-----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, GXKSo4nqGMPN0Yl+WqCbza2oBOJk3L4fizi+yfTxQd5kkMhJyY6K6rEtLzWtpxkF yeI990A7C4gm5yyEYVs7Ug== 0000899243-97-002222.txt : 19971117 0000899243-97-002222.hdr.sgml : 19971117 ACCESSION NUMBER: 0000899243-97-002222 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMEDISYS INC CENTRAL INDEX KEY: 0000896262 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 113131700 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24260 FILM NUMBER: 97718479 BUSINESS ADDRESS: STREET 1: 3029 S SHERWOOD FOREST BLVD STE 300 CITY: BATON ROUGE STATE: LA ZIP: 70816 BUSINESS PHONE: 5042922031 MAIL ADDRESS: STREET 1: 3029 SOUTH SHERWOOD FOREST BLVD STREET 2: SUITE 300 CITY: BATON ROUGE STATE: LA ZIP: 70816 FORMER COMPANY: FORMER CONFORMED NAME: ANALYTICAL NURSING MANAGEMENT CORP DATE OF NAME CHANGE: 19940819 FORMER COMPANY: FORMER CONFORMED NAME: M&N CAPITAL CORP DATE OF NAME CHANGE: 19930125 10-Q 1 FORM 10-Q U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ________________________________________________________________________________ [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 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: 0-24260 AMEDISYS, INC. ---------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 11-3131700 -------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 3029 S. Sherwood Forest Blvd., Ste. 300 Baton Rouge, LA 70816 --------------------------------------------------------------- (Address of principal executive offices including zip code) (504) 292-2031 (Registrant's telephone number, including area code) Indicate by check mark whether the issuer (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 such 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 [ ] Number of shares of Common Stock outstanding as of September 30, 1997: 2,850,067 shares PART I. FINANCIAL INFORMATION ---------------------
ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheet as of September 30, 1997 and December 31, 1996 ...................... 3 Consolidated Statements of Income for the Three and Nine Months ended September 30, 1997 and 1996................................................................ 4 Consolidated Statements of Cash Flows for the Nine Months ended September 30, 1997 and 1996...... 5 Notes to Consolidated Financial Statements....................................................... 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............................................................. 8 General.......................................................................................... 8 Health Care Provider Services.................................................................... 8 Home Health Care............................................................................... 8 Supplemental Staffing.......................................................................... 8 Outpatient Surgery............................................................................. 8 Alternate-Site Infusion Therapy Services....................................................... 8 Management Services.............................................................................. 9 Home Health Care Management Services........................................................... 9 Physician Practice Management Services......................................................... 9 Industry Overview................................................................................ 9 Results of Operations............................................................................ 9 Liquidity and Capital Resources................................................................ 11 Seasonality.................................................................................... 12
PART II. OTHER INFORMATION -----------------
ITEM 1. LEGAL PROCEEDINGS................................................................................ 12 ITEM 2. CHANGES IN SECURITIES............................................................................ 12 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................................................. 12 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................................. 12 ITEM 5. OTHER INFORMATION................................................................................ 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................................................. 12
2 AMEDISYS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996 (UNAUDITED)
