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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): March 31, 1997
COMMUNITY CARE OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-26502 52-1823411
(State or other (Commission (IRS Employer
jurisdiction of file number) Identification No.)
incorporation)
3050 North Horseshoe Drive, Suite 260, Naples, Florida 34104
(Address of principal executive offices)
Registrant's telephone number including area code: (941) 435-0085
Not Applicable
(Former name or former address, if changed since last report)
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<PAGE>
Item 5. Other Events
On March 31, 1997, the Company issued a press release and attachments containing
information which is incorporated herein by reference. A copy of the press
release and attachments is annexed hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of business acquired: Not applicable.
(b) Pro Forma financial information: Not applicable.
(c) Exhibits:
Exhibit
Number Description
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Exhibit 99.1 Press release and attachments dated March 31, 1997
2
<PAGE>
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SIGNATURE
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
COMMUNITY CARE OF AMERICA, INC.
Date: April 4, 1997 By: /s/ Deborah A. Lau
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Deborah A. Lau
Executive Vice President and
Chief Executive Officer
3
<PAGE>
EXHIBIT INDEX
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Exhibit
Number Description
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Exhibit 99.1 Press release and attachments dated March 31, 1997
4
<PAGE>
Exhibit 99.1
COMMUNITY CARE OF AMERICA, INC.
QUARTER ENDED
DECEMBER 31, 1996
PRESS RELEASE AND ATTACHMENTS
1. PRESS RELEASE AND TABLES
2. CONSOLIDATED STATEMENTS OF OPERATIONS
3. CONSOLIDATED BALANCE SHEETS
4. CONSOLIDATED STATEMENTS OF CASH FLOWS
<PAGE>
FOR IMMEDIATE RELEASE: Contact
Gary W. Singleton
President and Chief Executive Officer or
Deborah Lau Executive Vice President and
Chief Operating Officer Community Care
of America, Inc.
(941) 435-0085
Noonan/Russo Communications, Inc.
(212) 696-4455
Michele M. Helm (media), ext. 225
Pamela E. Burian (investors), ext. 213
COMMUNITY CARE OF AMERICA ANNOUNCES FOURTH QUARTER
AND FULL YEAR RESULTS
Naples, FL, March 31, 1997 - Community Care of America, Inc. (NASDAQ:
CCAI), a provider of community based healthcare services in rural,
medically underserved areas, today announced operating revenues and
results for the fourth quarter and twelve months ended December 31,
1996.
In prefacing the Company's announcement, Gary W. Singleton, President
and Chief Executive Officer of Community Care, stated: "Although the
Company, as previously announced, has taken substantial write-downs and
other non-recurring charges during the year, the Company believes that
it has strengthened its balance sheet which will allow for modest
earnings in 1997 and for a more solid foundation for more aggressive
earnings in 1998."
Total operating revenues for the fourth quarter before non-recurring
charges increased 16 percent to $33.6 million from $29.0 million for
the same period in 1995. Net loss for the fourth quarter before the
previously announced non-recurring charges taken in that quarter was
$2.7 million or $0.36 per share, compared to net earnings of $1.3
million or $0.25 per share for the same period in 1995. The
non-recurring charges (pre-tax) aggregating 10.7 million consists of an
adjustment to revenue for a change in the allowance for doubtful
accounts for certain third party receivables of $1.9 million; a
write-off of $2.0 million for deferred costs related to the refinancing
of a working capital line of credit, as well as certain costs of a
terminated secondary offering; and other proposed financing; and $6.8
million in losses from the sale of a hospital in connection with the
termination of an agreement to acquire other rural hospitals in Georgia
and other related balance sheet adjustments. The after tax effect of
these charges was ($7.9 million) or ($1.06) per share. The consolidated
net after tax loss for the fourth quarter was $10.7 million or $1.43
per share. Weighted average shares outstanding for the period increased
to 7,450,925 in 1996 from 5,316,000 in 1995.
