-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SJk6EUZD0Uyh6TL9Snoiol+J99gnoy6ClNBwvl8TxqYfQw/iaRc8XXqvNQyD1+hV FyDY/ySaPNmxFdS4xtuNUw== 0000889812-96-001053.txt : 19960919 0000889812-96-001053.hdr.sgml : 19960919 ACCESSION NUMBER: 0000889812-96-001053 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CLAIMS EVALUATION INC CENTRAL INDEX KEY: 0000774517 STANDARD INDUSTRIAL CLASSIFICATION: 6411 IRS NUMBER: 112601199 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14807 FILM NUMBER: 96608842 BUSINESS ADDRESS: STREET 1: 375 N BROADWAY STREET 2: ONE JERICHO PLAZA CITY: JERICHO STATE: NY ZIP: 11753 BUSINESS PHONE: 5169388000 MAIL ADDRESS: STREET 1: ONE JERICHO PLAZA CITY: JERICHO STATE: NY ZIP: 11753 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 or { } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 0-14807 AMERICAN CLAIMS EVALUATION, INC. (Exact name of Registrant as specified in its charter) New York 11-2601199 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Jericho Plaza, Jericho, New York 11753 (Address of principal executive offices) (Zip Code) (516) 938-8000 (Registrant's telephone number, including area code) (Not applicable) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $.01 per share 4,250,000 shares outstanding at July 29, 1996 AMERICAN CLAIMS EVALUATION, INC. INDEX Page No. -------- PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of June 30, 1996 and March 31, 1996 3 Consolidated Statements of Earnings for the Three Months ended June 30, 1996 and 1995 4 Consolidated Statements of Cash Flows for the Three Months ended June 30, 1996 and 1995 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10 2 PART I. FINANCIAL INFORMATION Item 1 - Consolidated Financial Statements AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets Jun.30,1996 Mar.31,1996 ----------- ----------- (Unaudited) Assets Current Assets: Cash and cash equivalents $ 7,882,668 7,242,029 Marketable securities -- 364,500 Accounts receivable (net of allowance for doubtful accounts of $15,000) 566,670 771,585 Prepaid expenses 52,799 53,571 ----------- ----------- Total current assets 8,502,137 8,431,685 Property and equipment, net 242,321 269,015 Excess cost over fair value of net assets acquired, net 557,980 566,086 ----------- ----------- $ 9,302,438 9,266,786 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable 419,591 511,694 Accrued expenses 91,129 129,293 Income taxes payable 227,252 142,703 Deferred income taxes 14,473 78,826 ----------- ----------- Total current liabilities 752,445 862,516 ----------- ----------- Stockholders' equity: Common stock, $.01 par value; authorized 10,000,000 shares; 4,250,000 shares issued and outstanding 42,500 42,500 Additional paid-in capital 3,267,699 3,267,699 Unrealized gain on marketable securities, net of tax -- 117,155 Retained earnings 5,239,794 4,976,916 ----------- ----------- Total stockholders' equity 8,549,993 8,404,270 ----------- ----------- $ 9,302,438 9,266,786 =========== =========== Note: The balance sheet at March 31, 1996 has been derived from the audited financial statements at that date. 3 AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) Three months ended ------------------ Jun.30,1996 Jun.30,1995 ----------- ----------- Revenues $ 953,160 1,394,069 Cost of services 440,279 627,589 ---------- ---------- Gross margin 512,881 766,480 Selling, general and administrative expenses 494,127 677,580 ---------- ---------- Operating earnings 18,754 88,900 Other income: Gain on sale of marketable securities, net 285,356 38,493 Interest income 111,785 81,230 Miscellaneous income 10,983 19,426 ---------- ---------- Earnings before provision for income taxes 426,878 228,049 Provision for income taxes 164,000 90,000 ---------- ---------- Net earnings $ 262,878 138,049 ========== ========== Net earnings per share of common stock $ .06 .03 ========== ========== Weighted average common and common equivalent shares 4,266,157 4,250,000 ========== ========== 4 AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Three months ended
Jun.30,1996 Jun.30,1995 ----------- ----------- Cash flows from operating activities: Net earnings $ 262,878 138,049 ----------- ----------- Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 34,800 37,261 Gain on sales of marketable securities (285,356) (38,493) Deferred income taxes (4,000) (91,000) Changes in assets and liabilities: Decrease in accounts receivable 204,915 147,740 Decrease in prepaid expenses 772 10,349 Decrease in deposits -- 250 (Decrease) in accounts payable (92,103) (26,271) (Decrease) in accrued expenses (38,164) (3,673) Increase in income taxes payable 84,549 145,103 ----------- ----------- Total adjustments (94,587) 181,266 Net cash provided by operating activities 168,291 319,315 ----------- ----------- Cash flows from investing activities: Purchase of marketable securities (118,768) (26,893) Proceeds from sales of marketable securities 591,116 127,196 Capital expenditures -- (9,829) ----------- ----------- Net cash provided by investing activities 472,348 90,474 ----------- ----------- Net increase in cash and cash equivalents 640,639 409,789 Cash and cash equivalents at beginning of period 7,242,029 5,500,159 ----------- ----------- Cash and cash equivalents at end of period $ 7,882,668 5,909,948 =========== =========== Supplemental Disclosure of Cash Flow Information: Income taxes paid $ 84,167 35,897 =========== ===========
