EXHIBIT 99.1
[LOGO OF CONCENTRA]
Contacts: | | Daniel J. Thomas | | Thomas E. Kiraly |
| | | Chief Executive Officer | | Executive Vice President and |
| | | (972) 364-8111 | | Chief Financial Officer |
| | | | | (972) 364-8217 |
CONCENTRA OPERATING CORPORATION REPORTS FOURTH QUARTER RESULTS
ADDISON, Texas, February 12, 2003 – Concentra Operating Corporation (“Concentra”) today announced results for the fourth quarter and year ended December 31, 2002. The Company reported consolidated Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) of $27,663,000 for the quarter as compared to $25,385,000 for the same period in the prior year.
Revenue for the fourth quarter was $250,092,000 as compared to $228,605,000 for the fourth quarter of 2001. Operating income increased to $17,506,000 from $4,413,000 in the year-earlier period. The net loss for the fourth quarter of 2002 was $8,000 as compared to a net loss of $9,742,000 in the fourth quarter of 2001. The prior year’s results included unusual charges of $6,065,000 associated with the Company’s acquisition of National Healthcare Resources, Inc. (“NHR”) in November of 2001.
For the full year, primarily due to the Company’s fourth quarter 2001 acquisition of NHR, revenue grew to $999,050,000 during 2002 as compared to $856,903,000 in 2001. Operating income for 2002 increased to $78,816,000 from $67,543,000 for the prior year. In addition to the effects of the fourth quarter unusual charges described above, results for 2001 reflected higher amortization expenses due to the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” in January of 2002. The net loss for 2002 was $3,553,000 as compared to a net loss of $18,407,000 in 2001. EBITDA, as computed in a manner consistent with the definition set forth in the Indentures for the Company’s Subordinated Notes, was $123,429,000 during 2002 as compared to $123,649,000 during 2001.
“Our fourth quarter results reflected an excellent performance in our Network Services segment and a continuation of the improving visit trends in our Health Services business,” said Daniel Thomas, Concentra’s Chief Executive Officer. “Primarily due to growth in gross reviewed charges and improved bill review savings rates, our group health bill review and re-pricing services achieved an exceptional level of performance during the quarter. Additionally, the improving same-market patient visit growth trends, which began in March of 2002, continued through the fourth quarter. During the quarter, we achieved a positive same-market visit growth in our health centers of 0.6% and a same-market net revenue per visit growth rate of 1.9%. This compares to same-market visit declines of 6.2%, 2.1%, and 0.9% in the first, second and third quarters of 2002. These and other trends continue to demonstrate that we are recovering from the pressures imposed on our clinic business by the nation’s economic climate. Although we continue to seek improved profitability and renewed growth in our ‘later-stage’ workers compensation services, we have benefited from a stabilization in our performance and from the cost reduction initiatives which we put into place late in the third quarter and early in the fourth quarter. These efforts have been particularly helpful in addressing our results in the Care Management segment.
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Concentra Reports Fourth Quarter Results
Page 2
February 12, 2003
“I’m pleased we ended 2002 on a positive note,” said Thomas. “With the renewed growth in our Health Services business, a higher level of performance from our Network Services business and continuing operational improvements in our Care Management services, I feel we are well positioned to demonstrate meaningful growth in revenue and earnings during the coming year.”
The Company also reported that as of December 31, 2002, it had no borrowings outstanding on its $100,000,000 revolving credit facility, had cash and investment balances of $19,002,000 and achieved a reduction in its days sales outstanding (“DSO”) from 64 days at September 30th to 62 days at December 31st.
Effective December 1, 2002, Concentra completed its previously announced acquisitions of Em3 and OccMed. Due to the majority ownership by Welsh, Carson, Anderson & Stowe of Em3, OccMed and Concentra, in accordance with applicable accounting literature, the historical results of operations of the acquisitions have been consolidated with Concentra’s historical results of operations. The equity interests of other investors, which are 34% in the case of Em3 and 31% in the case of OccMed, are reflected as a “minority interest” in Concentra’s financial statements for periods prior to the date of acquisition.
