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.
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