Response Oncology Reports 2000 Results

Apr 19, 2001, 01:00 ET from Response Oncology, Inc.

    MEMPHIS, Tenn., April 19 /PRNewswire/ -- Response Oncology, Inc.,
 (OTC Bulletin Board:   ROIX), today reported its financial results for the
 fourth quarter and year ended December 31, 2000.
 
      Net Revenue for Year and Quarter Ended December 31, 2000 and 1999
 
 
      (In Thousands)           12 Months Ended            Three Months Ended
                                 December 31,               December 31,
                              2000          1999          2000         1999
      Net patient service
        revenue             $14,105       $28,179       $3,184        $5,474
      Practice management
        service fees         77,671        68,413       19,716        17,433
      Pharmaceutical sales
        to physicians        38,510        37,530        7,892         9,499
      Clinical research
        revenue                 547         1,445           89           210
                           $130,833      $135,567      $30,881       $32,616
 
 
     For 2000, net revenues were $130.8 million, 3 percent lower than the
 $135.6 million reported in 1999.  A 14 percent increase in physician practice
 management (PPM) service fees, and a 3 percent rise in pharmaceutical sales to
 physicians were offset by a 50 percent decline in IMPACT(R) net patient
 service revenue for high dose chemotherapy and a 62 percent decline in
 clinical research revenue.
     The $14.1 million decrease in IMPACT(R) Center revenue continues to
 reflect the pullback in breast cancer admissions, which resulted from the high
 dose chemotherapy/breast cancer study presented at the American Society of
 Clinical Oncology (ASCO) in May 1999.  Since the release of this data, the
 high dose chemotherapy business has slowed significantly, as evidenced by a
 49 percent decrease in high dose procedures at the Company in 2000 as compared
 to 1999.  In addition, the Response Oncology experienced a decline in
 insurance approvals on some high dose referrals.  As a result of the decline
 in volumes, the Company closed 19 IMPACT(R) Centers in 2000 and will be
 closing at least 11 more in the second quarter of 2001.  PPM service fees rose
 due to increases in patient volume for both ancillary and non-ancillary
 services and pharmaceutical utilization, and occurred despite a 7 percent
 decrease in the number of physicians under management agreements for the year
 ended December 31, 2000, as compared to 1999.  Pharmaceutical sales rose as a
 result of increased drug utilization by the physicians serviced under these
 contracts, but were tempered by the termination of two pharmaceutical sales
 agreements effective July 1, 2000.
     Operating and general expenses for the year (excluding pharmaceuticals and
 supplies) were down 16 percent, or  $6.9 million, compared with 1999.  This
 reflected the cost reduction and containment steps begun in the first quarter
 of 2000, the closing 19 IMPACT(R) Centers, lower patient volumes, and the
 termination of certain service agreements in the PPM division.
 Pharmaceuticals and supplies expense rose 12 percent, or $9.2 million, in
 2000.  The increase primarily related to greater use of new chemotherapy
 agents with higher costs in the PPM division, and greater volume in
 pharmaceutical sales to physicians.  The Company recognized an after tax
 impairment charge of $9.9 million in the fourth quarter of 2000 related to the
 sale of the assets of Oncology Hematology Group of S. Florida, P.A., and the
 termination of its management services agreement with the Company at that
 time.  In addition, restructuring charges of $.9 million were recorded in the
 fourth quarter of 2000 related to the closing of various IMPACT(R) Centers,
 severance payments, and professional fees.  The Company's net loss for the
 year was ($14.4) million, equal to ($1.17) per diluted share, compared with a
 net loss of ($1.7) million, equal to ($0.14) per diluted share, for year ended
 1999.
     For the fourth quarter, net revenues were $30.9 million, down 5 percent
 from $32.6 million for the 1999 three months.  Excluding pharmaceuticals and
 supplies, all operating and general expenses were down 6 percent, or $630,000,
 due to the cost reduction programs mentioned earlier.  Pharmaceuticals and
 supplies expenses rose 3 percent, or $627,000, primarily due to higher
 pharmaceutical utilization in the PPM division, and increased pharmaceutical
 sales to physicians.  The net loss for the three months was ($13.1) million
 (after impairment and restructuring charges), equal to ($1.06) per diluted
 share, versus a loss of ($3.1) million, equal to ($0.26) per diluted share,
 for the same period in 1999.
     As previously announced, the Company's common stock was delisted from the
 Nasdaq National Market on March 15, 2001, since the Company could not meet the
 listing standard that requires a minimum bid price of $1.00.  In addition, on
 March 29, 2001, the Company and its wholly owned subsidiaries filed voluntary
 petitions for relief under Chapter 11 of the United States Bankruptcy Code in
 the United States District Court for the Western District of Tennessee.
 Response Oncology currently is developing a reorganization plan to restructure
 its obligations and operations.  However, there can be no assurance that this
 plan will be successful.
     Response Oncology, Inc. is a comprehensive cancer management company.  The
 Company provides advanced cancer treatment services through outpatient
 facilities known as IMPACT(R) Centers under the direction of practicing
 oncologists; compounds and dispenses pharmaceuticals to certain medical
 oncology practices for a fee; owns the assets of and manages the nonmedical
 aspects of oncology practices; and conducts clinical research on behalf of
 pharmaceutical manufacturers. Approximately 300 medical oncologists are
 affiliated with the Company through these programs.
 