Concentra Operating Corporation, the successor to and a wholly owned subsidiary of Concentra Inc., is the comprehensive outsource solution for containing healthcare and disability costs. Serving the occupational, auto and group healthcare markets, Concentra provides employers, insurers and payors with a series of integrated services which include employment-related injury and occupational health care, in-network and out-of-network medical claims review and re-pricing, access to specialized preferred provider organizations, first notice of loss services, case management and other cost containment services. Concentra provides its services to over 110,000 employers and 3,000 insurance companies, health plans and third party administrators nationwide.
A public, listen-only simulcast of Concentra’s fourth quarter conference call will begin at 9:00 a.m. Eastern Daylight Time tomorrow (February 13, 2003) and may be accessed via the Company’s web site,www.concentra.com. Investors are requested to access the call at least 15 minutes before the scheduled start time in order to complete a brief registration. An online replay will be available shortly after the conclusion of the live broadcast using the same link and will continue through March 13, 2003.
This press release contains certain forward-looking statements, which the Company is making in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that the Company’s actual results may differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the potential adverse impact of governmental regulation on the Company’s operations, changes in nationwide employment and injury rate trends, interruption in its data processing capabilities, operational, financing and strategic risks related to the Company’s capital structure and growth strategy, possible fluctuations in quarterly and annual operations, possible legal liability for adverse medical consequences, competitive pressures, adverse changes in market conditions for the Company’s services, and dependence on key management personnel. Additional factors include those described in the Company’s filings with the Securities and Exchange Commission.
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Concentra Reports Fourth Quarter Results
Page 3
February 12, 2003
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Consolidated Statements of Operations
(in thousands)
| | | Three Months Ended December 31,
| | | Year Ended December 31,
| |
| | | 2002
| | | 2001
| | | 2002
| | | 2001
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REVENUE: | | | | | | | | | | | | | | | | |
Health Services | | $ | 117,240 | | | $ | 106,676 | | | $ | 471,968 | | | $ | 443,321 | |
Network Services | | | 61,646 | | | | 52,422 | | | | 230,299 | | | | 185,267 | |
Care Management Services | | | 71,206 | | | | 69,507 | | | | 296,783 | | | | 228,315 | |
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Total revenue | | | 250,092 | | | | 228,605 | | | | 999,050 | | | | 856,903 | |
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COST OF SERVICES: | | | | | | | | | | | | | | | | |
Health Services | | | 104,012 | | | | 97,841 | | | | 406,164 | | | | 375,565 | |
Network Services | | | 34,468 | | | | 30,904 | | | | 138,218 | | | | 110,187 | |
Care Management Services | | | 65,529 | | | | 60,856 | | | | 267,054 | | | | 200,166 | |
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Total cost of services | | | 204,009 | | | | 189,601 | | | | 811,436 | | | | 685,918 | |
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Total gross profit | | | 46,083 | | | | 39,004 | | | | 187,614 | | | | 170,985 | |
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General and administrative expenses | | | 28,717 | | | | 24,098 | | | | 106,222 | | | | 81,631 | |
Amortization of intangibles | | | 1,060 | | | | 4,428 | | | | 3,776 | | | | 15,746 | |
Unusual charges | | | (1,200 | ) | | | 546 | | | | (1,200 | ) | | | 546 | |
Charges for acquisition of affiliate | | | — | | | | 5,519 | | | | — | | | | 5,519 | |
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Operating income | | | 17,506 | | | | 4,413 | | | | 78,816 | | | | 67,543 | |
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Interest expense, net | | | 15,027 | | | | 16,409 | | | | 63,582 | | | | 66,398 | |
(Gain)/loss on fair value of hedging arrangements | | | (1,307 | ) | | | (2,951 | ) | | | 7,589 | | | | 13,602 | |
Loss on early retirement of debt | | | 513 | | | | — | | | | 7,894 | | | | — | |
Loss of acquired affiliate, net of tax | | | — | | | | 3,226 | | | | — | | | | 5,833 | |
Other, net | | | 145 | | | | (1,347 | ) | | | (1,275 | ) | | | (3,640 | ) |
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Income (loss) before income taxes | | | 3,128 | | | | (10,924 | ) | | | 1,026 | | | | (14,650 | ) |
Provision (benefit) for income taxes | | | 3,136 | | | | (1,182 | ) | | | 4,579 | | | | 3,757 | |
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Net loss | | $ | (8 | ) | | $ | (9,742 | ) | | $ | (3,553 | ) | | $ | (18,407 | ) |
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Concentra’s fourth quarter and year ended December 31, 2001 bad debt expense of $3.9 million and $12.7 million, respectively, have been reclassified from a reduction to revenue to cost of services to conform to the classifications used in 2002. This reclassification resulted from a change in Concentra’s process and methodology for estimating bad debt and sales allowances during the first quarter of 2002.
