-----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, HIQxFSROi71DRhltTQ5rn7LXHpqeebBzILOu8DacUseNgmxQkSKcfyQRbdpMimsv ZLd73FVI+Kw5pP6KT45O1A== 0000915127-04-000032.txt : 20040512 0000915127-04-000032.hdr.sgml : 20040512 20040512161322 ACCESSION NUMBER: 0000915127-04-000032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040512 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHC INC /MA/ CENTRAL INDEX KEY: 0000915127 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 042601571 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22916 FILM NUMBER: 04799588 BUSINESS ADDRESS: STREET 1: 200 LAKE ST STE 102 CITY: PEABODY STATE: MA ZIP: 01960 BUSINESS PHONE: 9785362777 MAIL ADDRESS: STREET 1: 200 LAKE ST STREET 2: STE 102 CITY: PEABODY STATE: MA ZIP: 01960 8-K 1 k8_051204.txt FORM 8K REPORT DATED 02/11/04 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): May 12, 2004 PHC, Inc. (Exact Name of Registrant as Specified in its Charter) Massachusetts (State of Incorporation or Organization) 0-22916 04-2601571 (Commission File Number) (I.R.S. Employer Identification No.) 200 Lake Street, Suite 102, Peabody, Massachusetts 01960 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (978) 536-2777 -- 1 -- Item 12. Results of Operations and Financial Condition The registrant is providing the following information pursuant to Item 12. The information being provided consists of the attached news release relating to the registrants results of operations and financial condition for the quarter and nine-month period ended March 31, 2004. -- 2 -- 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. PHC, INC. Date: May 12, 2004 By: /s/ Bruce A. Shear Bruce A. Shear President -- 3 -- EX-99 2 exh_99.txt FINANCIAL RESULTS FOR 3RD QUARTER OF FISCAL 2004 Exhibit 99 PHC, INC. ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER OF FISCAL 2004 FOR IMMEDIATE RELEASE Company Contact: Investor Relations Contact: PHC, Inc. Hayden Communications, Inc. Bruce A. Shear Matthew Hayden 978-536-2777 843-272-4653 >> 3rd quarter revenues increase 10% compared to third quarter of 2003 >> Research activities reorganized under Pivotal Research Centers name Peabody, MA, May 13, 2004 -- PHC, Inc., d.b.a. Pioneer Behavioral Health (OTC Bulletin Board: PIHC), a leading provider of inpatient and outpatient behavioral health services, today announced financial results for the third quarter and nine-month period ended March 31, 2004. The results for the quarter and nine-month period do not include the results from Pivotal Research Centers, the operations of which Pioneer acquired in April, 2004. The results include $947,500 in one-time expenses related to the acquisition of Pivotal, and the disposition of a lawsuit the Company inherited from a previous acquisition. Without these one time expenses the Company would have reported an operating profit for both reporting periods. Revenues for the third quarter increased 10 percent to $6.5 million from the $5.9 million reported in the fiscal third quarter of 2003. Revenue from the Company's Wellplace division increased 86 percent to $733,411 from $393,328 reported for the third quarter of last year. This increase in revenue is due to the start of the Michigan call center contract in March 2003 and the smoking cessation contract for the State of Kansas, which began in July 2003. Net loss applicable to common shareholders for the quarter, which includes a number of one time expenses, was $845,265, or $0.06 per diluted share, compared to net income of $130,811, or $0.01 per diluted share reported in the year ago period. Revenues for the nine-month period ended March 31, 2004 increased nine percent to $19.1 million from $17.5 million for the comparable nine-month period in fiscal 2003. Net loss applicable to common shareholders for the nine months was $789,457, or $0.06 per diluted share, compared to net income of $797,956 or $0.05 per diluted share in the comparable period last year. The one-time expenses related to the settlement and interest expense totaled $947,500. Exclusive of these one-time events, the Company would have reported net income for the quarter of $102,235, or $0.01 per share. "The events which transpired this quarter were necessary to properly position us for both near and long-term success," commented Bruce A. Shear, Pioneer's chairman and chief executive. "We have successfully financed and completed the acquisition of Pivotal, which increases the size and profitability of the Company and significantly strengthens our pharmaceutical research division. We also successfully resolved the lawsuit brought against our North Point facility, -- 4 -- which