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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):December 29, 1999
VISION TWENTY-ONE, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 0-22977 59-3384581
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7360 BRYAN DAIRY ROAD
LARGO, FLORIDA 33777
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 727-545-4300
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ITEM 5. OTHER EVENTS.
Credit Facility. As the Company pursues its previously announced
strategic initiatives, it has obtained a waiver of certain provisions of its
amended credit facility. The Company, the Bank of Montreal as Agents for the
Banks and the Banks party to the Company's Amended and Restated Credit
Agreement (the "Credit Agreement") executed an additional waiver to its credit
facility dated December 29, 1999 relating to certain provisions of the Credit
Agreement. A copy of the waiver letter is filed herewith as Exhibit 4.23 and
incorporated herein by reference.
Press Releases. On January 10, 2000 the Company issued a press release
announcing modifications to its credit facility and providing an update on
strategic alternatives and the previously announced practice management unwind
initiative. A copy of the press release is filed herewith as Exhibit 99.1 and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
See Exhibit Index attached hereto.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in the press release filed with this Form 8-K and
oral statements by officers of the Company that are not based on historical
fact constitute "forward-looking statements" within the meaning of the
Securities Act of 1933 and 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," and
similar expressions and variations thereof are intended to specifically
identify forward-looking statements. Those statements appear in the press
release, and include statements regarding the intent, belief or current
expectations of the company, its directors or its officers with respect to,
among other things; our future growth and operating strategies and anticipated
future performance and operating results, our financing plans, our plan
regarding the anticipated restructuring of managed practice relationships, our
business integration plan and cost reduction program and the expected savings
therefrom, our expected charges for the fourth quarter, and our current and
expected future savings and charges from the consolidation of infrastructure
and the impact it may have on our future performance. 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) our inability to successfully increase and
expand vision care and refractive surgery programs; (ii) any future material
reduction in demand for refractive surgeries or should the actual refractive
eye care market be smaller than predicted; (iii) the degree current shortages
in refractive surgery equipment adversely impact our access to same at
reasonable prices; (iv) any material inability to successfully open and
integrate and profitably operate de novo clinics, refractive surgery centers
and ASCs; (v) any inability to obtain significant additional capital and to
obtain modifications and or amendments to our credit facility in the event we
are unable to sell significant business units of the company in full at
reasonable prices; (vi) any inability to acquire additional sufficient working
capital and financing at a reasonable cost to fund our future ongoing
operations and growth strategy in the event an amendment or modification to our
credit facility is not obtained or any inability to maintain compliance with
the covenants and commitments set forth in our credit facility; (vii) our
inability to use cash from our credit facility to significantly further our
growth strategy due to the terms of the credit facility restricting the use of
cash; (viii) the loss of or changes in key management or directors; (ix) the
short term basis of the bridge financing facility and the company's need for
additional financing in the event the company or a significant business unit is
not sold in the near future; (x) our ability to successfully restructure
existing relationships with our managed practices and maintain relationships
with a significant portion of our managed practices for vision care and
refractive business; (xi) our inability to close on tentative agreements to
unwind management agreements; (xii) our increasing inability to collect
management fees from managed practices; (xiii) any unexpected increase in the
charges related to the restructuring of our managed practices; (xiv) the number
of practices terminating their relationships with us completely and the impact
of any larger number of terminations than anticipated on our revenues and
operations; (xv) our inability to realize any significant benefits, cost
savings or reductions from our restructuring and cost programs; (xvi) the loss
of revenues due to the restructuring of practice management relationships and
resulting from a change to interim management agreements; (xvii) any failure or
significant delay of the newly structured business divisions of the Company to
perform profitably, successfully and in line with analysts future expectations;