Due to the acquisitions of Em3 Corporation and OccMed Systems, Inc. (the “Acquired Companies”), Concentra’s financial statements prior to December 1, 2002, have been restated to reflect the consolidation of the Acquired Companies’ financial statements, in accordance with accounting for reorganizations under common control. See the text of this earnings release for further information.
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Concentra Reports Fourth Quarter Results
Page 4
February 12, 2003
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Consolidated Balance Sheets
(in thousands)
| | | December 31, 2002
| | December 31, 2001
|
| | | (unaudited) | | |
ASSETS | | | | | | |
|
CURRENT ASSETS: | | | | | | |
Cash and cash equivalents | | $ | 19,002 | | $ | 8,950 |
Accounts receivable, net | | | 167,561 | | | 181,757 |
Prepaid expenses and other current assets | | | 39,407 | | | 36,677 |
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Total current assets | | | 225,970 | | | 227,384 |
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PROPERTY AND EQUIPMENT, NET | | | 134,981 | | | 142,244 |
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GOODWILL AND OTHER INTANGIBLE ASSETS, NET | | | 486,231 | | | 475,671 |
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OTHER ASSETS | | | 41,456 | | | 34,725 |
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| | | $ | 888,638 | | $ | 880,024 |
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LIABILITIES AND STOCKHOLDER’S EQUITY | | | | | | |
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CURRENT LIABILITIES: | | | | | | |
Revolving credit facility | | $ | — | | $ | 6,000 |
Current portion of long-term debt | | | 3,825 | | | 4,211 |
Accounts payable and accrued expenses | | | 108,513 | | | 130,858 |
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Total current liabilities | | | 112,338 | | | 141,069 |
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LONG-TERM PORTION OF DEBT | | | 476,001 | | | 552,270 |
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DEFERRED INCOME TAXES AND OTHER LIABILITIES | | | 90,056 | | | 74,097 |
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FAIR VALUE OF HEDGING ARRANGEMENTS | | | 33,472 | | | 25,883 |
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STOCKHOLDER’S EQUITY | | | 176,771 | | | 86,705 |
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| | | $ | 888,638 | | $ | 880,024 |
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Due to the acquisitions of Em3 Corporation and OccMed Systems, Inc. (the “Acquired Companies”), Concentra’s financial statements prior to December 1, 2002, have been restated to reflect the consolidation of the Acquired Companies’ financial statements, in accordance with accounting for reorganizations under common control. See the text of this earnings release for further information.
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Concentra Reports Fourth Quarter Results
Page 5
February 12, 2003
SUPPLEMENTAL INFORMATION
Concentra Operating Corporation’s (“Concentra”) historical results have been restated due to our acquisitions of Em3 Corporation (“Em3”) and OccMed Systems Inc. (“OccMed”), which were effective December 1, 2002. Because our primary shareholder, Welsh, Carson, Anderson & Stowe (“WCAS”), also controlled these two acquired companies, the accounting for these acquisitions is viewed as a reorganization of entities under common control. Accordingly, the historical costs of the acquired companies’ assets and liabilities have been utilized as if WCAS contributed their interests in the acquired companies to Concentra at their historical cost. The remainder acquired by Concentra was accounted for under the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations,” whereby assets and liabilities are “stepped-up” to fair value with the remainder allocated to goodwill. Accordingly, we have consolidated Em3 and OccMed’s historical financial statements with those of Concentra, and the equity interests of other investors, which are 34% in the case of Em3 and 31% in the case of OccMed, have been reflected as a “minority interest” in our financial statements for periods prior to December 1, 2002.
