-----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, TNbnV8QD62PHotUXgBekE454qa+sB19qmnTzaXEZCem3cv2cg3CzfUuBe2tY8fmb 8MvtItGuAbdswBH1mJdkUQ== 0000899243-98-001191.txt : 19980619 0000899243-98-001191.hdr.sgml : 19980618 ACCESSION NUMBER: 0000899243-98-001191 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19980617 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/A SEC ACT: SEC FILE NUMBER: 000-24260 FILM NUMBER: 98649932 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 - -----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, I+INq9QTf/jbj4W3ItF3jBTQOkgicr9DOTYOH4NF+UI9ZKv4AqanFyF4ZIcEK5y/ 0ZzqhoJvN9JOZEeJYQZ6Cg== 0000899243-98-001191.txt : 19980618 0000899243-98-001191.hdr.sgml : 19980618 ACCESSION NUMBER: 0000899243-98-001191 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19980617 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/A SEC ACT: SEC FILE NUMBER: 000-24260 FILM NUMBER: 98649932 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/A 1 FORM 10-Q/A U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A - - -------------------------------------------------------------------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 March 31, 1997: 2,584,549 shares PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheet as of March 31, 1997 and December 31, 1996..................................................3 Consolidated Statements of Income for the Three Months ended March 31, 1997 and 1996......................................4 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1997 and 1996......................................5 Notes to Consolidated Financial Statements.........................6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................6 General............................................................7 Industry Overview..................................................8 Company Overview of Business Segments..............................8 Health Care Provider Services Outpatient Surgery........................................8 Home Health Care..........................................9 Supplemental Staffing.....................................9 Management Services................................................9 Home Health Care Management Services......................9 Physician Practice Management Services....................10 FutureCare................................................10 Results of Operations..............................................10 Liquidity and Capital Resources...........................12 Inflation.................................................13 Seasonality...............................................13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS..................................................13 ITEM 2. CHANGES IN SECURITIES..............................................13 ITEM 3. DEFAULTS UPON SENIOR SECURITIES....................................13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................13 ITEM 5. OTHER INFORMATION..................................................13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................................13 2 Amedisys, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS as of March 31, 1997 and December 31, 1996 (Unaudited) March 31, December 31, ASSETS 1997 1996 Current Assets: Cash ......................................... $ 317,246 $ 103,165 Accounts Receivable, Net of Allowance for Doubtful Accounts of $690,379 in March 1997 and $732,166 in Dec 1996 ..... 8,943,255 8,270,982 Prepaid Expenses ............................. 388,382 264,125 Other Current Assets ......................... 537,544 515,993 ----------- ----------- Total Current Assets ..................... 10,186,427 9,154,265 Notes Receivable: Related Parties .............................. 215,425 190,208 Other Property, Plant and Equipment, Net ............. 4,747,613 4,609,718 Other Assets, Net .............................. 2,965,873 2,904,596 ----------- ----------- Total Assets ............................. $18,115,338 $16,858,787 =========== =========== LIABILITIES Current Liabilities: Notes Payable ................................ $ 5,053,228 $ 4,378,688 Current Portion of Long-Term Debt ............ 779,266 779,266 Accounts Payable ............................. 1,097,104 1,416,259 Accrued Expenses: Payroll and Payroll Taxes .................. 980,703 1,033,250 Income Taxes ............................... 148,269 0 Insurance .................................. 827,490 642,607 Other ...................................... 861,813 882,627 ----------- ----------- Total Current Liabilities .............. 9,747,873 9,132,697 Notes Payable to Related Parties ............... 929,252 943,592 Long-Term Debt ................................. 2,585,541 2,279,448 ----------- ----------- Total Liabilities ...................... 13,262,666 12,355,737 ----------- ----------- Minority Interest .............................. 176,562 188,269 ----------- ----------- STOCKHOLDERS' EQUITY Common Stock ................................. 2,585 2,576 Additional paid-in capital ................... 1,976,101 1,915,514 Stock Subscriptions Receivable ............... (73) (266) Retained Earnings ............................ 2,697,497 2,396,957 ----------- ----------- Total Stockholders' Equity ............... 4,676,109 4,314,781 ----------- ----------- Total Liabilities and Stockholders' Equity ............................... $18,115,338 $16,858,787 =========== =========== See accompanying notes to financial statements. 3 Amedisys, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME for the three months ended March 31, 1997 and 1996 (Unaudited)