(xviii) any material inability to successfully manage changes in our business
mix; (xix)any material inability to achieve internal growth in our business and
increase shareholder value; (xx) any future operating and net losses we may
incur; (xxi) our inability to
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successfully integrate and profitably operate our managed care business or for
existing managed care contracts to positively impact gross profit; (xxii) the
inability to expand our managed care business, renew existing managed care
contracts or maintain and expand our Contract Provider Network; (xxiii) any
adverse change in our medical claims to managed care revenue ratio; (xxiv)
changes in state and/or federal governmental regulations which could materially
affect our ability to operate or materially affect our profitability; (xxv) any
adverse governmental or regulatory changes or actions, including any healthcare
regulations and related enforcement actions; and (xxvi) the inability to
maintain or obtain required licensure in the states in which we operate and in
the states in which we may seek to operate in the future; (xxvii) consolidation
of our competitors, poor operating results by our competitors, or adverse
governmental or judicial rulings against our competitors; (xxviii) any failure
by us to meet analysts expectations; (xxix) our stock price; (xxx) the effect
of any future stock overhang in the market place (where the available stock for
sale would be in excess of demand) and any negative impact on our stock price
as a result of the overhang; (xxxi) our inability to successfully defend
against the class action lawsuits or any additional litigation that may arise;
(xxxii) 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
the press release and 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/ Theodore Gillette
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Theodore Gillette
Its: Chief Executive Officer
Dated: January 10, 2000
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
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<S> <C>
4.13* Credit Agreement dated as of January 30, 1998 among Vision
Twenty-One, Inc. the Banks Party Hereto and Bank of Montreal as
Agent.(1)
4.14* Amended and Restated Credit Agreement dated as of July 1, 1998
among Vision Twenty-One, Inc., and the Bank of Montreal as Agent
for a consortium of banks.(2)
4.15* First Amendment to the Amended and Restated Credit Agreement
dated as of February 23, 1999 among Vision Twenty-One, Inc., the
Banks party hereto and Bank of Montreal as Agent for the
Banks.(3)
4.16* Second Amendment to the Amended and Restated Credit Agreement
dated as of June 11, 1999 among Vision Twenty-One, Inc., the
Banks party hereto and Bank of Montreal as Agent for the
Banks.(3)
4.17* Third Amendment to the Amended and Restated Credit Agreement
dated as of August 30, 1999 by and among Vision Twenty-One,
Inc., the Banks party hereto and Bank of Montreal as Agent for
the Banks.(4)
4.18* Waiver Letter dated October 14, 1999 to Amended and Restated
Credit Agreement dated as of July 1, 1998 by and among Vision
Twenty-One, Inc. the Banks Party thereto and Bank of Montreal as
Agent.(5)
4.19* Fourth Amendment and Waiver to the Amended and Restated Credit
Agreement dated as of November 12, 1999 by and among Vision
Twenty-One, Inc. the Banks Party Thereto and Bank of Montreal as
Agent.(6)
4.20* Fifth Amendment to the Amended and Restated Credit Agreement
dated as of November 24, 1999 by and among Vision Twenty-One,
Inc. the Banks Party Thereto and Bank of Montreal as Agent.(7)
4.21* Sixth Amendment to the Amended and Restated Credit Agreement
dated as of December 3, 1999 by and among Vision Twenty-One,
Inc. the Banks Party Thereto and Bank of Montreal as Agent.(7)
4.22* Seventh Amendment to the Amended and Restated Credit Agreement
dated as of December 10, 1999 by and among Vision Twenty-One,
Inc. the Banks Party Thereto and Bank of Montreal as Agent.(7)
4.23 Waiver letter dated December 29, 1999 to Amended and Restated
Credit Agreement by and among Vision Twenty-One, Inc. the Banks
Party Thereto and Bank of Montreal as Agent.
(The Company is not filing any instrument with respect to long-
term debt that does not exceed 10% of the total assets of the
Company and the Company agrees to furnish a copy of such
instrument to the Commission upon request.)
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
10.59* Credit Agreement dated as of January 30, 1998 among Vision
Twenty-One, Inc., the Banks Party Hereto and Bank of Montreal as
Agent filed as Exhibit 4.13 to this Report and incorporated
herein by reference.
10.60* Amended and Restated Credit Agreement dated as of July 1, 1998
among Vision Twenty-One, Inc. the Banks Party Hereto and Bank of
Montreal as Agent, filed as Exhibit 4.14 to this Report and
incorporated herein by reference.
10.61* First Amendment to the Amended and Restated Credit Agreement
dated as of February 23, 1999 among Vision Twenty-One, Inc., the
Banks party hereto and Bank of Montreal as Agent for the Banks,
filed as Exhibit 4.15 to this Report and incorporated herein by
reference.
