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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 EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 28, 1999
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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 name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
In a press release issued April 28, 1999, Concentra Managed Care, Inc.,
a Delaware corporation ("Concentra"), announced its earnings for the quarter
ended March 31, 1999. A copy of the press release issued by Concentra is
attached as an exhibit hereto and is incorporated herein by reference in its
entirety.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
99.1 -- Press release dated April 28, 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.
By: /s/ RICHARD A. PARR
---------------------------------
Name: Richard A. Parr
Title: Executive Vice President
and General Counsel
Date: April 28, 1999
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
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<S> <C>
99.1 -- Press release dated April 28, 1999
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EXHIBIT 99.1
Contact: Joseph F. Pesce, CFO
Concentra Managed Care, Inc.
(617) 367-2163, Ext. 5101
CONCENTRA MANAGED CARE REPORTS FIRST QUARTER RESULTS
BOSTON, Mass. (April 28, 1999) - Concentra Managed Care, Inc.
(Nasdaq/NM: CCMC) today announced revenues and earnings for the first quarter
ended March 31, 1999. Revenues for the quarter increased 8% to $156,860,000 from
$145,544,000 in the same period last year. Operating income for the quarter
totaled $15,192,000 compared with $21,772,000 last year. Net income for the
first quarter was $6,763,000 or $0.14 per diluted share versus net income of
$10,447,000 or $0.22 per diluted share a year ago.
The results described above for the first quarter of 1998 do not
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 quarter of 1998, inclusive of this charge, was $847,000 or $0.02 per
diluted share.
Commenting on the announcement, Daniel J. Thomas, President and Chief
Executive Officer, noted that the Company's revenue growth in the first quarter
reflected a planned decline in field case management revenues due to the
Company's restructuring of this division during the fourth quarter of 1998 and
its ongoing efforts to renegotiate certain unprofitable contracts, as well as
its emphasis on early intervention services. With greater emphasis on such
services, including Concentra's new web-based first notice of injury system and
telephonic case management, the Company believes it can produce improved
outcomes for its customers by efficiently and cost-effectively resolving more
injury cases at an earlier stage, thus having a dramatic impact on replacement
wage costs. Thomas noted increased revenues from specialized cost containment
services partially offset the decline in field case management during the first
quarter, resulting in a 2% net decrease in revenues from managed care services
for the period. Revenues from Concentra's health services division increased 21%
for the quarter and reflected strong same-market revenue growth of approximately
11%.
The Company's lower earnings for the first quarter, which matched
management's expectations for the period, reflected lower gross profit on
revenue as well as higher general and administrative expenses. Concentra
continued to increase its spending during the quarter on new technology
initiatives that will promote more efficient operations and support the
Company's ongoing efforts to integrate its information systems and capitalize on
emerging growth opportunities such as its first notice of loss reporting program
via the Internet.
Separately, the Company announced that it filed preliminary proxy
materials on a confidential basis with the Securities and Exchange Commission on
March 31, 1999, in connection with the Company's proposed merger with Yankee
Acquisition Corp., an affiliate of Welsh, Carson, Anderson & Stowe.
Additionally, Concentra last week made a filing under the
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CCMC Reports First Quarter Results
Page 2
April 28, 1999
Hart-Scott-Rodino Antitrust Improvements Act to commence the required 30-day
waiting period. At the present time, these matters are still subject to review
by the relevant regulatory agencies, and the Company cannot predict with
certainty whether the Hart-Scott-Rodino waiting period will expire without
comment, when final proxy materials will be available for distribution, and
precisely when the anticipated special meeting of stockholders will be held to
consider the merger. The merger remains subject to approval by Concentra's
stockholders, the expiration of the Hart-Scott-Rodino waiting period, and other
customary conditions. Nevertheless, the Company believes the merger, subject to
the successful completion of these conditions, will be consummated early in the
third quarter.
As announced in March 1999, Concentra has agreed to merge with Yankee
Acquisition Corp. in a transaction valued at approximately $1.1 billion,
including assumed indebtedness. Under the terms of the merger, each of
Concentra's approximately 47.3 million outstanding shares of common stock will
be converted into the right to receive $16.50 in cash. The transaction is
structured to be accounted for as a recapitalization and Concentra will continue
to operate as an independent company under its current name and management.
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. At March 31, 1999, the Company had
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 had 89 service locations that provide specialized cost containment
services including utilization management, telephonic case management, and
retrospective bill review. The Company operates the nation's largest network of
occupational healthcare centers, managing the practices of approximately 300
physicians located in 169 centers in 50 markets in 25 states as of March 31,
1999.
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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CCMC Reports First Quarter Results
Page 3
April 28, 1999
CONCENTRA MANAGED CARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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1999 1998
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<S> <C> <C>
REVENUE:
Health services $ 72,071,000 $ 59,325,000
Managed care services:
Specialized cost containment 46,712,000 44,379,000
Field case management 38,077,000 41,840,000
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Total managed care services 84,789,000 86,219,000
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Total revenue 156,860,000 145,544,000
COST OF SERVICES:
Health services 59,108,000 46,288,000
Managed care services 65,937,000 64,758,000
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Total cost of services 125,045,000 111,046,000
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Total gross profit 31,815,000 34,498,000
General and administrative expenses 14,483,000 10,699,000
Amortization of intangibles 2,140,000 2,027,000
Non-recurring charge -- 12,600,000
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Operating income 15,192,000 9,172,000
Interest expense 4,677,000 3,882,000
Interest income (1,112,000) (233,000)
Other, net 164,000 109,000
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Income before income taxes 11,463,000 5,414,000
Provision for income taxes 4,700,000 4,567,000
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Net income $ 6,763,000 $ 847,000
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Basic earnings per share $ 0.14 $ 0.02
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Weighted average common shares outstanding 47,251,000 44,939,000
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Diluted earnings per share $ 0.14 $ 0.02
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Weighted average common shares and equivalents outstanding 47,882,000 47,769,000
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</TABLE>
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CCMC Reports First Quarter Results
Page 4
April 28, 1999
CONCENTRA MANAGED CARE, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
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ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 97,269,000 $ 104,478,000
Marketable securities 5,003,000 5,000,000
Accounts receivable, net 138,116,000 128,522,000
Prepaid expenses, tax assets and other current assets 31,687,000 29,706,000
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Total current assets 272,075,000 267,706,000
PROPERTY AND EQUIPMENT, NET 90,025,000 86,936,000
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 289,290,000 280,377,000
MARKETABLE SECURITIES 10,542,000 10,583,000
OTHER ASSETS 11,410,000 11,561,000
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$ 673,342,000 $ 657,163,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ -- $ --
Current portion of long-term debt 55,000 55,000
Accounts payable, accrued income tax and expenses 69,295,000 65,281,000
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Total current liabilities 69,350,000 65,336,000
LONG-TERM DEBT 327,845,000 327,870,000
DEFERRED INCOME TAXES AND OTHER LIABILITIES 27,800,000 24,082,000
STOCKHOLDERS' EQUITY:
Common stock 473,000 471,000
Paid-in capital 272,420,000 270,654,000
Unrealized gain on marketable securities 1,000 60,000
Retained deficit (24,547,000) (31,310,000)
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Total stockholders' equity 248,347,000 239,875,000
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$ 673,342,000 $ 657,163,000
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</TABLE>
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