ASSETS SEPTEMBER 30, 1997 DECEMBER 31, 1996 CURRENT ASSETS: CASH $ 2,656,644 $ 1,104,165 ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR DOUBTFUL ACCOUNTS OF $1,169,270 IN SEPTEMBER 1997 AND $732,166 IN DECEMBER 1996 9,125,109 8,270,982 PREPAID EXPENSES 490,168 264,125 OTHER CURRENT ASSETS 736,782 515.003 ----------- ----------- TOTAL CURRENT ASSETS 13,008,703 10,155,265 NOTES RECEIVABLE: RELATED PARTIES 244,758 190,208 PROPERTY, PLANT AND EQUIPMENT, NET 4,670,628 4,609,718 OTHER ASSETS, NET 3,096,758 1,903,596 ----------- ----------- TOTAL ASSETS $21,020,845 $16,858,787 =========== =========== LIABILITIES SEPTEMBER 30, 1997 DECEMBER 31, 1996 CURRENT LIABILITIES: NOTES PAYABLE $ 5,292,049 $ 4,378,688 CURRENT PORTION OF LONG-TERM DEBT 779,266 779,266 ACCOUNTS PAYABLE 1,086,471 1,416,259 ACCRUED EXPENSES: PAYROLL AND PAYROLL TAXES 1,698,305 1,033,250 INCOME TAXES 510,328 0 INSURANCE 964,181 642,607 OTHER 463,240 882,627 ----------- ----------- TOTAL CURRENT LIABILITIES 10,793,839 9,132,697 NOTES PAYABLE TO RELATED PARTIES 46,241 943,592 LONG-TERM DEBT 3,299,025 2,279,448 ----------- ----------- TOTAL LIABILITIES 14,139,105 12,355,737 ----------- ----------- MINORITY INTEREST 204,063 188,269 ----------- ----------- STOCKHOLDERS' EQUITY COMMON STOCK 2,850 2,576 ADDITIONAL PAID-IN CAPITAL 3,404,864 1,915,514 TREASURY STOCK (25,000) 0 STOCK SUBSCRIPTIONS RECEIVABLE 0 (266) RETAINED EARNINGS 3,294,962 2,396,957 ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 6,677,677 4,314,781 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $21,020,845 $16,858,787 ----------- -----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 3 AMEDISYS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
THREE MONTHS ENDED ------------------------------------------ SEPTEMBER 97 SEPTEMBER 96 INCOME: SERVICE REVENUE $14,118,203 100.0% $11,762,546 100.0% COST OF SERVICE REVENUE 7,616,320 53.9% 6,841,997 58.2% ----------- ----------- GROSS MARGIN 6,501,883 46.1% 4,920,549 41.8% ----------- ----------- GENERAL AND ADMINISTRATIVE EXPENSES: SALARIES AND BENEFITS 3,295,901 23.3% 2,619,508 22.3% OTHER 2,628,851 18.6% 2,095,433 17.8% ----------- ----------- TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 5,924,752 42.0% 4,714,941 40.1% ----------- ----------- OPERATING INCOME 577,131 4.1% 205,608 1.7% ----------- ----------- OTHER INCOME AND EXPENSE: INTEREST INCOME 9,855 0.1% 4,687 0.0% INTEREST EXPENSE (226,497) (1.6%) (157,506) (1.3%) MISCELLANEOUS 2,035 0.0% 19,307 0.2% ----------- ----------- TOTAL OTHER INCOME AND EXPENSES (214,606) (1.5%) (133,512) (1.1%) ----------- ----------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 362,525 2.6% 72,096 0.6% PROVISION FOR ESTIMATED INCOME TAXES 149,659 1.1% 25,500 0.2% ----------- ----------- INCOME BEFORE MINORITY INTEREST 212,866 1.5% 46,596 0.4% MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 11,624 0.1% 9,321 0.1% =========== =========== NET INCOME $ 224,490 1.6% $ 55,917 0.5% =========== =========== EARNINGS PER COMMON SHARE $ 0.08 $ 0.02 NINE MONTHS ENDED SEPTEMBER 97 SEPTEMBER 96 INCOME: SERVICE REVENUE $41,382,641 100.0% $33,647,998 100.0% COST OF SERVICE REVENUE 23,589,306 57.0% 19,168,820 57.0% ----------- ----------- GROSS MARGIN 17,793,335 43.0% 14,479,178 43.0% ----------- ----------- GENERAL AND ADMINISTRATIVE EXPENSES: SALARIES AND BENEFITS 8,793,349 21.2% 7,567,966 22.5% OTHER 7,061,539 17.1% 5,866,605 17.4% ----------- ----------- TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 15,854,888 38.3% 13,434,571 39.9% ----------- ----------- OPERATING INCOME 1,938,447 4.7% 1,044,607 3.1% ----------- ----------- OTHER INCOME AND EXPENSE: INTEREST INCOME 27,374 0.1% 37,026 0.1% INTEREST EXPENSE (619,818) (1.5%) (399,354) (1.2%) MISCELLANEOUS 77,902 0.2% 103,189 0.3% ----------- ----------- TOTAL OTHER INCOME AND EXPENSES (514,541) (1.2%) (259,139) (0.8%) ----------- ----------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 1,423,906 3.4% 785,468 2.3% PROVISION FOR ESTIMATED INCOME TAXES 528,280 1.3% 267,450 0.8% ----------- ----------- INCOME BEFORE MINORITY INTEREST 895,626 2.2% 518,018 1.5% MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 2,379 0.0% (15,745) (0.0%) ----------- ----------- NET INCOME $ 898,005 2.2% $ 502,273 1.5% =========== =========== EARNINGS PER COMMON SHARE $ 0.33 $ 0.19 =========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 4
