<PAGE>
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 26, 2000
___________________
CONCENTRA OPERATING CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 001-15699 75-2822620
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
5080 Spectrum Drive
Suite 400 - West Tower 75001
Addison, Texas (Zip code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (972) 364-8000
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 April 26, 2000,
announcing financial results for the quarter ended March 31, 2000, for Concentra
Operating Corporation.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release of the Registrant dated April 26, 2000
<PAGE>
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 OPERATING CORPORATION
(Registrant)
By: /s/ Richard A. Parr II
-----------------------------------------
Name: Richard A. Parr II
Title: Executive Vice President, General Counsel
& Secretary
Date: April 27, 2000
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
99.1 Press Release of Registrant dated April 26, 2000
<PAGE>
EXHIBIT 99.1
Contacts: Daniel J. Thomas Thomas E. Kiraly
President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
(617) 367-2163 (972) 364-8217
CONCENTRA OPERATING CORPORATION
REPORTS FIRST QUARTER RESULTS
ADDISON, Texas, April 26, 2000 - Concentra Operating Corporation
("Concentra") today announced financial results for its first quarter ended
March 31, 2000. Highlights of the quarter included a 17% increase in revenues
and a 19% increase in EBITDA when compared to first quarter of the prior year.
Revenue and EBITDA growth in the Company's Health Services, Concentra Preferred
Systems and First Notice Systems businesses contributed significantly to the
Company's results.
Revenues for the first quarter were $181,096,000 compared with $155,411,000
for the same period last year, reflecting an overall 17% increase. Operating
income increased 15% to $16,369,000 versus $14,216,000 for the first quarter of
the prior year. Concentra reported net income of $231,000 for the first quarter
of 2000 as compared with net income of $6,068,000 in the first quarter of 1999.
As expected, the Company's lower net income reflected the impact of interest
expense associated with new credit facilities put in place to help facilitate
Concentra's August 1999 recapitalization.
Earnings before interest, taxes, depreciation and amortization ("EBITDA"),
as computed in a manner consistent with the definition set forth in the
Company's $190 million Series A Senior Subordinated Notes, increased 19% to
$26,186,000 in the first quarter of 2000 versus $22,035,000 reported for the
comparable 1999 period.
"Our core business lines - Concentra Health Services, Concentra Preferred
Systems and First Notice Systems - continued to expand throughout the first
quarter, providing us with a strong overall increase in revenues and EBITDA,"
commented Daniel J. Thomas, President and Chief Executive Officer of Concentra.
"We also witnessed increasing stability in our field case management business
which, while operating somewhat below the level seen last year, showed a slight
increase in revenue and earnings compared with the fourth quarter of 1999. In
each of these four major lines of business, revenue and EBITDA growth exceeded
our original expectations for the quarter."
Thomas pointed out that the Health Services division continues to emerge as
a key driver of the Company's growth, cash flow and profitability. This
division accounted for 52% of Concentra's total first quarter revenues and
provided the bulk of the Company's $25.7 million in incremental revenue during
the quarter. Concentra Health Services, the nation's largest network of
occupational healthcare centers, benefited from strong internal growth in the
first quarter. The number of visits to Concentra's centers increased 28.5% in
total compared with the prior year and 8.5% on a same-market basis,
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reflecting a slightly higher mix of non-injury visits. Same-market revenues rose
8.0% compared with the same period last year. Concentra Health Services
currently operates 216 centers located in 63 markets in 32 states.
"While we are gratified by the growth and financial contributions of
Concentra Health Services, we also are pleased to note that key areas of our
specialized cost containment business continue to expand successfully," Thomas
said. "In particular, Concentra Preferred Systems continues to make solid gains
in growing its customer base, and First Notice Systems, while still a small part
of our overall operations, is our fastest growing line of business.
"Even with this strong and successful start to the new year, we realize
that it would be premature to draw long-term conclusions from the results of
just one quarter, and we recognize that there is much we must do to further
improve our operations," he added. "Nevertheless, we are encouraged by this
progress and believe these results further validate our strategies to work in
partnership with employers and insurers to control healthcare costs as we expand
our presence in occupational healthcare and in other key healthcare markets."
During the first quarter of 2000, Concentra increased its borrowings under
its $100 million revolving credit facility to $24.5 million to compensate for
previously anticipated seasonal working capital increases, capital expenditures
and acquisition expenditures.
Concentra Operating Corporation, the successor to and a wholly owned
subsidiary of Concentra Managed Care, Inc., is the comprehensive outsource
solution for containing healthcare costs. Serving the occupational, auto, and
group healthcare markets, Concentra offers prospective and retrospective
services to employers and payors by providing pre-employment testing, loss
prevention services, first report of loss, injury care, specialist networks and
other specialized cost containment services.
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, interruption in its data
processing capabilities, operational financing and strategic risks related to
the Company's capital structure and growth strategy, possible fluctuations in
quarterly and annual operations, 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.
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CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA MANAGED CARE, INC.
Unaudited Consolidated Statements of Operations
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
REVENUE:
Health services $ 94,260 $ 70,622
Managed care services:
Specialized cost containment 51,671 46,712
Field case management 35,165 38,077
-------- --------
Total managed care services 86,836 84,789
-------- --------
Total revenue 181,096 155,411
COST OF SERVICES:
Health services 76,995 57,800
Managed care services:
Specialized cost containment 35,379 32,903
Field case management 31,868 33,034
-------- --------
Total managed care services 67,247 65,937
-------- --------
Total cost of services 144,242 123,737
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Gross profit 36,854 31,674
General and administrative expenses 16,919 14,420
Amortization of intangibles 3,566 3,038
-------- --------
Operating income 16,369 14,216
Interest expense 16,221 4,677
Interest income (80) (1,112)
Other, net (196) 98
-------- --------
Income before income taxes 424 10,553
Provision for income taxes 193 4,485
-------- --------
Net income $ 231 $ 6,068
======== ========
</TABLE>
The consolidated statements of operations above include the post-
recapitalization transaction operating results of Concentra Operating
Corporation, a wholly owned subsidiary of Concentra Managed Care, Inc. and the
pre-recapitalization transaction operating results of Concentra Managed Care,
Inc. The recapitalization transaction was completed on August 17, 1999.
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CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA MANAGED CARE, INC.
Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
ASSETS (unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 6,744 $ 14,371
Accounts receivable, net 162,226 156,239
Prepaid expenses, taxes and other current assets 29,474 28,674
-------- --------
Total current assets 198,444 199,284
PROPERTY AND EQUIPMENT, NET 106,451 104,068
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 328,259 324,984
OTHER ASSETS 26,959 25,768
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$660,113 $654,104
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ 24,500 $ 4,000
Current portion of long-term debt 4,031 3,805
Accounts payable, accrued income tax and expenses 70,503 89,109
-------- --------
Total current liabilities 99,034 96,914
LONG-TERM DEBT 558,964 559,942
DEFERRED INCOME TAXES AND OTHER LIABILITIES 40,958 36,521
STOCKHOLDERS' EQUITY (DEFICIT) (38,843) (39,273)
-------- --------
$660,113 $654,104
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</TABLE>
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