March 97 Income: Service revenue ............................................ $13,384,717 100.0% Cost of service revenue .................................... 7,879,172 58.9% ----------- Gross margin ............................................. 5,505,545 41.1% ----------- General and administrative expenses: Salaries and benefits ...................................... 2,734,469 20.4% Other ...................................................... 2,156,361 16.1% ----------- Total general and administrative expenses ................ 4,890,830 36.5% ----------- Operating income ......................................... 614,716 4.6% ----------- Other income and expense: Interest income ............................................ 2,361 0.0% Interest expense ........................................... (184,275) (1.4)% Miscellaneous .............................................. 17,862 0.1% ----------- Total other income and expenses .......................... (164,052) (1.2)% ----------- Income before income taxes and minority interest ............. 450,664 3.4% Provision (Benefit) for estimated income taxes ............... 161,831 1.2% ----------- Income before minority interest .............................. 288,833 2.2% Minority interest in consolidated subsidiary ................. 11,707 0.1% ----------- Net income ................................................. $ 300,540 2.2% =========== Earnings per common share .................................... $ 0.12 ===========
4 Amedisys, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months ended March 31, 1997 and 1996 (Unaudited)
March 97 Cash Flows from operating activities: Net Income ............................................................ $ 300,540 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization ..................................... 309,629 Provision for bad debts ........................................... 183,565 Minority interest in affiliated company ........................... (11,707) (Gain) on disposal of property and equipment ...................... 0 Loss on sale of marketable securities ............................. 1,497 Changes in assets and liabilities: (Increase) in accounts receivable ............................... (855,838) (Increase) decrease in prepaid expenses ......................... (124,257) (Increase) in other current assets .............................. (21,551) (Increase) in other assets ...................................... (112,355) Increase (decrease) in accounts payable ......................... (319,154) Increase (decrease) in accrued expenses ......................... 320,478 ---------- Net cash (used in) operating activities .................... (329,153) ---------- Cash flow from investing activities: Purchase of furniture, fixtures & equipment ........................... (397,082) Proceeds from sale of furniture, fixtures & equipment ................. 0 (Increase) in notes receivable from related parties ................... (25,217) ---------- Net cash (used in) investing activities ..................... (422,299) ---------- Cash flow from financing activities: Net increase in borrowings on line of credit .......................... 674,539 Payments on notes payable ............................................. (134,107) Proceeds from note payables ........................................... 439,248 (Decrease) in note payable to related parties ......................... (14,339) Decrease in stock subscriptions ....................................... 192 ---------- Net cash provided by financing activities ................... 965,533 ---------- Net increase (decrease) in cash and cash equivalents .................... 213,081 Cash and cash equivalents at December 31, 1996 and 1995 ................. 103,165 ---------- Cash and cash equivalents at March 31, 1997 and 1996 .................... $ 317,246 ========== Supplemental disclosures of cash flow information: Cash payments for: Interest .......................................................... $ 180,793 ========== Income taxes ...................................................... $ 15,240 ==========
5 1. UNAUDITED FINANCIAL INFORMATION The financial information as of March 31, 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. INCOME TAXES The subsidiaries in which the Company owns interests greater that 80% file a consolidated federal income tax return. The primary care subsidiaries file individual income tax returns. 3. SUBSEQUENT EVENTS As of April 17, 1997, AMEDISYS completed a placement of common stock with Plymouth Partners, LP of Overhill Avenue, Rye, New York 10580. According to the terms of the placement, the Company issued 37,500 shares of Common Stock to Plymouth Partners, LP, pursuant to a shelf registration statement on Form S-1, SEC file number 333-08329 which was filed on July 18, 1996, amended October 25, 1996 and declared effective October 28, 1996, for gross proceeds of $262,500. The Company issued 112,500 shares of Common Stock to Plymouth Partners, LP, pursuant to a shelf registration statement on Form S-1, SEC file number 333-08329, for gross proceeds of $675,000. The net proceeds from both of these offerings was $831,117. 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. 