AMEDISYS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED) SEPTEMBER 97 SEPTEMBER 96 CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $ 898,005 $ 502,273 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: DEPRECIATION AND AMORTIZATION 866,310 566,628 PROVISION FOR BAD DEBTS 695,115 593,780 MINORITY INTEREST IN AFFILIATED COMPANY (2,379) 15,745 (GAIN) ON DISPOSAL OF PROPERTY AND EQUIPMENT (24,385) (3,711) LOSS ON SALE OF MARKETABLE SECURITIES 2,994 0 CHANGES IN ASSETS AND LIABILITIES: (INCREASE) IN ACCOUNTS RECEIVABLE (1,311,925) (1,884,271) (INCREASE) DECREASE IN PREPAID EXPENSES (226,041) 69,743 (INCREASE) IN OTHER CURRENT ASSETS (79,879) (240,623) (INCREASE) IN OTHER ASSETS (480,839) (627,910) INCREASE (DECREASE) IN ACCOUNTS PAYABLE (395,098) 955,119 INCREASE IN ACCRUED EXPENSES 1,153,355 732,419 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,095,233 679,192 ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES: PURCHASE OF FURNITURE, FIXTURES & EQUIPMENT (957,974) (1,452,648) PROCEEDS FROM SALE OF FURNITURE, FIXTURES & EQUIPMENT 193,913 156,388 PURCHASE OF CARE MEDICAL AND MOBILITY (465,000) 0 (INCREASE) DECREASE IN NOTES RECEIVABLE FROM RELATED PARTIES (54,550) 3,868 ----------- ----------- NET CASH (USED IN) INVESTING ACTIVITIES (1,283,611) (1,292,392) ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES: PURCHASE OF TREASURY STOCK (25,000) 0 NET INCREASE IN BORROWINGS ON LINE OF CREDIT 913,360 1,476,843 PAYMENTS ON NOTES PAYABLE (733,176) (653,059) PROCEEDS FROM NOTE PAYABLES 1,742,363 1,358,819 (DECREASE) IN NOTE PAYABLE TO RELATED PARTIES (987,924) (75,401) PROCEEDS FROM COMMON STOCK 830,967 7,199 DECREASE IN STOCK SUBSCRIPTIONS 266 12,248 ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,740,856 2,126,649 ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 1,552,479 1,513,449 CASH AND CASH EQUIVALENTS AT DECEMBER 31, 1996 AND 1995 1,104,165 870,004 ----------- ----------- CASH AND CASH EQUIVALENTS AT SEPTEMBER 30, 1997 AND 1996 $ 2,656,644 $ 2,383,453 =========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 5 AMEDISYS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
SEPTEMBER 97 SEPTEMBER 96 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: CASH PAYMENTS FOR: INTEREST $ 551,067 $ 373,272 =========== =========== INCOME TAXES $ 21,820 $ 504,713 =========== =========== SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITY: ACQUISITION OF CARE MEDICAL AND MOBILITY VALUE OF STOCK ISSUED IN EXCHANGE 600,000 VALUE OF NOTE PAYABLE ISSUED IN EXCHANGE 100,000 WORKING CAPITAL ACQUIRED NET OF CASH AND CASH EQUIVALENTS (312,917) ----------- NON CASH PORTION OF ACQUISITION 387,083 CASH PAYMENT FOR ACQUISITION OF CARE MEDICAL AND MOBILITY 465,000 ----------- GOODWILL RECORDED IN EXCHANGE $ 852,083 ===========
6 AMEDISYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Unaudited Financial Information The financial information as of September 30, 1997 and 1996, included herein is unaudited; however, such information reflects, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) that are necessary to present fairly the results of operations for such periods. Results of operations for the interim periods are not necessarily indicative of results of operations which will be realized for the year ending December 31, 1997. 2. Cash On July 1, 1997 AMEDISYS, Inc. advanced to FutureCare Health Plans, an additional $500,000, which increases the total advances to $1,500,000, which is included in cash balances, to FutureCare Health Plans to meet minimum capital and surplus requirements of the Louisiana State Department of Insurance to maintain its Health Maintenance Organization license and certificate of authority. FutureCare was discontinued and the Company's capital and surplus requirements will be returned upon approval of the Louisiana State Department of Insurance. 3. Income Taxes The subsidiaries in which the Company owns interests greater than 80% file a consolidated federal income tax return. The primary care subsidiaries file individual income tax returns. 4. Placement of Common Stock As of April 17, 1997, AMEDISYS completed a placement of its common stock with an institutional investor. According to the terms of the placement, the Company issued 37,500 shares of Common Stock for gross proceeds of $262,500. The Company issued 112,500 shares of Common Stock for gross proceeds of $675,000. The total net proceeds from both of these offerings was $830,967. 