EXHIBIT 99.1
TOTAL RENAL CARE, INC.
----------------------
PRESS RELEASE
FOR FURTHER INFORMATION PLEASE CONTACT:
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
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VICTOR M.G. CHALTIEL, CEO LARRY DELANEY, GENERAL INFORMATION
OR JOHN E. KING, CFO MOIRA CONLON, INVESTOR CONTACT
AT (310) 792-2600 MICHAELLE BURSTIN, MEDIA CONTACT
AT (310) 442-0599
KATHY BRUNSON, INVESTOR CONTACT
AT (312) 266-7800
FOR IMMEDIATE RELEASE
TUESDAY, NOVEMBER 3, 1998
TOTAL RENAL CARE REPORTS NET REVENUES UP 61%
AND NET INCOME UP 99% FOR THIRD QUARTER 1998
EARNINGS PER SHARE AT 35 CENTS, UP 94% FROM SAME YEAR-AGO QUARTER
THIRD QUARTER/RECENT HIGHLIGHTS:
. REVENUES UP 61% TO $318,585,000 FOR THE QUARTER
. EARNINGS UP 99% TO $29,109,000 FOR THE QUARTER
. CASH FLOW (EBITDA) MARGIN IMPROVED TO 28.7% FOR THE QUARTER
. ADDITION OF 54 CENTERS AND MORE THAN 3,300 PATIENTS SINCE JULY 1, 1998 FOR
A TOTAL OF APPROXIMATELY 36,400 PATIENTS AT SEPTEMBER 30, 1998 (INCLUDING
21 CENTERS AND 1,000 PATIENTS UNDER MANAGEMENT)
. ADDITION OF 15 CENTERS, AND APPROXIMATELY 1,500 PATIENTS SINCE OCTOBER 1,
1998 FOR A CURRENT TOTAL OF APPROXIMATELY 37,900 PATIENTS (INCLUDING 14
CENTERS AND 1,200 PATIENTS UNDER MANAGEMENT)
TORRANCE, CALIF., NOVEMBER 3, 1998 -- Continuing to report strong quarterly
financial results, TOTAL RENAL CARE HOLDINGS, INC. (NYSE: TRL), the second
largest domestic and largest independent worldwide provider of dialysis
services, today announced record revenues, earnings, and earnings per share for
the third quarter of 1998.
Revenues increased 61% to $318.6 million in the third quarter of 1998 from
$197.7 million in the corresponding period of 1997. Earnings increased 99% to
$29.1 million from $14.6 million and earnings per share increased 94% to $0.35
on 87.1 million weighted average shares outstanding, compared with earnings per
share of $0.18 on 80.5 million weighted average shares outstanding for the
prior-year third quarter period.
"The success of our aggressive, yet disciplined growth strategy in 1998 has
continued to result in an impressive financial track record quarter after
quarter," said Victor M.G.
Chaltiel, TRL Chairman, President and Chief Executive Officer. "With more than
8,000 patients added year-to-date, plus the 1,200 patents under Satellite
Dialysis Centers and those currently under a definitive agreement or an
agreement in principle, we believe that we are well-positioned for another
extraordinary year of growth in 1999."
Revenues increased 62% to $865.7 million in the first nine months of 1998 from
$535.4 million in the corresponding period of 1997. Earnings (before merger
costs of $92.8 million and $15.6 million of non cash expense related to a change
in accounting principle requiring start-up and organizational costs to be
expensed immediately rather than capitalized and the write-off of deferred
financing charges all of which were recognized in the first quarter, and $25.8
million from an extraordinary item and related charge associated with the
refinancing of existing credit lines and early retirement of underlying interest
swap arrangements recognized in the second quarter) increased 92% to $76.7
million up from $39.9 million. Earnings per share (before extraordinary item
and related charge, and merger costs and accounting change) increased 86% to
$0.93, compared with earnings per share of $0.50 for the same prior year nine
month period.
"Obviously, we are very pleased with the continuation of our exceptional 1998
performance into the last half of 1998," commented Mr. Chaltiel.
As previously disclosed, the Company's Florida-based laboratory subsidiary is
the subject of a third party carrier review and payment suspension.
Notwithstanding the provision by the Company of extensive supporting
documentation, the carrier still maintains that 99.3% of the tests performed by
the laboratory during the review period were not properly supported by the
prescribing physicians' medical justification and has issued a formal
overpayment determination in the amount of approximately $5.6 million. The
carrier has informed the local offices of the Department of Justice and the
Department of Health and Human Services of the overpayment determination. The
Company continues to cooperate fully with the carrier and believes that the
carrier's position is wrong, legally and factually. The Company has instituted
formal appeal proceedings relating to the overpayment determination and will
pursue all possible remedies available under the law.
