[IHS LETTERHEAD]
NEWS AND INFORMATION
FOR IMMEDIATE RELEASE:
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Contact: Robert N. Elkins, M.D.
Chairman & CEO
Marc B. Levin
Executive Vice President
Integrated Health Services, Inc.
(410)773-1000
Available on the Internet: http://www.Ihs.com
INTEGRATED HEALTH SERVICES FILES VOLUNTARY PETITION FOR
BANKRUPTCY REORGANIZATION
Company to Continue Normal Operations; Receives Commitment for up to
$300 million in DIP Financing
Sparks, MD, February 2, 2000 - Integrated Health Services, Inc. (OTC Bulletin
Board: IHSV) today announced that IHS and many of its operating subsidiaries
have filed voluntary petitions with the U.S. Bankruptcy Court for the District
of Delaware to reorganize under Chapter 11 of the U.S. Bankruptcy Code in order
to restructure the company's debt obligations. The company elected to seek court
protection in order to facilitate its efforts to restructure its capital and
lease obligations.
In announcing today's Chapter 11 filing, company management emphasized that the
filing has been organized to permit normal operations of its long term care
facilities and other businesses.
To ensure that the company has the working capital necessary to operate its
business, it has obtained a commitment for up to $300 million in
debtor-in-possession (DIP) financing with Citibank, N.A. IHS has requested the
Court's permission to access the DIP financing to fund normal business
operations and other cash needs during the bankruptcy proceeding.
Because of significant debt repayment obligations, the company has commenced
discussions with its banks and other lenders regarding the restructuring of the
company's debt. The Court protection afforded by Chapter 11 will give the
company an opportunity
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INTEGRATED HEALTH SERVICES, INC. o INVESTOR RELATIONS DEPARTMENT
910 Ridgebrook Road o Sparks, MD 21152 o 410-773-1035 o 410-773-1045(Fax)
to develop a plan for reorganization with the goal of emerging from bankruptcy
in a stronger financial position. The company is also in discussions with some
of the owners of the long term care facilities it operates in an effort to
renegotiate or cancel certain unprofitable leases.
IHS is the seventh national provider to file for bankruptcy protection in the
past six months. Other companies which have filed include Vencor Inc., Sun
Healthcare Group Inc., Mariner Post-Acute Network, Inc., Lenox Health Care Inc.,
Frontier Group Inc., and Newcare Health Corporation.
"The dramatic impact of the implementation of the 1997 Balanced Budget act on
our revenues and cash flow severely impacted the company's ability to service
our current capital structure," said Robert N. Elkins, Chairman and Chief
Executive Officer. "We believe we are taking the appropriate steps to assure
that we emerge from the reorganization process with a sound capital structure.
During this process, we will not lose sight of our core mission of providing
quality patient care."
Integrated Health Services is a highly diversified health services provider,
offering a broad spectrum of post-acute medical and rehabilitative services
through its nationwide healthcare network. IHS's post-acute services include
home respiratory services, subacute care, long term care and contract
rehabilitation services.
Statements in this press release concerning the Company's business
outlook or future economic performances, anticipated profitability, revenues,
expenses or other financial items, and product or service line growth, together
with other statements that are not historical facts are "forward-looking
statements" as that term is defined under the Federal Securities Laws. Any
forward-looking statements are estimates, reflecting the best judgment of the
party making such statements based upon currently available information and
involve a number of risks, uncertainties and other factors which could cause
actual results to differ materially from those stated in such statements. Risks,
uncertainties and factors which could affect the accuracy of such
forward-looking statements are identified in the public filings made by the
Company with the Securities and Exchange Commission, and forward-looking
statements contained in this press release or in other public statements of the
Company should be considered in light of those factors. Such factors may
include, without limitation, the availability of terms of capital in light of
recent losses, cash flow shortfalls and the Company's Chapter 11 bankruptcy
filing; adverse actions which may be taken by creditors and the outcome of
various bankruptcy proceedings; the Company's ability to attract patients given
its current financial position; and the effects of the healthcare reform and
legislation on the Company's business strategy and operations. There can be no
assurance that factors will not affect the accuracy of such forward-looking
statements. The Company cautions investors that any forward-looking statements
made by the Company are not guarantees of future performance. The Company
disclaims any obligation to update any such factors or to announce publicly the
results of any revisions to any of the forward-looking statements included
herein to reflect future events or developments.
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