Because of the accounting treatment described above, the amounts reported in our current consolidated financial statements differ from amounts previously reported in our 2000, 2001, and 2002 Forms 10-Q and 10-K. The enclosed supplemental schedules on pages 6 through 9 are provided to ensure that all investors have access to Concentra’s historical quarterly Balance Sheets and Statements of Operations based on the current presentation. As we have provided in the past, these supplemental schedules also reflect Concentra’s 2001 and 2002 quarterly and annual Reconciliations of Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), which also give effect to the restated historical financial statements as described above. Computations of EBITDA have been provided in this press release primarily due to the use of this measure by the holders of the Company’s 13% Senior Subordinated Notes, and other lenders, for purposes of determining our performance in light of our debt covenant requirements, which are stated in our debt agreements as measures which relate to EBITDA. Please see each EBITDA schedule herein for a description regarding the limitations, computation and utilization of this measure.
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Concentra Reports Fourth Quarter Results
Page 6
February 12, 2003
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Quarterly Consolidated Statements of Operations
(in thousands)
| | | Three Months Ended
| |
| | | March 31, 2001
| | | June 30, 2001
| | | September 30, 2001
| | | December 31, 2001
| | | March 31, 2002
| | | June 30, 2002
| | | September 30, 2002
| | | December 31, 2002
| |
REVENUE: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Health Services | | $ | 106,352 | | | $ | 115,277 | | | $ | 115,016 | | | $ | 106,676 | | | $ | 103,297 | | | $ | 123,429 | | | $ | 128,002 | | | $ | 117,240 | |
Network Services | | | 42,345 | | | | 45,331 | | | | 45,169 | | | | 52,422 | | | | 57,229 | | | | 56,260 | | | | 55,164 | | | | 61,646 | |
Care Management Services | | | 52,061 | | | | 54,274 | | | | 52,473 | | | | 69,507 | | | | 79,475 | | | | 74,470 | | | | 71,632 | | | | 71,206 | |
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Total revenue | | | 200,758 | | | | 214,882 | | | | 212,658 | | | | 228,605 | | | | 240,001 | | | | 254,159 | | | | 254,798 | | | | 250,092 | |
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COST OF SERVICES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Health Services | | | 88,974 | | | | 92,456 | | | | 96,294 | | | | 97,841 | | | | 98,567 | | | | 99,545 | | | | 104,040 | | | | 104,012 | |
Network Services | | | 26,247 | | | | 27,301 | | | | 25,735 | | | | 30,904 | | | | 33,551 | | | | 35,437 | | | | 34,762 | | | | 34,468 | |
Care Management Services | | | 45,295 | | | | 47,264 | | | | 46,751 | | | | 60,856 | | | | 67,372 | | | | 66,659 | | | | 67,494 | | | | 65,529 | |
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Total cost of services | | | 160,516 | | | | 167,021 | | | | 168,780 | | | | 189,601 | | | | 199,490 | | | | 201,641 | | | | 206,296 | | | | 204,009 | |
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Total gross profit | | | 40,242 | | | | 47,861 | | | | 43,878 | | | | 39,004 | | | | 40,511 | | | | 52,518 | | | | 48,502 | | | | 46,083 | |
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General and administrative expenses | | | 18,671 | | | | 20,133 | | | | 18,729 | | | | 24,098 | | | | 22,498 | | | | 27,127 | | | | 27,880 | | | | 28,717 | |
Amortization of intangibles | | | 3,677 | | | | 3,813 | | | | 3,828 | | | | 4,428 | | | | 932 | | | | 931 | | | | 853 | | | | 1,060 | |
Unusual charges | | | — | | | | — | | | | — | | | | 546 | | | | — | | | | — | | | | — | | | | (1,200 | ) |
Charges for acquisition of affiliate | | | — | | | | — | | | | — | | | | 5,519 | | | | — | | | | — | | | | — | | | | — | |
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Operating income | | | 17,894 | | | | 23,915 | | | | 21,321 | | | | 4,413 | | | | 17,081 | | | | 24,460 | | | | 19,769 | | | | 17,506 | |
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Interest expense, net | | | 16,805 | | | | 16,692 | | | | 16,492 | | | | 16,409 | | | | 16,434 | | | | 16,614 | | | | 15,507 | | | | 15,027 | |
