NOV 12,1999 5:06 PACIFIC 8:06 EASTERN
( BW)(CO-CORAM-HEALTHCARE)(CRH) Coram Healthcare Announces Third
Quarter 1999 Results
Business Editors/Health & Medical Writers
DENVER--(BUSINESS WIRE)--Nov. 12, 1999--Coram Healthcare
Corporation (NYSE:CRH), today announced financial results for the
third quarter ended September 30, 1999. Despite sequential
improvements in the company's infusion therapy business during the
quarter, the period's results were impacted by losses in the
subsidiaries that operate its Resource Network division ("R-Net"), and
by a charge and incremental expenses related primarily to the
wind-down of this division. Before the one-time charge and related
incremental expenses, the company reported a loss for the quarter of
($8.4) million or ($0.17) per diluted share. The loss for the quarter,
including this charge and related incremental expenses, was ($15.2)
million or ($0.30) per diluted share.
For the quarter ended September 30,1999, Coram reported net
revenues of $143.2 million, compared to total net revenues of $143.6
million reported for the third quarter ended September 30, 1998. These
results include a $14.0 million decline in the company's R-Net
revenues, on a year-over-year quarter basis, due primarily to the June
30, 1999 termination of the Master Agreement, effective May 1, 1998,
between Coram Healthcare Corporation and Aetna U.S Healthcare, Inc.
("Aetna").
For the nine months ended September 30, 1999, Coram's net
revenues were $456.9 million, a 24.0 percent increase over total net
revenues of $368.5 million for the nine months ended September 30,
1998.
In a separate statement, the company also announced today that
the R-Net subsidiaries filed voluntary petitions with the U.S.
Bankruptcy Court for the District of Delaware under chapter 11 of the
U.S. Bankruptcy Code. The filings do not include, and should not
effect, other Coram operations.
"Third quarter results and subsequent events demonstrate we are
making significant progress in our effort to restore the company's
profitability. We made improvements in our base infusion therapy
business and we are moving ahead with our planned future sale of our
prescription service division. All of this progress, together with
R-Net's decision to stem its losses through a quick wind-down of
operations, will contribute to an improvement in Coram's financial
performance in the coming year," said Donald J. Amaral, chairman and
interim chief executive officer of Coram Healthcare Corporation.
R-Net's business is managing a network of contract providers, on
behalf of managed care organizations. R-Net revenues were $10.3
million, or 7.2 percent of total Coram revenues for the quarter.
Segment losses in the company's R-Net subsidiaries accounted for
approximately ($3.8) million or almost one-half of the company's loss,
before the one-time charge, for the quarter.
The company also announced that it is in discussions with its
principal debt holders concerning certain covenants and other
provisions of its principal debt agreements.
Description of the One Time Charge and Related Incremental
Expenses
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-- A special charge of $5.1 million related to the company's
restructuring of its R-Net subsidiary operations, including
employee severance, reserve for lease expenses, and the
write-down of impaired assets.
-- Related incremental expenses of $1.7 million for legal and
professional fees in connection with the company's litigation
with Aetna, and for professional fees related to the preparation
of the company's R-Net subsidiary filing of voluntary petitions
under chapter 11 of the U.S. Bankruptcy Code.
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Third Quarter Operational Highlights
Coram's infusion therapy net revenue declined approximately three
percent, while EBITDA improved 29.0 percent, on a sequential basis.
Coram Prescription Services revenue increased 73.6 percent over
revenue reported for the third quarter of 1998.
Coram's Clinical Trials and Medical Informatics signed agreements
for 10 new studies during the quarter, totaling $2 million of revenue
over the lives of the studies. Total current studies now number 15.
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