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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): JULY 30, 1998
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CONCENTRA MANAGED CARE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 000-22751 04-3363415
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
312 Union Wharf
Boston, Massachusetts 02109
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (617) 367-2163
Not Applicable
(former address if changed since last report)
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Item 5. Other Events
See the press release attached hereto as Exhibit 99.1 dated July 30, 1998
announcing earnings for the quarter ended June 30,1998 for Concentra Managed
Care, Inc.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release of the Registrant dated July 30, 1998.
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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 thereunto duly authorized.
CONCENTRA MANAGED CARE, INC.
(Registrant)
By: /s/ Richard A. Parr II
Name: Richard A. Parr II
Title: Executive Vice President,
General Counsel & Secretary
Date: July 30, 1998
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER PAGE
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99.1 Press Release of Registrant dated July 30, 1998
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FOR IMMEDIATE RELEASE
Contacts: Joseph F. Pesce, CFO
Concentra Managed Care, Inc.
(617) 367-2163, Ext. 5101
CONCENTRA MANAGED CARE, INC. ANNOUNCES
SECOND-QUARTER 1998 FINANCIAL RESULTS
Revenues up 32%; operating income increases 55%;
net income rises 50% over the second quarter last year
BOSTON, Mass. (July 30, 1998) - Concentra Managed Care, Inc.
(Nasdaq/NM: CCMC) today announced that revenues for the second quarter ended
June 30, 1998, increased 32% to $158,884,000, compared with revenues of
$120,728,000 for the three months ended June 30, 1997. Operating income for the
second quarter of 1998 increased 55% to $27,820,000, from $17,983,000 for the
same period last year.
Net income for the three months ended June 30, 1998, rose 50% to
$14,161,000, or $0.30 per diluted share, compared with pro forma net income of
$9,440,000 or $0.21 per diluted share, for the same period last year.
For the six months ended June 30, 1998, revenues increased 34% to
$304,428,000, compared with revenues of $227,870,000 for the same period last
year. Operating income for the first six months of 1998 grew 56% to $49,592,000
from $31,695,000 for the same period last year. Net income increased 49% to
$24,608,000, or $0.52 per diluted share, compared with pro forma net income of
$16,520,000, or $0.36 per diluted share, for the same period last year.
The six month results for 1998 do not include a non-recurring charge of
$12,600,000 ($9,600,000 after-tax, or $0.20 per diluted share) taken in the
first quarter of 1998 for fees, expenses and restructuring charges primarily
associated with the February 1998 acquisition of Preferred Payment Systems.
"The fact that we continue to report record revenues and net income
demonstrates the power of the merged company and the response of our customers
to our offerings across the entire episode of care," says Donald J. Larson,
Chairman and Chief Executive Officer. "We are particularly pleased with our
internal integration efforts which have
(more)
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supported this growth as we continue to sell our services on a bundled and
unbundled basis. As our customers continue to look for creative solutions to
reduce their total insurance costs, only Concentra offers the widest range of
services and the only integrated care management approach to controlling the
costs and the duration of disability."
Concentra Managed Care is the leading provider and comprehensive
outsource solution for cost containment and fully integrated care management in
the occupational, auto, and group healthcare markets. Concentra offers
prospective and retrospective services to employers and insurers of all sizes,
providing pre-employment testing, loss prevention services, first report of
injury, injury care, specialist networks and specialized cost containment to the
disability and automobile injury markets. The company has 123 field case
management offices, with approximately 1,400 field case managers who provide
medical management and return to work services in 49 states, the District of
Columbia, and Canada. The company also has 85 service locations that provide
specialized cost containment services including utilization management,
telephonic case management, and retrospective bill review. Under the name
Concentra Medical Centers, the Company operates the nation's largest network of
occupational healthcare centers, currently managing the practices of 259
physicians located in 148 centers in 39 markets in 21 states.
-END-
This press release contains certain forward-looking statements, which the
Company is making in reliance on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that all
forward-looking statements involve risks and uncertainties, and that the
company's actual results may differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, the potential adverse impact of
governmental regulation on the company's operations, and interruption in its
data processing capabilities, operational, financing and strategic risks related
to the company's growth strategy, possible fluctuations in quarterly and annual
operations, and possible legal liability for adverse medical consequences,
competitive pressures, adverse changes in market conditions for the company's
services, and dependence on key management personnel. Additional factors include
those described in the company's Securities and Exchange Commission filings.
