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 FOURTH QUARTER RESULTS
ADDISON, Texas, February 13, 2001 - Concentra Operating Corporation
("Concentra") today announced financial results for the fourth quarter and year
ended December 31, 2000. Due primarily to a strong performance in the Company's
Health Services and Specialized Cost Containment service lines, Concentra
reported $26,532,000 in EBITDA for the fourth quarter, representing an 18%
increase over the same period last year.
Revenue for the fourth quarter rose 7% to $187,953,000 from $175,255,000
reported in the fourth quarter of 1999. Operating income increased 28% to
$15,518,000 compared with $12,157,000 for the same period last year. Revenue
for the year ended December 31, 2000, rose 10% to $752,161,000 from $681,412,000
in 1999. Operating income for 2000 increased 13% to $77,618,000 compared with
$68,672,000, excluding non-recurring charges, reported last year.
Earnings before interest, taxes, depreciation and amortization ("EBITDA"),
as computed in a manner consistent with the definition set forth in the
Company's $190 million Series A Senior Subordinated Notes, increased 18% to
$26,532,000 in the fourth quarter of 2000 compared with $22,449,000 reported for
the same period last year. For 2000, EBITDA totaled $119,300,000, representing
an increase of 14% from $104,695,000 in the year-earlier period.
After reflecting the non-operating effects of adopting new accounting
standards for the valuation of interest rate hedging arrangements and revenue
recognition, the Company reported a net loss for the fourth quarter and year
ended December 31, 2000, totaling $9,568,000 and $6,551,000, respectively. In
1999, Concentra reported net losses of $2,028,000 for the fourth quarter and
$26,504,000 for the year, with the latter amount including a non-recurring
charge of $54,419,000, or $45,884,000 after tax, related to the Company's re-
capitalization transaction in August 1999.
At December 31, 2000, Concentra had no borrowings outstanding under its
$100,000,000 revolving credit facility. During the fourth quarter of 2000, the
Company repaid $19,500,000 borrowed under this facility and ended the year with
approximately $6,549,000 in cash and cash equivalents.
Commenting on the results, Daniel J. Thomas, President and Chief Executive
Officer, said, "The year 2000 was a defining period for the Company, and we are
very pleased by the overall progress Concentra made during the year. As has
been the case throughout 2000, Health Services again led our year-over-year
growth in the fourth quarter. We were also aided by a strong performance in our
Specialized Cost Containment service line."
-MORE-
Concentra Reports Fourth Quarter Results
Page 2
February 13, 2001
Thomas pointed out that Concentra's Health Services business posted solid
growth during the fourth quarter of the year despite the challenges of inclement
weather across many of its markets. Severe weather conditions forced closings
and reduced operating times at many centers in such markets as Chicago, Detroit,
Dallas, and across the Midwest. Additionally, a shortage of flu vaccine reduced
visit counts in November and December. "Clearly, these challenges affected the
level of patient visits we experienced during the fourth quarter and our results
would have been even stronger were it not for these factors," he added.
Same-market revenue for Health Services rose 6.3% in the fourth quarter and
8.8% for the year to date. These gains primarily related to a higher number of
patient visits. During the fourth quarter, 51% of the total visits to
Concentra's occupational healthcare centers related to non-injury care compared
with 50% in the fourth quarter of 1999. Concentra ended 2000 with 216
occupational health centers located in 64 markets in 32 states.
Thomas also noted that Concentra's Specialized Cost Containment services
posted solid growth and improved EBITDA for the fourth quarter of 2000. "We are
pleased with the contributions of our Concentra Preferred Systems, Provider Bill
Review and Medical Exams businesses to our fourth quarter results. We've made
excellent progress in these business units during 2000," he said.
Separately, Thomas announced that Concentra's parent company has changed
its name from Concentra Managed Care, Inc. to Concentra, Inc. "We believe this
name more appropriately reflects the employer and insurance services nature of
our business," said Thomas.
In the fourth quarter of 2000, Concentra adopted the provisions of
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," pursuant to which the Company recorded a
non-cash, non-operating charge of $6,822,000 prior to taxes to reflect a
reduction in the fair value of the Company's interest rate hedging arrangements
in accordance with this new standard. The Company also said it will restate
its first three quarters of operations during 2000 to reflect the periodic
adjustment of its interest rate hedging arrangements to fair value in each of
those periods. The periodic non-cash increases and decreases in non-operating
income from these valuation adjustments relate to the Company's interest rate
hedging agreements entered into in connection with its variable-rate $475
million Senior Secured Credit Facility. If the Company holds these interest
rate hedging arrangements to maturity, the cumulative effect of these periodic
earnings adjustments will ultimately equal zero.
