-- Sells Infusion Therapy and HME/Respiratory Operations for $14.5 million
-- Plans Separation of Visiting Nurse Operations
LOUISVILLE, Ky., Nov. 12 /PRNewswire/ -- Caretenders HealthCorp
(Nasdaq: CTND) today announced changes in its operations to enable it to focus
solely on its adult day care business. The Company has sold its product
operations to Lincare Holdings, Inc., (Nasdaq/NM: LNCR) for $14.5 million and
is pursuing available strategic alternatives to complete the separation of its
visiting nurse operations.
"We are very excited to now be able to focus our undivided energy on our
adult day health services operations, and we are pleased that the product
transaction will provide us with improved access to the capital we need to
grow," said William B. Yarmuth, Caretenders Chairman and CEO. "We believe the
opportunities available to us to maximize shareholder value are much stronger
in adult day care than in the other divisions. This realignment will enable
us to be almost entirely debt free, have borrowing capacity available to fund
growth, and deliver higher earnings per share to our shareholders."
According to Yarmuth, the company further believes opportunities for
employees in the product and visiting nurse divisions will improve as a result
of the realignment. "They will benefit from the dedicated focus on their
specialty areas," he said. "We will continue to work diligently to ensure
smooth transitions for employees, patients, and referral sources.
Financial implications of operating division separation
As part of a formal plan of separation, the Company sold its product
operations (consisting of infusion therapy and respiratory and medical
equipment businesses) to Lincare in an asset sale for $14.5 million. Proceeds
from the sale are being used to repay obligations outstanding under the
Company's bank line of credit. Immediately after closing, approximately $4
million remained outstanding on the line of credit. The Company has retained
certain assets and liabilities associated with the product operations, the
liquidation of which is expected to generate additional proceeds of
approximately $3 million thus reducing the Company's bank borrowings to nearly
zero. Borrowing capacity will then be available to the Company to pursue
further development of the adult day care business. As a result of the
operational separations, the Company will report a one-time net of tax loss of
approximately $5 million or ($1.60) in the quarter ended September 30, 1999.
This charge reduces the book value of the operations to their expected net
realizable value and includes the estimated future operating results of the
visiting nurse operations prior to separation.
The income statements and balance sheets of the Company from this point
forward will be presented on a continuing operations basis (ADHS only). The
Company plans to extend the due day of its Form 10Q for the quarter ended
September 30, 1999 for up to 10 days past its November 15, 1999 due date to
properly reflect these operating changes in its financial statements. The
Company plans to announce its operating results for the three and six months
ended September 30, 1999 early next week.
Caretenders HealthCorp is an adult day health care services company
focused on providing alternatives for seniors and other special needs adults
who wish to avoid nursing home placement. The Company has locations in
Kentucky, Maryland, Alabama, Massachusetts, Connecticut, Indiana, Ohio, and
Florida.
Contact: William Yarmuth or Steve Guenthner (502) 899-5355.
All statements, other than statements of historical facts, included in
this news release, including the objectives and expectations of management for
future operating results, are forward-looking statements. These forward-
looking statements are based on the Company's current expectations. Although
the Company believes that the expectations with respect to the future of adult
day and home health services reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will prove to be
correct.
Because forward-looking statements involve risks and uncertainties, the
Company's actual results could differ materially. The potential risks and
uncertainties which could cause actual results to differ materially could
include the impact of further changes in the Medicare reimbursement system,
including the ultimate implementation of a prospective payment system;
government regulation; health care reform; pricing pressures from fourth-party
payers; and changes in laws and interpretations of laws relating to the
healthcare industry. For a more complete discussion regarding these and other
factors which could affect the Company's financial performance, refer to the
Company's Securities and Exchange Commission filing on Form 10-K for the year
ended March 31, 1999, in particular information under the headings "Business"
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations." The Company disclaims any intent or obligation to update its
forward-looking statements.
SOURCE Caretenders HealthCorp
 back to top
Company News On-Call:
http://www.prnewswire.com/comp/784275.html or fax,
800-758-5804, ext. 784275
CONTACT:
William Yarmuth or Steve Guenthner of
Caretenders HealthCorp, 502-899-5355
|
