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):
May 26, 1998
MEADOWBROOK REHABILITATION GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19726 94-3022377
(State or other (Commission File (I.R.S. Identification
Employer jurisdiction of Number) Number)
incorporation)
2000 Powell Street, Suite 1203, Emeryville, CA 94608
(Address of principal executive offices)
Registrant's telephone number, including area code:
(510) 420-0900
<PAGE>
Item 5. Other Events
On June 2, 1998, the Registrant announced that on May 26, 1998 its
Board of Directors approved the disposition of its home health agencies in
Colorado and Kansas and physical therapy clinics in Colorado. It is anticipated
that the closing and/or sale of its operations will be completed by the current
fiscal year ending June 30, 1998. These operations represent all of the
Registrant's remaining operating businesses.
Home health agencies have traditionally received Medicare
reimbursements based on actual reasonable allowable costs subject to per visit
limitations. As a result of regulations adopted by the Health Care Financing
Administration ("HCFA") effective July 1, 1998, such reimbursements will be
subject to new aggregate annual per-beneficiary limitations. The decision to
close its healthcare operations was prompted by the receipt on March 18, 1998,
of Medicare's notice to the Registrant of the new per-beneficiary cost limits
for each of our locations. These reimbursement amounts fall far below the
Registrant's per-beneficiary operating expense. In order for the Registrant to
decrease its operating losses and be able to retain as much capital as possible
for its acquisition strategy, the Registrant decided to dispose of its
operations.
The estimated loss on the disposition of these facilities will include
the writedown of property and equipment to market value, the writeoff of
goodwill, closedown expenses and the anticipated operating losses through the
disposition date. The Registrant is unable to estimate the amount of the
anticipated loss, although it is expected to be material.
A copy of the press release announcing the execution of the Agreement
is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Exhibit 99.1 Press release dated June 2, 1998 announcing the
disposition of its healthcare operations.
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.
MEADOWBROOK REHABILITATION GROUP, INC.
By: /s/ Harvey Wm. Glasser, M.D.
Harvey Wm. Glasser, M.D.
Dated: June 5, 1998 President and Chief Executive Officer
SECURITIES AND EXCHANGE COMMISSION
EXHIBITS
TO
FORM 8-K
DATED May 26, 1998
<PAGE>
EXHIBIT 99.1
CONTACT:
MEADOWBROOK REHABILITATION GROUP, INC.
Harvey Wm. Glasser, MD -or- Wm. Samuel Veazey
Chairman, President and CEO Chief Financial Officer
(510) 420-0900
FOR IMMEDIATE RELEASE
MEADOWBROOK ANNOUNCES THE DISPOSITION OF
ITS HEALTHCARE OPERATIONS
Emeryville, CA, June 2, 1998 - Meadowbrook Rehabilitation Group, Inc.
(Nasdaq: MBRK) today announced that its Board of Directors has approved the
disposition of its home health agencies in Colorado and Kansas and physical
therapy clinics in Colorado. It is anticipated that the closing and/or sale of
its operations will be completed by the current fiscal year ending June 30,
1998. These operations represent all of the Company's remaining operating
businesses.
Home health agencies have traditionally received Medicare
reimbursements based on actual reasonable allowable costs subject to per visit
limitations. As a result of regulations adopted by the Health Care Financing
Administration ("HCFA") effective July 1, 1998, such reimbursements will be
subject to new aggregate annual per-beneficiary limitations. The decision to
close its healthcare operations was prompted by the receipt on March 18, 1998,
of Medicare's notice to the Company of the new per-beneficiary cost limits for
each of our locations. These reimbursement amounts fall far below the Company's
per-beneficiary operating expense. In order for the Company to decrease its
operating losses and be able to retain as much capital as possible for its
acquisition strategy, the Company decided to dispose of its operations.
The estimated loss on the disposition of these facilities will include
the writedown of property and equipment to market value, the writeoff of
goodwill, closedown expenses and the anticipated operating losses through the
disposition date. The Company is unable to estimate the amount of the
anticipated loss, although it is expected to be material.
In addition, the Company today announced that effective March 31, 1998
it accepted the resignation of James Murphy, the Company's former Vice President
of Finance and Chief Financial Officer, who until then was in charge of the
Company's Colorado operations.
In his place, the Company has appointed Wm. Samuel Veazey, 37, to the
position of Vice President of Finance and Chief Financial Officer reporting to
Harvey Wm. Glasser, the Company's President and Chief Executive Officer. Prior
to his appointment, Mr. Veazey served as Vice President of Finance and Chief
Financial Officer for a medical products company in California. Mr. Veazey holds
a B.S. degree in Biology and Chemistry, an M.S. degree in Biomedical Engineering
and an M.B.A. in Finance and General Management, all from the University of
Miami in Miami, Florida.
Statements, either written or oral, which express the Company's
expectation for the future with respect to financial performance or operating
strategies can be identified as forward-looking statements. These statements are
made to provide the public with management's assessment of the Company's
business. Caution must be taken to consider these statements in light of a
number of factors discussed in the Company's filings with the Securities and
Exchange Commission. In the event such factors do not occur as management
anticipates, actual results could differ materially from the expectations
expressed in any forward-looking statements.
Meadowbrook Rehabilitation Group, Inc. currently owns and operates home
health agencies in Colorado and Kansas. In addition, Meadowbrook's long-term
strategy includes non-medical investments such as the Cambio Networks, Inc.
proposed acquisition.
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