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UNITED STATES
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): June 18, 1998
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VENCOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-14057 61-1323993
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
3300 Aegon Center
400 West Market Street
Louisville, Kentucky
(Address of principal executive offices)
40202
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7300
Not Applicable
(Former name or former address, if changed since last report.)
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ITEMS 1-4. NOT APPLICABLE.
ITEM 5. OTHER INFORMATION.
On June 18, 1998, Vencor, Inc. (the "Company") disclosed earnings
expectations for the Company based on its recently completed analysis of the
Balance Budget Act of 1997. A copy of the press release is included as an
exhibit to this filing and is incorporated herein by reference.
The above statements include a number of forward-looking statements,
particularly with respect to future financial results. All statements
regarding the Company's future financial results and plans and objectives of
management are forward-looking statements. These statements are based on
management's best assessment of current business conditions and action plans
that they believe are necessary for the Company to respond to changes in the
healthcare industry, including the implementation of the new Medicare
prospective payment system. However, actual results could differ materially
from projections contained in these forward-looking statements. The Company
cautions investors that any forward-looking statements are not guarantees of
future performance. Numerous factors exist which, in some cases have affected,
and in the future could cause results to differ materially from these
expectations. These statements involve risks and uncertainties concerning the
Company's business strategy addressing healthcare regulatory changes, its recent
reorganization and increased debt structure and other factors detailed in the
Company's Form 10 and in the Company's other filings with the Securities and
Exchange Commission.
ITEM 6. NOT APPLICABLE.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 Press Release dated June 18, 1998 announcing earnings
expectations for the Company.
ITEMS 8-9. NOT APPLICABLE.
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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 hereunto duly authorized.
VENCOR, INC.
Dated: June 18, 1998 By: /s/ W. Bruce Lunsford
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W. Bruce Lunsford
Chairman of the Board,
President and Chief
Executive Officer
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Exhibit 99.1
[Logo of Vencor, Inc. appears here]
CONTACT: W. Earl Reed, III
Executive Vice President and
Chief Financial Officer
(502) 596-7380
MEDIA INQUIRIES
Susan E. Moss
Vice President of Corporate Communications
(502) 596-7296
FOR IMMEDIATE RELEASE
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VENCOR DISCUSSES EARNINGS EXPECTATIONS AND BALANCED BUDGET ACT
LOUISVILLE, Ky. (June 18, 1998) -- Vencor, Inc. (NYSE: VC) today disclosed
earnings expectations for the Company based on its recently completed analysis
of the Balanced Budget Act of 1997. Detailed regulations related to the new
reimbursement system for nursing centers were made available by the Health Care
Financing Administration on May 5, 1998.
Vencor indicated that it anticipates diluted earnings per share for the
third quarter ended September 30, 1998 to approximate $0.12 to $0.15 per share,
while fourth quarter results are expected to improve to $0.17 to $0.20. In
addition, the Company also indicated that earnings targets for 1999 could range
between $0.75 and $0.80 per share. Vencor stated that a number of cost
reductions are being implemented throughout the Company in anticipation of the
new prospective payment system ("PPS") which will go into effect on July 1,
1998. These cost reductions include a reduction in the work force, primarily in
the number of certified therapists and are expected to save more than $100
million annually. In addition, the Company announced that it has delayed
indefinitely the construction of its previously planned corporate headquarters
building.
"We are on the verge of the most significant change in the Medicare
reimbursement system since the inception of the Company in 1985," Chairman and
Chief Executive Officer W. Bruce Lunsford announced. "An entirely new way of
thinking is needed in the long-term care industry. Vencor is reinventing itself
in order to lead the way."
Lunsford went on to say, "We are improving the operating efficiencies of
our three core businesses - nursing centers, hospitals and ancillary services
and will continue to improve the quality of our patient care. The initial phase
of the restructuring plan has already been successfully implemented. The role
of certified therapists has been re-evaluated and the mix of employees in Vencor
facilities is being changed to reduce costs and maximize efficiency. We intend
to continue to reduce debt by selling non-strategic assets, including the
previously
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announced sale of 90% of our stake in Atria Communities, Inc. and by eliminating
acquisition activities for the next 12 to 18 months."
In conjunction with its announcement, Vencor also indicated that earnings
for the second quarter ended June 30, 1998 would range from $0.03 to $0.05 per
share on a pro forma basis before one-time charges. Second quarter results are
being negatively affected by the transition to PPS, reimbursement issues
associated with the recently completed spin-off and a decline in nursing center
census. The Company also expects to record one-time charges for costs related
to the Company's recently completed spin-off from Ventas (NYSE:VTR) and losses
associated with the previously announced sales of its home health and hospice
operations which are expected to reduce second quarter net income by
approximately $120 million.
Vencor is a long-term healthcare provider operating hospitals, nursing
centers and contract ancillary services in 45 states.
The above statements include a number of forward-looking statements,
particularly with respect to future financial results. All statements
regarding the Company's future financial results and plans and objectives of
management are forward-looking statements. These statements are based on
management's best assessment of current business conditions and action plans
that they believe are necessary for the Company to respond to changes in the
healthcare industry, including the implementation of the new Medicare
prospective payment system. However, actual results could differ materially
from projections contained in these forward-looking statements. The Company
cautions investors that any forward-looking statements are not guarantees of
future performance. Numerous factors exist which, in some cases have affected,
and in the future could cause results to differ materially from these
expectations. These statements involve risks and uncertainties concerning the
Company's business strategy addressing healthcare regulatory changes, its recent
reorganization and increased debt structure and other factors detailed in the
Company's Form 10 and in the Company's other filings with the Securities and
Exchange Commission.
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