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 ANNOUNCES FIRST QUARTER RESULTS
ADDISON, Texas, May 8, 2001 - Concentra Operating Corporation ("Concentra")
today announced financial results for the first quarter ended March 31, 2001.
The Company reported $29,024,000 in EBITDA, which represented an 11% increase
over the prior year.
Revenue for the first quarter was $198,083,000 compared with $181,096,000
for the same period last year, representing an increase of 9%. Operating income
increased 15% to $18,767,000 versus $16,369,000 for the first quarter of the
prior 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 to
$29,024,000 in the first quarter of 2001 versus $26,186,000 reported for the
comparable period in 2000.
Commenting on the announcement, Daniel J. Thomas, President and Chief
Executive Officer of Concentra, said, "We are pleased to report solid increases
in revenue and cash flow during the first quarter. While Health Services, our
largest business, continues to provide a solid foundation for Concentra's
growth, we are equally encouraged by the positive trends occurring in our other
lines of business. In particular, we have witnessed renewed expansion in Care
Management Services following a period of stabilization in 2000, and we are
beginning to see the payoff from the technology investments we have made in
Network Services through increased revenues and a stronger pipeline of new
business opportunities. We believe this more balanced growth reflects the
initial results of our efforts to better integrate our resources, information
systems and product lines."
Thomas pointed out that the first quarter performance of Concentra's Health
Services division was notable from several standpoints. During the quarter,
despite a slow-down in the growth of non-injury related visits associated with a
national decrease in hiring rates, this unit nevertheless demonstrated overall
visit and revenue growth. Same-market revenue for Health Services rose 6.7% in
the first quarter, reflecting both an increase in visits and revenue per visit.
Approximately 49.7% of Health Services' first quarter visits involved injury
care, up from 49.0% in the same period last year.
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Concentra Reports First Quarter Results
Page 2
May 8, 2001
Health Services also completed a significant acquisition during the quarter
which expanded its operations into a new state. In March 2001, Concentra Health
Services acquired the assets of Industrial Health Care Company ("IHC"), a
privately held operator of seven occupational health centers and several on-site
offices for large employers located throughout the state of Connecticut. IHC
was the largest operator of such facilities in Connecticut, generating annual
patient visits in excess of 157,000. This acquisition gave Concentra an
immediate and substantial presence throughout the state of Connecticut, a new
market for Concentra Health Services, and provides an attractive platform to
support the Company's long-term growth plans for the region. Concentra ended
the first quarter of 2001 with 224 occupational health centers across 69 markets
in 32 states.
During the quarter, the Company generated significantly increased operating
cash flows as compared to the prior year. For the quarter ending March 31,
2001, Concentra produced $4,612,000 in positive cash flow from operations as
compared to a $15,044,000 use of operating cash flows during the same period
last year. This strong cash flow was primarily a result of increased earnings
and improved working capital management, and reflected a decrease in the number
of Days Sales Outstanding from 79 at the end of 2000 to 75 at the end of the
first quarter of 2001. Due to seasonal working capital demands and the Health
Services acquisition completed in the first quarter, Concentra had $17,000,000
in outstanding borrowings under its $100,000,000 revolving credit facility at
March 31, 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.
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Concentra Reports First Quarter Results
Page 3
May 8, 2001
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Consolidated Statements of Operations
(in thousands)
Three Months Ended
March 31,
--------------------
2001 2000
--------- --------
REVENUE:
Health services $ 103,677 $ 94,260
Network services 42,345 40,919
Care management services 52,061 45,917
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Total revenue 198,083 181,096
COST OF SERVICES:
Health services 85,426 76,995
Network services 26,247 25,447
Care management services 45,295 41,800
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Total cost of services 156,968 144,242
--------- --------
Total gross profit 41,115 36,854
General and administrative expenses 18,671 16,919
Amortization of intangibles 3,677 3,566
--------- --------
Operating income 18,767 16,369
Interest expense, net 16,910 16,141
Loss (gain) on fair value of hedging arrangements 6,726 (1,537)
Other, net 7 (196)
--------- --------
Income (loss) before income taxes (4,876) 1,961
Provision (benefit) for income taxes (554) 893
--------- --------
Net income (loss) $ (4,322) $ 1,068
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Prior-year revenue and cost of services have been reclassified to conform to the
Company's current reporting of business segments
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Concentra Reports First Quarter Results
Page 4
May 8, 2001
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2001 2000
------------ ------------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,084 $ 6,549
Accounts receivable, net 165,586 160,418
Prepaid expenses and other current assets 26,198 24,679
------------ ------------
Total current assets 197,868 191,646
PROPERTY AND EQUIPMENT, NET 109,293 109,110
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 333,479 323,162
OTHER ASSETS 32,773 32,937
------------ ------------
$ 673,413 $ 656,855
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LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ 17,000 $ --
Current portion of long-term debt 5,208 5,228
Accounts payable and accrued expenses 65,740 70,189
------------ ------------
Total current liabilities 87,948 75,417
LONG-TERM DEBT 555,273 556,334
DEFERRED INCOME TAXES AND OTHER LIABILITIES 51,447 51,589
FAIR VALUE OF HEDGING ARRANGEMENTS 16,312 9,586
STOCKHOLDER'S EQUITY (DEFICIT) (37,567) (36,071)
------------ ------------
$ 673,413 $ 656,855
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