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): December 11, 2002
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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.)
Item 5. Other Events and Regulation FD Disclosure.
Kindred Healthcare, Inc. (the "Company") has announced it has entered into
a non-binding letter of intent with Senior Health Management, LLC ("SHM") to
transfer the operations of its 18 skilled nursing facilities in Florida. Under
the proposed transaction, SHM or its designee will sublease 16 of the Company's
18 Florida facilities for an initial term of five years. The lease payments
under the subleases will be equal to the lease payments under the primary
leases. The Company will remain a primary guarantor under the primary leases. In
addition, SHM will lease with an option to purchase the remaining two facilities
owned by the Company. SHM also will purchase certain personal property assets
related to the operations of the Florida facilities. The Company will retain the
working capital associated with all of its Florida facilities.
In addition to entering into a definitive agreement, the consummation of a
proposed transaction is subject to a number of material conditions including,
without limitation, the receipt of required approvals from the Company's
lenders, regulators, governmental entities and private third parties. The
Company leases 15 of the 18 Florida facilities from Ventas, Inc. ("Ventas").
Although Ventas has previously publicly announced its intention to work with the
Company in facilitating a Florida exit strategy, Ventas has informed the Company
that it will object to the transaction unless it receives a substantial and
material consent fee and other lease concessions. The Company has informed
Ventas that this demand is improper. The Company believes it has the ability to
sublease 12 of these facilities without Ventas's consent and that Ventas's
consent cannot be unreasonably withheld on the remaining three facilities. The
Company also indicated that should Ventas improperly interfere with the
completion of the proposed transaction, it will seek appropriate legal remedies
against Ventas as well as damages for the continuing losses sustained by the
Company.
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, 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," "projected," "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 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 liquidity or results of operations;
(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 professionals; (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, including labor and employee benefit costs, in response to the
prospective payment systems, implementation of the Company's Corporate Integrity
Agreement and other regulatory actions; (j) the Company's ability to comply with
the terms of its Corporate Integrity Agreement; (k) the effect of a restatement
of the Company's previously issued consolidated financial statements; (l) the
Company's ability to integrate operations of acquired facilities; (m) the
increase in the costs of defending and insuring against alleged patient care
liability claims and the Company's ability to predict the estimated costs
related to such claims; (n) 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; and (o) the Company's ability to consummate
the proposed transaction with SHM. Many of these factors are beyond the control
of the Company and its management. The Company cautions investors that 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 December 11, 2002.
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: December 11, 2002 By: /s/ Richard A. Lechleiter
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Richard A. Lechleiter
Senior Vice President, Chief Financial
Officer and Treasurer