5. Acquisitions On August 1, 1997, AMEDISYS, Inc. agreed to purchase all of the assets and certain liabilities of Allgood Medical Services, Inc., a Louisiana corporation doing business as Care Medical and Mobility Equipment Company with its headquarters in Metairie, Louisiana. Care Medical and Mobility Equipment Company is a durable medical equipment supplier. The purchase was for $1,165,000 with $465,000 in cash, $600,000 in stock and a $100,000 note. On August 12, 1997, AMEDISYS signed an option to purchase a home health care company located in Oklahoma in a stock for stock transaction. The Company provides home health care with locations throughout the State of Oklahoma. The close of the transaction is subject to due diligence by both parties and the entering into a definitive agreement containing standard conditions, representation, and warranties customary for these types of transactions. 7 AMEDISYS is currently in the process of completing two private placements relating to the Company's 100% owned outpatient surgery centers located in Houston and Pasadena, TX. These placements will offer qualified investors the opportunity to acquire up to 30% of each outpatient surgery center. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read in conjunction with the Consolidated Financial Statements appearing in Item 1. GENERAL The Company's divisions provide a synergistic menu of integrated services which provide for disease state management with a continuum of care. Patients, health care providers and managed care benefit from a wide range of services provided by one Company. The Company's services include: HEALTH CARE PROVIDER SERVICES: HOME NURSING SERVICES: This division provides a broad spectrum of home nursing services provided by care givers ranging from highly trained critical care registered nurses to licensed practical nurses and certified home health aides. The Company operates 17 home health care offices, all of which are accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAHO), the nationally recognized standard for quality in the home health care industry. Growth in this sector continues to be driven by payors seeking cost- effective alternatives to lengthy hospital stays. SUPPLEMENTAL STAFFING: Medical personnel including registered nurses, licensed practical nurses, certified nurses' aides, and therapists provide staff relief in a variety of markets including hospitals, nursing homes, assisted living centers, physician offices and home health care companies, as well as private duty care. In operation since the early 1980's, this division provides service in 12 locations. Earlier this year, a clerical staffing program was introduced in three markets as an adjunct service for the Company's clients. The Company differentiates itself from its competitors through the use of a proprietary software system which generates a faster and more accurate scheduling response than traditional methods used throughout the industry. OUTPATIENT SURGERY CENTERS: The Company currently operates three outpatient surgery centers. Its two centers in Houston, TX are wholly owned by AMEDISYS and the Hammond, LA center is a joint venture with local physicians in which the Company owns a 56% share. All three centers have been accredited. Construction has begun on a fourth center located in Houston, TX with commencement of operations expected in March, 1998. The Company will own 42% of the center and in addition, will provide management services. Growth in the outpatient surgery center market is being fueled by advances in technology which allow a greater number of procedures to be performed in an outpatient setting at a significantly lower cost. ALTERNATE-SITE INFUSION THERAPY SERVICES: In the third quarter of 1997, the Company established a team of highly talented, proven experts in infusion therapy and plans to initiate services in the fourth quarter of 1997. These services will include a wide range of infusion therapies as well as durable medical equipment and respiratory therapy. Services will be provided through clinical partnerships with physicians in their offices, in infusion suites and to patients in their home and alternate-sites. A key component in the successful delivery of infusion therapy services is the support of a high quality nursing team. This division will utilize the Company's successful and well respected nursing division to support this facet of its operations. 