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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): MARCH 4, 1998.
INTEGRATED HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION><S> <C> <C> <C>
DELAWARE 001-12306 23-2428312
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
Incorporation)
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10065 RED RUN BOULEVARD
OWINGS MILLS, MARYLAND 21117
(Address of Principal Executive Offices)
(410) 998-8400
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
In a press release dated March 4, 1998, Integrated Health Services, Inc.
(the "Company") reported its revenues and operating results for the fourth
quarter and year ended December 31, 1997. A copy of the press release and the
Company's consolidated statement of earnings is included as Exhibit 99.01 hereto
and incorporated by reference herein.
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(c) Exhibits.
Exhibit No. Document
99.01 Press Release dated March 4, 1998 and
the Company's consolidated statement of
earnings.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.
INTEGRATED HEALTH SERVICES, INC.
By: /s/
________________________
Name: C. Taylor Pickett
Title: Executive Vice President and
Chief Financial Officer
Dated: March 12, 1998
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EXHIBIT INDEX
SEQUENTIALLY NUMBERED
EXHIBIT NO. DOCUMENT PAGE
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99.01 Press Release dated March 4, 6
1998 and the Company's
consolidated statement of
earnings.
EXHIBIT 99.01
Wednesday March 4, 6:30 am Eastern Time
Company Press Release SOURCE: Integrated Health Services, Inc. Integrated Health
Services Reports Fourth Quarter And Year End Results
OWINGS MILLS, Md., March 4 --
Integrated Health Services, Inc. (NYSE: IHS - news) today announced revenues and
operating results for the fourth quarter and year ended December 31, 1997.
"The fourth quarter represents another successful quarter for the Company," said
Robert N. Elkins, M. D. Chairman and Chief Executive Officer. "We are very
pleased with our operating and financial performance in the quarter and excited
to have closed both the RoTech acquisition and the Horizon assets acquisition.
These acquisitions clearly strengthen our network and their integration into IHS
is going extremely well."
Net revenues for the fourth quarter totaled $602.2 million, representing a 35%
increase over the fourth quarter of 1996. Earnings before non-recurring items
were $27.9 million in the quarter compared to $14.4 million in the fourth
quarter 1996. Earnings per share (diluted) before non-recurring items were $.64
for the fourth quarter compared to $.53 in the fourth quarter 1996, representing
a 21% increase.
The Company recorded a non-recurring charge of $87.9 million, net of tax, in the
fourth quarter 1997 as a result of its fourth quarter acquisition of RoTech and
Horizon and the resulting plan to dispose of certain non-strategic assets in
order to allow the Company to focus on its core operations.
Net revenues for the year ended December 31, 1997 totaled $1,993.3 million
representing a 39% increase over the previous year. Earnings before
non-recurring and extraordinary items were $89.1 million for the year ended
December 31, 1997, compared to $59.7 million for the same period in 1996.
Earnings per share (diluted) before non-recurring items were $2.55 for the year
ended December 31, 1997 compared to $2.20 for the same period in 1996.
After giving effect to the non-recurring charges, extraordinary items and
cumulative effect of accounting change, the Company reported a net loss of $33.5
million for the year ended December 31, 1997 and net earnings of $46.3 million
for the year ended December 31, 1996.
"The fourth quarter marks another increase in our operating margin which
reflects the ability of our management team to improve operations and
successfully integrate acquisitions," said Dr. Elkins. "The acquisition of the
Horizon assets which closed on December 31, 1997 is complementary to our core
long term care and contract rehabilitation business lines. It not only increases
our service network, but provides opportunities for cost savings and operating
synergies."
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Key highlights for the quarter include:
- -- Revenues from higher margin specialty medical services increased 40% to
$478.1 million in the fourth quarter of 1997 from $340.9 million in the
fourth quarter of 1996.
- -- Specialty medical services now represent 79% of total company revenue
compared to 76% in the fourth quarter 1996.
- -- The Company completed the acquisition of RoTech Medical Corporation, a
leading provider of home respiratory services. The acquisition served to
strengthen the IHS balance sheet, reduce its leverage, increase its margins
and expand its services.
- -- The Company completed the acquisition of the Horizon/CMS long term care
facilities, contract rehabilitation operations and other assets from
HEALTHSOUTH. This acquisition was complementary to IHS operations and
enhances the Company's position as one of the premier companies in its
sector.
Integrated Health Services is a highly diversified health services provider,
offering a broad spectrum of post-acute medical and rehabilitative services
through its nationwide healthcare network. IHS's post-acute services include
subacute care, rehabilitation services, long term care, home respiratory
services and home nursing services. Supporting the full continuum of healthcare
needs, IHS currently operates over 2,000 post-acute service locations in 47
states throughout the U.S.
Statements in this press release concerning the Company's business outlook or
future economic performances, anticipated profitability, revenues, expenses or
other financial items, anticipated cost synergies and product or service line
growth, together with other statements that are not historical facts, are
"forward-looking statements" as that term is defined under the Federal
Securities Laws. Any forward-looking statements are estimates, reflecting the
best judgment of IHS based upon currently available information and involve a
number of risks, uncertainties and other factors which could cause actual
results to differ materially from those stated in such statements. Risks,
uncertainties and factors which could affect the accuracy of such forward
looking statements are identified in the public filings made with the Securities
and Exchange Commission, and forward looking statements contained in this press
release or in other public statements of the Company should be considered in
light of those factors. There can be no assurance that these or other factors
will not affect the accuracy of such forward looking statements.
7
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INTEGRATED HEALTH SERVICES, INC.
CONSOLIDATED STATEMENT OF EARNINGS (LOSS)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
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THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
NET REVENUES:
BASIC MEDICAL SERVICES $ 114,006 $ 93,305 $ 382,274 $ 389,773
SPECIALTY MEDICAL SERVICES 478,133 340,912 1,571,704 999,209
MANAGEMENT SERVICES AND OTHER 10,022 11,505 39,307 46,541
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TOTAL REVENUES 602,161 445,722 1,993,285 1,435,523
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COSTS AND EXPENSES:
OPERATING EXPENSES 439,388 348,602 1,479,006 1,093,948
CORPORATE ADMINISTRATIVE AND GENERAL 20,756 16,086 76,824 60,976
DEPRECIATION AND AMORTIZATION 22,932 15,772 70,750 41,681
RENT 29,814 23,805 105,136 77,785
INTEREST, NET 43,210 18,077 115,201 64,110
NON-RECURRING CHARGES (INCOME), NET 112,995 19,841 133,042 (14,457)
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TOTAL COSTS AND EXPENSES 669,095 442,183 1,979,959 1,324,043
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EARNINGS (LOSS) BEFORE INCOME TAXES, EXTRAORDINARY ITEM
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE (66,934) 3,539 13,326 111,480
FEDERAL AND STATE INCOME TAXES (6,852) 1,363 24,449 63,715
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EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (60,082) 2,176 (11,123) 47,765
EXTRAORDINARY ITEM 0 0 (20,552) (1,431)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (1,830) 0 (1,830) 0
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NET EARNINGS (LOSS) $ (61,912) $ 2,176 $ (33,505) $ 46,334
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PER COMMON SHARES -BASIC
EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE $ (1.55) $ 0.09 $ (0.39) $ 2.12
NET EARNINGS (LOSS) (1.59) 0.09 (1.19) 2.06
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PER COMMON SHARES - DILUTED
EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE $ (1.55) $ 0.14 $ (0.39) $ 1.83
NET EARNINGS (LOSS) (1.59) 0.14 (1.19) 1.78
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