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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Under Section 14(d)(4)
of the Securities Exchange Act of 1934
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PROVANTAGE HEALTH SERVICES, INC.
(Name of Subject Company)
PROVANTAGE HEALTH SERVICES, INC.
(Names of Person(s) Filing Statement)
Common Stock, $0.01 par value per share
(Including the Associated Preferred Share Purchase Rights)
(Title of Class of Securities)
743725 10 3
(CUSIP Number of Class of Securities)
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Jeffrey A. Jones
President and Chief Executive Officer
ProVantage Health Services, Inc.
N19 W24130 Riverwood Drive
Waukesha, Wisconsin 53188
(262) 312-3000
(Name, address and telephone number of person
authorized to receive notices and communications on
behalf of the person(s) filing statement)
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With copies to:
Jay O. Rothman
Russell E. Ryba
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
(414) 271-2400
[X] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
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[Logo of ProVantage]
Investor Contact: Bob Abramowski
262-312-3643
ProVantage Announces First Quarter Earnings
WAUKESHA, Wis., May 10/PRNewswire/ - ProVantage Health Services, Inc. (NYSE:
PHS) announced revenues for its first quarter ended April 29, 2000 of $275.7
million, which is a 28.3% increase over revenues of $214.9 million in the
previous year. Net earnings for the first quarter of fiscal 2000 totaled $1.9
million compared with $2.4 million for last year. The Company has experienced in
the first quarter of fiscal 2000 margin pressures. Other costs were in line with
management expectations. During the first quarter of fiscal 2000, the Company
recorded merger related costs before income tax effects of $0.4 million. The
Company had announced on May 4, 2000 that it had entered into a definitive
agreement under which Merck & Co. would acquire ProVantage for $12.25 per share
in cash pursuant to a tender offer for all of ProVantage's outstanding shares.
The total acquisition price for the Company will approximate $222 million.
Supplemental basic earnings per share were $0.11 for the current fiscal quarter
compared to $0.13 for the prior year. Supplemental net earnings per share is
calculated based on the actual number of shares outstanding after the completion
of the initial public offering of common stock which occurred on July 14, 1999.
Commenting on the results, Jeffrey A. Jones, President and Chief Executive
Officer said, "The executive management team of ProVantage has been heavily
engaged in meeting with and making presentations to potential buyers of the
Company in an effort to enhance shareholder value. This effort was successful
and resulted in the announced pending transaction with Merck & Co. During this
period of time the rest of our management team and associates continued to serve
our clients at high levels while managing our continued growth."
ProVantage is a leading healthcare knowledge company with Health Benefit
Management (HBM) and Health Information Technology (HIT) divisions that serve
more than 19 million people. Its goal is to be the leading third-party supplier
of products and services designed to optimize the quality and minimize the cost
of healthcare services. ProVantage provides services to more than 3,200
customers, including pharmacy benefit management services and vision benefit
management services. The health information technology division licenses
products that are designed to improve the quality of healthcare. These products
are being used by clients in programs covering more than 13 million people.
ProVantage's customers include healthcare payors, self-funded employers, third-
party health plan administrators, state and federal agencies, union-sponsored
benefit plans and pharmaceutical manufacturers. For more information regarding
ProVantage, please visit our website at http://www.provantageinc.com or call
investor relations (262) 312-3878.
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[Logo of ProVantage]
This press release contains forward-looking statements within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements are subject to important factors which could cause ProVantage's
actual results to differ materially from those anticipated by the forward-
looking statements. These factors include those referenced in ProVantage's Form
10-K for fiscal 1999 or as may be described from time to time in ProVantage's
subsequent SEC filings.
THE TENDER OFFER FOR THE OUTSTANDING SHARES OF PROVANTAGE HEALTH SERVICES, INC.
