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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): September 16, 1996
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Commission File Number: 0-23472
PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 93-1072052
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer
Identification Number)
One S.W. Columbia Street, Suite 900
Portland, Oregon 97252
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (503) 222-4191
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PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
FORM 8-K
INDEX
Item Description Page
1. Changes in Control of Registrant.....................................3
2. Acquisition or Disposition of Assets.................................3
3. Bankruptcy or Receivership...........................................3
4. Changes in Registrant's Certifying Accountant........................3
5. Other Events.........................................................3
6. Resignations of Registrant's Directors...............................3
7. Financial Statements and Exhibits....................................3
Signatures...........................................................4
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
None
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
None
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
None
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
None
ITEM 5. OTHER EVENTS
On September 16, 1996, the Company announced that it had hired in-
house general counsel and that it was expecting earnings per share in
the range of $0.09 to $0.10 for the six month second half of 1996 and,
for 1997, current operations earnings per shares in the range of
$0.32. On September 18, 1996, the Company announced that it approved
a plan that provides non-executive officer employees with the choice
of cancelling certain option grants with exercise prices above the
current market price for the Company's common stock in exchange for
replacement options with exercise prices equal to the current market
price for the Company's common stock. Copies of the press releases
regarding these matters are attached as Exhibit 99.1 and 99.2
respectively.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
None
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBITS:
Exhibit 99.1 Press Release dated September 16, 1996
Exhibit 99.2 Press Release dated September 18, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed by the
undersigned thereunto duly authorized.
PACIFIC REHABILITATION & SPORTS
MEDICINE, INC.
Date: October 22, 1996 By /s/ Bill Barancik
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Bill Barancik
President and Chief Executive Officer
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PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
FORM 8-K CURRENT REPORT
EXHIBIT INDEX
Exhibit Description
Exhibit 99.1 Press Release dated September 16, 1996
Exhibit 99.2 Press Release dated September 18, 1996
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EXHIBIT "99.1"
Pacific Rehabilitation & Sports Medicine, Inc.
Suite 190
8100 NE Parkway Drive
Vancouver, WA 98662
NEWS RELEASE Contact: Bill Barancik
- ------------ President and Chief
FOR IMMEDIATE RELEASE Executive Officer
or
William A. Norris
Executive VP-Finance
Pacific Rehabilitation &
Sports Medicine, Inc.
(360) 260-8130
PACIFIC REHAB APPOINTS SENIOR VICE PRESIDENT - GENERAL COUNSEL
AND DISCUSSES EARNINGS PROJECTIONS
Vancouver, Washington (September 16, 1996) -- Pacific Rehabilitation &
Sports Medicine, Inc. (Nasdaq: PRHB) today announced that the Company's
outside general counsel, Michael McArthur-Phillips of Garvey, Schubert & Barer,
had agreed to join the Company as Senior Vice President - General Counsel and
Secretary. Mr. Bill Barancik, the Company's President and Chief Executive
Officer stated, "We are pleased to have Mike join us as a member of the
executive team. Mike has represented the Company for three years from its
initial public offering through all of the Company's acquisitions since that
time, and has been primarily responsible for the Company's ongoing corporate and
securities compliance."
The Company also announced that it was expecting earnings per share in the
range of $0.09 to $0.10 for the six month second half of 1996. For the year
1997, the Company said it was expecting from current operations earnings per
share in the range of $0.32. Earnings will be higher if the Company is able to
successfully consummate a number of acquistions. In this regard, the Company
has engaged the investment banking firm of Shipley Raidy Capital Partners, LP to
pursue a private placement of debt that will provide capital to be used for
strategic acquisitions and working capital purposes. These earnings per share
amounts are exclusive of any restructuring or other extraordinary charges and
are based on approximately the same number of equivalent shares outstanding.
Mr. Barancik stated, "I have been with the Company five months. During that
time, I have had the opportunity to spend time at the Company's clinics and to
get acquainted with many of the Company's employees. These visits have given me
a lot of optimism about the Company and its future. As you know, in recent
months we have closed and consolidated some operations in Hawaii and, as we have
previously indicated, more reorganizations and consolidation of clinics in
additional markets such as Texas and California may be necessary as we take
actions to increase our profitability. Since May, the Company, starting at the
individual clinic level, has gone through an exhaustive budgeting process
designed to identify areas where revenue can be increased and costs can be
reduced. As
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a result of that process, I now have a much greater degree of confidence in our
internal projections than when I arrived. I believe this budgeting process and
resulting confidence are significant milestones for the Company. Of course, a
number of factors and events, many of which we have limited or no control over,
may impact our projections. Nonetheless, I believe that the Company will earn
in the range of $0.09 to $0.10 per share in the second half of 1996 and in the
range of $0.32 per share in 1997, exclusive of any acquisitions or any
restructuring or other extraordinary charges and based on approximately the same
number of shares."
