DENVER, May 10, 2000 (PRIMEZONE) -- Coram Healthcare Corporation (OTCBB:CRHE) today reported results for the first quarter ended March 31, 2000. Results reported a year ago for the first quarter have been reclassified to conform with the 1999 year-end and 2000 presentation, primarily due to the discontinued operations of the Company's R-Net related subsidiaries.
Commenting on the results, which follow this discussion, Coram Chairman, President and Chief Executive Officer Daniel D. Crowley noted the following comparisons of the quarter ended March 31 to the same quarter a year ago:
- Net operating cash flow from continuing operations was positive $2.1 million this year vs. negative $13.9 million a year ago. - The Company made net debt repayments of $5.6 million this year vs. net borrowings of $14.9 million last year. - Accounts payable decreased $6.4 million this year vs. an increase of $5.7 million last year. - Accounts receivable increased approximately $600,000 this year vs. an increase of $15.6 million last year. - Operating income from continuing operations was $4.9 million this year vs. $1.0 million last year. - Net loss from continuing operations was $0.03 per share this year vs. a net loss of $0.12 per share from continuing operations last year.
"Since my appointment November 30, 1999, we have focused on the key objectives of changing the sales mix to increase our percentage of core therapies, improving cash collection and reducing costs," said Mr. Crowley. "We have done this thoughtfully, energetically and with singularity of focus, and the improved results we achieved in the first quarter are a direct result of these initiatives, particularly the cost reductions."
Mr. Crowley added: "Patients and customers can have more confidence that the Company is now headed in the right direction. We have strong, stable field operations with dedicated, experienced employees. Operational improvements allowed Coram to become current on accounts payable and allowed management to strengthen our communications and working relationships with key suppliers. This has improved trade terms in some instances."
Mr. Crowley continued: "During the first quarter the Company performed much better than in the recent past, and I have confidence that Coram has a good opportunity to succeed. However, the fact remains that Coram has significant debt and interest expenses that negatively affect shareholders' equity, net income and earnings per share. That is one of the reasons why our next major corporate initiative is to try to convert a significant portion of Coram's debt to equity. Our goal is to convert enough to have net shareholders' equity of more than $75 million by the end of the year. Based on preliminary discussions with our three debt holders, we are hopeful that this can be achieved. However, no assurances can be provided that a conversion will be achieved or what the terms of such a conversion might be. While a conversion of debt to equity would strengthen the balance sheet, it is highly likely in Coram's present circumstances that the equity of current shareholders will be diluted significantly by such a conversion."
As of May 8, 2000, the aggregate principal amounts outstanding under the Series A and B notes were $168.4 million and $92.1 million, respectively. Additionally, the Company's revolving line of credit had $34.5 million outstanding as of May 8, 2000. The current quarterly interest obligation on the debt is approximately $6.2 million.
The Company's previously disclosed review of strategic alternatives, including a possible sale of Coram Prescription Services (CPS), is ongoing and the results are expected to be announced in the near future. The Company cannot predict whether a sale will occur or what the proceeds would be from any sale. It is anticipated that any proceeds of such a sale would be used to reduce debt.
As reported on April 26, 2000, the Company amicably settled its lawsuit with Aetna U.S. Healthcare and is working with Aetna toward potential new contractual relationships for infusion and CPS. The terms of the settlement were not disclosed.
Denver-based Coram Healthcare, through its subsidiaries, is a national leader in providing quality home infusion therapies. Company subsidiaries also provide support for clinical trials, medical product development and medical informatics, as well as specialty pharmacy benefit management and mail order services.
Note: Except for historical information, all other statements in this press release are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's actual results may vary materially from these forward-looking statements due to important risk factors including the Company's lack of profitability; uncertainties associated with the outcomes of certain pending legal proceedings; the Company's significant level of outstanding indebtedness; the Company's need to obtain additional financing or equity; uncertainties associated with the dilution that would occur if the Company's existing debt holders exercise their equity conversion rights; the Company's limited liquidity; and the Company's dependence upon the prices paid by third party payors for the Company's services; and certain other factors. Certain risk factors are described in greater detail in the Company's Form 10-K Annual Report on file with the Securities and Exchange Commission.
CORAM HEALTHCARE CORPORATION
Consolidated Statements of Operations
(In Millions, Except Per Share Data)
Three Months
Ended
March 31,
2000 1999
----------- -----------
(unaudited)
Net Revenue $ 134.8 $ 124.3
Cost of Service 100.7 96.7
------ ----
Gross Profit 34.1 27.6
Operating Expenses:
Selling, General and
Administrative Expenses 23.4 18.9
Provision for Estimated
Uncollectible Accounts 3.2 4.0
Amortization of Goodwill 2.6 2.7
Restructuring Costs 0.0 1.0
----------- -----------
Total Operating Expense 29.2 26.6
----------- -----------
Operating Income from
Continuing Operations 4.9 1.0
Interest Expense (6.7) (6.6)
Other Income (Expense), Net 0.4 0.2
----------- -----------
Loss from Continuing Operations
before Income Taxes and
Minority Interest (1.4) (5.4)
Income Tax Expense 0.1 0.1
Minority Interest in Net Income of
Consolidated Joint Ventures 0.0 0.4
----------- -----------
Net Loss from Continuing Operations (1.5) (5.9)
Discontinued Operations:
Income from Operations 0.0 5.5
Loss on Disposal (3.4) 0.0
----------- -----------
Income (Loss) from
Discontinued Operations (3.4) 5.5
----------- -----------
Net Loss $ (4.9) $ (0.4)
======= =======
Basic and Diluted Earnings per
Share of Common Stock:
Loss from Continuing Operations $ (0.03) $ (0.12)
Income (Loss) from
Discontinued Operations (0.07) 0.11
----------- -----------
Net Loss $ (0.10) $ (0.01)
=========== ===========
=========== ===========
-- Certain amounts in the 1999 financial statement have been
reclassified to conform to the 2000 presentation.
CORAM HEALTHCARE CORPORATION
Consolidated Balance Sheets
(In Millions)
March 31, December 31,
2000 1999
------------- --------
(unaudited)
Assets:
Cash and Cash Equivalents $ 0.1 $ 6.2
Cash Limited as to Use 0.9 1.0
Accounts Receivable, Net 108.0 107.4
Other Current Assets 26.3 29.0
---- ----
Total Current Assets 135.3 143.6
Goodwill, Net 213.5 216.1
Other Assets 41.1 43.5
----- ----
Total Assets $ 389.9 $ 403.2
======= =======
Liabilities and Stockholders'
Deficit:
Current Liabilities $ 64.3 $ 70.5
Net Liabilities of
Discontinued Operations 36.4 34.5
Long-term Debt, including
Revolving Lines of Credit 299.1 302.7
Other Liabilities 16.7 17.2
Stockholders' Deficit (26.6) (21.7)
------ ------
Total Liabilities and
Stockholders' Deficit $ 389.9 $ 403.2
======== =======
-- Certain amounts in the 1999 financial statement have been
reclassified to conform to the 2000 presentation.