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UNITED STATES
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) April 30, 1998
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TOTAL RENAL CARE HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-4034 51-0354549
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
21250 Hawthorne Boulevard, Suite 800, Torrance, California 90503
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(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (310) 792-2600
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N/A
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(Former name or former address, if changed since last report.)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 Press Release dated April 30, 1998
99.2 Press Release dated April 30, 1998
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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 hereunto duly authorized.
Total Renal Care Holdings, Inc.
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(Registrant)
Date April 30, 1998 /s/ John E. King
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(Signature)*
John E. King
Vice President, Finance and Chief
Financial Officer
*Print name and title of the signing officer under his signature.
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NEWS
BULLETIN
FROM
FRB EXHIBIT 99.1
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The Financial Relations Board Inc.
As Previously Announced Following the Acquisition of RXT,
TRL to Take a Total of $133-$138 Million in Charges
TORRANCE, Calif.--April 30, 1998--As previously announced following
the acquisition of Renal Treatment Centers Inc. ("RXT"), Total Renal Care
Holdings Inc. (NYSE:TRL), will take merger-related and other charges of $108
million in the first quarter of 1998.
Additionally, the company expects to recognize between $25 million and
$30 million of non-cash charges related to prior periods, which will require a
revision of RXT's previously announced results of operations including a
potential correction of previously audited results. It is expected that the
year-end audit of RXT will be completed by May 15, 1998, and followed by the
appropriate amended filings.
Cash charges related to the acquisition will be $67 million including
employee, organizational and integration-related expenses and fees to investment
bankers, legal and accounting advisors, as well as miscellaneous charges such as
those relating to the cancellation of leases, among others.
Non-cash expenses related to the acquisition will be $26 million
including non-cash charges associated with certain exercises of RXT stock
options, and the write-off of eliminated assets such as computer systems,
laboratory facilities and other assets.
TRL will realize a tax benefit of $18.1 million related to the
first-quarter charges outlined above net of non-deductible costs associated with
the issuance of TRL shares.
Additionally, other non-cash expenses taken during the quarter include
$11.2 million ($6.9 million net of taxes), for a change in accounting principle
regarding the early adoption of a new accounting standard which requires start
up and organizational costs to be immediately expensed rather than capitalized
as well as $4.4 million, ($2.8 million net of taxes)_ as an extraordinary loss
related to the write-off of deferred financing charges stemming from the early
pay-off of the RXT commercial bank revolver.
Torrance-based Total Renal Care Holdings is the third largest (and
largest independent worldwide) provider of integrated dialysis services in the
United States for patients suffering from chronic kidney failure.
The company owns and operates high-quality, free-standing kidney
dialysis centers and home peritoneal dialysis programs in 33 states, as well as
Washington, D.C.; Puerto Rico; Guam; Argentina; and Europe, and also provides
high-quality acute hemodialysis services to in-patients at approximately 260
hospitals.
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Currently, TRL has 408 outpatient dialysis facilities and provides services
to approximately 31,700 patients. The company additionally operates ESRD
laboratory and pharmacy facilities, as well as vascular access management,
transplant services and ESRD clinical research programs.
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CONTACT: Total Renal Care Holdings Inc., Torrance
Victor M.G. Chaltiel/John E. King, 310/792-2600 or
The Financial Relations Board, Los Angeles
Larry Delaney, 310/442-0599 (general information)
Moira Conlon, 310/442-0599 (investor contact)
Michaelle Burstin, 310/442-0599 (media contact)
Kathy Brunson, 312/266-7800 (investor contact)
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EXHIBIT 99.2
NEWS BULLETIN
FROM:
FRB
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The Financial Relations Board Inc.
Total Renal Care Reports Net Revenues Up
62% and Net Income Up 59% for First Quarter 1998; Earnings Per Share at
28 Cents, Up 56% From Same Year-Ago Quarter
First Quarter/Recent Highlights:
before all charges as described in a separate news release issued Thursday
- -- Revenues up 62% to $258,749,000 for the quarter
- -- Earnings up 59% to $21,978,000 for the quarter
- -- Cash Flow (EBITDA) margin improved to 27.0% for the quarter
- -- Addition of 11 centers and more than 2,100 patients since December 31, 1997,
for a total of approximately 30,700 patients at March 31, 1998
- -- Additional 17 centers and more than 1,000 patients since April 1, 1998,
along with 23 centers and more than 1,500 patients with agreements in
principle
- -- Achieved strong same-store first quarter volume growth of 9%
- -- Completed $300 million increase to its $1.05 billion senior credit
facilities, now totaling $1.350 billion
TORRANCE, Calif.--April 30, 1998--Continuing to report strong quarterly
financial results following its merger with Renal Treatment Center Inc.
(NYSE:RXT), Total Renal Care Holdings Inc. (NYSE:TRL), the third-largest (and
largest independent) worldwide provider of dialysis services, Thursday announced
record revenues, earnings, and earnings per share for the first quarter of 1998.
Before all charges as described in a separate news release issued
Thursday, revenues increased 62% to $258.7 million in the first quarter of 1998,
up from $160.1 million in the corresponding period of 1997.
Earnings increased 59% to $22.0 million,up from $13.8 million, and
earnings per share increased 56% to $0.28 on 78.9 million weighted average
shares outstanding, compared with earnings per share of $0.18 on 79.1 million
weighted average shares outstanding, for the prior-year first quarter period.
"The success of our aggressive, yet disciplined, growth strategy in
fiscal 1997 and the first quarter of 1998 has continued to result in a strong
financial track record quarter after quarter," said Victor M.G. Chaltiel, TRL
chairman, president and chief executive officer.