Pacific Rehab provides outpatient physical therapy services at 70
outpatient rehabilitation clinics in Washington, Oregon, California, Hawaii,
Nevada, Arizona, Texas, Mississippi, Florida, and Maryland.
FORWARD LOOKING STATEMENTS. The foregoing information contains forward-
looking information about the Company, including those that relate to the
Company's projected earnings for the periods indicated. These forward-looking
statements are based upon certain assumptions and are subject to a number of
risks and uncertainties. Actual results could differ materially from these
forward-looking statements. Important factors to consider, many of which are
beyond the Company's control, in evaluating such forward-looking statements,
include the assumptions that (i) the Company will not experience unanticipated
working capital or other cash requirements; (ii) the outpatient rehabilitation
market will continue to grow and consolidate, the Company will be able to
consummate a limited number of strategic acquisitions on favorable terms, and
such acquisitions will have a positive impact on results of operations; (iii)
managed care organizations will continue to grow and control more patient
referrals, such organizations will continue to demand that providers of
outpatient rehabilitation services have a regional presence, and the Company
will continue to be able to retain existing contracts and obtain new contracts
with managed care organizations; (iv) changes in federal and state legislation
and regulations will not further adversely impact the ability of physicians to
refer patients to the Company's clinics; (v) reimbursement and utilization rates
for the Company's therapy services will not be significantly reduced; (vi) the
Company's marketing efforts will continue to be successful; (vii) the Company
will be able to comply with the terms and conditions of its credit facility and
be able to renew or replace its credit facility upon expiration on favorable
terms; and (viii) additional debt or equity capital, if needed, will be
available and on terms acceptable to the Company. Investors are directed to the
Company's Annual Report on Form 10-K (as amended by Amendment No. 2 on Form 10-
K/A filed July 11, 1996) for the year ended December 31, 1995, the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June
30, 1996, the Company's Registration Statement on Form S-3 (Reg. No. 333-306),
and the Company's Current Reports on Form 8-K dated April 2, April 15, July 1
and July 17, 1996, all of which are available without charge from the Company,
for a more complete description of the risks and uncertainties relating to the
Company.
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EXHIBIT "99.2"
Pacific Rehabilitation & Sports Medicine, Inc.
Suite 190
8100 NE Parkway Drive
Vancouver, WA 98662
NEWS RELEASE Contact: Bill Barancik
- ------------ President and Chief
FOR IMMEDIATE RELEASE Executive Officer
or
William A. Norris
Executive VP-Finance
Pacific Rehabilitation &
Sports Medicine, Inc.
(360) 260-8130
PACIFIC REHAB TAKES ACTION TO RETAIN NON-EXECUTIVE OFFICER
EMPLOYEES HOLDING ABOVE MARKET OPTIONS
Vancouver, Washington (September 18, 1996) -- Pacific Rehabilitation &
Sports Medicine, Inc. (Nasdaq: PRHB), today announced that the Board of
Directors' approved a plan that provides non-executive officer employees with
the choice of canceling certain option grants with exercise prices above the
current market price in exchange for new option grants that have exercise prices
equal to the current market price for the Company's common stock. The new
replacement option grants only apply to existing grants issued to non-executive
officer employees. Affected employees will have the choice of canceling their
old option grants in exchange for a new option grant for the same number of
shares at the market value on September 16, 1996. The new grants will utilize
shares already available for grant under the normal provisions of the company's
1993 Amended and Restated Combination Stock Option Plan.
Mr. Bill Barancik, the Company's President and Chief Executive Officer
stated, "As we grow and continue our focus on increased operating results, it is
critical that we recognize, motivate, and retain our key personnel. The Board
of Directors felt that it was in the best interest of shareholders to take
timely action to help achieve this objective."
Pacific Rehab provides outpatient physical therapy services at 70
outpatient rehabilitation clinics in Washington, Oregon, California, Hawaii,
Nevada, Arizona, Texas, Mississippi, Florida and Maryland.
