U.S. Oncology plans revolver drawdowns to fund working capital plans

By Sara Rosenberg

New York, March 15 - U.S. Oncology Inc. plans to draw on its revolving credit facility in 2006 to help fund various working capital plans, according to an 8-K filed with the Securities and Exchange Commission Wednesday.

The company plans to spend $100 million to $110 million for the development of cancer centers, purchase of clinical equipment and investment in information systems, and about $70 to $80 million primarily in receivables and pharmaceutical inventory to adequately stock and operate the distribution warehouse, and the acceleration of payables to take advantage of prompt payment discounts offered by pharmaceutical manufacturers.

In addition to using revolver borrowings, the company anticipates using cash flow generated from operations, lease or purchase money financing for certain equipment purchases and indebtedness to physicians in connection with new affiliations for the working capital plans.

U.S. Oncology is a Houston-based cancer-care services company.

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