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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: September 13, 1994
CORAM HEALTHCARE CORPORATION
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(Exact name of registrant as specified in charter)
Delaware 1-11343 33-0615337
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4675 MacArthur Court, Suite 1250 Newport Beach, California 92660
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(Address of principal executive offices) (Zip Code)
(714) 955-8776
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(Registrant's telephone number including area code)
not applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. Other Events.
On September 7, 1994, Coram Healthcare Corporation, a
Delaware corporation (the "Registrant"), issued a press release
announcing details and implementation of the Registrant's previously
announced restructuring plan and the recordation of pre-tax
restructuring charges. A copy of such press release is attached
hereto as Exhibit 99 and is incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of businesses acquired.
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Inapplicable.
(b) Pro forma financial information (unaudited).
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Inapplicable.
(c) Exhibits.
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99 Press Release dated September 7, 1994, announcing
details and implementation of the Registrant's
previously announced restructuring plan and the
recordation of pre-tax restructuring charges.
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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 thereunto duly authorized.
Date: September 13, 1994
CORAM HEALTHCARE CORPORATION
By: /s/ James M. Sweeney
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James M. Sweeney, Chairman and
Chief Executive Officer
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EXHIBIT INDEX
Exhibit
No. Document Description Sequentially Numbered Page
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99 Press Release dated September 7, 5
1994, announcing details and
implementation of the Registrant's
previously announced restructuring
plan and the recordation of pre-tax
restructuring charges.
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EXHIBIT 99
TO CURRENT REPORT ON
FORM 8-K
CORAM HEALTHCARE CORPORATION DETAILS RESTRUCTURING PLAN
NEWPORT BEACH, Calif. -- (BUSINESS WIRE) -- Sept. 7, 1994 -- Coram
Healthcare Corporation (NYSE: CRH) Wednesday reported further details of its
previously announced restructuring plan including: the finalization of the
estimated financial impact of the plan; the financial impact of a special
charge taken for potential uncollectible receivables; and the final costs
associated with the merger of T2 Medical, Curaflex Health Services,
HealthInfusion and Medisys in July of this year. Charges aggregating $138.1
million (pre-tax) have been recorded to account for completion of all
components of the plan.
As described in previous reports, Coram's plan has been developed on
the premise that significant synergies can be attained by consolidating the
activities of the four merged companies. After significant financial and
resources analysis, the plan has been developed to reduce future operating
costs, improve productivity and gain efficiencies through consolidation and
elimination of a number of branch and corporate offices.
Coram has recorded a pre-tax restructuring charge of $92.3 million to
reflect the estimated total costs of implementing the plan. Of this amount, $4
million of future cash expenditures are anticipated primarily for severance,
benefits and outplacement services for the planned workforce reduction and
costs for the closing of facilities. The remaining $48.3 million represents
non-cash charges to write down, to estimated net realizable value, fixed
assets, investments, and deferred costs related to the facilities impacted by
the plan.
Implementation of the plan already has started and is expected to be
substantially complete by the fall of 1995. The most significant part of the
plan as it relates to personnel and number of facilities is in the regional,
local and satellite infusion centers and corporate offices. It is anticipated
that approximately 80 infusion centers will be consolidated into other existing
or new centers, with an expected workforce reduction of approximately 480
positions. It also is anticipated that all existing corporate offices will be
consolidated into the company's new corporate office being opened in Colorado,
with an expected workforce reduction of approximately 110 positions.
Coram expects to achieve significant savings in the range of $30
million to $40 million annually during the next 24 months as a result of the
implementation of the plan. The company expects improved results from
reductions in personnel and related costs,
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facilities rent and operating costs, and corporate overhead and governance
costs.
As a result of the company's strategic direction developed under the
plan and the disruptions experienced during the merger and transition process,
the company has taken a special charge of $17.3 million for anticipated
uncollectible accounts and other receivables. In establishing this reserve,
Coram evaluated the aging of the trade receivables since the merger process
began and evaluated the impact of ending relationships with certain centers.
Substantially all of the anticipated merger costs have been
accumulated for the combination of the companies. Coram has recorded charges
aggregating $28.5 million and such charges will be reflected in the company's
reported results for the third quarter.
Commenting on Wednesday's announcement, Coram's Chairman and Chief
Executive Officer James M. Sweeney said "The strategic and financial impact of
our merger and restructuring plans reflect what the marketplace wants from our
industry -- efficient operations and high quality service. Coram's mission is
to be the leader in those areas and our restructuring plans provide that
opportunity.
Our people have invested tremendous time and effort in building our
plan, considering both the personnel side of our decisions and the financial
side. I am particularly proud of the way our people have performed. This is a
time of change and excitement within our industry. Coram is poised to lead the
industry, in the face of healthcare reform, into a new era that focuses on
improving the quality of healthcare while driving costs out of the system."
Coram Healthcare Corp. provides a wide range of alternate site
healthcare delivery services, including ambulatory and home infusion therapies,
lithotripsy, and institutional pharmacy services.
CONTACT: Paine & Associates, Costa Mesa, Calif.
Erin Peacock or David Paine, 714/755-0400
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