Monday April 20, 12:33 pm Eastern Time
Company Press Release
Iatros Health Network Reports Financial Results
ATLANTA--(BUSINESS WIRE)--April 20, 1998--Iatros Health Network, Inc. (NASDAQ:IHNI - news)
reported revenue from continuing operations for the years ended December 31, 1997 and 1996 of $25,512,540 and
$11,261,119, respectively, representing an increase of $14,251,421. The 1996 comparative revenues reflect a
reduction for revenues associated with discontinued operations. Nursing facility operations revenue was
$12,191,384, compared to $0 in 1996. For 1997, ancillary services revenue advanced to $11,283,832 versus
$8,319,151 in 1996, which was an increase of 35.6%. Revenue from management services was $2,037,324 versus
$984,747 in 1996 as adjusted for discontinued operations. Revenue from development services was $0 compared to
$1,957,227 in 1996.
For the 12 months ended December 31, 1997, the Company reported a loss of $18,210,342 or $1.13 per share on
a weighted number of primary shares of 16,666,375 versus a net loss of $10,314,561 in 1996 or $.77 per share on a
weighted number of primary shares outstanding of 13,946,359. The net loss was largely attributed to losses
associated with discontinued operations of $6,658,226, a $5,637,703 write-down of intangible assets, a $2,700,000
write-off a deferred tax asset, and substantial general and administrate expenses associated with the Company's
business history and corporate expenses. In releasing results for 1997, Iatros also reported that at December 31,
1997, total current assets were $9,695,375 versus total current liabilities of $12,812,078.
During 1997 and to date, the Company has been successful in reducing levels of its corporate overhead and general
and administrative costs. Continued cost reductions are required, however, for the Company to achieve positive cash
flow from continuing operations. In the alternative, the Company requires a higher revenue base to support the
corporate overhead represented by its executive management structure. In addition, the Company requires infusion of
capital in order to satisfy its short-term obligations.
The Company has been engaged in discussions with third parties having an interest in corporate merger opportunities
or otherwise in the purchase of certain of its business holdings. The Company has been particularly focused on
growth prospects which would yield added economies and eliminate redundancy of overhead costs through merger
or acquisition.
In light of the Company's current financial position, its inability to independently meet its short-term corporate
obligations, its need to further capitalize existing operations, and its dependency on continued cost reductions and
revenue growth to support continuing operations, its viability as a going concern is uncertain. It is for the
aforementioned reason that the Company intends to pursue and consummate a merger transaction with NewCare
Corporation (''NWCA'').
The Company and NWCA have renegotiated the terms of merger previously announced by NWCA, and they have
entered into a non-binding letter of intent for the acquisition by means of a merger of the outstanding common and
Series B Preferred Stock and options and warrants of IHNI (excluding, however, any shares of IHNI common stock
issued to NWCA by IHNI) for approximately $7,000,000 in NWCA common stock, valued at the average closing
bid price of the NWCA common stock for the 20 trading days ending 2 trading days prior to the closing date of the
merger (''NWCA Price''), or a combination of NWCA common stock and cash at the option of NWCA, and of the
outstanding Series A Preferred Stock for approximately $1,000,000 in a combination of NWCA common stock,
cash and warrants for 250,000 shares of NWCA common stock at an exercise price of $1.00 above the NWCA
Price. The acquisition transaction is subject to, among other things, execution of a definitive merger agreement and
approval of the shareholders of IHNI and NWCA.
In connection with NWCA's December investment of $1,000,000, NWCA has nominated Mr. Frank Cama and Mr.
Jim Sanregret to the Company's Board of Directors to fill 2 existing vacancies.
Iatros Health Network is a provider of management and health care ancillary services to the long-term care industry.
The Company's principal market areas currently include Pennsylvania and New England.
This news release contains ''forward-looking statements''. The forward-looking statements in this news release are
made pursuant to the ''safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995. Such
statements involve known and unknown risks, uncertain risks, uncertainties and other factors that could cause the
actual results of the Company to differ materially from the results expressed or implied by such statements, including
general economic and business conditions, conditions affecting the Company's customers and suppliers, competitor
responses to the Company's products and services, the overall market acceptance of such products and services, and
other factors disclosed in the Company's last filed Annual Report on Form 10-KSB. Accordingly, although the
Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove correct. Actual results may differ materially from these forward-looking
statements.
Iatros Health Network, Inc.
Fiscal 1997 Results
(in $000s except per share amounts)
(unaudited)
Years Ended December 31,
Item 1997 1996 1995
---------- ---------- ----------
Revenue 25,512,540 11,261,119 11,017,865
Income (loss)
from continuing
operations before
other income
(expense), income
tax benefit
and discontinued
operations (692,210) (2,055,115) 3,576,720
Other income (expenses) (8,109,906) (3,005,565) (861,280)
Income (loss)
from continuing
operations before
income tax
benefit and discontinued
operations (8,802,116) (5,060,680) 2,715,439
Income tax benefit
(expense), net (2,750,000) 1,180,000 670,000
Income (loss) from
continuing
operations before
discontinued
operations (11,552,116) (3,880,680) 3,385,439
Income (loss)
from discontinued
operations (6,658,226) (6,433,881) 269,748
Net Income (loss) (18,210,342) (10,314,561) 3,655,188
Basic earnings (loss) per share:
Continuing operations (.73) (.31) .35
Discontinued operations (.40) (.46) .03
Net Income (loss) (1.13) (.77) .38
Weighted average number of
shares of common stock and
equivalents outstanding 16,666,375 13,946,359 9,002,561
Contact:
Iatros Health Network, Atlanta
Joseph L. Rzepke, CFO
404/266-3643 |
