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PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ] Definitive Proxy Statement
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[X] Soliciting Material Pursuant to Rule 14a-12
CARECENTRIC, INC.
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(Name of Registrant as Specified In Its Charter)
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INVESTOR NOTICE
If CareCentric proceeds with a proposed merger described previously, then
it will file with the SEC a proxy statement and other relevant documents
concerning the merger. Investors of CareCentric are urged to read the proxy
statement when and if filed and any other relevant documents filed with the SEC
because they will contain important information. You will be able to obtain the
documents free of charge at the website maintained by the SEC at www.sec.gov. In
addition, you may obtain documents filed with the SEC by CareCentric free of
charge by requesting them in writing from Ana McGary at CareCentric, Inc., 2625
Cumberland Parkway, Suite 310, Atlanta, GA 30339 or by telephone at (678)
264-4400.
CareCentric, its directors and executive officers and certain of their
employees and the investor group described previously may be deemed to be
participants in the solicitation of proxies from the stockholders of CareCentric
in connection with the merger, if consummated. These participants may have
interests in the merger, if consummated, including interests resulting from
holding options or shares of CareCentric common stock. Information about the
interests of directors and executive officers of CareCentric, the investor
group, and their ownership of securities of CareCentric will be set forth in the
proxy statement, when and if filed.
Investors should ready the proxy statement carefully when and if it becomes
available before making any voting or investment decisions.
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: John R. Festa
President and CEO
(678) 264-4400
CARECENTRIC REPORTS 2002 FINANCIAL RESULTS
ATLANTA, GA (March 12, 2003) - CareCentric, Inc. (OTC Bulletin Board: CURA), a
leading provider of management information systems to the home health care
community, reports today its Annual Report of Financial Results for the year
ended December 31, 2002. CareCentric reported a 7.7% increase in revenues to
$22.0 million for 2002 against revenues of $20.4 million in 2001. The Net Cash
Used in Operating Activities for 2002 was $0.8 million and in 2001 was $3.9
million. Results from Continuing Operations for 2002 was a profit of $0.3
million compared to a loss of $9.8 million in 2001, after adding back an $11.8
million impairment charge recorded in 2001.
"This year's results clearly illustrate the Company's progress and operating
focus during the last year," stated John R. Festa, President and CEO of
CareCentric. "Our 2002 reported results of operations report a material
improvement from losses in both 2000 and 2001 to a net profit in 2002 while
posting an increase of 7.7% in sales for 2002 over 2001. In 2002, we met all
required regulatory updates for our products, introduced new products for the
point of care market and solidified our research and development plans for the
future. In 2003 we will continue to further advance our improved financial
performance while adding renewed emphasis on our customer service and
development of our next generation of products."
Mr. Festa added, "It is our intent to continue to aggressively reinvest the
Company's cash flow into product enhancements including electronic billing
modules, point-of-care based products and the development of new generation
product platforms. We believe CareCentric is in a unique position to understand
our customers' needs in both the home health agency and medical equipment
sectors."
"The Board of Directors is very pleased with the improved financial performance
of the Company in 2002 and remains committed to supporting the Company in its
strategic investment in its customers, products, and technological evolution."
stated John E. Reed, Chairman of the Board.
CareCentric provides information technology systems and services to over 1,500
customers. CareCentric provides freestanding, hospital-based and multi-office
home health care providers (including skilled nursing, private duty, home
medical equipment and supplies, IV pharmacy and hospice) complete information
solutions that enable these home care operations to generate and utilize
comprehensive and integrated financial, operational and clinical information.
With offices nationwide, CareCentric is headquartered in Atlanta, Georgia.
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Note regarding Private Securities Litigation Reform Act: Statements made in this
press release which are not historical facts, including projections, statements
of plans, objectives, expectations, or future economic performance, are forward
looking statements that involve risks and uncertainties and are subject to the
safe harbor created by the Private Securities Litigation Reform Act of 1995.
CareCentric's future financial performance could differ significantly from that
set forth herein, and from the expectations of management. Important factors
that could cause CareCentric's financial performance to differ materially from
past results and from those expressed in any forward looking statements include,
without limitation, the inability to obtain additional capital resources,
variability in quarterly operating results, customer concentration, product
performance and acceptance, long sales cycles, long and varying delivery cycles,
CareCentric's dependence on business partners, emerging technological standards,
risks associated with acquisitions and the risk factors detailed in
CareCentric's Registration Statement on Form S-4 (File No. 333-96529) and from
time to time in CareCentric's periodic reports filed with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates.
3
CARECENTRIC, INC.