Additionally, Concentra implemented, retroactive to January 1, 2000, the
new Securities and Exchange Commission's Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements," pursuant to which the Company
recorded a one-time, non-operating charge of $2,817,000 net of tax for the
cumulative effect of the change in accounting for revenue from certain of its
post-payment service offerings.
A listen-only simulcast and replay of Concentra's fourth quarter conference
call can be accessed at www.streetevents.com. The simulcast will begin at
--------------------
approximately 8:00 a.m. Central Time tomorrow; a replay of this call will be
available at approximately noon Central Time tomorrow and may be accessed until
March 14, 2001.
-MORE-
Concentra Reports Fourth Quarter Results
Page 3
February 13, 2001
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.
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, 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.
-MORE-
Concentra Reports Fourth Quarter Results
Page 4
February 13, 2001
CONCENTRA OPERATING CORPORATION
a wholly-owned subsidiary of
CONCENTRA, INC.
Unaudited Consolidated Statements of Operations
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2000 1999 2000 1999
-------- -------- -------- --------
REVENUE:
Health Services $ 96,700 $ 87,643 $399,660 $330,064
Specialized Cost Containment 55,993 52,454 210,746 204,084
Field Case Management 35,260 35,158 141,755 147,264
-------- -------- -------- --------
Total revenue 187,953 175,255 752,161 681,412
COST OF SERVICES:
Health Services 82,377 73,326 321,784 265,083
Specialized Cost Containment 35,693 35,734 143,031 137,293
Field Case Management 33,473 32,500 128,609 132,113
-------- -------- -------- --------
Total cost of services 151,543 141,560 593,424 534,489
-------- -------- -------- --------
Gross profit 36,410 33,695 158,737 146,923
General and administrative expenses 17,177 18,073 66,491 65,291
Amortization of intangibles 3,715 3,465 14,628 12,960
Non-recurring charge - - - 54,419
-------- -------- -------- --------
Operating income 15,518 12,157 77,618 14,253
Interest expense 16,928 16,165 68,932 35,779
Interest income (288) (176) (803) (2,900)
Loss on change in fair value of
hedging arrangements 6,822 - 9,586 -
Other, net (462) (244) (725) (391)
-------- -------- -------- --------
Income (loss) before income taxes (7,482) (3,588) 628 (18,235)
Provision (benefit) for income taxes (731) (1,560) 4,362 8,269
-------- -------- -------- --------
Income (loss) before effect of
accounting change (6,751) (2,028) (3,734) (26,504)
Cumulative effect of accounting
change, net of tax 2,817 - 2,817 -
-------- -------- -------- --------
Net income (loss) $ (9,568) $ (2,028) $ (6,551) $(26,504)
======== ======== ======== ========
The consolidated statements of operations above include the post-
recapitalization transaction operating results of Concentra Operating
Corporation, a wholly-owned subsidiary of Concentra, Inc. and the pre-
recapitalization transaction operating results of Concentra, Inc. The
recapitalization transaction was completed on August 17, 1999.
-MORE-
Concentra Reports Fourth Quarter Results
Page 5
February 13, 2001
CONCENTRA OPERATING CORPORATION
a wholly-owned subsidiary of
CONCENTRA, INC.
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2000 1999
----------- ------------
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 6,549 $ 14,371
Accounts receivable, net 160,418 156,239
Prepaid expenses and other current assets 24,679 28,674
---------- -----------
Total current assets 191,646 199,284
PROPERTY AND EQUIPMENT, NET 109,110 104,068
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 323,162 324,984
OTHER ASSETS 32,937 25,768
---------- -----------
$656,855 $654,104
========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Revolving credit facility $ - $ 4,000
Current portion of long-term debt 5,228 3,805
Accounts payable and accrued expenses 70,189 81,768
---------- -----------
Total current liabilities 75,417 89,573
LONG-TERM DEBT, NET 556,334 559,942
DEFERRED INCOME TAXES AND OTHER LIABILITIES 51,589 43,862
FAIR VALUE OF HEDGING ARRANGEMENTS 9,586 -
STOCKHOLDER'S EQUITY (DEFICIT) (36,071) (39,273)
---------- -----------
$656,855 $654,104
========== ===========
-END-