-----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, V895NPZLOFXDfw2eLs1I8sCCleOfs+fGQL7Dfqfl2KFAa3G8KdphnYkt+uC7I1E5 PJTRt2IgH+zbXxLMSYC4gg== 0000936392-98-000315.txt : 19980226 0000936392-98-000315.hdr.sgml : 19980226 ACCESSION NUMBER: 0000936392-98-000315 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980219 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980225 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PMR CORP CENTRAL INDEX KEY: 0000829608 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 232491701 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20488 FILM NUMBER: 98549450 BUSINESS ADDRESS: STREET 1: 501 WASHINGTON ST 5TH FL CITY: SAN DIEGO STATE: CA ZIP: 92103 BUSINESS PHONE: 6192952227 MAIL ADDRESS: STREET 1: 3990 OLD TOWN AVENUE SUITE 206A CITY: SAN DIEGO STATE: CA ZIP: 92110 FORMER COMPANY: FORMER CONFORMED NAME: ZARON CAPITAL INC DATE OF NAME CHANGE: 19891116 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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): FEBRUARY 19, 1998 PMR CORPORATION (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 000-20488 23-2491707 (Commission File No.) (IRS Employer Identification No.) 501 WASHINGTON STREET, 5TH FLOOR SAN DIEGO, CALIFORNIA 92103 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (619) 610-4001 2 ITEM 5. OTHER EVENTS. A. PMR hereby incorporates by reference the contents of the news release announcing the third quarter results and regulatory challenges filed as Exhibit 99.1 to this report. B. PMR hereby incorporates by reference the contents of the news release announcing the signing of the letter of intent filed as Exhibit 99.2 to this report. 2. 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (C) EXHIBITS. 99.1 News Release dated February 19, 1998. 99.2 News Release dated February 19, 1998. 3. 4 SIGNATURE 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 hereunto duly authorized. PMR CORPORATION Dated: February 24, 1998 By: /s/ Mark P. Clein -------------------------------- Mark P. Clein Executive Vice President and Chief Financial Officer 4. 5 INDEX TO EXHIBITS 99.1 News Release dated February 19, 1998. 99.2 News Release dated February 19, 1998. 5. EX-99.1 2 EXHIBIT 99.1 1 EXHIBIT 99.1 [PRM CORPORATION LOGO] For Immediate Release February 19, 1998 PMR ANOUNCES THIRD QUARTER RESULTS AND RECENT REGULATORY CHALLENGES SAN DIEGO, CA -- PMR CORPORATION (NASDAQ NMS - "PMRP"), a leading provider of disease management services for the Seriously Mentally Ill (SMI), today announced results for the third quarter ended January 31, 1998. Revenues for the quarter were $16.5 million versus revenues of $14.2 million for the same period in the prior fiscal year. Net Income for the quarter was $1.3 million or $.18 per share, compared with net income of $831,000 or $.14 per share. Revenues for the nine months ended January 31, 1998 were $50.3 million versus revenues of $41.5 million for the same period in the prior fiscal year. Net Income for the nine months ended January 31, 1998 was $3.5 million or $.54 per share, compared with net income of $2.2 million or $.40 per share. "We are pleased with these results during our seasonally most challenging quarter." said Allen Tepper, Chief Executive Officer. "Revenues expanded 16% as we added three new outpatient programs and one new crisis service for an existing customer. Revenue growth was offset by a decrease in case rates from one of the behavioral health organizations in Tennessee. Earnings expanded 60% due to sustained margin growth versus last year's third quarter. Pre-tax margins reached a record level of 13.6% and the Company reported its eleventh consecutive quarter of increased earnings." The Company has been informed that its largest customer, which represents approximately 14% of the Company's revenues, has received a letter from an official of Region IX of the Health Care Financing Administration ("HCFA"), informing the customer that the customer's partial hospitalization programs managed by PMR can no longer be considered "provider-based" for Medicare reimbursement purposes. The letter states that the "provider-based" status for the customer's programs will be 1. 2 removed March 1, 1998. Based on its understanding of HCFA's "provider-based" policy, the Company believes that Region IX's determination is incorrect. HCFA's Central Office has agreed to review this determination. To the extent necessary to conform to HCFA's definition of "provider-based" status, the Company intends to make reasonable changes within its control to its contract and operations, so that the programs it manages meet HCFA's definition of "provider-based." In addition, the Company is investigating an alternative basis for its customer to receive Medicare reimbursement for services to the extent that the programs managed by PMR are not deemed to be "provider-based." The extent of any impact on profitability will be determined by the nature of any contract restructuring with the provider and HCFA's concurrence with such restructuring with regard to the "provider-based" designation. In the event that the "provider-based" determination is not re-established for this customer's programs or such programs are not otherwise eligible for reimbursement, or if similar determinations are made to other programs managed by the Company, there would be a material adverse effect on the Company's revenue and net income. The Company has also been informed that the outpatient program that it formerly managed in Dallas, Texas is subject to a civil investigation being conducted by the U.S. Department of Health and Human Services' Office of Inspector General and the U.S. Attorney's office in Dallas, Texas (collectively the "Agencies"). The investigation is a result of a HCFA review of partial