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
March 19, 1997
Date of Report (date of earliest event reported)
MEDNET, MPC CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 0-17120 88-0215949
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
Incorporation) Number)
871-C Grier Drive
Las Vegas, Nevada 89119
(Address of principal executive offices)
702-361-3119
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On March 19, 1997 the Company issued a press release announcing that it
would be taking a fourth quarter 1996 charge in excess of $13,000,000, that it
expected to restate the results of the first quarter of 1996 and subsequent
periods and that 1996 revenues will be less than previously announced. The press
release also stated that its Nevada pharmacy license will be placed on probation
as a result of previously announced proceedings. A copy of the press release is
attached as an exhibit.
Item 7. Financial Statements and Exhibits.
The following exhibit is filed herewith:
(a) Press release dated March 19, 1997.
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.
MEDNET, MPC CORPORATION
Dated: March 20, 1997 By /s/ Robert Bagdasarian
-------------------------
Name: Robert Bagdasarian
Title: Chief Executive
Officer
NEWS RELEASE
Mednet, MPC Corporation
FOR IMMEDIATE RELEASE Contact:Robert Bagdasarian
Chief Executive Officer
(702)361-3119
MEDNET ANNOUNCES LOSSES FOR YEAR-END
BUT IMPLEMENTS STRATEGY TO RESTRUCTURE THE COMPANY
COMPANY TO INCUR FOURTH QUARTER CHARGES
LAS VEGAS, Nevada (March 19, 1997) -- Mednet, MPC Corporation (Nasdaq:MMRX), a
provider of managed prescription care services, today announced that it has
implemented a strategy to streamline the Company's organizational structure and
operations to position Mednet for future growth. The Company also announced
that, as a result of a re-evaluation of intangible assets, the Company would
incur a fourth quarter charge in excess of $13 million. The Company expects to
report an operating loss for the year in addition to the fourth quarter charges.
Revenue for 1996 is expected to be approximately $93 million, which was lower
than November projections of $100 to $110 million. The Company expects to
restate the results of its first three quarters which will affect the
profitability reported for the first quarter and subsequent periods. Final
year-end results will be reported upon completion of the annual audit. The
Company is expected to announce final results in conjunction with the filing of
its Form 10-K.
The Company has closed its Chicago-based dispensing facility and
consolidated its operations into its Las Vegas facility. In addition, it will
implement cost-saving measures in its Las Vegas, Nevada, and Lemoyne,
Pennsylvania, facilities. This consolidation/restructuring plan is expected to
reduce annual operating costs by approximately $2.5 million. Under the plan, new
management has already reduced personnel 40% by streamlining the Company's
organizational structure.
The Company also announced that, as a result of the proceedings brought
by the Nevada State Board of Pharmacy in July of 1996 for violations in the
operation of its Nevada mail order pharmacy in October and November 1995, the
Company's Nevada pharmacy license has been put on probation. The Company will
fully comply with the conditions of the probation. Management believes that the
consolidation of the facilities will provide new management with tighter control
over its operation.
Mr. Robert A. Bagdasarian, chief executive officer of Mednet, said,
"Mednet's Board of Directors has affirmed new management plans for sweeping
changes in Mednet's structure, organization and staffing. These changes will
allow the Company to compete as a restructured participant in the managed care
arena. We expect to have lower sales in 1997, but improve net performance of the
Company. As the new chief executive officer of Mednet, my first priority is to
develop a new business strategy to put the Company on the right track for
improved performance. An in-depth analysis helped us to recognize opportunities
for consolidation among our facilities and to identify nonprofitable contracts
for cancellation. As previously noted and as a result of our consolidation
efforts, we have written off certain intangible assets as required by accounting
rules."
In closing, Mr. Bagdasarian said, "We believe these actions will give
the new management team a stronger base from which to build a turn-around
strategy. We look forward to a challenging period of implementing our new
strategy."
Mednet, MPC Corporation, through its wholly owned subsidiaries,
Medi-Claim and Medi-Mail, provides drug prescription benefit management services
including the establishment of mail service and retail pharmacy networks through
contracts with licensed pharmacies.
Except for historical information contained herein, the matters discussed
in this press release are forward-looking statements that involve risks and
uncertainties. Among the factors that could cause actual results to differ
materially include failure of revenue on new contracts to develop as estimated,
loss of existing contracts, ineffectiveness of cost-savings efforts, general
downward trends in the Company's industry, negative impacts of pending and
threatened litigation and other contingencies and other risk factors detailed
from time to time in the Company's reports filed with the Securities and
Exchange Commission.