"With more than 3,000 patients added year-to-date, plus more than 1,500
patients currently under agreements in principle, we believe that we are
well-positioned for another extraordinary year."
Same-Store Treatment Growth
"The strong 9% same-store treatment growth achieved by the
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company is the direct result of our quality and outcomes management programs,
resulting in mortality rates significantly better than the U.S. average, along
with our focused managed care strategy, which should also further bolster growth
in our new RXT centers," stated Chaltiel.
$300 Million Increase to Senior Credit Facilities
The company has also refinanced its current credit lines by adding
$300 million for a total of $1.350 billion, $545 million of which is currently
unused. This financing was led by the Bank of New York and Donaldson, Lufkin &
Jenrette.
"Obviously, we are pleased with the continuation of our exceptional
1997 performance into 1998 after the completion of our merger with RXT on
February 27, 1998," concluded Chaltiel.
Torrance-based Total Renal Care Holdings is the third-largest (and
largest independent) worldwide provider of integrated dialysis services for
patients suffering from chronic kidney failure.
The company owns and operates high-quality, free-standing kidney
dialysis centers and home peritoneal dialysis programs in 33 states, as well as
Washington, D.C.; Puerto Rico; Guam; Argentina; and Europe, and also provides
high-quality acute hemodialysis services to inpatients at approximately 260
hospitals.
Currently, TRL has 408 outpatient dialysis facilities and provides
services to approximately 30,700 patients. The company additionally operates
ESRD laboratory and pharmacy facilities, as well as vascular access management,
transplant services and ESRD clinical research programs.
For information on Total Renal Care Holdings via facsimile at no cost,
call 800/PRO-INFO and dial company code 039.
This release contains forward-looking statements which are made
pursuant to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include statements
regarding business trends, projections and market opportunities and involve
risks and uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors which could cause or contribute to
such differences include, but are not limited to, the uncertainties associated
with governmental regulation, general economic and other market conditions, and
the "risk factors" set forth in the company's filings with the Securities and
Exchange Commission. The forward-looking statements should be considered in
light of these risks and uncertainties.
Expansion Highlights
PRE-MERGER WITH RTC
<TABLE>
<CAPTION>
POST
MERGER
Quarter ended Year Quarter
ended ended
Mar. 31, June 30, Sept. 30, Dec. 31, Dec. 31, Mar. 31,
1997 1997 1997 1997 1997 1998
<S> <C>
Treatments 375,050 451,664 489,922 553,218 1,869,854 1,099,627
Patients 10,900 12,700 13,700 15,800 15,800 30,700
Centers 139 166 174 197 197 391
Revenue
per Treatment $237 $232 $232 $236 $234 $235
</TABLE>
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TOTAL RENAL CARE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
Three Months
1998 1997(a)
<S> <C> <C>
Net operating revenues $258,749,000 $160,137,000
Operating expenses:
Facilities 165,295,000 107,728,000
General and administrative 16,910,000 9,916,000
Provision for doubtful accounts 6,763,000 3,985,000
Depreciation and amortization 19,004,000 11,089,000
Merger Costs 92,835,000 0
Total operating expenses 300,807,000 312,718,000
Operating (loss) income (42,058,000) 27,419,000
Interest expense (14,517,000) (3,937,000)
Interest income 1,642,000 594,000
Income (loss) before income taxes, minority
interests, extraordinary item and cumulative
effect of a change in accounting principal (54,933,000) 24,076,000
Income taxes (3,550,000) 8,927,000
Income (loss) before minority interests, extra-
ordinary item and cumulative change in accounting
principal (51,383,000) 15,149,000
Minority interests in income of consolidated
subsidiaries 1,393,000 1,305,000
Income (loss) before extraordinary item and
cumulative effect of a change in accounting
principal (52,776,000) 13,844,000
Extraordinary loss, net of tax of $1,580,000 2,812,000 0
Cumulative effect of a change in accounting
principal, net of tax of $4,300,000 6,896,000 0
Net (loss) income $(62,484,000) $13,844,000
Earnings (loss) per common share:
Net income (loss) before extraordinary item and
cumulative effect on change in accounting
principal $(0.67) $0.18
Extraordinary loss $(0.03) $0.00
Cumulative effect of change in accounting
principal $(0.09) $0.00
Net (loss) income $(0.79) $0.18
Weighted average number of common shares
outstanding 78,926,000 78,895,000
</TABLE>
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TOTAL RENAL CARE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION> Three Months
1998 1997(a)
<S> <C> <C>
Earnings (loss) per common share assuming dilution:
Net income (loss) before
extraordinary item and
cumulative effect on change in
accounting principal $(0.67) $0.18
Extraordinary loss $(0.03) $0.00
Cumulative effect of change in
accounting principal $(0.09) $0.00
Net (loss) income $(0.79) $0.18
Weighted average number of common
shares and equivalents outstanding
assuming dilution 78,926,000 79,091,000
</TABLE>
(a) As announced Thursday, the company expects to recognize between $25 million
and $30 million of non-cash charges, part of which may effect the results
of operations for the three months ended March 31, 1997.
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CONTACT: Total Renal Care Inc., Torrance
Victor M.G. Chaltiel/John E. Kings, 310/792-2600
or
Financial Relations Board
310/442-0599
Larry Delaney, general information
Moira Conlon, investor contact
Michaelle Burstin, media contact
or
Kathy Brunson, investor contact, 312/266-7800
