Concentra Operating 8-K Concentra Operating Corporation Reports Year-end Results

Exhibit 99.1

Contacts:	Daniel J. Thomas	Thomas E. Kiraly
	President and	Executive Vice President and
	Chief Executive Officer	Chief Financial Officer
	(972) 364-8111	(972) 364-8217

CONCENTRA OPERATING CORPORATION REPORTS YEAR-END RESULTS

Announces Plan To Prepay $32 Million In Senior Term Debt

ADDISON, Texas, February 14, 2006 – Concentra Operating Corporation (“Concentra” or the “Company”) today announced results for the fourth quarter ended December 31, 2005. The Company reported consolidated Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“Adjusted EBITDA”) of $34,160,000 for the quarter. This represented an increase of 18% over the $29,005,000 in Adjusted EBITDA reported for the same period in 2004. Concentra computes Adjusted EBITDA in the manner prescribed by its bond indentures, and a reconciliation of Adjusted EBITDA to net income is provided within this press release. The Company also reported strong increases in its cash flow from operations and its retained cash balances. Due to its strong fourth quarter cash flow trends, the Company currently intends to prepay $31,623,000 in senior term indebtedness at the conclusion of the first quarter.

Revenue for the fourth quarter of 2005 increased 16% to $303,396,000 from $261,022,000 in the year-earlier period. Operating income was $20,945,000 in the fourth quarter, an increase of 5% from $19,880,000 in the same period last year. Growth in operating income during the quarter was affected by increases in general and administrative expenses related primarily to a $3,286,000 increase in the Company’s non-cash equity compensation expenses, as well as other increases related to Concentra’s fourth quarter acquisitions, legal expenses and other compensation costs. Approximately $2,500,000 of the non-cash equity compensation expenses related to the Company’s fourth quarter appointment of its new Chairman and were non-recurring in nature. Net income for the quarter was $212,000, which included a pre-tax loss on early retirement of debt totaling $6,029,000, versus net income of $4,557,000 in the year-earlier quarter.

Concentra’s revenue for 2005 increased 5% to $1,155,069,000 from $1,095,849,000 in 2004. Operating income increased to $127,586,000, up 72% from $74,118,000 for 2004. The Company’s growth in operating income reflected the impact of a non-cash impairment charge of $41,682,000 reported in the third quarter of 2004 related to the write down of goodwill and other

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Concentra Announces Year-end 2005 Results

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February 14, 2006

long-lived assets of the Company’s Care Management Services segment. Net income for 2005 was $53,801,000 as compared to a net loss of $9,975,000 in 2004. In addition to the impairment charge described above, the Company’s net loss for 2004 included a loss on early retirement of debt totaling $14,105,000. For 2005, Adjusted EBITDA was $165,022,000, representing a 7% increase from $154,755,000 in 2004.

“We are pleased to have finished the year on such positive notes,” said Daniel Thomas, President and Chief Executive Officer of Concentra. “During the fourth quarter, we were able to complete the acquisition of Beech Street Corporation and commence our integration process. By combining the strengths of Beech Street with our existing group health and workers’ compensation network operations, we are well positioned to deliver new services that will assist payors and employers in achieving broader provider access and in lowering their healthcare and disability costs. With these expanded services, I believe we will re-establish growth in the Network Services segment of our business during the coming year.

“Another positive note during the quarter was that our Health Services division continued to provide us with the solid growth trends that we have been experiencing all year,” Thomas added. “Our same-center patient visits grew at a rate of 4.1%, and we continued to achieve strong growth in the diversified services portion of this business segment. With the acquisition of Occupational Health + Rehabilitation Inc, we now have 300 health centers nationwide.”

Due primarily to positive accounts receivable collection trends, the Company also achieved significant increases in its operating cash flows and cash balances. At the conclusion of the fourth quarter, the Company’s Days Sales Outstanding decreased to 51 days, which represented the lowest level achieved in Concentra’s history. As a result of these working capital trends and the Company’s underlying operating growth, Concentra’s net cash provided by operating activities for the year grew to $141,799,000, an increase of $42,926,000 as compared to the year ended December 31, 2004. At December 31, 2005, Concentra had $65,057,000 in unrestricted cash and investments.

As a result of its strong fourth quarter cash flow performance and growing cash balances, the Company currently intends to prepay $31,623,000 in senior term indebtedness at the conclusion of the first quarter, in addition to its normal scheduled principal payments. Of this amount, $14,123,000 is being prepaid in compliance with the excess cash flow covenants of the Company’s Senior Credit Facility. The remaining $17,500,000 is being made as an optional prepayment.

