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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): March 2, 2000
OPTICARE HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-15223 76-0453392
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
87 Grandview Avenue, Waterbury, Connecticut 06708
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 596-2236
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On March 2, 2000, OptiCare Health Systems, Inc. (the "Company") issued
a press release announcing its financial results for the fourth quarter of 1999
and the year ended December 31, 1999. The press release, as previously
disclosed, also indicates that the Company and Vision Twenty-One, Inc. have
entered into a definitive merger agreement pursuant to which the Company will
acquire Vision Twenty-One. A copy of the press release is filed herewith as
Exhibit 99.1 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Joint Press Release, dated March 2, 2000.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in the press release filed with this Form 8-K and
oral statements by directors or officers of the Company that are not based on
historical fact constitute "forward-looking statements" within the meaning of
the Securities Act of 1933 and Securities Exchange Act of 1934. The terms
"OptiCare", "Company," "we," "our" and "us" refer to OptiCare Health Systems,
Inc. The words "expect," "believe," "goal," "plan," "intend," "estimate," and
similar expressions and variations thereof are intended to specifically identify
forward-looking statements. Those statements appear in the press release, and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things; the
consummation of the proposed merger transaction contemplated between the Company
and Vision Twenty-One, Inc. ("Vision Twenty-One"). You are cautioned that any
such forward looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those projected in the forward looking statements as a result of various
factors. The factors that might cause such differences include, among others,
the following: (i) the inability of the proposed transaction to ultimately
close; (ii) the inability of the conditions to the closing of the transaction to
be satisfied, including but not limited to obtaining the required approval of
the shareholders of both companies; (iii) our inability to obtain required
financing in connection with the transaction; (iv) the loss of or changes in key
personnel, management or directors; (v) the inability to maintain our managed
care business; (vi) any adverse change in our managed care business; (vii)
changes in state and/or federal governmental regulations which could materially
affect our ability to operate or materially affect our ability to consummate the
proposed
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transaction with Vision Twenty-One; (viii) any adverse governmental or
regulatory changes or actions, including any healthcare regulations and related
enforcement actions; (ix) the ability to maintain or obtain required licensure
in the states in which we operate; (x) our stock price and Vision Twenty-One's
stock price; (xi) additional litigation claims that may arise; and (xii) other
factors including those identified in our filings from time to time with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise forward looking statements to reflect events or
circumstances after the date of the press release and this Form 8-K or to
reflect the occurrence of unanticipated events.
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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.
OPTICARE HEALTH SYSTEMS, INC.
Dated: March 2, 2000 By: /s/ Steven L. Ditman
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Name: Steven L. Ditman
Title: Chief Financial Officer
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EXHIBIT INDEX
Description
Exhibit Number Description
99.1 Press Release, dated March 2, 2000.
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[OPTICARE HEALTH SYSTEMS, INC. LOGO]
Contact:
Steven L. Ditman
Executive Vice President and
Chief Financial Officer
OptiCare Health Systems, Inc.
(203) 596-2236
Investor Relations:
Robert P. Jones/Ephie Bernstein/Dory Lombardo
Media: Stacey Nield
Morgen-Walke Associates
(212) 850-5600
OPTICARE HEALTH SYSTEMS, INC. NET REVENUE INCREASES 120%
FOR FOURTH QUARTER 1999
Waterbury, Connecticut, March 2, 1999 - OptiCare Health Systems, Inc.
(AMEX: OPT) today announced financial results for the fourth quarter of 1999.
The financial statements for the three month period ending December 31, 1999 are
based upon consolidated operating results reported by OptiCare Health Systems,
Inc. The financial results prior to September 1999 are based upon the results
reported by its predecessor company.
Net revenues more than doubled to $31.7 million for the fourth quarter of
1999, compared to $14.4 million in the same period last year. The Company
reported net income from continuing operations of $139,000, or $0.02 per basic
common share, compared to a net loss from continuing operations of ($2.0)
million or ($1.67) per basic common share for the same period in 1998. The
Company's EBITDA increased 23% in the fourth quarter of 1999 as compared to the
third quarter of 1999. The number of basic weighted average shares outstanding
were 8,972,128 for the fourth quarter of 1999, compared to 2,299,325 for the
fourth quarter of 1998, which primarily increased as a result of a merger.
For the year ended December 31, 1999, net revenues increased 46% to $94.6
million from $64.6 million in the same period in 1998. The Company reported net
profit from continuing operations of $ 351,000 compared to a net loss from
continuing operations of ($3.2)million for the same period last year. The basic
weighted average shares outstanding were 4,776,501 for the year ended December
31, 1999 compared to 2,256,461 in the same period of 1998.
Highlights for the quarter included closing the acquisition of Cohen
Systems, Inc. a software developer and seller of an Internet based order entry
software system that captures and links all eye care patient data. Also, the
Company announced that it signed a letter of intent with ConnectiCare, Inc. to
provide medical/surgical managed care services as well as routine eye care
coverage to ConnectiCare's 215,000 commercial and Medicare members. In addition,
the Company opened a Laser Vision Correction (LVC) site in Rocky Mount, North
Carolina.