(Gain) loss on fair value of hedging arrangements | | | 6,726 | | | | (3,646 | ) | | | 13,473 | | | | (2,951 | ) | | | (5,190 | ) | | | 6,374 | | | | 7,712 | | | | (1,307 | ) |
Loss on early retirement of debt | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,381 | | | | 513 | |
Loss of acquired affiliate, net of tax | | | 1,116 | | | | 426 | | | | 1,065 | | | | 3,226 | | | | — | | | | — | | | | — | | | | — | |
Other, net | | | (290 | ) | | | (736 | ) | | | (1,267 | ) | | | (1,347 | ) | | | (688 | ) | | | (623 | ) | | | (109 | ) | | | 145 | |
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Income (loss) before income taxes | | | (6,463 | ) | | | 11,179 | | | | (8,442 | ) | | | (10,924 | ) | | | 6,525 | | | | 2,095 | | | | (10,722 | ) | | | 3,128 | |
Provision (benefit) for income taxes | | | (554 | ) | | | 5,802 | | | | (309 | ) | | | (1,182 | ) | | | 3,569 | | | | 1,418 | | | | (3,544 | ) | | | 3,136 | |
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Net (loss) income | | $ | (5,909 | ) | | $ | 5,377 | | | $ | (8,133 | ) | | $ | (9,742 | ) | | $ | 2,956 | | | $ | 677 | | | $ | (7,178 | ) | | $ | (8 | ) |
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Due to the acquisitions of Em3 Corporation and OccMed Systems, Inc. (the "Acquired Companies"), Concentra's financial statements prior to December 1, 2002, have been restated to reflect the consolidation of the Acquired Companies' financial statements, in accordance with accounting for reorganizations under common control. See the text of this earnings release for further information.
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Concentra Reports Fourth Quarter Results
Page 7
February 12, 2003
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Consolidated Balance Sheets
(in thousands)
| | | March 31, 2001
| | | June 30, 2001
| | September 30, 2001
| | December 31, 2001
| | March 31, 2002
| | June 30, 2002
| | September 30, 2002
| | December 31, 2002
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ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
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CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 7,358 | | | $ | 8,836 | | $ | 14,711 | | $ | 8,950 | | $ | 8,331 | | $ | 45,105 | | $ | 10,591 | | $ | 19,002 |
Accounts receivable, net | | | 165,586 | | | | 173,685 | | | 170,903 | | | 181,757 | | | 176,887 | | | 179,920 | | | 177,737 | | | 167,561 |
Prepaid expenses and other current assets | | | 26,184 | | | | 28,100 | | | 27,774 | | | 36,677 | | | 37,171 | | | 40,855 | | | 44,488 | | | 39,407 |
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Total current assets | | | 199,128 | | | | 210,621 | | | 213,388 | | | 227,384 | | | 222,389 | | | 265,880 | | | 232,816 | | | 225,970 |
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PROPERTY AND EQUIPMENT, NET | | | 112,143 | | | | 116,306 | | | 118,143 | | | 142,244 | | | 140,577 | | | 137,469 | | | 136,139 | | | 134,981 |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | | | 333,479 | | | | 331,697 | | | 329,392 | | | 475,671 | | | 478,657 | | | 478,711 | | | 476,565 | | | 486,231 |
OTHER ASSETS | | | 58,457 | | | | 55,795 | | | 58,047 | | | 34,725 | | | 34,910 | | | 38,205 | | | 56,995 | | | 41,456 |
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| | | $ | 703,207 | | | $ | 714,419 | | $ | 718,970 | | $ | 880,024 | | $ | 876,533 | | $ | 920,265 | | $ | 902,515 | | $ | 888,638 |
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LIABILITIES AND STOCKHOLDER'S EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | |
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CURRENT LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | |
Revolving credit facility | | $ | 17,000 | | | $ | — | | $ | — | | $ | 6,000 | | $ | 21,500 | | $ | — | | $ | 6,000 | | $ | — |
Current portion of long-term debt | | | 5,208 | | | | 4,288 | | | 5,264 | | | 4,211 | | | 6,606 | | | 7,579 | | | 7,564 | | | 3,825 |
Accounts payable and accrued expenses | | | 62,098 | | | | 77,408 | | | 71,675 | | | 130,858 | | | 112,035 | | | 109,473 | | | 115,539 | | | 108,513 |
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Total current liabilities | | | 84,306 | | | | 81,696 | | | 76,939 | | | 141,069 | | | 140,141 | | | 117,052 | | | 129,103 | | | 112,338 |
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LONG-TERM PORTION OF DEBT | | | 555,273 | | | | 555,163 | | | 553,187 | | | 552,270 | | | 551,242 | | | 550,212 | | | 501,678 | | | 476,001 |
