EXHIBIT 99.1
[LOGO]
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 SECOND QUARTER RESULTS
ADDISON, Texas, July 31, 2001 - Concentra Operating Corporation
("Concentra") today announced financial results for the second quarter and six-
month period ended June 30, 2001. The Company reported $37,527,000 in EBITDA for
the quarter, which represented a 12% increase over the prior year.
Revenue for the second quarter increased 11% to $211,924,000 compared with
$190,348,000 for the same period last year. Operating income increased 16% to
$26,938,000 versus $23,216,000 for the second quarter of 2000. Net income for
the quarter totaled $7,731,000 compared with $1,144,000 in the year-earlier
period.
Revenue for the first half of 2001 increased 10% to $410,007,000 compared
with $371,444,000 for the same period during the prior year. Operating income
increased 15% to $45,705,000 versus $39,585,000 for the first half of 2000. Net
income for the first six months of 2001 was $3,409,000 compared with $2,212,000
in the year-earlier period.
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 12% to $37,527,000 in
the second quarter of 2001 versus $33,478,000 in the same quarter last year. For
the first half of 2001, EBITDA increased to $66,551,000 from $59,664,000 during
the prior year, which also represented an increase of 12%.
Commenting on the announcement, Daniel J. Thomas, President and Chief
Executive Officer of Concentra, said, "Our financial results for the second
quarter reflect solid expansion in all aspects of our business. I'm particularly
pleased that despite the effect of the nationwide slowdown in new employment on
our visit trends, our Health Services division nevertheless produced solid
overall growth. Total revenue increased by 9% and our gross profit grew by 12%
in this line of business as compared to the prior year. These results reflect
the benefits of increases in the average rate per visit, an expansion in the
number of health centers and good management of our expenses. Our Network
Services segment also produced exceptional results during the quarter.
Significant increases in our traditional out-of-network bill review services
contributed greatly to these strong results. I also continue to be encouraged by
the revenue and earnings growth we've been achieving in our Care Management
Services segment during this year. For the quarter and the year to date, we've
been able to demonstrate a profitable expansion of this line of business and
have benefited financially from its complementary nature to our other two
service lines."
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Concentra Announces Second Quarter Results
Page 2
July 31, 2001
As of June 30, 2001, Concentra Health Services operated 228 occupational
health centers across 70 markets in 32 states.
During the second quarter, Concentra continued to generate significant
operating cash flow compared with the prior year, allowing the Company to repay
all of the $17,000,000 in borrowings that were outstanding under its
$100,000,000 revolving credit facility as of March 31, 2001. For the six months
ending June 30, 2001, Concentra produced $30,324,000 in positive cash flow from
operations compared with $9,001,000 during the first half of the prior year.
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.
A public, listen-only simulcast of Concentra's second quarter conference
call will begin at 9:00 a.m. Eastern Daylight Time tomorrow (August 1, 2001) and
may be accessed via the Company's web site, concentra.com. Investors are invited
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to access the call at least 15 minutes before the start time in order to
complete a brief registration form and receive an entry password. Listening via
the Internet requires Windows Media Player Version 7, which may be downloaded
free of charge from the Company's website. An online replay will be available
shortly after the conclusion of the live broadcast using the same link and will
continue through September 1, 2001.
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 Second Quarter Results
Page 3
July 31, 2001
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Unaudited Consolidated Statements of Operations
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- --------
REVENUE:
Health Services $112,319 $103,004 $215,996 $197,264
Network Services 45,331 38,862 87,676 79,781
Care Management Services 54,274 48,482 106,335 94,399
-------- -------- -------- --------
Total revenue 211,924 190,348 410,007 371,444
COST OF SERVICES:
Health Services 86,684 80,113 172,110 157,108
Network Services 27,301 24,929 53,548 50,376
Care Management Services 47,264 42,186 92,559 83,986
-------- -------- -------- --------
Total cost of services 161,249 147,228 318,217 291,470
-------- -------- -------- --------
Total gross profit 50,675 43,120 91,790 79,974
General and administrative expenses 19,924 16,246 38,595 33,165
Amortization of intangibles 3,813 3,658 7,490 7,224
-------- -------- -------- --------
Operating income 26,938 23,216 45,705 39,585
Interest expense, net 16,753 17,595 33,663 33,736
Loss (gain) on fair value of hedging
arrangements (3,646) 2,483 3,080 946
Other, net 298 73 305 (123)
-------- -------- -------- --------
Income before income taxes 13,533 3,065 8,657 5,026
Provision for income taxes 5,802 1,921 5,248 2,814
-------- -------- -------- --------
Net income $ 7,731 $ 1,144 $ 3,409 $ 2,212
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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 Second Quarter Results
Page 4
July 31, 2001
CONCENTRA OPERATING CORPORATION
a wholly owned subsidiary of
CONCENTRA INC.
Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2001 2000
------------ ------------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,280 $ 6,549
Accounts receivable, net 173,652 160,418
Prepaid expenses and other current assets 28,232 24,679
------------ ------------
Total current assets 207,164 191,646
PROPERTY AND EQUIPMENT, NET 108,545 109,110
GOODWILL AND OTHER INTANGIBLE ASSETS, NET 331,697 323,162
OTHER ASSETS 29,957 32,937
------------ ------------
$ 677,363 $ 656,855
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LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ -- $ --
Current portion of long-term debt 4,288 5,228
Accounts payable and accrued expenses 82,958 70,189
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Total current liabilities 87,246 75,417
LONG-TERM DEBT 555,163 556,334
LONG-TERM DEFERRED TAX AND OTHER LIABILITIES 50,438 51,589
FAIR VALUE OF HEDGING ARRANGEMENTS 12,666 9,586
STOCKHOLDER'S EQUITY (DEFICIT) (28,150) (36,071)
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$ 677,363 $ 656,855
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