     This release contains discussions of items that may constitute forward-
 looking statements within the meaning of federal securities laws.  Although
 Response Oncology believes that expectations reflected in these statements are
 based on reasonable assumptions, it can give no assurances that its
 expectations will be achieved.  The Private Securities Litigation Reform Act
 of 1995 provides a safe harbor for forward-looking statements.  Factors that
 could cause or contribute to such differences include, but are not limited to:
 (i) a continued decline in high dose chemotherapy referrals and approvals due
 to the high dose chemotherapy breast cancer results; (ii) a continued decline
 in margins for cancer drugs; (iii) the Company's inability to raise additional
 capital or refinance existing debt; (iv) uncertainty surrounding the outcome
 of its Chapter 11 filing; and (v) issues regarding the implementation of its
 new business plan.  For more information on risk factors, please refer to the
 Company's 2000 Form 10-K.
 
 
                    RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollar amounts in thousands except for share data)
 
                                                    Years Ended December 31,
                                                       2000           1999
 
     NET REVENUE                                     $130,833       $135,567
 
     COSTS AND EXPENSES
       Salaries and benefits                           21,308         25,810
       Pharmaceuticals and supplies                    89,444         80,210
       Other operating costs                            8,683         11,529
       General and administrative                       6,927          6,487
       Depreciation and amortization                    4,610          4,509
       Interest                                         3,680          3,305
       Provision for doubtful accounts                  1,309          2,625
       Impairment of management service agreements
        and associated assets                          15,951          1,921
                                                      151,912        136,396
 
     LOSS BEFORE INCOME TAXES AND MINORITY INTEREST   (21,079)          (829)
       Minority owners' share of net earnings            (633)          (700)
 
     LOSS BEFORE INCOME TAXES                         (21,712)        (1,529)
       Income tax provision (benefit)                  (7,293)           164
 
     NET LOSS                                         (14,419)        (1,693)
     Dividend to preferred stockholders                 - - -          - - -
 
     NET LOSS TO COMMON STOCKHOLDERS                 ($14,419)       ($1,693)
 
     LOSS PER COMMON SHARE:
       Basic                                           ($1.17)        ($0.14)
       Diluted                                         ($1.17)        ($0.14)
 
     Weighted average number of common shares:
       Basic                                       12,288,352     12,014,153
       Diluted                                     12,288,352     12,014,153
 
 
                    RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollar amounts in thousands except for share data)
 
                                               Three Months Ended December 31,
                                                        2000           1999
 
     NET REVENUE                                      $30,881        $32,616
 
     COSTS AND EXPENSES
       Salaries and benefits                            5,398          6,592
       Pharmaceuticals and supplies                    20,994         20,367
       Other operating costs                            2,016          2,623
       General and administrative                       2,656          1,485
       Depreciation and amortization                    1,161          1,130
       Interest                                         1,131            800
       Provision for doubtful accounts                    905          1,469
       Impairment of management service agreements
        and associated assets                          15,951          1,921
                                                       50,212         36,387
 
     LOSS BEFORE INCOME TAXES AND MINORITY INTEREST   (19,331)        (3,771)
       Minority owners' share of net earnings            (188)           (94)
 
     LOSS BEFORE INCOME TAXES                         (19,519)        (3,865)
       Income tax benefit                              (6,463)          (723)
 
     NET LOSS                                         (13,056)        (3,142)
     Dividend to preferred stockholders                 - - -          - - -
 
     NET LOSS TO COMMON STOCKHOLDERS                 ($13,056)       ($3,142)
 
     LOSS PER COMMON SHARE:
       Basic                                           ($1.06)        ($0.26)
       Diluted                                         ($1.06)        ($0.26)
 
     Weighted average number of common shares:
       Basic                                       12,290,412     12,108,822
       Diluted                                     12,290,412     12,108,822
 
 

SOURCE Response Oncology, Inc.
    MEMPHIS, Tenn., April 19 /PRNewswire/ -- Response Oncology, Inc.,
 (OTC Bulletin Board:   ROIX), today reported its financial results for the
 fourth quarter and year ended December 31, 2000.
 