hospitalization services rendered to 63 patients at this location. The Dallas program was operational from January 1996 to February 6, 1998. A representative of the Agencies has indicated that the investigation is civil in nature and focuses on eligibility of patients for partial hospitalization services. The eligibility determinations for participation at the Dallas program were made by board certified or board eligible psychiatrists. The Company is cooperating fully with the Agencies and to date, no formal complaint or demand has been made by the Agencies. Due to the preliminary nature of the investigation, the Company is unable to predict the ultimate outcome of the investigation, or the material impact, if any, on the Company's business, financial condition or results of operations. The Company plans a conference call for tomorrow, Friday February 20, at 9:00 am EST to discuss these events and other issues of interest. Participants please call 1-800-289-0436, reservation number 436374. PMR is a leader in the development and management of programs and services for individuals with a serious mental illness. PMR currently manages 54 programs in 13 states in both fee-for-service and managed care environments, principally focused on the public sector market. This press release contains forward looking statements that involve risks and uncertainties, including the risk that the Company will not be able to make changes to 2. 3 its contract and operations to meet HCFA's definition of "provider-based" designation or find an alternative basis for reimbursement; and the risks and uncertainties set forth in the Company's periodic reports and other filings with the Securities and Exchange Commission. Forward looking statements reflect the Company's current views with respect to future events. Actual results may vary materially and adversely from those anticipated, believed, estimated, or otherwise indicated. ### CONTACT: PMR Corporation: 619-610-4001 Mark Clein, Executive V.P./CFO 3. 4 PMR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED JANUARY 31, JANUARY 31, -------------------------------- -------------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Revenue $ 16,522,304 $ 14,190,480 $ 50,259,598 $ 41,512,062 Expenses: Operating expenses 11,541,613 10,343,441 35,518,340 30,601,881 Marketing, general and 2,188,307 1,464,523 6,618,429 4,495,776 administrative Provision for bad debts 769,725 851,617 2,191,486 2,246,698 Depreciation and amortization 293,372 167,271 764,641 517,030 Interest - Net (521,536) (45,492) (698,079) (130,022) ------------ ------------ ------------ ------------ 14,271,481 12,781,360 44,394,817 37,731,363 ------------ ------------ ------------ ------------ Income before income taxes 2,250,823 1,409,120 5,864,781 3,780,699 Income tax expense 923,279 578,000 2,405,000 1,550,000 ------------ ------------ ------------ ------------ Net income 1,327,544 831,120 3,459,781 2,230,699 Less dividends on: Series C convertible preferred -- -- -- 17,342 stock ------------ ------------ ------------ ------------ Net income for common stock $ 1,327,544 $ 831,120 $ 3,459,781 $ 2,213,357 ============ ============ ============ ============ Earnings per common share Basic $ 0.19 $ 0.17 $ 0.60 $ 0.48 ------------ ------------ ------------ ------------ Diluted $ 0.18 $ 0.14 $ 0.54 $ 0.40 ============ ============ ============ ============ Shares used in computing earnings per share Basic 6,919,204 4,960,361 5,765,758 4,644,762 ------------ ------------ ------------ ------------ Diluted 7,544,509 5,818,032 6,453,494 5,607,760 ============ ============ ============ ============
4. EX-99.2 3 EXHIBIT 99.2 1 EXHIBIT 99.2 [PMR LOGO] For Immediate Release February 19, 1998 PMR ANNOUNCES LETTER OF INTENT FOR ACQUISITION SAN DIEGO, CA -- PMR CORPORATION (NASDAQ NMS - "PMRP"), a leading provider of disease management services for the Seriously Mentally Ill (SMI), today announced that a letter of intent has been signed to acquire the provider division of American Psych Systems ("APS"). This division includes five partial hospitalization programs, two hospital management contracts and other outpatient services in New York and Ohio. Total revenues for the division are approximately $6.5 million. "The provider division of APS is an excellent addition to PMR's program offerings," said Allen Tepper, CEO. "These programs have an excellent clinical reputation, place us in new markets, add new programatic tracks and add diversification to our payor mix." The Company expects to complete the transaction in its fourth fiscal quarter and anticipates that the transaction will contribute to earnings per share in the fiscal year beginning May 1, 1998. The Company plans a conference call for tomorrow, Friday February 20, at 9:00 am EST to discuss this event and other issues of interest. Participants please call 1-800-289-0436, reservation number 436374. PMR is a leader in the development and management of programs and services for individuals with a serious mental illness. PMR currently manages 54 programs in 13 states in both fee-for-service and managed care environments, principally focused on the public sector market. This press release contains forward looking statements that involve risks and uncertainties, including the risk that the Company will not successfully complete the acquisition of the provider division of APS or that the acquisition will not contribute to earnings per share in fiscal year 1999. Forward looking statements reflect the Company's current views with respect to future events. Actual results may vary materially and adversely from those anticipated, believed, estimated, or otherwise indicated. ### 1. 2 CONTACT: PMR Corporation: 619-610-4001 Mark Clein, Executive V.P./CFO 2. -----END PRIVACY-ENHANCED MESSAGE-----