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<PAGE>
For the year ended December 31, 1996, total operating revenues before
the $1.9 million revenue adjustment described above, were $129.4
million, compared to $94.2 million for the same period in 1995, an
increase of 37.4 percent. Net earnings for the year ended December 31,
1996 before the impact of second and fourth quarter non-recurring
charges were $1.0 million or $0.13 per share compared to earnings
applicable to common stock before extraordinary item of $2.0 million or
$0.42 per share for the year ended December 31, 1995. In addition to
the fourth quarter non-recurring charges, results include non-recurring
charges in the second quarter of $19.2 million. After the impact of the
non-recurring charges, aggregating $28.9 million, the net loss for the
year ended December 31, 1996 was $18.9 million or $2.56 per share
compared to net earnings applicable to common stock of $1.0 million or
$0.22 per share for the twelve months ended December 31, 1995. Weighted
average shares outstanding for the 1996 twelve month period increased
to 7,384,697 from 4,840,457 in 1995.
Operations before non-recurring charges for the fourth quarter ended
December 31, 1996 compared to the third quarter ended September 30,
1996 resulted in a decrease in revenues of $700,000, an increase in
operating expenses and corporate administrative and general of $2.9
million, and an increase in fixed costs of $2.2 million. The decrease
in revenues is due to a reduction in Medicare Routine Cost Limit
exception revenue and a reduction in Medicaid rates, applicable to all
participants, in the Southeast. The increase in operating expenses is
the result of the development of new programs to attract higher acuity
residents. The Company does not expect to benefit from additional
reimbursement on these programs until mid 1997. Additional annualized
reimbursement related to these programs is expected to be in the range
of $3.0 to $4.0 million. The Company revised its vacation policy
resulting in an increase in operating expenses of $900,000. The change
will reduce future vacation expense for the Company. The increase in
the fixed costs were a result of the closing of projects no longer in
progress and the expensing of related capitalized interests and
amortization costs.
"As previously announced, the Company has been reviewing its balance
sheet at year end and has made appropriate provisions and adjustments
which it believes are prudent to provide a fresh beginning for 1997,"
said Gary W. Singleton, President and Chief Executive Officer of
Community Care of America, Inc. "The Company has undergone major
restructuring and reorganization in 1996 in which the Company incurred
charges for the restructuring and closing of certain existing physician
practices, primary care clinics and day care centers. We also
terminated the agreements under which the Company had been managing
nine long-term care facilities in Maine, and conveyed a rural hospital
in connection with the termination of our proposed acquisition of
certain other hospitals in Georgia, which resulted in various
accounting charges. Management has spent a considerable amount of time
stabilizing the direction of the Company and feels it has made
significant progress after securing a three year financing arrangement
with Daiwa Securities America, Inc. for a line of credit of up to $15
million, securing a
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<PAGE>
five year management agreement for Integrated Health Services, Inc. to
provide the Company with financial, accounting, MIS, reimbursement, and
ancillary services, as well as a line of credit for working capital of
up to $5 million. While the transition to the less expensive, more
sophisticated and responsive systems of Integrated Health Services is
still in process with the expected time of completion being May 31,
1997, management believes that these service arrangements are a major
step towards obtaining adequate financing needed for the Company to
continue to implement its strategy of building networks in rural,
medically underserved areas as well as pursue other strategic
alternatives that will enhance and maximize shareholder value." Mr.
Singleton added, "The Company has taken dramatic action to strengthen
the balance sheet. If the Company is not able to achieve a strategic
consolidation during 1997, we believe that these actions will provide
for modest earnings in 1997 and for a more solid foundation for more
aggressive earnings in 1998."
The Company also announced that, in response to the engagement of Smith
Barney, as financial advisor, it has received several credible
expressions of interest ranging from potential acquirers and joint
venture partners to sources of capital infusions. Mr. Singleton
commented, "We are gratified by the interest shown in the Company by
potential acquirers, joint venture partners and organizations
interested in providing a much needed infusion of capital. As we
complete the evaluation of these opportunities with Smith Barney we
will share our progress with the public."
Separately, the Company announced that Gary W. Singleton, President and
Chief Executive Officer, has resigned effective April 4, 1997 although
he will remain available to the Company in a consulting role. Ms.
Deborah Lau, currently Executive Vice President and Chief Operating
Officer, has been appointed to the position of President and Chief
Executive Officer effective upon Mr. Singleton's departure. Mr.
Singleton commented that "I was brought into the Company during a
period of crisis with the direction to stabilize the Company,
discontinue as many unprofitable operations as possible, reduce
corporate overhead, and prepare the Company for eventual strategic
opportunities. I believe that these goals have been accomplished and
that the Company will be in very capable hands under the direction of
Ms. Lau. She has done an excellent job in stabilizing census, improving
Medicare revenues, and in assuring improved quality of care within our
facilities. We have worked closely together over the last several
months to assure a smooth transition." The Company also announced that
the Board of Directors has accepted the resignation of David Fater,
Chief Financial Officer, who left to pursue other opportunities.