CONSOLIDATED BALANCE SHEETS
AUDITED
DOLLARS IN THOUSANDS
DECEMBER 31,
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2002 2001
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ASSETS
Current assets:
Cash and cash equivalents $ 826 $ 201
Accounts receivable, net of allowance for doubtful
accounts of $1,307,000 and $1,042,000 respectively 4,632 4,185
Prepaid expenses and other current assets 696 608
Notes receivable 215 413
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Total current assets 6,369 5,407
Purchased software, furniture and equipment, net 1,036 1,533
Intangible assets, net 4,308 5,437
Other assets 194 431
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Total assets $ 11,907 $ 12,808
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LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
Current liabilities:
Line of credit $ 4,525 $ 5,572
Accounts payable 1,584 2,185
Accrued compensation expense 556 593
Accrued liabilities 6,113 6,574
Customer deposits 1,495 2,120
Unearned revenues 4,223 3,981
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Total current liabilities 18,496 21,025
Accrued liabilities, less current portion 150 750
Notes payable long-term 8,520 5,343
Commitments and contingencies
Shareholders' equity (Deficit):
Preferred Stock ; 10,000,000 shares authorized all Series B,C,D,E
$.001 par value; Series C Preferred, cancelled in 2002 6 7
Common stock, $.001 par value; 20,000,000 shares authorized;
4,371,350 shares issued and outstanding at December 31, 2002
and December 31, 2001 4 4
Unearned compensation (134) (210)
Additional paid-in capital 20,430 21,280
Stock warrants 1 1
Accumulated deficit (36,565) (36,391)
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Total shareholders' equity (Deficit) (15,259) (14,310)
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Total liabilities and shareholders' equity (Deficit) $ 11,907 $ 12,808
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CARECENTRIC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AUDITED
DOLLARS IN THOUSANDS
YEARS ENDED DECEMBER 31,
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2002 2001
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Net revenues $ 22,015 $ 20,446
Costs and expenses:
Cost of revenues 6,408 8,217
Selling, general and administrative 9,770 10,715
Research and development 3,431 6,158
Amortization and depreciation 1,696 3,865
Write down of intangibles - 11,799
Restructuring charge - 675
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Total costs and expenses 21,305 41,429
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Income (loss) from operations 710 (20,983)
Other income (expense):
Other income (expense) 250 -
Interest expense (712) (592)
Interest and other income 45 37
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Income (loss) before taxes $ 293 $ (21,538)
Income tax benefit (expense) - (15)
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Income (loss) from continuing operations 293 $ (21,553)
Discontinued operations
Loss on disposal of discontinued operations - (2,632)
Income (loss) from operations of
discontinued segment before taxes - (483)
Applicable tax expense - -
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Net income (loss) from discontinued operations - (3,115)
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Net income (loss) $ 293 $ (24,668)
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Cumulative preferred dividends (467) (722)
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Net income (loss) available to common shareholders $ (174) $ (25,390)
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Net income (loss) per share - basic and diluted
available to common shareholders $ (0.04) $ (5.94)
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Weighted average common shares - basic and
diluted 4,371 4,272
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CARECENTRIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
AUDITED
DOLLARS IN THOUSANDS
YEARS ENDED DECEMBER 31,
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2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (174) $ (25,390)
ADJUSTMENTS TO RECONCILE NET (LOSS) INCOME
TO NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES:
Provision for doubtful accounts 351 500
Amortization and depreciation 1,696 4,252
Stock based Compensation charged to earnings 76 -
Loss on discontinued operations - 2,632
Write down of intangibles - 11,799
CHANGES IN ASSETS AND LIABILITIES, NET OF ACQUISITIONS:
Accounts receivable (797) 2,101
Prepaid expenses and other current assets (88) 90
Other assets 137 138
Accounts payable (600) 1,447
Accrued compensation (37) (23)
Accrued liabilities (1,026) (26)
Customer deposits (626) (376)
Unearned revenues 242 (1,020)
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Net cash used in operating activities (846) (3,876)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Assets and liabilities disposed of - (16)
Purchase of software, furniture and equipment (70) (327)
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Net cash used in investing activities (70) (343)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on notes payable - -
Proceeds from notes payable 3,176 -
Increase (decrease) in line of credit (1,047) 4,058
Payment on capital lease obligation (36) -
Proceeds from Consulting note receivable 298 -
Cancellation of Series C Preferred stock (850) -
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Net cash provided by financing 1,541 4,058
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Net change in cash and cash equivalents 625 (161)
Cash and cash equivalents, beginning of period 201 362
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Cash and cash equivalents, end of period $ 826 $ 201
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