DEFERRED INCOME TAXES AND OTHER LIABILITIES | | | 55,728 | | | | 57,528 | | | 59,652 | | | 74,097 | | | 73,123 | | | 77,423 | | | 88,086 | | | 90,056 |
FAIR VALUE OF HEDGING ARRANGEMENTS | | | 16,312 | | | | 12,666 | | | 26,139 | | | 25,883 | | | 20,694 | | | 27,068 | | | 34,779 | | | 33,472 |
STOCKHOLDER'S EQUITY | | | (8,412 | ) | | | 7,366 | | | 3,053 | | | 86,705 | | | 91,333 | | | 148,510 | | | 148,869 | | | 176,771 |
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| | | $ | 703,207 | | | $ | 714,419 | | $ | 718,970 | | $ | 880,024 | | $ | 876,533 | | $ | 920,265 | | $ | 902,515 | | $ | 888,638 |
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Due to the acquisitions of Em3 Corporation and OccMed Systems, Inc. (the "Acquired Companies"), Concentra's financial statements prior to December 1, 2002, have been restated to reflect the consolidation of the Acquired Companies' financial statements, in accordance with accounting for reorganizations under common control. See the text of this earnings release for further information.
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Concentra Reports Fourth Quarter Results
Page 8
February 12, 2003
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Reconciliation of Net Income to EBITDA
(in thousands)
| | | Three Months Ended December 31,
| | | Year Ended December 31,
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| | | 2002
| | | 2001
| | | 2002
| | | 2001
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Net loss | | $ | (8 | ) | | $ | (9,742 | ) | | $ | (3,553 | ) | | $ | (18,407 | ) |
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Provision (benefit) for income taxes | | | 3,136 | | | | (1,182 | ) | | | 4,579 | | | | 3,757 | |
Interest expense, net | | | 15,027 | | | | 16,409 | | | | 63,582 | | | | 66,398 | |
(Gain) loss on fair value of hedging arrangements | | | (1,307 | ) | | | (2,951 | ) | | | 7,589 | | | | 13,602 | |
Loss on early retirement of debt | | | 513 | | | | — | | | | 7,894 | | | | — | |
Loss of acquired affiliate, net of tax | | | — | | | | 3,226 | | | | — | | | | 5,833 | |
Charges for acquisition of affiliate | | | — | | | | 5,519 | | | | — | | | | 5,519 | |
Unusual charges | | | (1,200 | ) | | | 546 | | | | (1,200 | ) | | | 546 | |
Depreciation expense | | | 10,913 | | | | 9,951 | | | | 42,957 | | | | 32,820 | |
Amortization of intangibles | | | 1,060 | | | | 4,428 | | | | 3,776 | | | | 15,746 | |
Minority share of depreciation, amortization, and interest | | | (471 | ) | | | (819 | ) | | | (2,195 | ) | | | (2,165 | ) |
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EBITDA | | $ | 27,663 | | | $ | 25,385 | | | $ | 123,429 | | | $ | 123,649 | |
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Computations of Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) have been provided in this press release primarily due to the use of this measure by the holders of the Company’s 13% Senior Subordinated Notes, and other lenders, for purposes of determining our performance in light of our debt covenant requirements, which are stated in the Company’s debt agreements as measures which relate to EBITDA. Our computation of this measure may differ from that provided by other companies due to differences in the inclusion or exclusion of items in our computations as compared to that of others. Our measure of EBITDA has been made in a manner consistent with the requirements of the indenture which relates to our 13% Senior Subordinated Notes. EBITDA is a measure that is not prescribed for under Generally Accepted Accounting Principles (“GAAP”). EBITDA specifically excludes changes in working capital, capital expenditures and other items which are set forth on a cash flow statement presentation of a company’s operating, investing and financing activities, nor does it include the effects of interest expense, depreciation expense, amortization expense, taxes and other items which are included when determining a company’s net income. As such, we would encourage a reader not to use this measure as a substitute for the determination of net income, operating cash flow, or other similar GAAP-related measures, and to use it primarily for the debt covenant compliance purposes described above.