Forward-looking Statements: Except for statements of historical fact,
statements made herein are forward-looking in nature and are inherently
subject to risks and uncertainties.
The actual results of the Company may differ materially from those
reflected in the forward-looking statements based on a number of
important risk factors and uncertainties, including, but not limited to
factors disclosed from time to time in the Company's reports on Form
10- K and Form 10-Q and in other Securities and Exchange Commission
filings.
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<PAGE>
Community Care of America, Inc., is a provider of healthcare services
in rural markets focused on developing community-based networks
providing a broad range of high quality, low-cost healthcare services.
CCA operates skilled nursing facilities in medically-underserved, rural
areas throughout the United States. In addition, CCA provides other
ancillary services to address community specific needs including adult
day care, assisted living, home healthcare and transportation. The
Company owns, leases, or manages 66 service operations, which consists
of 54 long-term care facilities, one rural hospital, three physician
practices, one home health care agency, one child day care center and
six assisted living programs.
###
(Table Follows)
<PAGE>
<TABLE>
<CAPTION>
COMMUNITY CARE OF AMERICA, INC.
THREE MONTHS ENDED
DECEMBER 31, 1995
1995 1996
---- ----
<S> <C> <C>
Total operating revenue before non-recurring charges $28,974,000 $33,636,000
Earnings before , non-recurring
harges, income taxes and extraordinary item 1,900,000 (4,355,000)
Non-recurring charges --- (10,707,000)
Earnings before income taxes and extraordinary item 1,900,000 (15,062,000)
Earnings applicable to common stock before extraordinary item 1,329,000 (10,655,000)
Net earnings (loss) applicable to common stock 1,329,000 (10,655,000)
Per common share:
Earnings before extraordinary item $0.25 (1.43)
Net earnings (loss) $0.25 (1.43)
Weighted average shares outstanding 5,316,000 7,450,925
TWELVE MONTHS ENDED
DECEMBER 31, 1995
1995 1996
---- ----
Total operating revenue before non-recurring charges $94,178,000 $129,362,000
Earnings before non-recurring charges,
income taxes and extraordinary item 3,488,000 1,521,000
Non-recurring charges --- (29,892,000)
Earnings before income taxes and extraordinary item 3,488,000 (28,371,000)
Earnings applicable to common stock before extraordinary item 2,033,000 (18,905,000)
Extraordinary item, net of income tax benefit (992,000) ---
Net earnings (loss) applicable to common stock 1,041,000 (18,905,000)
Per common share:
Earnings before extraordinary item $0.42 ($2.56)
Extraordinary item (0.20) -
Net earnings (loss) $0.22 ($2.56)
Weighted average shares outstanding 4,840,457 7,384,697
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Community Care of America, Inc.
and Subsidiaries
Consolidated Statements of Operations
Three Months Ended Twelve Months Ended
December 31, December 31,
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues:
Net patient service revenues $ 27,923,000 $ 33,381,000 $ 92,259,000 $124,127,000
Other operating revenues 1,051,000 255,000 1,919,000 5,235,000
Non-recurring charges 0 (1,850,000) 0 (1,850,000)
------------ -------------- ------------ -------------
Total operating revenues 28,974,000 31,786,000 94,178,000 127,512,000
------------ -------------- ------------ -------------
Operating expenses:
Facility operating expenses 22,134,000 29,998,000 73,693,000 104,888,000
Corporate administrative and general 1,372,000 1,619,000 4,765,000 5,332,000
Rent 1,946,000 2,958,000 6,404,000 8,999,000
Depreciation and amortization 616,000 1,095,000 2,033,000 3,021,000
Interest, net of interest income 1,006,000 2,321,000 3,795,000 5,601,000
Non-recurring charges 0 8,857,000 0 28,042,000
------------ -------------- ------------ -------------
Total expenses from operations 27,074,000 46,848,000 90,690,000 155,883,000
------------ -------------- ------------ -------------
Earnings before income taxes and
extraordinary item 1,900,000 (15,062,000) 3,488,000 (28,371,000)
Federal and state income taxes 571,000 (4,407,000) 1,047,000 (9,466,000)
------------ -------------- ------------ -------------
Earnings before extraordinary item 1,329,000 (10,655,000) 2,441,000 (18,905,000)
Extraordinary item, net of income taxes 0 0 (992,000) 0
------------ -------------- ------------ -------------
Net earnings 1,329,000 (10,655,000) 1,449,000 (18,905,000)
Dividends-preferred stock 0 0 (408,000) 0
------------ -------------- ------------ -------------
Net earnings (loss) applicable to common stoc $ 1,329,000 $ (10,655,000) $ 1,041,000 $(18,905,000)
============ ============== ============ =============
Earnings (loss) per common share,
Before extraordinary item $ 0.25 $ (1.43) $ 0.42 $ (2.56)
Extraordinary item 0.00 0.00 (0.20) 0.00
------------ -------------- ------------ -------------
Net earnings (loss) $ 0.25 $ (1.43) $ 0.22 $ (2.56)
============ ============== ============ =============
Weighted average number of common and
common equivalent shares outstanding 5,316,000 7,450,925 4,840,457 7,384,697
============ ============== ============ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Community Care of America, Inc.