8 MANAGEMENT SERVICES: ------------------- HEALTH CARE MANAGEMENT SERVICES: Through AMEDISYS Resource Management, the Company provides home health care companies with a comprehensive menu of management services. These include financial systems, general agency management, new business development, management information systems and support, and the development and implementation of quality improvement programs, including preparation for the JCAHO accreditation process. Either separately or as a complement to its management services, the Company offers a proprietary software system designed to address the issues of Medicare cost reimbursement, clinical outcomes data, patient utilization, scheduling and multiple payor options. PHYSICIAN PRACTICE MANAGEMENT SERVICES: This division provides business management services, allowing physician group practices and independent physician associations (IPO's) to remain a step ahead of their competition through its innovative information and business systems. In addition, the Company provides its clients with access to managed care contracts and group purchasing discounts. Its years of experience in the health care arena provide the Company with a basis of information and experience which differentiates it from its competitors. INDUSTRY OVERVIEW - ----------------- The Company believes the health care industry is being challenged to be creative in a way that is foreign to its history. There is a challenge for hospitals to reduce waste and over spending and to change from a cost plus system to a price sensitive, market driven business. Employers and insurers are seeking alternative solutions to reduce the cost of providing health care benefits, and federal and state governments are confronted with the need to decrease spending in Medicare and Medicaid programs. AMEDISYS is in step with the industry trend toward cost reduction and has positioned itself as the cost-effective alternative. With its broad menu of synergistic services, the Company is positioned to work in partnership with managed care organizations, payors and physicians to create a continuum of care that will not only benefit its referral sources, but patients as well. It is developing integrated networks and strategic alliances that will provide its customers with access to the highest quality care at reasonable prices. These agreements are structured according to the Company's understanding of the requirements and restrictions of health care laws and regulations including the Stark legislation. Congress recently included changes in regulations governing the reimbursement system for home nursing care in its Medicare budget. The changes include a provision for prospective pay which will take effect October 1, 1999. A prospective payment system could enable efficient home health care operators to retain their profits. The Company is positioned for this change since it has reduced costs in its home health care delivery system and has developed and implemented a software system which will provide a smooth transition from cost reimbursement to prospective pay. Prior to the initiation of prospective pay, Medicare authorities have indicated they expect to institute a fee reduction in reimbursement rates for home health care. Congress has also enacted legislation to curtail the growth in Medicare home health care reimbursement limits which could potentially reduce these limits. RESULTS OF OPERATIONS - --------------------- The Company continued to show strong growth in revenue and earnings for the third quarter in 1997. The Company's revenues increased by 20% and 23% for the three and nine months ended September 30, 1997, respectively, compared to the same periods last year. The largest increase in revenue was from the Management Services division which had increases of 74% and 86% in the three months and nine months ended September 30, 1997, respectively, compared to the same period in 1996. Outpatient surgery also showed significant growth in revenue of 38% and 66% for the three and nine months ended September 30, 1997, respectively, compared to those periods in 1996. Staffing and Patient Care services reported growth in revenue of 14% and 13% for the reporting periods. 9 Outpatient surgery revenue growth was due to the opening of St. Luke's SurgiCenter in Hammond, LA in November, 1996. Home health care management service, which is part of the Company's management service organization ("MSO"), increased revenue primarily due to a significant contract signed in July, 1997. The Company also continued to experience revenue growth from the sale of its home health care software system. Supplemental medical staffing, which is reported in staffing and patient care services, showed revenue growth for the three and nine months ended September 30, 1997, of 35% and 44%, respectively, over the same periods in 1996. Its growth is attributable to increasing the scope of services including private duty, as well as an increased demand for specialty nursing