6 GENERAL AMEDISYS, INC. ("Company"), provides health care and management services. Health care provider services include home health care, temporary medical staffing and outpatient surgery. The Company is also developing a Management Services Organization ("MSO") which offers a comprehensive scope of management services to physician practices, Independent Practice Associations and home health care agencies. The Company provides services through a network of subsidiaries, which consist of the following: AMEDISYS STAFFING SERVICES, INC. ("ASS") supplies highly trained critical care registered nurses and licensed practical nurses to all types of health care facilities. Independent contract nurses are utilized to meet the staffing needs of client health care facilities. AMEDISYS NURSING SERVICES, INC. ("ANS") is an employee-based staffing agency that provides a variety of relief personnel such as registered and licensed practical nurses, and certified nurses' aides for staff relief in all types of health care facilities. AMEDISYS SPECIALIZED MEDICAL SERVICES, INC. ("ASM"), AMEDISYS HOME HEALTH, INC. AND AMEDISYS HOME HEALTH, INC. OF TEXAS provide skilled nursing care, home health aides, physical therapy, occupational therapy, speech therapy and medical social workers to homebound patients. AMEDISYS SURGERY CENTERS, L. C. ("ASC") operates two outpatient surgery centers in Houston, Texas, and one surgery center in Hammond, Louisiana, which commenced operation in November, 1996. AMEDISYS PHYSICIAN SERVICES, INC. ("APS") provides management of physician practices and networks including Independent Practice Associations. APS also operates a laboratory. AMEDISYS MANAGEMENT SERVICES ORGANIZATION D/B/A AMEDISYS RESOURCE MANAGEMENT - Provides management of home health agencies. The Company currently operates three outpatient surgery centers. The two centers in Houston are wholly owned by AMEDISYS and the recently completed center in Hammond, Louisiana is a joint venture with local physicians in which the Company owns 56%. The Company recently began construction on a fourth center, in the Houston area, which will be majority owned by physicians with the Company as a 34% shareholder and providing management services. This center is anticipating beginning operations in December, 1997. The Company operates 17 home health care sites in Louisiana, Texas and North Carolina. All Medicare sites are accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAHO) which is the nationally recognized quality standard in the home health care industry. As part of the management program for home health care agencies the Company is leasing its proprietary software system which meets Medicare financial reporting and clinical data collection requirements. The system was introduced in July 1996 after three years of development and field testing. Temporary medical staffing offices operate in eight states with a concentration of sites in Louisiana and Texas. Private duty services were added in 1996 to offices which had dual operations of home health care and staffing. Physician services began in 1994 with the acquistion of an Internal Medicine Group in Southeast Louisiana. The Company pursued the equity model of physician practice management and acquired and managed several primary care practices. In 1995, AMEDISYS converted its model to an MSO system which is more profitable and allows more flexibility for the physicians and the Company. The Company is also developing and managing Independent Practice Associations and developing a statewide Preferred Provider Organization in Louisiana which it will manage and "rent" to "MCOs". 7 INDUSTRY OVERVIEW The Company believes that the health care industry is in a period of rapid change being driven by employers and insurers who want to reduce the cost of providing health care benefits to their employees and by federal and state governments who want to decrease spending on Medicare and Medicaid programs. Managed care is emerging as a possible solution. Managed Care Organizations ("MCOs") include Health Maintenance Organizations ("HMOs") and Preferred Provider Organizations ("PPOs"). Large self insured employer groups are also trying to reduce their health care costs by negotiating with provider groups for capitated or discounted fees. The Company recognizes the industry trend towards cost reduction and has positioned its services as cost effective alternatives to hospitalization. Hospital services are the most costly in the health care delivery system. Home health care and outpatient surgery centers can provide many of the services formerly found in the hospital setting at a lower cost. The Company's management services are focused on the physician and home health care industries to help independent providers become cost effective and competitive during an era of consolidation and corporate acquistions. Since the Company has business segments which reduce the cost of health care and relationships with physician groups, an opportunity to form integrated networks and/or service group agreements is present in some markets. These strategic alliances, networks or service groups are attractive to MCOs since they provide economies of scale, large provider panels and "one stop shop" convenience for the patients. The Company operates such agreements according to its understanding of the requirements and restrictions of the Stark legislation. This year Congress is considering several bills which may change the cost reimbursement nature of home health care in the Medicare system. A prospective pay system which allows efficient home health care operators to