10.62* Second Amendment to the Amended and Restated Credit Agreement
dated as of June 11, 1999 among Vision Twenty-One, Inc., the
Banks party thereto and Bank of Montreal as Agent for the Banks,
filed as Exhibit 4.16 to this Report and incorporated herein by
reference.
10.65* Third Amendment to the Amended and Restated Credit Agreement
dated as of August 30, 1999 by and among Vision Twenty-One,
Inc., the Banks party hereto and Bank of Montreal as Agent for
the Banks, filed as Exhibit 4.17 to this Report and incorporated
herein by reference.
10.67* Waiver Letter dated October 14, 1999 to Amended and Restated
Credit Agreement dated as of July 1, 1998 by and among Vision
Twenty-One, Inc. the Banks Party thereto and Bank of Montreal as
Agent, filed as Exhibit 4.18 to this report and incorporated
herein by reference.
10.69* Fourth Amendment and Waiver to the Amended and Restated Credit
Agreement dated as of November 12, 1999 by and among Vision
Twenty-One, Inc. the Banks Party Thereto and Bank of Montreal as
Agent, filed as Exhibit 4.19 to this report and incorporated
herein by reference.
10.70* Fifth Amendment to the Amended and Restated Credit Agreement
dated as of November 24, 1999 by and among Vision Twenty-One,
Inc. the Banks Party Thereto and Bank of Montreal as Agent,
filed as Exhibit 4.20 to this report and incorporated herein by
reference.
10.71* Sixth Amendment to the Amended and Restated Credit Agreement
dated as of December 3, 1999 by and among Vision Twenty-One,
Inc. the Banks Party Thereto and Bank of Montreal as Agent,
filed as Exhibit 4.21 to this report and incorporated herein by
reference.
10.72* Seventh Amendment to the Amended and Restated Credit Agreement
dated as of December 10, 1999 by and among Vision Twenty-One,
Inc. the Banks Party Thereto and Bank of Montreal as Agent,
filed as Exhibit 4.22 to this report and incorporated herein by
reference.
10.73 Waiver letter dated December 29, 1999 to Amended and Restated
Credit Agreement by and among Vision Twenty-One, Inc. the Banks
Party Thereto and Bank of Montreal as Agent, filed as Exhibit
4.23 to this report and incorporated herein by reference.
99.1 Press Release dated January 10, 2000 announcing an update on
corporate developments.
</TABLE>
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*Previously filed as an Exhibit in the Company filing identified in the
footnote following the Exhibit Description and incorporated herein by
reference.
(1) Form 8-K filed February 10, 1998.
(2) Form 8-K filed July 10, 1998.
(3) Form 10-K filed June 18, 1999.
(4) Form 8-K filed September 14, 1999.
(5) Form 8-K filed October 25, 1999.
(6) Form 10-Q filed November 15, 1999.
(7) Form 8-K filed December 13, 1999.
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Exhibit 4.23
December 29, 1999
Vision Twenty-One, Inc.
7360 Bryan Dairy Road, Suite 200
Largo, FL 33777
Attention: Theodore Gillette, Chief Executive Officer
Gentlemen:
We refer to the Amended and Restated Credit Agreement dated as of July
1, 1998, as amended, between you and us (the "Credit Agreement"). All
capitalized terms used herein without definition shall have the same meaning
herein as such terms are defined in the Credit Agreement.
The Borrower is in the process of soliciting offers from one or more
investors to sell all or substantial portions of the assets of, or equity
interests in, the Borrower and its Subsidiaries, including without limitation
their managed care business and their refractive surgery business (collectively
being referred to herein as the "V21 Business"). The Borrower expects one or
more letters of intent to acquire the V21 Business being entered into by the
Borrower and such investor(s) with a view to repaying the Obligations owing to
the Banks in full upon consummation of the sale of the V21 Business pursuant to
the terms thereof. Pending the sale of the V21 Business, the Borrower intends
to sell a substantial number of the physician practice management groups
operated by the Borrower and its Subsidiaries (collectively being referred to
herein as the "PPM Businesses"). The Borrower intends to use a portion of the
proceeds from the sale of the PPM Businesses to meet its reasonable and
necessary operating expenses until the sale of the V21 Business is consummated.