      Net Revenue for Year and Quarter Ended December 31, 2000 and 1999
 
 
      (In Thousands)           12 Months Ended            Three Months Ended
                                 December 31,               December 31,
                              2000          1999          2000         1999
      Net patient service
        revenue             $14,105       $28,179       $3,184        $5,474
      Practice management
        service fees         77,671        68,413       19,716        17,433
      Pharmaceutical sales
        to physicians        38,510        37,530        7,892         9,499
      Clinical research
        revenue                 547         1,445           89           210
                           $130,833      $135,567      $30,881       $32,616
 
 
     For 2000, net revenues were $130.8 million, 3 percent lower than the
 $135.6 million reported in 1999.  A 14 percent increase in physician practice
 management (PPM) service fees, and a 3 percent rise in pharmaceutical sales to
 physicians were offset by a 50 percent decline in IMPACT(R) net patient
 service revenue for high dose chemotherapy and a 62 percent decline in
 clinical research revenue.
     The $14.1 million decrease in IMPACT(R) Center revenue continues to
 reflect the pullback in breast cancer admissions, which resulted from the high
 dose chemotherapy/breast cancer study presented at the American Society of
 Clinical Oncology (ASCO) in May 1999.  Since the release of this data, the
 high dose chemotherapy business has slowed significantly, as evidenced by a
 49 percent decrease in high dose procedures at the Company in 2000 as compared
 to 1999.  In addition, the Response Oncology experienced a decline in
 insurance approvals on some high dose referrals.  As a result of the decline
 in volumes, the Company closed 19 IMPACT(R) Centers in 2000 and will be
 closing at least 11 more in the second quarter of 2001.  PPM service fees rose
 due to increases in patient volume for both ancillary and non-ancillary
 services and pharmaceutical utilization, and occurred despite a 7 percent
 decrease in the number of physicians under management agreements for the year
 ended December 31, 2000, as compared to 1999.  Pharmaceutical sales rose as a
 result of increased drug utilization by the physicians serviced under these
 contracts, but were tempered by the termination of two pharmaceutical sales
 agreements effective July 1, 2000.
     Operating and general expenses for the year (excluding pharmaceuticals and
 supplies) were down 16 percent, or  $6.9 million, compared with 1999.  This
 reflected the cost reduction and containment steps begun in the first quarter
 of 2000, the closing 19 IMPACT(R) Centers, lower patient volumes, and the
 termination of certain service agreements in the PPM division.
 Pharmaceuticals and supplies expense rose 12 percent, or $9.2 million, in
 2000.  The increase primarily related to greater use of new chemotherapy
 agents with higher costs in the PPM division, and greater volume in
 pharmaceutical sales to physicians.  The Company recognized an after tax
 impairment charge of $9.9 million in the fourth quarter of 2000 related to the
 sale of the assets of Oncology Hematology Group of S. Florida, P.A., and the
 termination of its management services agreement with the Company at that
 time.  In addition, restructuring charges of $.9 million were recorded in the
 fourth quarter of 2000 related to the closing of various IMPACT(R) Centers,
 severance payments, and professional fees.  The Company's net loss for the
 year was ($14.4) million, equal to ($1.17) per diluted share, compared with a
 net loss of ($1.7) million, equal to ($0.14) per diluted share, for year ended
 1999.
     For the fourth quarter, net revenues were $30.9 million, down 5 percent
 from $32.6 million for the 1999 three months.  Excluding pharmaceuticals and
 supplies, all operating and general expenses were down 6 percent, or $630,000,
 due to the cost reduction programs mentioned earlier.  Pharmaceuticals and
 supplies expenses rose 3 percent, or $627,000, primarily due to higher
 pharmaceutical utilization in the PPM division, and increased pharmaceutical
 sales to physicians.  The net loss for the three months was ($13.1) million
 (after impairment and restructuring charges), equal to ($1.06) per diluted
 share, versus a loss of ($3.1) million, equal to ($0.26) per diluted share,
 for the same period in 1999.
     As previously announced, the Company's common stock was delisted from the
 Nasdaq National Market on March 15, 2001, since the Company could not meet the
 listing standard that requires a minimum bid price of $1.00.  In addition, on
 March 29, 2001, the Company and its wholly owned subsidiaries filed voluntary
 petitions for relief under Chapter 11 of the United States Bankruptcy Code in
 the United States District Court for the Western District of Tennessee.
 Response Oncology currently is developing a reorganization plan to restructure
 its obligations and operations.  However, there can be no assurance that this
 plan will be successful.
     Response Oncology, Inc. is a comprehensive cancer management company.  The
 Company provides advanced cancer treatment services through outpatient
 facilities known as IMPACT(R) Centers under the direction of practicing
 oncologists; compounds and dispenses pharmaceuticals to certain medical
 oncology practices for a fee; owns the assets of and manages the nonmedical
 aspects of oncology practices; and conducts clinical research on behalf of
 pharmaceutical manufacturers. Approximately 300 medical oncologists are
 affiliated with the Company through these programs.
 
