UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): July 7, 2003
HEALTHSOUTH Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-10315 63-0860407
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(Commission File Number) (IRS Employer Identification No.)
One HealthSouth Parkway, Birmingham, Alabama 35243
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(Address of Principal Executive Offices, Including Zip Code)
(205) 967-7116
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(Registrant's Telephone Number, Including Area Code)
ITEM 9. REG FD DISCLOSURE.
On July 7, 2003, representatives of HEALTHSOUTH Corporation
("HEALTHSOUTH" or the "Company") made a presentation to HEALTHSOUTH stakeholders
using slides containing the information attached to this Current Report on Form
8-K as Exhibit 99. Copies of slides used in the presentation, including graphic
images, are available for viewing on our website located at www.healthsouth.com,
although we reserve the right to discontinue that availability at any time.
The information contained herein is furnished pursuant to Item 9 of
Form 8-K and shall not be deemed to be "filed" for the purposes of Section 18 of
the Securities Exchange Act of 1934 or otherwise subject to the liabilities of
that Section, unless we specifically incorporate it by reference in a document
filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
By filing this Current Report on Form 8-K and furnishing this information, we
make no admission as to the materiality of any information in this Current
Report on Form 8-K.
CAUTIONARY STATEMENTS REGARDING PROJECTIONS
In connection with our efforts to arrange a comprehensive restructuring
of our obligations, we are furnishing a preliminary business plan update,
together with certain projections of our future operating performance. The
projections consist of summary revenues, cash, debt, expenses, EBITDA and EBITDA
margin of HEALTHSOUTH and its divisions for the twelve months ending June 30,
2004. The projections contained herein are based on assumptions which we
believe, as of the date hereof, are reasonable; however, there will inevitably
be differences between the projections contained herein and our actual results,
because events and circumstances frequently do not occur as expected, and those
differences may be material. The projections contained herein, while presented
with numerical specificity, are based on numerous estimates and assumptions and
are subject to significant uncertainties and contingencies, many of which are
beyond our control. Consequently, there can be no assurance that these
projections will be realized. The projections contained herein have been
presented in a summary format. If full projected financial statements, including
all required disclosures thereto were presented, you may reach a different
conclusion about HEALTHSOUTH's projected financial operations. You are cautioned
not to place reliance on the projections.
We undertake no duty or obligation to publicly update or revise the
information contained in this Current Report on Form 8-K, although we may do so
from time to time as we believe is warranted. Any such updating may be made
through the filing of other reports or documents with the SEC, through press
releases or through other public disclosure.
The projections contained herein were not prepared with a view to
compliance with published guidelines of the SEC nor the guidelines established
by the American Institute of Certified Public Accountants regarding projections
or forecasts. The information does not purport to present operations in
accordance with GAAP, and our
independent auditors have not examined, compiled or performed any procedures
with respect to the projections, nor have they expressed any opinion or any
other form of assurance of such information or its achievability, with respect
to such projections.
As we previously reported, the SEC and the Department of Justice are
investigating the financial reporting and related activity of HEALTHSOUTH for
prior periods and, in light of those investigations, our previously filed
financial statements should no longer be relied upon. As a result of the
investigations, the Special Audit Review Committee of our Board of Directors
engaged a forensic auditing team from PricewaterhouseCoopers LLP to fully review
all issues related to the SEC's allegations concerning our previous financial
reports. In addition, our Audit Committee dismissed Ernst & Young as our
independent accountants and Ernst & Young withdrew their audit reports on all of
HEALTHSOUTH's previously filed financial statements. Effective May 7, 2003, our
Audit Committee engaged PricewaterhouseCoopers as our independent accountants.
HEALTHSOUTH ceased making any principal or interest payments on outstanding
obligations and, accordingly, is in default thereunder.
We have not completed our financial statements or filed our annual
report on Form 10-K for the fiscal year ended December 31, 2002 or our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2003 and we have not yet
determined the extent of any required restatement of our prior financial
reports.
FORWARD LOOKING STATEMENTS
The projections and other matters discussed herein constitute
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which
represent HEALTHSOUTH's current expectations and beliefs concerning future
events that involve risks and uncertainties which could cause actual results to
differ materially from those currently anticipated. The projections are based on
numerous assumptions (a substantial number of which are contained herein) and
involve a number of risks and uncertainties, many of which are beyond our
control, including the completion by PricewaterhouseCoopers of its forensic
accounting review; the completion of the investigations by the Department of
Justice and the SEC into our financial reporting; completion of the
investigation by the Centers for Medicare and Medicaid Services (or CMS) into
our cost reports and other matters; the resolution of outstanding litigation
against us, including certain class action litigation alleging violations under
federal securities laws and certain "qui tam" actions; significant changes in
our management team; our ability to successfully amend, restructure and/or
renegotiate our existing indebtedness or cure or receive a waiver of the events
of default under such agreements, the failure of which may result in our filing
of a voluntary petition for bankruptcy; our ability to continue to operate in
the ordinary course and manage our relationships with our creditors, vendors and
suppliers, physician partners, employees and patients; changes, delays in or
suspension of reimbursement for our services by governmental or private payors;
changes in the regulation of the healthcare industry at either or both of the
federal and state levels; changes to or delays in the implementation of the
prospective payment system for inpatient rehabilitation services;
competitive pressures in the healthcare industry and our response thereto; our
ability to obtain and retain favorable arrangements with third-party payors; and
general conditions in the economy and capital markets.
NOTE REGARDING PRESENTATION OF NON-GAAP FINANCIAL MEASURES
The projections contained herein include certain non-GAAP financial
measures, including "EBITDA" to assist in assessing projected operating
performance and to facilitate quantification of planned business activities. We
define "EBITDA" as earnings from continuing operations before interest expense,
minority interest, income tax, depreciation and amortization. We believe that
EBITDA is useful to stakeholders because it is commonly used as an analytical
indicator within the healthcare industry to calculate facility performance,
allocate resources and measure leverage capacity and debt service ability. We
are disclosing this non-GAAP financial measures in order to provide transparency
to investors. EBITDA should not be considered as a measure of financial
performance under GAAP.
We are not currently able to provide a reconciliation for the non-GAAP
financial measures used in our projections to a financial measure calculated in
accordance with GAAP. As discussed above, the forensic auditing team from
PricewaterhouseCoopers has not finished its review of our financial statements,
which we believe will materially affect the value of our assets and result in a
material adjustment thereto. Until PricewaterhouseCoopers finishes its review
and we prepare financial statements for prior periods, we are not able to
provide a projected balance sheet or income statement and, therefore, we are not
able to provide a presentation of a comparable financial measure calculated in
accordance with GAAP or reconcile "EBITDA" to such a GAAP financial measure.
Classification of certain restructuring charges and expenses is not in
accordance with GAAP. We are isolating these charges and expenses, which
represent one-time charges and expenses in connection with the restructuring and
crisis period discussed in the presentation. Our actual financial reporting in
future periods will include these costs in normal operating results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
HEALTHSOUTH CORPORATION
By: /s/ Guy Sansone
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Name: Guy Sansone
Title: Acting Chief Financial Officer
Dated: July 7, 2003
EXHIBIT INDEX
Exhibit Number Description
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99 Slides used in presentation of HEALTHSOUTH
Corporation, dated July 7, 2003