retain a portion of the profits is being considered in the current Congressional session. The Company is positioned for any such legislative change. Such a change would also drive growth in the Company's MSO since many home health care agencies would need such services to adapt to such a significant change in the Medicare payment system. COMPANY OVERVIEW OF BUSINESS SEGMENTS HEALTH CARE PROVIDER SERVICES: OUTPATIENT SURGERY The Company currently operates two centers in the Houston, Texas area and one in Hammond, Louisiana which is a start-up and a joint venture with local physicians. The outpatient center in Hammond is a model which can be replicated in various markets from a physical plant, clinical and business perspective. The Company began construction on a fourth center in May, 1997 in the Houston area. The outpatient surgery strategy of the Company fits the health care delivery system model and offers an additional platform for the the Company's physician practice management services. In addition, this business segments' margins are higher than the Company's home health care and medical staffing components. 8 The Company believes that the industry will grow because technological advances enable more procedures to be performed in this setting at a significantly lower cost than in a hospital surgical suite. Physicians who participate in the centers can also have ownership and share in the profits generated from facility fees. HOME HEALTH CARE Home health care is one of the fastest growing segments of the Company's business mix. The company has 17 home health care offices. Home health care visits for the company increased 40% from 1995 to 1996. The home health care industry is continuing to grow. Growth is driven by payors who want to reduce hospital stays by utilizing a cost effective alternative and by patients who prefer to be treated at home. AMEDISYS was initially positioned as a specialty home health care service of highly qualified and specialized nurses who could provide quality care for acutely ill patients at home. The Company continues to provide these services and has expanded to traditional home care services as well. The Company has also positioned itself to handle changes in the home health care business by establishing systems that are necessary to succeed in the new health care environment. One of those key developments is its proprietary software system which meets the multifaceted reporting requirements of Medicare and another is achieving JCAHO accreditation with commendation. SUPPLEMENTAL STAFFING The Company has 12 supplemental staffing offices and has successfully competed in the industry for 13 years. The Company built its reputation on providing highly qualified specialty nurses but has since expanded to providing practical and vocational nurses, therapists and certified nurse aides. A clerical staffing program is being introduced into three test markets this year which will include general office and clerical services, as well as, health care related services. The Company has also expanded client facilities and currently staffs hospitals, nursing homes, assisted living centers, physician offices and other home health care agencies. The Company distinguishes itself from its competitors in the following ways: (1) the ability to recruit and staff specialty nurses in all of its markets; (2) 24-hour access to staffing coordinators using computerized scheduling and information systems; (3) rigorous orientation and screening procedures; and (4) a proprietary software scheduling program which generates a faster scheduling response time than traditional methods. MANAGEMENT SERVICES: HOME HEALTH CARE MANAGEMENT SERVICES AMEDISYS offers management services to home health care agencies. The scope of services provided by the Resource Management division include financial systems development, general agency management, business development, management information system support, and development of quality improvement programs. Services also include a complete program which assists a home health agency with JCAHO accreditation preparation. AMEDISYS home health software system, Analytical Medical Systems (AMS), is a comprehensive medical software system designed to monitor Medicare cost reimbursement, decrease collection turnaround time, and provide accurate utilization reports. Agencies can contract with the Company for the software system and/or a more comprehensive management package. AMEDISYS Resource Management distinguishes itself from other management companies by (1) the availability of the software system, (2) the experience and reputation of the professional staff, and (3) the knowledge of the regulatory environment and trends among the private and governmental payors to shift to managed care. The consolidation of the home health care delivery system and the emergence of managed care in the Medicare system should continue to drive growth in this industry. 