     This release contains discussions of items that may constitute forward-
 looking statements within the meaning of federal securities laws.  Although
 Response Oncology believes that expectations reflected in these statements are
 based on reasonable assumptions, it can give no assurances that its
 expectations will be achieved.  The Private Securities Litigation Reform Act
 of 1995 provides a safe harbor for forward-looking statements.  Factors that
 could cause or contribute to such differences include, but are not limited to:
 (i) a continued decline in high dose chemotherapy referrals and approvals due
 to the high dose chemotherapy breast cancer results; (ii) a continued decline
 in margins for cancer drugs; (iii) the Company's inability to raise additional
 capital or refinance existing debt; (iv) uncertainty surrounding the outcome
 of its Chapter 11 filing; and (v) issues regarding the implementation of its
 new business plan.  For more information on risk factors, please refer to the
 Company's 2000 Form 10-K.
 
 
                    RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollar amounts in thousands except for share data)
 
                                                    Years Ended December 31,
                                                       2000           1999
 
     NET REVENUE                                     $130,833       $135,567
 
     COSTS AND EXPENSES
       Salaries and benefits                           21,308         25,810
       Pharmaceuticals and supplies                    89,444         80,210
       Other operating costs                            8,683         11,529
       General and administrative                       6,927          6,487
       Depreciation and amortization                    4,610          4,509
       Interest                                         3,680          3,305
       Provision for doubtful accounts                  1,309          2,625
       Impairment of management service agreements
        and associated assets                          15,951          1,921
                                                      151,912        136,396
 
     LOSS BEFORE INCOME TAXES AND MINORITY INTEREST   (21,079)          (829)
       Minority owners' share of net earnings            (633)          (700)
 
     LOSS BEFORE INCOME TAXES                         (21,712)        (1,529)
       Income tax provision (benefit)                  (7,293)           164
 
     NET LOSS                                         (14,419)        (1,693)
     Dividend to preferred stockholders                 - - -          - - -
 
     NET LOSS TO COMMON STOCKHOLDERS                 ($14,419)       ($1,693)
 
     LOSS PER COMMON SHARE:
       Basic                                           ($1.17)        ($0.14)
       Diluted                                         ($1.17)        ($0.14)
 
     Weighted average number of common shares:
       Basic                                       12,288,352     12,014,153
       Diluted                                     12,288,352     12,014,153
 
 
                    RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollar amounts in thousands except for share data)
 
                                               Three Months Ended December 31,
                                                        2000           1999
 
     NET REVENUE                                      $30,881        $32,616
 
     COSTS AND EXPENSES
       Salaries and benefits                            5,398          6,592
       Pharmaceuticals and supplies                    20,994         20,367
       Other operating costs                            2,016          2,623
       General and administrative                       2,656          1,485
       Depreciation and amortization                    1,161          1,130
       Interest                                         1,131            800
       Provision for doubtful accounts                    905          1,469
       Impairment of management service agreements
        and associated assets                          15,951          1,921
                                                       50,212         36,387
 
     LOSS BEFORE INCOME TAXES AND MINORITY INTEREST   (19,331)        (3,771)
       Minority owners' share of net earnings            (188)           (94)
 
     LOSS BEFORE INCOME TAXES                         (19,519)        (3,865)
       Income tax benefit                              (6,463)          (723)
 
     NET LOSS                                         (13,056)        (3,142)
     Dividend to preferred stockholders                 - - -          - - -
 
     NET LOSS TO COMMON STOCKHOLDERS                 ($13,056)       ($3,142)
 
     LOSS PER COMMON SHARE:
       Basic                                           ($1.06)        ($0.26)
       Diluted                                         ($1.06)        ($0.26)
 
     Weighted average number of common shares:
       Basic                                       12,290,412     12,108,822
       Diluted                                     12,290,412     12,108,822
 
 SOURCE  Response Oncology, Inc.