5 AMERICAN CLAIMS EVALUATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) General The accompanying unaudited financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the Company's Annual Report to Shareholders for the year ended March 31, 1996. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made to present fairly the financial position, results of operations and cash flows as at and for the periods shown. 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Three Months ended June 30, 1996 and 1995 The following table sets forth information with respect to the Company's sources of revenues for the three month periods ended June 30, 1996 and June 30, 1995: Three months Three months ended ended June 30, 1996 June 30, 1995 ------------- ------------- Hospital bill audit services $ 652,071 $1,079,708 Vocational rehabilitation services 301,089 314,361 ---------- ---------- $ 953,160 $1,394,069 ========== ========== Consolidated revenues for the three months ended June 30, 1996 decreased 31.6% to $953,160 from the $1,394,069 reported for the comparable period ended June 30, 1995. During the three months ended June 30, 1996, hospital bill audit ("HBA") services declined by 39.6% and vocational rehabilitation services posted a 4.2% decrease from the corresponding period last year. The most notable cause for the decrease in HBA revenues is the previously announced loss of business from a single client. During August 1995, MetraHealth notified the Company that it was to be acquired by United Healthcare Corp. and planned to perform its hospital bill audits internally, thus phasing out the use of the Company's services. MetraHealth, formerly the Company's largest client, accounted for approximately 22% of consolidated revenues prior to August 1995. The cost of evaluations for HBA services as a percentage of HBA revenues increased to 47.6% from the previous year's comparable percentage of 44.6%. This increase is primarily attributable to a change in the mix of HBA services being rendered with provider discount network ("PDN") services capturing a larger percentage in the current period. PDN services generally provide for lower gross margins due to the cost of related access fees. The cost of services for vocational rehabilitation services decreased to 43.1% of related revenues for the three months ended June 30, 1996 as compared to 46.4% for the three months ended June 30, 1995. Selling, general and administrative expenses for the three months ended June 30, 1996 increased to 51.8% of consolidated revenues from 48.6% of consolidated revenues during the three months ended June 30, 1995. Overall, selling, general and administrative expenses for the quarter ended June 30, 1996 decreased by $183,453, or 27.1%, from the comparable period last year. During the current quarter, the Company earned $111,785 of interest income representing an increase of $30,555 over the three months 7 ended June 30, 1995. This increase resulted from higher interest rates in addition to an increase in the Company's cash and cash equivalents available for investment. The Company also realized net gains on the sale of marketable securities of $285,356 during the three months ended June 30, 1996, as compared to gains of $38,493 on the sale of marketable securities during the three months ended June 30, 1995. Liquidity and Capital Resources During the three month period ended June 30, 1996, cash provided by operating activities was $168,291, compared with $319,315 during the comparable period last year. Net earnings of $262,878 coupled with a decrease in accounts receivable of $204,915 which was offset by gains on the sale of marketable securities of $285,356 were the major factors in net cash provided by operations during the current quarter. Cash provided by investing activities for the three months ended June 30, 1996 was $472,348, as compared with $90,474 in the comparable period last year. During the three month ended June 30, 1996, $591,116 of cash provided from the proceeds of sales of marketable securities was offset by $118,768 used for the purchase of additional marketable securities. At June 30, 1996, the Company had working capital of $7,749,692 as compared to working capital of $7,569,169 at March 31, 1996. The Company has intensified its review of strategic alternatives for maximizing shareholder value, focusing upon acquisitions and/or the dispositions of certain assets. Potential acquisitions will be evaluated based on their merits within the Company's current line of business, as well as other fields. The Company believes that it has sufficient cash resources and working capital to meet its capital requirements for the foreseeable future. 8 PART II. OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) None. (b) No reports on Form 8-K were filed during the quarter ended June 30, 1996. 9 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. AMERICAN CLAIMS EVALUATION, INC. Date: August 7, 1996 By: /s/ Gary Gelman ---------------- Gary Gelman Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) Date: August 7, 1996 By: /s/ Gary J. Knauer ------------------- Gary J. Knauer Chief Financial Officer and Treasurer (Principal Financial Officer) EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from the consolidated financial statements and is qualified in its entirety by reference to such financial statements. 1 3-MOS MAR-31-1997 JUN-30-1996 7,882,668 0 581,670 15,000 0 8,502,137 647,320 404,999 9,302,438 752,445 0 42,500 0 0 3,267,699 9,302,438 953,160 953,160 440,279 440,279 494,127 0 0 426,878 164,000 262,878 0 0 0 262,878 0.06 0.06
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