and Subsidiaries
Consolidated Balance Sheets
December 31,
==================================
1995 1996
-------------- --------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 2,485,000 $ 1,709,000
Accounts receivable net of allowance for doubtful accounts
and contractual adjustments of $1,978,000 and $4,833,000
at December 31, 1995 and 1996: 12,934,000 16,407,000
Supplies inventory 1,534,000 1,761,000
Prepaid expenses and other current assets 3,662,000 1,095,000
-------------- --------------
Total current assets 20,615,000 20,972,000
Property, plant, and equipment, net of accumulated
depreciation 54,327,000 58,424,000
Excess of cost over fair value of assets, net of
accumulated amortization of $139,000 and $710,000
at December 31, 1995 and December 31, 1996 3,299,000 13,666,000
Notes receivable 2,533,000 0
Deposits 10,244,000 6,637,000
Deferred financing costs 948,000 1,066,000
Other assets 1,324,000 1,354,000
-------------- -----------------
$ 93,290,000 $ 102,119,000
============== =================
Liabilities and shareholders' Equity
Current liabilities:
Current maturities of long-term debt $ 1,258,000 $ 6,341,000
Accounts payable and accrued expenses 14,869,000 23,402,000
Put option contracts payable (219,798 shares outstanding) 0 2,181,000
--------------- -----------------
Total current liabilities 16,127,000 31,924,000
Long-term debt, less current maturities 34,407,000 54,030,000
Deferred income taxes 9,334,000 162,000
Common stock subject to repurchase (219,798 shares outstanding) 2,181,000 0
Shareholders' equity:
Common stock, $.0025 par value; authorized 15,000,000
shares; issued and outstanding 6,762,991 and 7,597,801
at December 31, 1995 and 1996 17,000 19,000
Additional paid-in capital 31,356,000 35,021,000
Deficit (132,000) (19,037,000)
--------------- -----------------
Total shareholders' equity 31,241,000 16,003,000
--------------- -----------------
$ 93,290,000 $ 102,119,000
============== =================
</TABLE>
<PAGE>
<TABLE>
Community Care of America, Inc.
and Subsidiaries
Consolidated Statements of Cash Flows
Twelve Months Ended
December 31,
==================================
1995 1996
-------------- ---------------
<S> <C> <C>
Net cash provided by (used in) operating activities $ 3,021,000 $ (360,000)
Cash flow from investing activities:
Property, plant and equipment additions (6,647,000) (13,441,000)
Business acquisitions (10,719,000) (6,132,000)
Notes receivable (2,533,000) (233,000)
Deposits (3,194,000) (519,000)
Other assets (877,000) (69,000)
------------- -------------
Net cash used in investing activities (23,970,000) (20,394,000)
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Cash flows from financing activities:
Proceeds from issuances of stock 27,589,000 160,000
Redemption of preferred stock (8,142,000) 0
Dividends on preferred stock (571,000) 0
Principal reductions of long term debt (60,404,000) (19,782,000)
Proceeds from long term debt borrowings 61,733,000 41,931,000
Deferred financing costs (696,000) (2,331,000)
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Net cash provided from financing activities 19,509,000 19,978,000
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Decrease in cash and cash equivalents (1,440,000) (776,000)
Cash and cash equivalents, beginning of period 3,925,000 2,485,000
------------- -------------
Cash and cash equivalents, end of period $ 2,485,000 $ 1,709,000
============= =============
</TABLE>
