives including the rollout of laser vision correction
initiatives; (vi) our expected growth in laser vision correction procedures;
and (vii) the timing of our filing of Form 10-K and 10-Q.
You are cautioned that any such forward looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those projected in the forward
looking statements as a result of various factors. The factors that might cause
such differences include, among others, the following: (i) the inability to
avoid the occurrence of unreconciled items or other items impacting our
accounts in the future and the potential impact on our financial performance of
the expense associated with such items; (ii) any material inability to
successfully implement our strategy of increasing vision care and refractive
care initiatives; (iii) any material inability to achieve internal growth in
our business and increase shareholder value; (iv) any material inability to
acquire sufficient capital and financing at a reasonable cost or to maintain
our credit
2
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facility to fund our ongoing operations and growth strategy; (v) the company
experiencing future operating and net losses; (vi)our inability to realize any
significant benefits, cost savings or reductions from our restructuring
program; (vii) unexpected cost increases; (viii) our inability to increase and
expand vision care and refractive surgery programs and achieve other desired
initiatives; (ix) a slow down in demand for refractive surgeries; (x) the
inability to successfully obtain public and/or private investment capital to
meet our operating needs and expand operations; (xi) our inability to meet
financing covenants and commitments set forth in our credit facility; (xii)
consolidation of our competitors, poor operating results by our competitors, or
adverse governmental or judicial rulings against our competitors; (xiii) any
failure by us to meet analysts expectations and any continuing weakness in our
sector; (xiv) as a result of our decision to concentrate on internal growth and
to slow down our acquisition pace, any material failure to achieve internal
growth necessary to achieve overall company growth projected by analysts; (xv)
the managed practices' inability to operate satisfactorily under the management
agreement which dissatisfaction may result in an attempt by the managed
practices having material business with us to challenge or seek to terminate
the management agreement due to any alleged failure on our part to perform;
(xvi) our inability to obtain a reasonable sale price or the refusal of our
lenders to approve any proposed sale of any of our business units and the
resulting impact of such sales on our revenues, earnings and/or investor
confidence; (xvii) any adverse governmental or regulatory actions resulting
from our inability to timely file our 10-K or 10-Q; (xviii) our inability to
successfully defend against the class action lawsuits filed against us and any
potential additional litigation that may arise; (xix) our current and future
managed care contracts, the impact such contracts have on gross profit, and the
impact of the loss of such contracts or inability to enter into new and
additional contracts may have on our financial performance; and (xx) any
reduction in coverage of and ratings by analysts following us and other factors
including those identified in our filings from time-to-time with the SEC.
The company undertakes no obligation to publicly update or revise
forward looking statements to reflect events or circumstances after the date of
this Form 8-K or to reflect the occurrence of unanticipated events.
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SIGNATURE
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.
VISION TWENTY-ONE, INC.
By: /s/ Richard T. Welch
----------------------------------
Richard T. Welch
Its: Chief Financial Officer
Dated: June 8, 1999
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
99.1 Copy of Press Release of the Company dated June 8, 1999.
99.2 Copy of Press Release of the Company dated June 8, 1999.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contacts:
Theodore Gillette Richard Welch Heidi Hart
Chairman, President and CEO Chief Financial Officer Investor Relations
Vision Twenty-One, Inc. Vision Twenty-One, Inc. Vision Twenty-One, Inc.
727-545-4300 ext. 2103 727-545-4300 ext. 2118 727-545-4300 ext. 2124
VISION TWENTY-ONE ANNOUNCES COMPLETION OF RECONCILIATION PROCESS
-ALSO ANNOUNCES FINAL 1998 YEAR END RESULTS-
Largo, FL - June 8, 1999 - Vision Twenty-One, Inc. (Nasdaq: EYES), a leading
health care company exclusively focused on eye care, today announced the
conclusion of its previously announced accounting reconciliation process and
the final results for its year ended December 31, 1998.
