Item 7.01.
Regulation FD Disclosure.
SEC Reports
As previously disclosed, 21st Century Oncology Holdings, Inc. (the Company) is in the process of finalizing its Form 10-K for the fiscal year ended December 31, 2015 and Form 10-Q for the period ended March 31, 2016. The completion of the process has been delayed as a result of the restatement of prior year financial results. Also as previously disclosed, on May 12, 2016, the Company received a default notice, relating to the Companys failure to timely provide certain financial reports, from Morgan Stanley Senior Funding, Inc., as administrative agent (the Administrative Agent) for the lenders under the credit agreement (the Credit Agreement) of 21st Century Oncology, Inc. (21C), the Companys subsidiary. The Company also received default notices (the Indenture Default Notices) from Wilmington Trust, National Association, as trustee of 21Cs 11.00% Senior Notes due 2023 (the Notes), acting at the direction of holders of Notes, for failing to timely provide certain financial reports required by the indenture governing the Notes (the Indenture). Such notices were received on May 17, 2016 with respect to the Form 10-K and June 1, 2016 with respect to the Form 10-Q. On June 10, 2016, the Company entered into an amendment and waiver to the Credit Agreement to, among other things, waive through July 31, 2016 any default or event of default under the Credit Agreement for failing to timely provide the financial reports for the year ended December 31, 2015 and quarter ended March 31, 2016 (the SEC Reports). The amendment also waives any cross-default that may arise under the Credit Agreement prior to or on July 31, 2016 as a result of a default or event of default under the Indenture for failure to timely deliver the SEC Reports.
As a result of the foregoing, if 21C does not furnish or file the SEC Reports within 60 days after receipt of the Indenture Default Notices (as applicable) as required by the Indenture or deliver the SEC Reports to the Administrative Agent by July 31, 2016 as required by the Credit Agreement (together, the Report Deadlines), then such failure to timely deliver will be deemed an event of default under the Indenture or Credit Agreement, as applicable.
The Company currently does not anticipate being able to meet the Report Deadlines. As a result, the Company expects to engage in discussions with the lenders under the Credit Agreement and the holders of the Notes regarding extending the Report Deadlines to August 31, 2016 (for the SEC Reports as well as the report for the quarter ended June 30, 2016) and waiving until August 31, 2016 any defaults or events of default that would otherwise occur due to the failure to timely provide such reports.
Preliminary Results
In the interim, the Company is providing the following additional preliminary results. The preliminary results are based on managements current expectations. Actual results could differ materially from such estimates. Final adjustments and other material developments may arise between the date hereof and the date that the Company announces its final results for these periods.
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For the full year 2015, the Company expects to report total revenue between $1,068 million and $1,090 million and Pro Forma Adjusted EBITDA of between $155 million and $165 million.
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For the fourth quarter of 2015, the Company expects to report total revenue between $262 million and $267 million and Pro Forma Adjusted EBITDA of between $37 million and $40 million.
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For the first quarter of 2016, the Company expects to report total revenue between $264 million and $281 million and Pro Forma Adjusted EBITDA of between $38 million and $42 million.
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The Company expects to report cash and cash equivalents of approximately $56 million as of June 30, 2016. During the second quarter of 2016, the Company incurred cash expenses of approximately $2.0 million related to the Credit Agreement amendment and waiver and approximately $4.7 million in conjunction with the financial restatement process. During the second quarter of 2016, the Company also invested in new medical equipment. The Company also incurs higher amounts of cash interest expense in the second and fourth quarters of each fiscal year due to the interest due on the Notes.
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