COMMON STOCK DESCRIBED IN THIS ANNOUNCEMENT HAS NOT YET COMMENCED. AT THE TIME A
SUBSIDIARY OF MERCK & CO. INC. COMMENCES ITS OFFER, IT WILL FILE A TENDER OFFER
STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND PROVANTAGE HEALTH
SERVICES, INC. WILL FILE A SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO
THE OFFER. SECURITY HOLDERS SHOULD READ EACH OF THE TENDER OFFER STATEMENT AND
THE SOLICITATION/RECOMMENDATION STATEMENT WHEN IT IS AVAILABLE BECAUSE EACH
CONTAINS IMPORTANT INFORMATION. INVESTORS CAN GET THE TENDER OFFER STATEMENT
(INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITIAL, AND OTHER
OFFER DOCUMENTS), THE SOLICITATION/RECOMMENDATION STATEMENT AND OTHER FILED
DOCUMENTS FOR FREE AT THE SECUTRITIES AND EXCHANGE COMMISSION'S WEBSITE AT
WWW.SEC.GOV. AN OFFER TO PURCHASE THE RELATED LETTER OF TRANSMITTAL AND CERTAIN
OTHER DOCUMENTS, AS WELL AS THE SOLICITATION/RECOMMENDATION STATEMENT, WILL BE
MADE AVAIALBE TO SHAREHOLDERS OF PROVANTAGE HEALTH SERVICES, INC. AT NO EXPENSE
TO THEM.
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[Logo of ProVantage]
Exhibit 1
ProVantage Health Services, Inc.
Consolidated Statements of Net Earnings
(in thousands, except per share data)
<TABLE>
<CAPTION>
13 weeks ended 13 weeks ended
April 29, 2000 May 1, 1999
<S> <C> <C>
Revenues $275,677 $214,949
Costs and Expenses
Cost of revenues 260,778 201,181
Selling, general and administrative expenses 9,004 7,778
Depreciation and amortization expenses 2,726 2,061
Merger related costs 400 ---
Interest income - net 627 174
Earnings before income taxes 3,396 4,103
Provision for income taxes 1,483 1,750
Net earnings 1,913 2,353
Net earnings per share
Basic $ .11 $ .19
Diluted $ .11 $ .19
Weighted average shares outstanding
Basic 18,150 12,550
Diluted 18,157 12,550
Supplemental net earnings per share
Basic $ .11 $ .13
Diluted $ .11 $ .13
Supplemental shares outstanding
Basic 18,150 18,150
Diluted 18,157 18,150
</TABLE>
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[Logo of ProVantage]
Exhibit 2
ProVantage Health Services, Inc.
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
April 29, 2000 January 29, 2000
<S> <C> <C>
Cash and cash equivalents $ 66,754 $ 39,895
Receivables, less allowances 110,335 114,456
Pharmaceutical inventories 4,103 3,713
Deferred tax benefits 643 650
Other current assets 1,852 1,620
Total current assets 183,687 160,334
Intangibles - net 66,939 67,978
Other assets - net 17 21
Property and equipment - net 31,113 28,916
Total Assets $281,756 $257,249
Short-term obligations $ 782 $ 826
Accounts payable trade 85,439 78,645
Accounts payable - ShopKo Stores, Inc. 27,842 11,236
Accrued liabilities 10,989 12,011
Total current liabilities 125,052 102,718
Long-term obligations 1,792 2,006
Deferred income taxes 7,957 7,483
Stockholders' equity 146,955 145,042
Total Liabilities and Stockholders' Equity $281,756 $257,249
</TABLE>
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[Logo of ProVantage]
Exhibit 3
Non-Financial Data
(in thousands)
<TABLE>
<CAPTION>
13 weeks ended 13 weeks ended
April 29, 2000 May 1, 1999
<S> <C> <C>
Pharmacy network claims processed 10,228 8,827
Mail pharmacy prescriptions filled 303 244
April 29, 2000 May 1, 1999
Number of pharmacies in network 52,000 52,000
Health benefit management lives covered 5,444 5,024
</TABLE>