To afford the Borrower an opportunity to consummate the sale of the
V21 Business, the Borrower has requested that the Banks extend the temporary
waiver period provided for in Sections 2.1 and 2.2 of that certain Seventh
Amendment and Waiver to Credit Agreement dated as of December 10, 1999, among
the Borrower, the Banks, and the Agent (the "Seventh Amendment") from December
31, 1999, to February 29, 2000, and postpone the due date for the payment of
principal and interest otherwise due on December 31, 1999, and of interest
otherwise due on January 31, 2000, to February 29, 2000. By signing below, the
Banks hereby agree to extend the waiver period provided in Sections 2.1 and 2.2
of the Seventh Amendment from December 31, 1999, to February 29, 2000, and
agree to postpone the due date for the payment of principal and interest
otherwise due on December 31, 1999, and of interest otherwise due on January
31, 2000, to February 29, 2000, provided that:
(a) the Borrower agrees that it shall use its best efforts to
sell the Vision 21 Business or significant parts thereof with a view
to repaying the Obligations owing to the Banks and to promptly advise
the Banks of its receipt of any written letters of intent to acquire
the Vision 21 Business or any significant part thereof (with copies
thereof to be promptly furnished to the Banks), in each case subject
to its directors' fiduciary duties;
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Vision Twenty-One, Inc.
December 29, 1999
Page 2
(b) until the Obligations are paid in full, the Borrower shall
provide to the Banks a weekly Budget pursuant to Section 1.14(f) of
the Credit Agreement and such Budget shall be subject to the Approved
Budget procedures set forth therein, regardless of whether or not then
being accompanied by a request for a Borrowing of Bridge Loans;
(c) at all times on and after the date hereof (i) all proceeds
from the sale of any assets of the Borrower and its Subsidiaries
(including, without limitation, proceeds from the sale of V21
Business, the PPM Businesses, or any part thereof), and (ii) cash
receipts arising from the operation of the business of the Borrower
and its Subsidiaries not applied pursuant to an Approved Budget, shall
in each case be remitted promptly upon receipt to the Agent; and
(d) except to the extent applied to payments pursuant to an
Approved Budget or applied to the Obligations owing to the Banks,
proceeds received pursuant to clause (c) above shall be held by the
Agent as collateral for the remaining Obligations owing to the Banks
(the Agent hereby being granted a Lien on and right of set-off for the
benefit of the Banks against all such amounts so held).
The Borrower hereby acknowledges and agrees to the foregoing conditions, and
also hereby acknowledges and agrees that any sale of its or its Subsidiaries'
assets or businesses (whether a sale of the V21 Business or the portions
thereof described herein as the PPM Businesses, or otherwise) shall be subject
to the prior written consent of the Banks, and all proceeds from any such sale
represent proceeds of the Banks' Collateral, to be held by the Agent or applied
to the Obligations pursuant to the terms of the Credit Agreement as modified
hereby.
Except as specifically modified hereby, all of the terms and
conditions of the Credit Agreement and the other Loan Documents shall stand and
remain unchanged and in full force and effect. This waiver shall become
effective upon the execution and delivery hereof by each of the Banks and the
Borrower as set forth below. This waiver may be executed in counterparts and by
different parties on separate counterpart signature pages, each of which shall
be an original and all of which taken together shall constitute one and the
same instrument. This waiver shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
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Vision Twenty-One, Inc.
December 29, 1999
Page 3
This waiver letter is entered into by and among the parties hereto as
of the date first above written.
BANK OF MONTREAL, in its individual capacity as BANK ONE TEXAS, N.A. a Bank and
as Agent
By /s/ Jack J. Viang By /s/ Ronnie Kaplan
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Name Jack J. Viang Name Ronnie Kaplan
Title Director Title Vice President
PACIFICA PARTNERS I, L.P. PILGRIM PRIME RATE TRUST
By: Imperial Credit Asset Management, By: Pilgrim Investments, Inc., as its
as its Investment Manager Investment Manager
By /s/ Dean K. Kawai By /s/ Charles E. LeMieux
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Name Dean K. Kawai Name Charles E. LeMieux
Title Vice President Title Assistant Vice President
PILGRIM AMERICA HIGH INCOME MERRILL LYNCH BUSINESS FINANCIAL
INVESTMENTS LTD. SERVICES, INC.