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Concentra Announces Year-end 2005 Results

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February 14, 2006

Concentra Operating Corporation, a wholly owned subsidiary of Concentra Inc., is dedicated to improving the quality of life by making healthcare accessible and affordable. Serving the occupational, auto and group healthcare markets, Concentra provides employers, insurers and payors with a series of integrated services that include employment-related injury and occupational healthcare, in-network and out-of-network medical claims review and repricing, access to preferred provider organizations, first notice of loss services, case management and other cost containment services. Concentra provides its services to approximately 136,000 employer locations and 3,700 insurance companies, group health plans, third-party administrators and other healthcare payors. The Company has 300 health centers located in 40 states. It also operates the Beech Street and FOCUS networks. These provider networks include 544,000 providers, 52,000 ancillary providers and 4,400 acute-care hospitals nationwide.

A public, listen-only simulcast of Concentra’s fourth quarter conference call will begin at 9:00 a.m. Eastern Standard Time tomorrow (February 15, 2006) and may be accessed via the Company’s website, 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 using the same link will be available shortly after the conclusion of the live broadcast and will continue through March 15, 2006.

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, acquisitions 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 Announces Year-end 2005 Results

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February 14, 2006

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,
	2005			2004			2005			2004
REVENUE:
Health Services	$	171,964		$	141,659		$	667,053		$	576,880
Network Services		82,292			64,962			286,018			281,374
Care Management Services		49,140			54,401			201,998			237,595
Total revenue		303,396			261,022			1,155,069			1,095,849
COST OF SERVICES:
Health Services		149,015			123,241			550,149			474,343
Network Services		45,180			39,281			165,730			163,800
Care Management Services		42,524			46,666			173,833			208,505
Total cost of services		236,719			209,188			889,712			846,648
Total gross profit		66,677			51,834			265,357			249,201
General and administrative expenses		44,056			31,357			135,773			130,263
Amortization of intangibles		1,676			693			3,424			3,234
Loss on impairment		—			—			—			41,682
Gain on sale of assets		—			—			(1,426	)		—
Unusual charges		—			(96	)		—			(96	)
Operating income		20,945			19,880			127,586			74,118
Interest expense, net		16,428			13,236			57,709			55,606
Gain on fair value of economic hedges		(218	)		—			(87	)		—
Loss on early retirement of debt		6,029			—			6,029			14,105
Other, net		662			332			3,264			3,047
Income (loss) before income taxes		(1,956	)		6,312			60,671			1,360
Provision (benefit) for income taxes		(2,429	)		1,706			6,061			10,627
Income (loss) from continuing operations		473			4,606			54,610			(9,267	)
Loss from discontinued operations		261			49			809			708
Net income (loss)	$	212		$	4,557		$	53,801		$	(9,975	)

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February 14, 2006

CONCENTRA OPERATING CORPORATION

a wholly owned subsidiary of

CONCENTRA INC.

Consolidated Balance Sheets

(in thousands)

	December 31, 2005		December 31, 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	65,057	$	61,319
Restricted cash and short-term investments		4,723		1,250
Accounts receivable, net		171,357		175,294
Prepaid expenses and other current assets		43,773		32,011
Total current assets		284,910		269,874
PROPERTY AND EQUIPMENT, NET		124,556		103,058
GOODWILL AND OTHER INTANGIBLE ASSETS, NET		664,090		449,698
OTHER ASSETS		29,809		30,710
	$	1,103,365	$	853,340
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES:
Revolving credit facility	$	—	$	—
Current portion of long-term debt		20,074		34,092
Accounts payable and accrued expenses		163,774		123,387
Total current liabilities		183,848		157,479
LONG-TERM DEBT, NET		840,756		700,112
DEFERRED INCOME TAXES AND OTHER LIABILITIES		72,599		58,615
STOCKHOLDER’S EQUITY (DEFICIT)		6,162		(62,866	)
	$	1,103,365	$	853,340

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February 14, 2006

CONCENTRA OPERATING CORPORATION

a wholly owned subsidiary of

CONCENTRA INC.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
	2005			2004
OPERATING ACTIVITIES:
Net income (loss)	$	53,801		$	(9,975	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of property and equipment		36,485			39,799
Amortization of intangibles		3,424			3,234
Restricted stock amortization and equity-based compensation		4,162			868
Loss on impairment of goodwill and long-lived assets		—			41,682
Gain on sale of assets		(1,426	)		—
Unusual charges		—			(96	)
Gain on change in fair value of economic hedges		(87	)		—
Write-off of deferred financing costs		6,029			2,505
Deferred income taxes		1,094			6,204
Write-off of fixed assets		737			160
Changes in assets and liabilities:
Accounts receivable, net		20,047			(2,972	)
Prepaid expenses and other assets		(575	)		15,794
Accounts payable and accrued expenses		18,108			1,670
Net cash provided by operating activities		141,799			98,873
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired		(220,826	)		(6,794	)
Purchases of property, equipment and other assets		(49,143	)		(27,897	)
Increase in restricted cash		—			(1,250	)
Proceeds from sale of assets		1,699			—
Net cash used in investing activities		(268,270	)		(35,941	)
FINANCING ACTIVITIES:
Borrowings (payments) under revolving credit facilities, net		—			—
Proceeds from the issuance of debt		525,000			222,850
Repayments of debt		(400,065	)		(147,926	)
Dividend to parent		—			(96,028	)
Payment of early debt retirement costs		—			(11,600	)
Payment of deferred financing costs		(4,063	)		(8,495	)
Distributions to minority interests		(823	)		(3,445	)
Contribution from the issuance of common stock by parent		10,160			410
Net cash provided by (used in) financing activities		130,209			(44,234	)
NET INCREASE IN CASH		3,738			18,698
CASH, BEGINNING OF PERIOD		61,319			42,621
CASH, END OF PERIOD	$	65,057		$	61,319