service in hospitals. Gross margins increased by 4% and 0%, as a percentage of revenue, for the three and nine months ended September 30, 1997 over the same periods in 1996, respectively. This increase during the 3 month period was due to increased revenue and restructuring of medical management contracts with medical facilities in the Management Services division. Gross margins decreased in the Outpatient Surgery division in both periods due to reduced net revenue per case, as well as, reduced case load. Additionally, revenues in Staffing and Patient Care Services increased in both periods. General and administrative expenses increased 26% and 18% for the three and nine months ended September 30, 1997 compared to the same periods in 1996. The increases were due primarily to the additional outpatient surgery center and increased costs in the Management Services division. The Company's net income increased for the third consecutive quarter for the three and nine months ended September 30, 1997 compared to the same period in 1996. The Company's net income increased to $224,490 or $0.08 per share from $55,917 or $0.02 per share for the three months ended September 30, 1997 and 1996, respectively. Net income for the nine months period ended September 30, 1997 was $898,005 or $0.33 per share compared to $502,273 or $0.19 per share in the same period in 1996. The increased net income is attributable to substantial growth in revenue in the Management Services and Staffing and Patient Care Services division, as well as, cost controls instituted in the Staffing and Patient Services division.
=================================================================================================================================== STAFFING AND PATIENT CARE SERVICES (DOLLARS IN THOUSANDS) =================================================================================================================================== THREE MONTHS ENDED NINE MONTHS ENDED ----------------------------------------------- ------------------------------------------------ SEPTEMBER, 1997 SEPTEMBER, 1996 SEPTEMBER, 1997 SEPTEMBER ,1996 ------------------- ------------------- ------------------- --------------------- Revenue $11,122 100.0% $9,781 100.0% $32,166 100.0% $28,353 100.0% Cost of Revenue 6,784 61.0% 5,932 60.6% 19,792 61.5% 16,844 59.4% ------- ------ ------- ------- Gross Margin 4,338 39.0% 3,849 39.4% 12,374 38.5% 11,509 40.6% Gen. & Admin. 3,047 27.4% 4,008 41.0% 8,221 25.6% 11,625 41.0% ------- ------ ------- ------- Operating Income $ 1,291 11.6% $ (159) (1.6)% $ 4,153 12.9% $ (116) (0.4)% ======= ====== ======= ======= ====================================================================================================================================
10
==================================================================================================================================== MANAGEMENT SERVICES (DOLLARS IN THOUSANDS) ==================================================================================================================================== THREE MONTHS ENDED NINE MONTHS ENDED ----------------------------------------------- ----------------------------------------------- SEPTEMBER, 1997 SEPTEMBER, 1996 SEPTEMBER, 1997 SEPTEMBER, 1996 -------------------- ------------------- ------------------ -------------------- Revenue $1,255 100.0% $ 720 100.0% $3,862 100.0% $2,080 100.0% Cost of Revenue 134 10.7% 549 76.3% 1,786 46.2% 1,429 68.7% ------ ----- ------ ------ Gross Margin 1,121 89.3% 171 23.8% 2,076 53.8% 651 31.3% Gen. & Admin. 434 34.6% 279 38.8% 1,019 26.4% 689 33.1% ------ ----- ------ ------ Operating Income $ 687 54.7% $(108) (15.0)% $1,057 27.4% $ (38) (1.8)% ====== ===== ====== ====== ====================================================================================================================================
==================================================================================================================================== OUTPATIENT SURGERY (DOLLARS IN THOUSANDS) ==================================================================================================================================== THREE MONTHS ENDED NINE MONTHS ENDED ----------------------------------------------- ------------------------------------------------ SEPTEMBER, 1997 SEPTEMBER, 1996 SEPTEMBER, 1997 SEPTEMBER, 1996 ------------------- ------------------ -------------------- ------------------ Revenue $1,741 100.0% $1,261 100.0% $5,355 100.0% $3,214 100.0% Cost of 699 40.1% 361 28.6% 2,011 37.6% 896 27.9% Revenue ------ ------ ------ ------ Gross Margin 1,042 59.9% 900 71.4% 3,344 62.4% 2,318 72.1% Gen. & Admin. 981 56.3% 555 44.0% 2,827 52.8% 1,377 42.8% ------ ------ ------ ------ Operating $ 61 3.5% $ 345 27.4% $ 517 9.7% $ 941 29.3% Income ====== ====== ====== ====== ====================================================================================================================================