Torrance-based Total Renal Care Holdings, Inc. is the second largest domestic
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 306 hospitals. Currently, TRL will operate 492
outpatient dialysis facilities and provide services to approximately 37,900
patients, with approximately 2,200 patients in 35 centers under TRL management
(including patients to be served under the Satellite Dialysis Centers agreement,
which is effective December 1, 1998). 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, INC., VIA FACSIMILE AT NO COST,
CALL 1-800-PRO-INFO AND DIAL COMPANY CODE TRL.
EXPANSION HIGHLIGHTS
QUARTER ENDED YEAR ENDED QUARTER ENDED
------------------------------- --------------- -----------------------------------------
SEPTEMBER 30, DECEMBER 31, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1997 1997 1997 1998 1998 1998
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Treatments............... 489,922 553,218 1,869,854 1,099,627 1,186,597 1,283,734
Patients................. 13,700 15,800 15,800 30,700 33,100 36,400
Centers.................. 174 197 197 391 423 477
Revenue per Treatment.... $ 232 $ 236 $ 234 $ 235 $ 243 $ 248
(Financial Tables to Follow)
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 operations
integration 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.
TOTAL RENAL CARE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS NINE MONTHS
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1998 1997 1998 1997
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Net operating revenues........................ $318,585,000 $197,749,000 $865,684,000 $535,401,000
Operating expenses:
Facilities.................................. 200,925,000 131,670,000 549,544,000 360,771,000
General and administrative.................. 17,174,000 13,208,000 50,589,000 35,244,000
Provision for doubtful accounts............. 8,997,000 5,390,000 23,539,000 14,786,000
Depreciation and amortization............... 22,435,000 14,194,000 62,474,000 38,023,000
Merger costs................................ 0 0 92,835,000 0
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Total operating expenses................... 249,531,000 164,462,000 778,981,000 448,824,000
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Operating income.............................. 69,054,000 33,287,000 86,703,000 86,577,000
Interest expense.............................. (19,805,000) (7,525,000) (50,866,000) (17,179,000)
Interest swap--early termination costs........ 0 0 (9,823,000) 0
Interest income............................... 963,000 883,000 3,627,000 2,346,000
------------ ------------ ------------ ------------
Income before income taxes, minority
interests, extraordinary item and
cumulative effect of a change in accounting
principle................................... 50,212,000 26,645,000 29,641,000 71,744,000
Income taxes.................................. 19,244,000 11,163,000 28,924,000 28,681,000
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Income before minority interests,
extraordinary item and cumulative effect of
a change in accounting principle............ 30,968,000 15,482,000 717,000 43,083,000
Minority interests in income of consolidated
subsidiaries................................ 1,859,000 850,000 4,817,000 3,193,000
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Income (loss) before extraordinary item and
cumulative effect of a change in accounting
principle................................... 29,109,000 14,632,000 (4,100,000) 39,890,000
Extraordinary loss, net of tax of $7,668,000. 0 0 12,744,000 0
Cumulative effect of a change in accounting
principle, net of tax of $4,300,000......... 0 0 6,896,000 0
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Net (loss) income............................. $ 29,109,000 $ 14,632,000 $(23,740,000) $ 39,890,000
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Earnings (loss) per common share:
Net income (loss) before extraordinary
item and cumulative effect of change in
accounting principle...................... $ 0.36 $ 0.19 $ (0.05) $ 0.52
Extraordinary loss......................... $ 0.00 $ 0.00 $ (0.16) $ 0.00
Cumulative effect of change in accounting.. $ 0.00 $ 0.00 $ (0.09) $ 0.00
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Net (loss) income.......................... $ 0.36 $ 0.19 $ (0.30) $ 0.52
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Weighted average number of common shares
outstanding................................ 80,858,000 77,752,000 79,982,000 77,405,000
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Earnings (loss) per common share--assuming
dilution:
Net income (loss) before extraordinary
item and cumulative effect of change in
accounting principle...................... $ 0.35 $ 0.18 $ (0.05) $ 0.50
Extraordinary loss......................... $ 0.00 $ 0.00 $ (0.16) $ 0.00
Cumulative effect of change in accounting.. $ 0.00 $ 0.00 $ (0.09) $ 0.00
------------ ------------ ------------ ------------
Net (loss) income.......................... $ 0.35 $ 0.18 $ (0.30) $ 0.50
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Weighted average number of common shares
and equivalents outstanding--assuming
dilution................................... 87,052,000 80,532,000 79,982,000 79,683,000
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