-more-
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Commenting on the results for the fourth quarter, Dean J. Yimoyines, M.D.,
Chairman and Chief Executive Officer of OptiCare Health Systems, Inc. stated,
"We are pleased to report solid financial results for the fourth quarter of
1999. Our Laser vision correction and professional services segment net revenues
grew 180% from $1.0 million in the third quarter of 1999 to $2.8 million in the
fourth quarter of 1999. Additionally OptiCare's Managed Care services segment
experienced 31% growth in net revenues for the fourth quarter of 1999 as
compared to the third quarter of 1999. We're also particularly pleased with the
progress of our ongoing integration of our recent mergers, which closed in
1999."
Subsequent to the close of the quarter, the Company completed the sale of
3,571,429 registered shares of common stock at a price of $3.50 per share. The
Company received proceeds from the offering of approximately $12.5 million,
including the cancellation of a $2 million note previously issued by the
Company. The proceeds will be used to pay down indebtedness, to expand the
Company's laser vision correction and professional services divisions, and for
general corporate purposes.
On February 10, 2000, the Company announced execution of a definitive
merger agreement to acquire Vision Twenty-One (Nasdaq: EYES). The merger will
combine the two companies' laser vision correction and managed eye care
businesses and will place OptiCare in a leading position for the delivery and
management of eye care services. The Company anticipates it will close the
Vision Twenty-One acquisition, which is subject to the satisfaction of certain
conditions, in the third quarter and believes the transaction will be accretive
to OptiCare's earnings.
Dr. Yimoyines concluded, "The combination with Vision Twenty-One will
significantly accelerate our growth in laser vision correction and managed care
services. Subsequent to the anticipated closing, the Company will operate
11 laser vision correction and 10 ambulatory surgery centers, have approximately
10 million managed care lives and 11,000 practicing eye care providers. We
believe this transaction, coupled with OptiCare's current internal growth, will
strongly support the Company's overall growth strategy."
OptiCare Health Systems, Inc. is an integrated eye care services company
focused on providing laser vision correction, managed care and professional eye
care services. It currently owns, operates, and develops laser vision correction
and ambulatory surgical centers and provides systems, including Internet-based
software solutions to eye care professionals.
Forward-looking statements (statements which are not historical facts) in
this release are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. OptiCare Health Systems' actual
results could differ materially from those expressed or indicated by
forward-looking statements. Factors that could cause or contribute to such
differences include but are not limited to, regulatory changes, risks related to
the eye care industry, the Company's ability to successfully integrate and
profitably operate its operations, and other factors. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, including
those risks and uncertainties detailed in the Company's filings with the
Securities and Exchange Commission. For a more detailed discussion of OptiCare
Health Systems, Inc.'s fourth quarter results, please consult the Company's
Annual Report on Form 10-K to be filed with the SEC no later than March 30,
2000.
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OPTICARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31, Year Ended December 31,
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1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET REVENUES:
Laser vision correction and
professional services $ 2,785 $ -- $ 4,061 $ --
Managed care services 8,336 3,714 24,425 14,902
Integrated services and product sales 20,617 10,734 66,147 49,710
----------- ----------- ----------- -----------
Total net revenues 31,738 14,448 94,633 64,612
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Cost of sales 9,759 7,610 41,182 35,237
Medical claims expense 6,641 2,754 19,545 10,994
Salaries, wages and benefits 9,971 2,100 20,073 9,275
Selling, general and administrative 3,483 1,706 7,932 5,996
Depreciation 568 364 1,408 1,133
Amortization 347 72 605 284
Interest expense, net 660 1,126 3,248 4,498
----------- ----------- ----------- -----------
Total operating expenses 31,429 15,732 93,993 67,417
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 309 (1,284) 640 (2,805)
INCOME TAX EXPENSE 170 670 289 434
----------- ----------- ----------- -----------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 139 (1,954) 351 (3,239)
DISCONTINUED OPERATIONS:
Loss from discontinued operations, net of tax -- (12,138) -- (11,287)
Loss from disposal of discontinued operations,
net of tax -- (23,564) (2,317) (23,564)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 139 $ (37,656) $ (1,966) $ (38,090)
=========== =========== =========== ===========
NET INCOME (LOSS) PER COMMON SHARE:
Income (loss) from continuing operations:
Basic $ 0.02 $ (1.67)* $ (0.05)* $ (2.54)*
=========== =========== =========== ===========
Diluted $ 0.01 $ (1.67)* $ (0.05)* $ (2.54)*
=========== =========== =========== ===========
Net income (loss):
Basic $ 0.02 $ (17.20)* $ (0.54)* $ (17.99)*
=========== =========== =========== ===========
Diluted $ 0.01 $ (17.20)* $ (0.54)* $ (17.99)*
=========== =========== =========== ===========
Weighted avergage shares outstanding:
Basic 8,972,128 2,299,325 4,776,501 2,256,461
=========== =========== =========== ===========
Diluted 9,557,011 2,299,325 4,776,501 2,256,461
=========== =========== =========== ===========
Earnings per share, from continuing operations,
excluding goodwill amortization:
Basic $ 0.05 $ (1.64)* $ 0.07* $ (2.41)*
=========== =========== =========== ===========
Diluted $ 0.05 $ (1.64)* $ 0.07* $ (2.41)*
=========== =========== =========== ===========
EBITDA $ 1,884 $ 278 $ 5,901 $ 3,110
</TABLE>
* Includes effect of preferred stock dividend