LIQUIDITY AND CAPITAL RESOURCES At September 30, 1997 the Company had revolving bank lines of credit of $5,500,000 and $750,000, both bearing interest at prime rate plus 1%. As of September 30, 1997, $1,022,415 was available under the combined lines of credit. The lines of credit are collateralized by 80% of eligible receivables in staffing and outpatient surgery, 75% of eligible receivables in home health care, and 80% of physician notes receivable. Eligible receivables are defined principally as accounts that are aged less than 90 days for staffing and outpatient surgery and 120 days for home health care. The Company's operating activities provided $1,095,233 during the first nine months of 1997, whereas such activities provided $679,192 in cash during the first nine months of 1996. This change is due to a decrease in the rate of growth of accounts receivables from improved collections of amounts due. Cash from operating activities improved even with substantial reduction of accounts payable and increase in prepaid expenses. Net cash used in investing activities remained relatively constant with $1,283,611 and $1,292,392 used for the nine months ending September 30, 1997 and 1996 respectively. Purchases of furniture, fixtures and equipment decreased $494,674; however, $465,000 was used to purchase a home medical equipment entity, Care Medical and Mobility. Net cash provided by financing activities decreased to $1,740,856 from $2,126,649 for the nine months ending September 30, 1997 and 1996, respectively. The change is due to a decrease in the Company's borrowing on its lines of credit offset by proceeds from a private stock placement. 11 At September 30, 1997, the Company had working capital of $2,214,864 and stockholder's equity of $6,677,677. The Company's ratio of total liabilities to equity at September 30, 1997 was 2.12 to 1.0. The Company's sources of external and internal financing are limited. The Company may need to obtain additional financing in order to meet future capital requirements. In April 1997, AMEDISYS issued a total of 150,000 shares of common stock for net proceeds of $830,967 and in August, 1997 issued 115,518 shares of common stock in connection with the acquisition of Care Medical and Mobility. To date, the Company has used no other source of external financing. SEASONALITY The demand for the Company's home health care and management services are not typically influenced by seasonal factors. However, demand for supplemental staffing services is affected by variations in the hospital census at various times of the year. Outpatient surgery services also experience seasonal fluctuations. PART II. OTHER INFORMATION - ----------------- ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION On September 1, 1997 AMEDISYS, Inc. appointed James P. Cefaratti to the position of President and Chief Operating Officer. William F. Borne, founder of AMEDISYS, Inc., formerly held the titles of Chairman, Chief Executive Officer and President. He remains Chairman and Chief Executive Officer. Mr. Cefaratti has extensive senior management experience in the health care industry. He has served as president and chief executive officer in numerous entrepreneurial organizations and in senior management with major corporations including National Medical Care, a subsidiary of W.R. Grace, and Foster Medical Corporation, a subsidiary of Avon Products. He recently served as Chief Executive Officer of Home Intensive Care. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None 12 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 hereunto duly authorized. AMEDISYS, INC. By: /s/ MITCHEL G. MOREL ---------------------------------------- Mitchel G. Morel, Chief Financial Officer Principal Financial and Accounting Officer DATE: November 13, 1997 13 EX-27 2 EXHIBIT 27
5 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 2,656,644 0 9,125,109 1,169,270 736,782 13,008,703 4,670,628 2,616,211 21,020,845 10,793,839 0 0 0 2,850 6,674,827 21,020,845 41,382,641 41,382,641 23,589,306 15,854,888 514,541 695,115 619,818 1,423,906 528,280 898,005 0 0 0 898,005 $.33 0
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