9 PHYSICIAN PRACTICE MANAGEMENT SERVICES Physician Practice Management services physician group practices and Independent Physician Associations. In the AMEDISYS system, the physician can remain independent but have access to information and business systems which allow the practice to remain competitive. The physician can choose to use the Company's management services or to join an Independent Practice Association developed and /or managed by the Company. Leverage in negotiating contracts with managed care organizations is a key reason physicians belong to Independent Practice Associations. Negotiating strength is particularly attractive in capitated (prepaid) managed care contracts. According to the Medical Group Management Association ("MGMA"), 55% of all group practices derived revenue from at risk HMO/PPO contracts in 1994--up from 53% in 1993. Group practices derived 15% of total medical revenue from at-risk managed care contracts in 1994, up slightly from 14% in 1993. AMEDISYS believes this trend will accelerate in the next five years as MCOs gain market share. On May 1,1996, the Company signed an agreement with the Louisiana Health Care Authority, the Louisiana state agency which controls the public hospital system in Louisiana, to manage physician services at a state hospital in Lake Charles, Louisiana. Under the agreement the Company coordinates the services of the inpatient staff with community physicians working in outpatient clinics. The arrangement is a unique public-private partnership which opens access to a full range of medical services in the community. The agreement began July 1, 1996 for a three year term. The maximum amount for the contract period totals approximately $11 million against which monthly invoices are applied. RESULTS OF OPERATIONS The Company continues to show strong growth in revenue for the three months ended March 31,1997 compared to the same period last year. The Company derives revenues from provider and management services in health care. Provider services include home health care, supplemental medical staffing and outpatient surgery. Management services include physician practice and home care management. The Company's proprietary software system provides the foundation for the Company's home care management program. 10 The Company's revenue increased by 32% to $13,384,717 for the first three months ended March 31,1997 compared to $10,116,199 in the first three months ended March 31,1996. This increase in revenue reflects growth in each business segment. The largest increase, as a percentage of the previous year, was from home health care management which started operations in 1996. Its revenue grew significantly as more aggressive marketing strategies were implemented and the software system was introduced in January 1997. Outpatient surgery revenues increased 108% over the same period last year due to the opening of the St. Luke's SurgiCenter in Hammond, Louisiana in November, 1996. Supplemental medical staffing increased its revenue by 58% from the same period in 1996. Its growth is attributable to increasing the scope of services including private duty, as well as, increased demand for specialty nursing services in hospitals whose staffs were downsized during consolidation and restructuring activities. Home health care revenue showed growth of 4% although patient visits increased 20%. Home health care revenue is based on cost reimbursement rates. The Company costs have been controlled in order to make it more competitive for private and managed care patients. Gross margins decreased by 3% to 41% of revenue or $5,505,546 in the period ended March 31,1997 from 44% of revenue or $ 4,499,099 for the same period in 1996. The decrease is attributable to the following factors: (1) a physician services cost plus contract which is below the normal gross margins of the Company (2) reduced general and administrative cost in home health care which is cost reimbursed, and (3) St. Lukes SurgiCenter was staffed to meet Medicare survey requirements. General and administrative expenses decreased by 5% to 36% of revenue or $4,890,830 for the period ended March 31,1997 from 41% of revenue or $4,138,826 for the same period in 1996. The reductions in general and administrative expenses were primarily in the supplemental staffing and home health care divisions due to internal controls and cost reductions. These expenses were approximately 7% lower as a percentage of revenue for staffing services and approximately 3% lower as a percentage of revenue in the home health care division for the periods ended March 31, 1997 and 1996. Outpatient surgery increased general and administrative expenses by 3% of revenue, an increase of $500,032. The increase was due to the opening of the St. Lukes facility in Hammond. St. Lukes' salaries were in place prior to a full patient volume to meet Medicare survey standards and to start-up the center with proper quality standards. The Company's net income increased to $300,540 or $.12 per share from $194,169 or $.08 per share in the periods ended March 31,1997 and 1996, respectively. The increased net income is attributable to increased revenues in all of the Company's business segments, internal controls on costs and internal goals which are linked with a budgetary process. An incentive system was also implemented to reward managers and their staffs who reach their goals. The Company also benefited from the investment made in the previous year in upgrading outpatient surgery centers and the restructuring of the home health care and staffing operations and the development of management services for physicians, physician networks and home health care agencies. The Company's software system was three years in development and this year the Company is realizing revenues from leasing the system in connection with its management services to home health care providers. OUTPATIENT SURGERY (DOLLARS IN THOUSANDS) ================================================================================ THREE MONTHS ENDED MARCH, 1997 MARCH, 1996 Revenue .......................... $1,610 100.0% $775 100.0% Cost of Revenue .................. 570 35.4% 223 28.8% ------ ---- Gross Margin ..................... 1,040 64.6% 552 71.2% General & Administrative ........ 923 57.3% 423 54.5% ------ ---- Operating Income ................. $ 117 7.3% $129 16.7% ====== ==== 11