For the year ended December 31, 1998, revenues increased 221% to $223.4
million, while EBITDA before unusual items, grew 352% to $17.4 million. Unusual
items consist of: business integration costs of $8.3 million related to the
previously announced restructuring plan; merger costs of $0.7 million; start-up
and software development costs of $1.0 million, an extraordinary charge of $1.3
million related to early extinguishment of debt; and expenses for the
inter-company reconciliation and other items totaling $4.2 million. The results
of the Company's reconciliation of the previously announced unreconciled items
was a $1.6 million expense impact and this coupled with other one time items
including receivables, revenue recognition regarding acquisition integration
fees, and intangibles reduced income by $2.6 million. As a result of the
intercompany reconciliation and a change in the accounting treatment by the
Company relative to previously recorded acquisition integration fees, the
Company's 1998 quarterly financial information will be revised in a footnote to
its 1998 audited financial statements whereupon these previously recorded fees
will be accounted for as reduction of purchase price in connection with the
acquisitions. Excluding the impact of these items in 1998, and excluding an
extraordinary charge in 1997, net income increased to $3.2 million, or $0.22
per share on a diluted basis compared to net income of $0.4 million or $0.05
per diluted share on a comparable basis last year. After consideration of these
items, the Company reported a net loss of $8.0 million or a net loss per
diluted share of $0.55 for 1998. The Company's Form 10-K encompassing the
audited financial statements is expected to be filed before June 15, 1999.
As previously announced, the unreconciled items required extensive analysis of
the financial statements from year end 1996, 1997 and 1998 for many of the
Company's acquired entities, resulting in a delay in filing the Company's 10-K.
The identified items substantially resulted from the different accounting
systems used for each entity during the prior periods. Currently, these
entities are operating on a single accounting management information system
using thin client server technology to connect them to corporate headquarters
over a private intranet network.
Theodore Gillette, Chairman, President and CEO, of Vision Twenty-One,
commented, "This reconciliation and the resulting delays have been very
difficult for everyone involved. However, the extended nature of the process we
used was the correct choice for our shareholders. I am confident that the
continuous improvement emanating from this process is yielding an ever stronger
organization positioned for long term growth."
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Mr. Gillette continued, "It is also important to not let the distraction of
this now completed reconciliation foreshadow the extraordinary accomplishments
of our team. With the exception of future start up costs, which all Company's
face, the costs associated with these unusual items will not impact us in the
future. On a per share basis, our EBITDA before these unusual items grew 169%
from $0.45 per share on a diluted basis in 1997 to $1.21 per share on a diluted
basis in 1998. Additionally, during 1998, we were the fastest growing company
in the vision correction and refractive surgery categories. Based upon the
markets' positive view toward refractive surgery companies, we believe the
Company's increased focus on refractive surgery initiatives and its growth in
that business has positioned the Company to capture future increased
shareholder value."
Vision Twenty-One specializes in the management and delivery of vision care,
with a growing emphasis on refractive surgery. Vision Twenty-One has vision
care delivery systems in 40 markets located in 26 states and 13,000 affiliated
eye care providers. The company is headquartered in Largo, FL and maintains
regional offices in Phoenix, Minneapolis and Newark. For additional information
on Vision Twenty-One, please visit the Company's web site at www.vision21.com.
###
Statements contained in this press release that are not based on historical
fact, including statements regarding its anticipated future growth, shareholder
value, refractive surgery initiatives and future performance and operating
results are forward-looking statements. Actual results may differ materially
from the statements made as a result of various factors including, but not
limited to, the risks associated to the Company's ability to successfully
continue the implementation of its business plan for increased vision care with
special emphasis in refractive care initiatives; the success of its refractive
initiatives; its continued ability to maintain and access acceptable and
necessary credit in which to operate and grow its business successfully; its
ability to profitably manage its managed businesses and managed care business;
the ability of the Company to achieve increased shareholder value and long term
growth; any loss of significant contract(s); the inability of the Company to
realize any significant benefits from its anticipated cost reductions or to
achieve these cost reductions; the effect of government laws and regulations
regarding health care or managed care contracting; unanticipated changes in
competition; and other risks, including those identified in the Company's most
recent 10-Q and in other documents filed by the Company with the U.S.