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February 14, 2006

CONCENTRA OPERATING CORPORATION

a wholly owned subsidiary of

CONCENTRA INC.

Unaudited Reconciliation of Net Income to Adjusted EBITDA

(in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004
Net income (loss)	$	212		$	4,557		$	53,801		$	(9,975	)
Provision (benefit) for income taxes		(2,429	)		1,706			6,061			10,627
Interest expense, net		16,428			13,236			57,709			55,606
Depreciation expense		9,699			9,329			36,485			39,799
Amortization expense		1,676			693			3,424			3,234
Amortization of equity-based compensation		3,067			(219	)		4,162			868
EBITDA		28,653			29,302			161,642			100,159
Gain on fair value of economic hedges		(218	)		—			(87	)		—
Loss on impairment		—			—			—			41,682
Loss on early retirement of debt		6,029			—			6,029			14,105
Gain on sale of assets		—			—			(1,426	)		—
Unusual charges		—			(96	)		—			(96	)
Discontinued operations – income tax		(141	)		(27	)		(436	)		(381	)
Minority share of depreciation, amortization and interest		(163	)		(174	)		(700	)		(714	)
Adjusted EBITDA	$	34,160		$	29,005		$	165,022		$	154,755

Computations of Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“Adjusted EBITDA”) have been provided in this press release due to the use of this measure by the holders of the Company’s 9.5% Senior Subordinated Notes and 9.125% Senior Subordinated Notes and other lenders, for purposes of determining the Company’s performance in light of its debt covenant requirements, which are stated in the Company’s debt agreements as measures that relate to Adjusted EBITDA. Adjusted EBITDA is disclosed because compliance with the liquidity covenants included in these agreements is considered material to the Company. The Company’s computations of this measure may differ from that provided by other companies due to differences in the inclusion or exclusion of items in its computations as compared to that of others. The Company’s measure of Adjusted EBITDA has been made in a manner consistent with the requirements of the indenture that relates to its 9.5% Senior Subordinated Notes and 9.125% Senior Subordinated Notes. Adjusted EBITDA is a measure that is not prescribed for under Generally Accepted Accounting Principles (“GAAP”). Adjusted EBITDA specifically excludes changes in working capital, capital expenditures and other items that are set forth on a cash flow statement presentation of a company’s operating, investing and financing activities, and it also excludes the effects of interest expense, depreciation expense, amortization expense, taxes and other items that are included when determining a company’s net income. As such, the Company 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 above.

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February 14, 2006

CONCENTRA OPERATING CORPORATION

a wholly owned subsidiary of

CONCENTRA INC.

Supplemental Information

We use certain operating metrics to measure aspects of our operations. Additionally, from time to time, we provide estimates of our possible future financial performance. Our disclosure to you of this information is conditioned in its entirety by the provisions, risk factors and cautionary statements provided for you in the main text of this press release. It is being provided solely to ensure full and fair disclosure to investors in the Company’s existing debt instruments and for no other purpose.

Operating Metrics and Information:

	Three Months Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004
Health centers at period end		300			257			300			257
Total visits to health centers		1,621,347			1,433,455			6,570,824			5,916,170
Injury-related visits %		47.6	%		48.8	%		46.6	%		48.1	%
Center revenue (in thousands) [a]	$	144,638		$	124,874		$	579,000		$	513,601
Same-center performance [b]:
Visits per business day growth		4.1	%		8.1	%		4.1	%		8.4	%
Revenue per visit growth		1.0	%		(0.3	)%		1.3	%		(0.5	)%
Revenue per business day growth		5.1	%		7.8	%		5.5	%		7.9	%

Current 2006 performance guidance:

(Subject to immediate change and no public update or notice; includes the effects of recent acquisitions)

Revenue:	$1.325 billion to $1.375 billion.
Adjusted EBITDA [c]:	$187 million to $194 million.
Operating Cash Flow:	$90 million to $100 million.
Capital Expenditures:	$45 million to $50 million.

Notes:

[a] Excludes diversified services.

[b] Our same-center comparisons represent all centers that Health Services has operated for the previous two full years as of the date indicated, excluding existing centers affected by the consolidation of acquired centers.

[c] Please refer to the discussion on Page 7 of this press release concerning the Company’s computation and use of Adjusted EBITDA.

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