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 23, 1999
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CONCENTRA MANAGED CARE, INC.
(Exact name of Registrant as specified in its charter)
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<CAPTION>
<C> <S> <C>
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)
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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 23, 1999
announcing revenues and earnings for the quarter ended June 30, 1999 for
Concentra Managed Care, Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
99.1 Press Release of the Registrant dated July 23, 1999
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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 23, 1999
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
99.1 Press Release of Registrant dated July 23, 1999
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EXHIBIT 99.1
Contact: Thomas E. Kiraly
Executive Vice President and
Chief Financial Officer
(617) 367-2163, Ext. 5101
CONCENTRA MANAGED CARE REPORTS SECOND QUARTER RESULTS
BOSTON, Mass. (July 23, 1999) - Concentra Managed Care, Inc.
(Nasdaq/NM: CCMC)("Concentra") today announced revenues and earnings for the
second quarter ended June 30, 1999. Revenues for the quarter increased 11% to
$174,088,000 from $157,501,000 in the same period last year. Operating income
for the quarter totaled $23,928,000 compared with $27,604,000 last year. Net
income for the second quarter was $11,526,000 or $0.24 per diluted share versus
net income of $14,161,000 or $0.30 per diluted share a year ago.
For the six months ended June 30, 1999, revenues increased 9% to
$329,499,000 from $301,783,000 for 1998. Operating income for the first half of
1999 was $38,144,000 compared with $36,728,000 last year. Net income for the six
months ended June 30, 1999 totaled $17,594,000 or $0.37 per diluted share versus
net income of $15,008,000 or $0.32 per diluted share for the same period last
year.
The results described above for the first six months of 1998 include a
non-recurring charge of $12,600,000 ($9,600,000 after-tax or $0.20 per diluted
share) for fees, expenses and restructuring charges primarily associated with
the February 1998 acquisition of Preferred Payment Systems. Net income for the
first half of 1998, excluding this charge, was $24,608,000 or $0.52 per diluted
share.
EBITDA, as adjusted for computation in a manner consistent with the
definition set forth in the Company's pending $190 million Series A Senior
Subordinated Notes offering, was $32,181,000 for the quarter ending June 30,
1999 and $54,217,000 for the six-month period ending June 30, 1999.
Commenting on the announcement, Daniel J. Thomas, President and Chief
Executive Officer, said, "We are pleased with the strong growth achieved in our
health services division during the second quarter and our continuing expansion
of the number of occupational healthcare centers in our national network. We
also are gratified by the progress we made during the quarter in developing a
larger base of business for our specialized cost containment services,
particularly through the exceptional performance of our Concentra Preferred
Systems business unit. These divisions met or exceeded our expectations for
revenue growth in the second quarter and continue to make strong contributions
to the Company's overall profitability."
Thomas noted that revenues from the Company's field case management
unit for the period remained largely unchanged from the level seen in the first
quarter. During the second half of 1998, the Company initiated new efforts to
renegotiate under-performing field case management contracts and reallocate its
resources to improve overall performance.
Thomas also pointed out that Concentra recently distributed proxy
materials to stockholders in connection with the Company's pending merger with
Yankee Acquisition Corp., a corporation formed by Welsh, Carson, Anderson &
Stowe. Concentra has scheduled a special meeting of
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stockholders on August 17, 1999, to consider and act on the merger proposal.
Stockholders of record as of the close of business on July 8, 1999 are entitled
to notice of and to vote at this special meeting.
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
loss, injury care, specialist networks and specialized cost containment to the
disability and automobile injury markets. Currently, the Company operates the
nation's largest network of occupational healthcare centers, managing the
practices of approximately 334 physicians located in 188 centers in 55 markets
in 29 states. The Company has approximately 1,100 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 84 service locations that
provide specialized cost containment services including utilization management,
telephonic case management, first notice of loss reporting, and retrospective
bill review.
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, consummation of
transactions involving the acquisition of some or all of the Company's common
stock and related financing transactions, 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 filings with the Securities and Exchange
Commission.
Any offering of securities in connection with the merger will be made
only by means of a prospectus.
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CONCENTRA MANAGED CARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
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1999 1998 1999 1998
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REVENUE:
Health services $ 81,942,000 $ 66,019,000 $ 152,564,000 $124,082,000
Managed care services:
Specialized cost containment 54,200,000 47,124,000 100,912,000 91,503,000
Field case management 37,946,000 44,358,000 76,023,000 86,198,000
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Total managed care services 92,146,000 91,482,000 176,935,000 177,701,000
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Total revenue 174,088,000 157,501,000 329,499,000 301,783,000
COST OF SERVICES:
Health services 62,586,000 48,861,000 120,386,000 94,001,000
Managed care services 67,618,000 67,772,000 133,555,000 132,530,000
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Total cost of services 130,204,000 116,633,000 253,941,000 226,531,000
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Total gross profit 43,884,000 40,868,000 75,558,000 75,252,000
General and administrative expenses 16,841,000 11,228,000 31,261,000 21,873,000
Amortization of intangibles 3,115,000 2,036,000 6,153,000 4,051,000
Non-recurring charge - - - 12,600,000
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Operating income 23,928,000 27,604,000 38,144,000 36,728,000
Interest expense 4,714,000 4,588,000 9,391,000 8,470,000
Interest income (1,014,000) (1,429,000) (2,126,000) (1,662,000)
Other, net 182,000 48,000 280,000 109,000
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Income before income taxes 20,046,000 24,397,000 30,599,000 29,811,000
Provision for income taxes 8,520,000 10,236,000 13,005,000 14,803,000
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Net income $ 11,526,000 $ 14,161,000 $ 17,594,000 $ 15,008,000
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Basic earnings per share $ 0.24 $ 0.30 $ 0.37 $ 0.33
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Weighted average common shares
outstanding 47,372,000 46,744,000 47,312,000 45,842,000
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Diluted earnings per share $ 0.24 $ 0.30 $ 0.37 $ 0.32
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Weighted average common shares
and equivalents outstanding 48,114,000 47,816,000 47,999,000 47,793,000
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CONCENTRA MANAGED CARE, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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JUNE 30, DECEMBER 31,
1999 1998
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 67,688,000 $ 101,128,000
Marketable securities 6,998,000 5,000,000
Accounts receivable, net 152,530,000 127,615,000
Prepaid expenses, tax assets and other current assets 36,505,000 33,094,000
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Total current assets 263,721,000 266,837,000
PROPERTY AND EQUIPMENT, NET 94,764,000 85,926,000
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 308,676,000 277,953,000
MARKETABLE SECURITIES 8,989,000 10,583,000
OTHER ASSETS 19,008,000 15,495,000
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$ 695,158,000 $ 656,794,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ - $ -
Current portion of long-term debt 150,000 55,000
Accounts payable, accrued income tax and expenses 73,959,000 64,912,000
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Total current liabilities 74,109,000 64,967,000
LONG-TERM DEBT 328,118,000 327,870,000
DEFERRED INCOME TAXES AND OTHER LIABILITIES 32,976,000 24,082,000
STOCKHOLDERS' EQUITY:
Common stock 474,000 471,000
Paid-in capital 273,224,000 270,654,000
Unrealized (loss) gain on marketable securities (27,000) 60,000
Retained deficit (13,716,000) (31,310,000)
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Total stockholders' equity 259,955,000 239,875,000
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$ 695,158,000 $ 656,794,000
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