Due to the acquisitions of Em3 Corporation and OccMed Systems, Inc. (the “Acquired Companies”), Concentra’s financial statements prior to December 1, 2002, have been restated to reflect the consolidation of the Acquired Companies’ financial statements, in accordance with accounting for reorganizations under common control. See the text of this earnings release for further information.
-MORE-
Concentra Reports Fourth Quarter Results
Page 9
February 12, 2003
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Reconciliation of Net Income to EBITDA
(in thousands)
| | | March 31, 2001
| | | June 30, 2001
| | | September 30, 2001
| | | December 31, 2001
| | | March 31, 2002
| | | June 30, 2002
| | | September 30, 2002
| | | December 31, 2002
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Net income (loss) | | $ | (5,909 | ) | | $ | 5,377 | | | $ | (8,133 | ) | | $ | (9,742 | ) | | $ | 2,956 | | | $ | 677 | | | $ | (7,178 | ) | | $ | (8 | ) |
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Provision (benefit) for income taxes | | | (554 | ) | | | 5,802 | | | | (309 | ) | | | (1,182 | ) | | | 3,569 | | | | 1,418 | | | | (3,544 | ) | | | 3,136 | |
Interest expense, net | | | 16,805 | | | | 16,692 | | | | 16,492 | | | | 16,409 | | | | 16,434 | | | | 16,614 | | | | 15,507 | | | | 15,027 | |
(Gain) loss on fair value of hedging arrangements | | | 6,726 | | | | (3,646 | ) | | | 13,473 | | | | (2,951 | ) | | | (5,190 | ) | | | 6,374 | | | | 7,712 | | | | (1,307 | ) |
Loss on early retirement of debt | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,381 | | | | 513 | |
Loss of acquired affiliate, net of tax | | | 1,116 | | | | 426 | | | | 1,065 | | | | 3,226 | | | | — | | | | — | | | | — | | | | — | |
Charges for acquisition of affiliate | | | — | | | | — | | | | — | | | | 5,519 | | | | — | | | | — | | | | — | | | | — | |
Unusual charges | | | — | | | | — | | | | — | | | | 546 | | | | — | | | | — | | | | — | | | | (1,200 | ) |
Depreciation expense | | | 6,600 | | | | 7,665 | | | | 8,604 | | | | 9,951 | | | | 10,310 | | | | 10,368 | | | | 11,366 | | | | 10,913 | |
Amortization of intangibles | | | 3,677 | | | | 3,813 | | | | 3,828 | | | | 4,428 | | | | 932 | | | | 931 | | | | 853 | | | | 1,060 | |
Minority share of depreciation, amortization and interest | | | (194 | ) | | | (417 | ) | | | (735 | ) | | | (819 | ) | | | (544 | ) | | | (578 | ) | | | (602 | ) | | | (471 | ) |
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EBITDA | | $ | 28,267 | | | $ | 35,712 | | | $ | 34,285 | | | $ | 25,385 | | | $ | 28,467 | | | $ | 35,804 | | | $ | 31,495 | | | $ | 27,663 | |
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Computations of Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA") have been provided in this press release primarily due to the use of this measure by the holders of the Company's 13% Senior Subordinated Notes, and other lenders, for purposes of determining our performance in light of our debt covenant requirements, which are stated in the Company's debt agreements as measures which relate to EBITDA. Our computation of this measure may differ from that provided by other companies due to differences in the inclusion or exclusion of items in our computations as compared to that of others. Our measure of EBITDA has been made in a manner consistent with the requirements of the indenture which relates to our 13% Senior Subordinated Notes. EBITDA is a measure that is not prescribed for under Generally Accepted Accounting Principles ("GAAP"). EBITDA specifically excludes changes in working capital, capital expenditures and other items which are set forth on a cash flow statement presentatio
Due to the acquisitions of Em3 Corporation and OccMed Systems, Inc. (the "Acquired Companies"), Concentra's financial statements prior to December 1, 2002, have been restated to reflect the consolidation of the Acquired Companies' financial statements, in accordance with accounting for reorganizations under common control. See the text of this earnings release for further information.
-END-