NURSING SERVICES (DOLLARS IN THOUSANDS) ==================================================================================================================== HOME HEALTH CARE MEDICAL STAFFING ==================================================================================================================== THREE MONTHS ENDED MARCH 1997 MARCH 1996 MARCH 1997 MARCH 1996 Revenue $ 6,248 100.0% $6,017 100.0% $ 4,296 100.0% $2,716 100.0% Cost of Revenue 3,633 58.2% 3,312 55.1% 2,868 66.7% 1,816 66.9% ------ ----- ------ ----- Gross Margin 2,615 41.8% 2,704 44.9% 1,427 33.2% 900 33.1% Gen. & Admin. 1,978 31.7% 2,067 34.4% 543 12.6% 550 20.3% ------ ----- ------ ----- Operating Income $ 637 10.2% $ 637 10.6% $ 884 20.6% $ 350 12.8% ======= ====== ======= ====== ==================================================================================================================== MANAGEMENT SERVICES (DOLLARS IN THOUSANDS) PHYSICIAN SERVICES HOME CARE MANAGEMENT ==================================================================================================================== THREE MONTHS ENDED MARCH 1997 MARCH 1996 MARCH 1997 MARCH 1996 Revenue $ 848 100.0% $ 516 100.0% $ 382 100.0% $ 91 100.0% Cost of Revenue 730 86.0% 265 51.4% 78 20.4% 0 .0% ----- ----- ------ ----- Gross Margin 118 14.0% 251 48.6% 304 79.7% 91 100.0% Gen. & Admin. 160 18.9% 172 33.2% 136 35.6% 13 14.4% ----- ----- ----- ----- Operating Income $ (42) -4.9% $ 79 15.4% $ 168 44.1% $ 78 85.4% ====== ======= ====== ===== ====================================================================================================================
LIQUIDITY AND CAPITAL RESOURCES At March 31, 1997 the Company had a revolving bank line of credit of $5,500,000 bearing interest at the lender's prime rate. As of March 31, 1997, $446,772 was available under the line of credit. The line of credit is collateralized by 80% of eligible receivables in staffing and outpatient surgery and 75% in home health care. 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. Net cash used in operating activities decreased from $610,951 in the three months ended March 31,1996 to $330,153 in the three months ended March 31, 1997. This change is primarily attributable to increased net income and a decrease in accounts receivables. Net cash used in investing activities decreased from $707,978 in the three months ended March 31, 1996 to $422,299 in the three months ended March 31, 1997. This decrease is attributable to reduced purchases of furniture, fixtures and equipment. Net cash provided by financing activities increased from $893,880 to $965,533 for the three months ended March 31, 1996 and 1997, respectively. The change is primarily due to a decrease in notes payable. 12 At March 31,1997, the Company had working capital of $438,554 and stockholder's equity of $4,676,109. The Company's ratio of total liabilities to equity at March 31,1997 was 2.84 to 1.0. The Company's sources of external and internal financing are limited. The Company may need to obtain additional financing, either through public or private securities offerings or borrowing, in order to meet future capital requirements. AMEDISYS completed a placement with Plymouth Partners, LP to subsequently issue 150,000 shares of Common Stock for $937,500. To date, the Company has no other source of external financing. INFLATION The Company does not believe that inflation has had a material effect on its results of operations. The Company expects that any increase in costs attributable to inflation in the future would be offset by an increase in fees charged for services. SEASONALITY The demand for the Company's home health care services is 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. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Reimbursement for home health care services to patients covered by the Medicare program is based on cost reimbursement rates. Final reimbursement is determined after submission of annual cost reports and audits thereof by the fiscal intermediaries. At this time, the fiscal intermediary is auditing two of the Company's providers. Management believes that the ultimate resolution of such matters will not have a significant effect on the Company's financial position or results of operations. 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 May 9, 1997, Irv Gregory resigned his position as President of the Company's Outpatient Surgery Division and as a member of the Board of Directors of the Company. Mr. Gregory resigned to pursue other interests. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None 13 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 thereunto duly authorized. AMEDISYS, INC. By: /s/ MITCHEL G. MOREL ------------------------------- Mitchel G. Morel Chief Financial Officer Principal Financial and Accounting Officer June 17, 1998 14 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1997 MAR-31-1997 317,246 0 8,943,255 690,379 537,544 10,186,427 4,747,613 2,302,460 18,115,338 9,747,873 0 0 0 2,585 4,673,524 18,115,338 13,384,717 13,384,717 7,879,172 4,890,830 (164,052) 183,565 (234,353) 450,664 161,831 300,540 0 0 0 300,540 .12 0
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