Securities and Exchange Commission (SEC).
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VISION TWENTY-ONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1998
--------- ---------
(audited) (audited)
(restated for pooling)
<S> <C> <C>
REVENUES:
LADS operations, net $43,521 $109,478
Managed care 18,762 54,980
Buying group 7,261 58,959
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Total revenue 69,544 223,417
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OPERATING EXPENSES:
LADS operating expenses 35,140 86,277
Medical claims 14,090 42,159
Cost of buying group sales 6,882 55,926
General & administrative 9,579 25,827
Depreciation & amortization 2,196 6,984
Business integration costs --- 8,301
Merger costs --- 718
Start-up and software development costs --- 932
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Total operating expenses 67,887 227,124
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INCOME (LOSS) FROM OPERATIONS 1,657 (3,707)
Interest expense 1,252 5,379
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INCOME (LOSS) BEFORE INCOME TAXES 405 (9,086)
Income taxes (2,450)
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INCOME (LOSS) BEFORE EXTRAORDINARY CHARGE 405 (6,636)
Extraordinary charge - early extinguishment 323 1,319
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NET INCOME (LOSS) $82 ($7,955)
======= ========
EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) before extraordinary charge $0.05 ($0.46)
Extraordinary charge (0.04) (0.09)
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Net income (loss) per common share $0.01 ($0.55)
======= ========
Weighted average common shares 7,976 14,385
EARNINGS (LOSS) PER COMMON SHARE-ASSUMING DILUTION:
Income (loss) before extraordinary charge $0.05 ($0.46)
Extraordinary charge (0.04) (0.09)
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Net income (loss) per common share -
assuming dilution $0.01 ($0.55)
======= ========
Weighted average common shares 8,572 14,385
Medical claims to managed care revenue 75.1% 76.7%
======= ========
SUPPLEMENTAL INFORMATION:
Loss before extraordinary charge ($6,636)
Business integration costs 8,301
Merger costs 718
Start-up and software development costs 932
Other unusual items 4,200
Proforma income tax effect (4,349)
--------
Income before unusual items $3,166
========
Income before unusual items per share -
assuming dilution $0.22
Weighted average common shares (diluted) 14,708
</TABLE>
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contacts:
Theodore Gillette Richard Welch Heidi Hart
Chairman, President and CEO Chief Financial Officer Investor Relations
Vision Twenty-One, Inc. Vision Twenty-One, Inc. Vision Twenty-One, Inc.
727-545-4300 ext. 2103 727-545-4300 ext. 2118 727-545-4300 ext. 2124
VISION TWENTY-ONE ANNOUNCES FIRST QUARTER 1999 RESULTS
-REFRACTIVE SURGERY PROCEDURES INCREASE 213%-
-COMPANY ALSO ANNOUNCES SALE OF BUYING GROUP-
Largo, FL - June 8, 1999 - Vision Twenty-One, Inc. (Nasdaq: EYES), a leading
health care company exclusively focused on eye care, today announced results
for the first quarter ended March 31, 1999.
Revenues for the first quarter ended March 31, 1999 increased over 30% to $65.9
million while EBITDA before business integration costs increased over 20% to
$5.4 million. Excluding the impact of business integration costs in 1999 as a
result of the Company's previously disclosed restructuring plan, net income was
$1.3 million, or $0.09 per share on a diluted basis or inclusive of business
integration costs, $16,175. The business integration costs which are expected
to continue to be incurred by the Company through 1999 on a diminishing basis,
are expected to provide approximately $8.0 million in total annual cost savings
to the Company once fully implemented. These cost savings will increasingly be
realized in 1999 as the year progresses. The Company did not have a tax
provision in the first quarter of 1999. The Form 10-Q encompassing the
comparative periods is expected to be filed by the Company within 1 to 2 weeks.
