SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): February 16, 1999
UNIVERSAL STANDARD HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Michigan 34-0-20400 38-2986640
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
Attn: Alan S. Ker, Chief Financial Officer
26500 Northwestern Highway, Suite 400
Southfield, Michigan 48076
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (248) 358-0810
(Former name or former address, if changed since last report)
Item 5. Other Events
The Company announced on February 16, 1999 that it intends to
present an out of court restructuring plan to the creditors of Universal
Diagnostic, the Company's former clinical laboratory division, in the next
thirty days, once final numbers are available. Universal Diagnostic
discontinued operations following the sale of certain of its clinical
laboratory assets in August 1998. The Company has retained a recognized
financial consultant to assist in this restructuring effort. The Company
believes that an out of court restructuring will result in a greater
dividend to the creditors of its laboratory business.
The Company has determined not to pay the interest payment on its
outstanding 8.25% Convertible Subordinated Debentures, due February 1, 1999,
resulting in the occurrence of an event of default under the Debentures.
The Debentures and related interest will be included in the Company's
restructuring plan, which is expected to be presented to Debenture holders
in the next 30 days. The Debentures were issued by the parent company in
1996 and are not obligations of the Company's managed care operations.
The Company's continuing managed care business is conducted by
separate wholly-owned subsidiaries, Universal Standard Healthcare of
Delaware, Inc., Universal Standard Healthcare of Michigan, Inc., Universal
Standard Healthcare of Ohio, Inc. and TPA, Inc., and will not be included in
the restructuring plan. These managed care entities will continue their
current operations in accordance with their past practices.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1. Press Release dated February 16, 1999
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.
Dated: February 16, 1999
UNIVERSAL STANDARD HEALTHCARE, INC.
/S/ Alan S. Ker
--------------------------------------
Alan S. Ker
Vice President, Finance
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated February 16, 1999
UNIVERSAL STANDARD
ANNOUNCES RESTRUCTURING PLAN
FOR DIVESTED CLINICAL LABORATORY DIVISION
Southfield, Michigan -- February 16, 1999 -- Universal Standard
Healthcare, Inc. (Nasdaq: UHCI) announced today that it intends to present
an out of court restructuring plan to the creditors of Universal Diagnostic,
the Company's former clinical laboratory division, in the next thirty days,
once final numbers are available. Universal Diagnostic was discontinued
following the sale of certain of its clinical laboratory assets in August
1998. The Company has retained a recognized financial consultant to assist
in this restructuring effort. The Company believes that an out of court
restructuring will result in a greater dividend to the creditors of its
laboratory business.
The Company has determined not to pay the interest payment on its
outstanding 8.25% Convertible Subordinated Debentures, due February 1, 1999,
resulting in the occurrence of an event of default under the Debentures.
The Debentures and related interest will be included in the Company's
restructuring plan, which is expected to be presented to Debenture holders
in the next 30 days. The Debentures were issued by the parent company in
1996 and are not obligations of the Company's managed care operations.
The Company's continuing managed care business is conducted by
separate wholly-owned subsidiaries, Universal Standard Healthcare of
Delaware, Inc., Universal Standard Healthcare of Michigan, Inc., Universal
Standard Healthcare of Ohio, Inc. and TPA, Inc., and will not be included in
the restructuring plan. These managed care entities will continue their
current operations in accordance with their past practices.
"We are excited by the future prospects for our managed care
subsidiaries. Recent new managed care programs include a laboratory,
imaging and home medical services program for Liebert, a division of Emerson
Electric, and a phased national laboratory and imaging program for Whirlpool
Corporation. Liebert and Whirlpool Corporation are the first groups to
contract for our new imaging product, which was introduced mid last year.
In addition, we have made substantial progress in increasing network
compliance, substantially reducing the cost of claims and inquiry costs.
The Company expects to complete its claims automation project by the end of
1999. The goal of this project is to have over 70% of all claims submitted,
processed and paid electronically, reducing operating expenses and improving
quality and service levels," stated Eugene E. Jennings, President and Chief
Executive Officer of Universal Standard Healthcare, Inc. "The restructuring
plan is the last step in the process of liquidating our laboratory
operations and is designed to put the Company in a stronger financial
position for the future."
Universal Standard Healthcare, Inc. currently owns subsidiaries
operating in all 50 states, which provide clinical laboratory, outpatient
diagnostic imaging, and home medical services (including durable medical
equipment and supplies) for employers on a capitated basis.
The information in this Press Release contains forward-looking
statements within the meaning of the Securities Exchange Act of 1934.
Please refer to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, and its Quarterly Report on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 1998, for a description
of the factors that could cause actual results to differ materially from
those in the forward-looking statements, including uncertainties inherent in
the execution of a restructuring plan, including the level of cooperation of
the Company's creditors, particularly the holders of the 8.25% Convertible
Subordinated Debentures due February 1, 1999, uncertainties inherent in the
discontinuation of an operation, such as the amounts which the Company will
be able to realize on the disposition of its laboratory assets and
collection of its laboratory accounts receivable, which could be less than
the book value of such assets and could result in additional losses, and
costs in excess of those anticipated resulting from employee terminations,
closure of facilities and resolution of regulatory issues, intense
competition in the managed care business, particularly from larger, better
capitalized companies, dependence of the Company on third parties to provide
services under its managed care programs, uncertainties due to the fact that
the Company's programs are generally terminable by the customer on short
notice and many of the Company's service arrangements are terminable on
short notice, the impact of the highly regulated nature of the managed care
business on the Company's continuing operations and the cost and the ability
of the Company to continue to satisfy increasing regulatory requirements
relating to the managed care business, the long sales cycle involved in the
managed care business, the dependence of the Company on a limited number of
large customers for its revenue and growth, most of whom are involved in the
automotive industry, the ability of the Company to develop new managed care
products, the level of interest that existing and potential new customers
may have in managed care products offered by the Company, the ability of the
Company to identify and satisfy market needs, potential increases in
operating costs resulting from the failure of the Company's principal
suppliers to become Year 2000 compliant, and economic conditions in the
health care and automotive industries in general.
CONTACT: UNIVERSAL STANDARD HEALTHCARE INC.
Alan Ker, 248/358-0810
