UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): May 20, 2003
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KINDRED HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-14057 61-1323993
(State or other jurisdiction (Commission File (IRS Employer
of incorporation or organization) Number) Identification No.)
680 South Fourth Street
Louisville, Kentucky
(Address of principal executive offices)
40202-2412
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7300
Not Applicable
(Former name or former address, if changed since last report.)
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Item 5. Other Events and Regulation FD Disclosure.
Kindred Healthcare, Inc. (the "Company") has announced that it has entered
into a non-binding letter of intent with Senior Health Management, LLC ("SHM")
to divest all of its Florida nursing center operations. Under the non-binding
letter of intent, SHM or one or more of its nominees will purchase the real
estate related to the 15 nursing centers the Company plans to acquire from
Ventas, Inc. ("Ventas") and the two nursing centers currently owned by the
Company in Florida. The sales price for the real estate and related personal
property associated with all of the Florida nursing center operations will
approximate $65 million, payable in cash at closing. SHM has executed a
commitment letter with CapitalSource Finance LLC to finance the purchase of the
real property.
SHM's nominee will sublease the remaining Florida facility operated by the
Company. The rental payments under the proposed sublease are expected to
approximate the Company's annual rental obligations under the existing lease
agreement. The proposed sublease will expire upon the expiration of the primary
lease.
If the parties are unable to close the purchase transaction by June 30,
2003, the Company will enter into an interim lease of the 17 facilities with
SHM's nominees until the sale can be consummated, under which rentals for the 15
Ventas facilities are expected to approximate the Company's rental obligations
for these facilities under its existing master leases with Ventas, and rentals
for the two facilities currently owned by the Company will equal an aggregate of
$24,000 per month.
In a related transaction, SHM's nominees also will acquire the Company's
accounts receivable relating to the Florida nursing centers.
In addition to entering into definitive documentation, the consummation of
the proposed transaction is subject to several material conditions, including,
without limitation, the receipt of required approvals from each party's board of
directors, the Company's lenders, completion of SHM's financing and certain
regulatory and other approvals. The transaction also is conditioned upon the
completion of the Company's previously announced agreement to purchase the 15
Florida facilities from Ventas.
The Company also announced that it has entered into a non-binding letter of
intent to sell the Texas nursing facility it will acquire from Ventas. Under the
non-binding letter of intent, the Company will sell the facility and related
personal property for approximately $4.5 million, payable in cash at closing.
The Company has targeted September 30, 2003 to complete the sale. The Company
also intends to lease the facility until consummation of the sale to the
proposed purchaser beginning July 1, 2003 for approximately $21,000 per month.
In addition to entering into definitive documentation, the consummation of
this proposed transaction is subject to several material conditions, including,
without limitation, the receipt of required approvals from each party's board of
directors, the Company's lenders, completion of the purchaser's financing and
certain regulatory and other approvals. The transaction also is
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conditioned upon the completion of the Company's previously announced agreement
to purchase the facility from Ventas.
The Company currently operates one other leased nursing center in Texas. As
previously announced, the Company recently entered into an agreement with the
landlord of that nursing center to terminate the lease effective June 30, 2003.
This Form 8-K includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements regarding the
Company's expected future financial position, results of operations, cash flows,
financing plans, business strategy, budgets, capital expenditures, competitive
positions, growth opportunities, plans and objectives of management and
statements containing the words such as "anticipate," "approximate," "believe,"
"plan," "estimate," "expect," "project," "could," "should," "will," "intend,"
"may" and other similar expressions, are forward-looking statements.
Such forward-looking statements are inherently uncertain, and stockholders
and other potential investors must recognize that actual results may differ
materially from the Company's expectations as a result of a variety of factors,
including, without limitation, those discussed below. Such forward-looking
statements are based on management's current expectations and include known and
unknown risks, uncertainties and other factors, many of which the Company is
unable to predict or control, that may cause the Company's actual results or
performance to differ materially from any future results or performance
expressed or implied by such forward-looking statements. These statements
involve risks, uncertainties and other factors discussed below and detailed from
time to time in the Company's filings with the Securities and Exchange
Commission.
Factors that may affect the Company's plans or results include, without
limitation, (a) the Company's ability to operate pursuant to the terms of its
debt obligations and its master lease agreements with Ventas; (b) the Company's
ability to meet its rental and debt service obligations; (c) adverse
developments with respect to the Company's results of operations or liquidity;
(d) the Company's ability to attract and retain key executives and other
healthcare personnel; (e) increased operating costs due to shortages in
qualified nurses and other healthcare personnel; (f) the effects of healthcare
reform and government regulations, interpretation of regulations and changes in
the nature and enforcement of regulations governing the healthcare industry; (g)
changes in the reimbursement rates or methods of payment from third party
payors, including the Medicare and Medicaid programs and the new prospective
payment system for long-term acute care hospitals; (h) national and regional
economic conditions, including their effect on the availability and cost of
labor, materials and other services; (i) the Company's ability to control costs,
particularly labor and employee benefit costs; (j) the Company's ability to
comply with the terms of its Corporate Integrity Agreement; (k) the Company's
ability to integrate operations of acquired facilities; (l) the increase in the
costs of defending and insuring against professional liability claims and the
Company's ability to predict the estimated costs related to such claims; and (m)
the Company's ability to successfully reduce (by divestiture or otherwise) its
exposure to professional liability claims in the state of Florida and other
states. Many of these factors are beyond the Company's control. The Company
cautions investors that
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any forward-looking statements made by the Company are not guarantees of future
performance. The Company disclaims any obligation to update any such factors or
to announce publicly the results of any revisions to any of the forward-looking
statements to reflect future events or developments.
A copy of the press release issued by the Company is attached as Exhibit
99.1
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 - Press Release dated May 20, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
KINDRED HEALTHCARE, INC.
Date: May 21, 2003 By: /s/ Richard A. Lechleiter
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Richard A. Lechleiter
Senior Vice President, Chief
Financial Officer and Treasurer
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