Refractive surgical procedures for the first quarter increased 213% to 4,189 as
compared to 1,336 for the first quarter of 1998. The Company's medical loss
ratio was 73.1% for the first quarter compared to 74.3% for the same period in
1998.
The Company announced the completion of the sale of its Buying Group for an
undisclosed amount. The Company applied the cash portion of the purchase price
primarily to repay a portion of outstanding borrowings under the Company's
credit facility. The sale of the Buying Group will reduce the Company's
revenues but will be beneficial to the Company's overall operating margins. The
Company had previously announced its intentions of selling the Buying Group
which had little long-term strategic value to the Company based upon its
current vision and refractive care priorities.
Theodore Gillette, Chairman, President and CEO, of Vision Twenty-One stated,
"The first quarter of 1999 represents an important turning point for the
Company as we initiate a more focused business plan. Our strategy going forward
will be a disciplined process of leveraging our leading vision care market
share and our core competency in refractive surgery to create shareholder value
and long term growth."
Mr. Gillette continued, "We have implemented our laser vision correction
initiatives in only four of our existing 40 markets with outstanding results.
On a forward basis, we will accelerate our laser vision correction initiatives.
We expect refractive surgery to be the highest growth segment of the Company
and a substantial portion of our future earnings."
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Vision Twenty-One specializes in the management and delivery of vision care,
with a growing emphasis on refractive surgery. Vision Twenty-One has vision
care delivery systems in 40 markets located in 26 states and 13,000 affiliated
eye care providers. The company is headquartered in Largo, FL and maintains
regional offices in Phoenix, Minneapolis and Newark. For additional information
on Vision Twenty-One, please visit the Company's web site at www.vision21.com.
Statements contained in this press release that are not based on historical
fact, including statements regarding its anticipated future growth, shareholder
value, refractive surgery initiatives, operating margins, and future
performance and operating results are forward looking statements. Actual
results may differ materially from the statements made as a result of various
factors including, but not limited to, the risks associated to the Company's
ability to successfully continue the implementation of its business plan for
increased vision care with special emphasis in refractive care initiatives; the
success of its refractive initiatives; its continued ability to maintain and
access acceptable and necessary credit in which to operate and grow its
business successfully; its ability to profitably manage its managed businesses
and managed care business; the ability of the Company to achieve increased
shareholder value and long term growth; any loss of significant contract(s);
the inability of the Company to realize any significant benefits from its
anticipated cost reductions or to achieve these cost reductions; the effect of
government laws and regulations regarding health care or managed care
contracting; unanticipated changes in competition; and other risks, including
those identified in the Company's most recent 10-Q and in other documents filed
by the Company with the U.S. Securities and Exchange Commission (SEC).
<PAGE> 3
VISION TWENTY-ONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1999
---------------
(unaudited)
<S> <C>
REVENUES:
LADS operations, net $36,904
Managed care 14,185
Buying group 14,778
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Total revenue $65,867
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OPERATING EXPENSES:
LADS operating expenses 30,829
Medical claims 10,372
Cost of buying group sales 14,062
General & administrative 5,220
Depreciation & amortization 2,185
Business integration costs 1,298
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Total operating expenses 63,966
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INCOME FROM OPERATIONS 1,901
Interest expense 1,885
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INCOME BEFORE INCOME TAXES 16
Income taxes
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NET INCOME $16
=======
EARNINGS PER COMMON SHARE (BASIC AND DILUTED) $0.00
Weighted average common shares (diluted) 15,080
Medical claims to managed care revenue 73.1%
=======
SUPPLEMENTAL INFORMATION:
Net income $16
Business integration costs 1,298
=======
Net income excluding business integration costs (1) $1,314
=======
Net income excluding business integration
costs per share - assuming dilution $0.09
</TABLE>
(1) There are no income taxes for the three months ended March 31, 1999.