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Concentra Managed Care, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
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Three Months Ended Six Months Ended
June 30, June 30,
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1998 1997 1998 1997
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Restated Restated
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REVENUES:
Field case management .................................... $ 44,358,000 $ 34,632,000 $ 86,198,000 $ 67,021,000
Specialized cost containment ............................. 47,124,000 33,431,000 91,503,000 61,801,000
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Managed care services ............................... 91,482,000 68,063,000 177,701,000 128,822,000
Health services .......................................... 67,402,000 52,665,000 126,727,000 99,048,000
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Total revenues ................................. 158,884,000 120,728,000 304,428,000 227,870,000
COST OF SERVICES:
Managed care services .................................... 67,772,000 53,189,000 132,530,000 100,546,000
Health services .......................................... 49,950,000 38,411,000 96,238,000 74,216,000
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Total cost of services ........................ 117,722,000 91,600,000 228,768,000 174,762,000
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Total gross profit .................... 41,162,000 29,128,000 75,660,000 53,108,000
General and administrative expenses ...................... 11,294,000 9,980,000 21,993,000 19,013,000
Amortization of intangibles .............................. 2,048,000 1,165,000 4,075,000 2,400,000
Non-recurring charge ..................................... -- -- 12,600,000 --
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Operating income ...................... 27,820,000 17,983,000 36,992,000 31,695,000
Interest expense ......................................... 4,588,000 2,765,000 8,470,000 5,192,000
Interest income .......................................... (1,429,000) (781,000) (1,662,000) (1,632,000)
Other, net ............................................... 264,000 482,000 373,000 809,000
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Income before income taxes ..................... 24,397,000 15,517,000 29,811,000 27,326,000
Provision for income taxes ............................... 10,236,000 5,395,000 14,803,000 9,501,000
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Net income ............................................... $ 14,161,000 $ 10,122,000 $ 15,008,000 $ 17,825,000
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Pro forma net income (1) ................................. $ 9,440,000 $ 16,520,000
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Basic pro forma and actual earnings per share (1) ........ $ 0.30 $ 0.22 $ 0.33 $ 0.39
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Weighted average common shares outstanding ............... 46,744,000 42,494,000 45,842,000 42,439,000
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Diluted pro forma and actual earnings per share (1) ...... $ 0.30 $ 0.21 $ 0.32 $ 0.36
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Weighted average common shares and equivalents outstanding 47,816,000 46,337,000 47,793,000 46,324,000
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(1) Net income and earnings per share for the three and six months ended June
30, 1997 have been calculated as if Preferred Payment Systems, Inc. ("PPS") had
been subject to federal and state income taxes for the entire period, based
upon an effective tax rate indicative of the statutory rates in effect. Prior
to its acquisition by the company during the first quarter of 1998, PPS elected
to be taxed as an S corporation, and accordingly, was not subject to federal
and state income taxes in certain jurisdictions.
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Concentra Managed Care, Inc.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
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June December
ASSETS 30, 1998 31, 1997
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Restated
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CURRENT ASSETS:
Cash and cash equivalents ........................... $ 121,922,000 $ 12,576,000
Accounts receivable, net ............................ 119,955,000 106,963,000
Prepaid expenses, tax assets and other current assets 28,838,000 26,212,000
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Total current assets ........................ 270,715,000 145,751,000
PROPERTY AND EQUIPMENT, AT COST ....................... 124,418,000 104,054,000
Less: Accumulated depreciation and amortization ...... (45,011,000) (38,351,000)
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NET PROPERTY AND EQUIPMENT ............................ 79,407,000 65,703,000
GOODWILL AND OTHER INTANGIBLE ASSETS, NET ............. 269,963,000 262,592,000
OTHER ASSETS .......................................... 15,676,000 8,925,000
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$ 635,761,000 $ 482,971,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Revolving credit facilities ......................... $ -- $ 49,000,000
Current portion of long-term debt ................... 418,000 7,497,000
Accounts payable, accrued income tax and expenses ... 63,967,000 52,136,000
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Total current liabilities ................... 64,385,000 108,633,000
LONG-TERM DEBT, NET OF CURRENT PORTION ................ 327,769,000 150,103,000
DEFERRED INCOME TAXES AND OTHER LIABILITIES ........... 16,323,000 17,794,000
STOCKHOLDERS' EQUITY:
Common stock ........................................ 469,000 436,000
Paid-in capital ..................................... 265,608,000 257,022,000
Retained deficit .................................... (38,793,000) (51,017,000)
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Total stockholders' equity .................. 227,284,000 206,441,000
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$ 635,761,000 $ 482,971,000
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