By /s/ Charles E. LeMieux By /s/ Jeremy M. Dhein
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Name Charles E. LeMieux, CFA Name Jeremy M. Dhein
Title Assistant Vice President Title Assistant Vice President
Acknowledged and agreed to as of the date first above written.
VISION TWENTY-ONE, INC.
By /s/ Bruce Maller
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Name Bruce Maller
Title Board Chairman
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Exhibit 99.1
FOR IMMEDIATE RELEASE
VISION TWENTY-ONE, INC.
CORPORATE OFFICE
7360 BRYAN DAIRY ROAD, SUITE 200
LARGO, FL 33777-1506
TEL. 727.545.4300
FAX 727.545.4419
WWW.VISION21.COM
VISION TWENTY-ONE PROVIDES
UPDATE ON CORPORATE DEVELOPMENTS
LARGO, FL - JANUARY 10, 2000 - VISION TWENTY-ONE, INC. (NASDAQ: EYES), a
leading healthcare company exclusively focused on eye care, today provided an
update regarding its Bank Credit Facility, PPM unwind program and its
evaluation of strategic alternatives to the Company. The Company also reported
commencement of a corporate consolidation plan.
CREDIT FACILITY MODIFICATIONS
Pursuant to a letter agreement effective December 29, 1999, the Company
received an extension of temporary waivers relative to certain covenants and
payments under its Credit Facility from December 31, 1999 to February 29, 2000.
The agreement requires a continued effort by the Company to sell all or a
portion of the Company. Under the terms of the letter agreement, during the
period of waiver, the Company must continue to provide a budget to the bank
group for their approval. Additionally, all proceeds from the sale of any
assets and net cash flows from operations not applied to budgeted expenses
shall be remitted to the bank group.
PPM UNWIND PROGRAM
The Company closed on the unwind of three of its managed practices in return
for a combination of cash and stock to the Company. Under these unwind
agreements, the management agreements with the Company will be canceled and the
employees along with certain assets located at their clinics will be
transferred back to the practices. As mentioned, the Company expects, subject
to continuing approval of the bank, to draw upon funds received pursuant to
such unwinds to meet its reasonably and necessary operating expenses. Neither
of these transactions involves officers or directors of the Company.
Additionally, the Company reports it is continuing its negotiations with the
other practices with expectations of additional closings during January.
STRATEGIC ALTERNATIVES
The Company is continuing to have serious discussions relative to a sale of all
or a portion of the Company. The Company plans to continue to concentrate on
evaluating its alternatives with the goal of achieving the best result for its
shareholders.
CONSOLIDATION PLANS
As a result of the recent sales of the buying group and retail optical
divisions, as well as the previously announced unwind of the PPM division, the
Company is in the process of implementing further consolidation in its
operating infrastructure. The Company expects to substantially close the Largo,
Florida service center and to consolidate the managed care operations to the
Boca Raton, Baltimore and Phoenix regional offices. In addition, refractive and
ambulatory surgery center operations will be consolidated to a location which
has yet to be determined. As a result of these changes, the Company expects to
have net eliminations in excess of 70 full time positions. These positions are
in excess of the employees being transferred back to the practices as part of
the PPM unwind
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program. The Company further reported that depending upon the outcome of the
negotiations surrounding the strategic alternatives noted above, a final
decision as to relocation of corporate services, accounting and financial
reporting, is on hold at this time.
Vision Twenty-One, Inc. is a vision care Company focused on the development of
refractive eye laser and surgery centers. The Company is headquartered in
Largo, FL., and maintains regional offices in Phoenix, Minneapolis and
Somerset, NJ.
This press release contains statements which may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Investors and prospective investors 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 as set forth from time to time in the Company's filings with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise the forward-looking statements made in this press
release to reflect events or circumstances after the date of this press release
or to reflect the occurrence of unanticipated events.
CONTACTS:
Bruce Maller Theodore Gillette
Chairman President and CEO
Vision Twenty-One, Inc. Vision Twenty-One, Inc.
727-545-4300 ext. 2112 727-545-4300 ext. 2103