will allow us to appropriately focus all of our attention on operations and strategic initiatives to enhance long-term shareholder value. The settlement and associated legal fees, coupled with the costs related to the debt we initially planned to use for the Pivotal acquisition have certainly impacted our results for the period, but I have no doubt whatsoever that the Company is stronger today." One-Time Expenses: During the third quarter the company spent $370,000 on legal fees, and $463,000 in a settlement regarding the medical malpractice lawsuit brought against a clinician who worked for the company's North Point Mental Health subsidiary prior to Pioneer's acquisition of North Point. As a result of this situation, the Company incurred $1,031,249 of one-time expenses during the nine months ended March 31, 2004. The Company also experienced higher than normal interest expense during the quarter related to the Company's initial plan to finance the acquisition of Pivotal primarily through debt, which resulted in the up-front expensing of $114,500 of financing costs, the amount that would have been amortized over the term of the loan. In order to fund the acquisition, it was determined that equity financing was more favorable for the company and its shareholders. As a result of this one-time expense, interest expense and financing costs for the quarter increased 72 percent to $219,116. Exclusive of this one-time expense, interest expense for the quarter would have decreased 18 percent to $104,616. Mr. Shear continued, "We continued to see strong growth in our Wellplace division, which benefited from the rollout of our services contract with Wayne County, Michigan, along with implementation of a new smoking cessation program in Kansas. The Company was recently notified that its contract with the State of Nebraska will end in May, as it has not been funded by the State for a new term. Our next initiative will be the expansion of our facilities and service centers in Michigan. While revenue from our pharmaceutical research operations declined during the quarter, we believe this trend will be reversed under the proven leadership of Dr. Louis Kirby and Mr. Michael Colombo and the Pivotal team. We have elected to consolidate our research operations under the Pivotal brand name, and we have confidence that the team will significantly broaden our opportunities in the pharmaceutical research segment." Capital Resources: Subsequent to the end of the quarter, the company offered for sale an aggregate of up to 1,918,196 shares of its Class A Common Stock and warrants to purchase up to 479,549 shares of Class A Common Stock, providing proceeds of $2,110,016 for the use in the acquisition of Pivotal Research Centers, LLC and for working capital when it was determined that debt financing terms would not be the most favorable for the Company. As a result of the financing, the Company's balance sheet remained strong. Cash increased from $494,991 to $963,737. Shareholder's equity increased 11 percent, to $2.1 million, up from $1.9 million as of June 30, 2003. The Company continued to reduce its long-term debt obligation. Long-term debt at the end of March was $2.3 million, down from $2.9 million as of June 30, 2003. About Pioneer Behavioral Health Pioneer Behavioral Health's core business provides inpatient and outpatient behavioral healthcare services. The company contracts with national insurance companies, major transportation and gaming companies to provide behavioral health services. Pioneer also owns and operates Wellplace.com, a leading Internet-based provider of behavioral health services to consumers and professionals. For more information, please visit our web site at www.phc-inc.com or www.haydenir.com. -- 5 -- This press release may include forward-looking statements that are subject to risks and uncertainties. Forward-looking statements include information about possible or assumed future results of the operations or the performance of the company and its future plans and objectives. Various future events or factors may cause the actual results to vary materially from those expressed in any forward-looking statements made in this press release (or during the associated conference call). These factors and risks are discussed in the company's annual report on Form 10-KSB for the years ended June 30, 2003 and 2002, copies of which were filed with the Securities and Exchange Commission, and in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission since October 2003. - tables follow - -- 6 -- PHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended March 31, March 31, 2004 2003 2004 2003 _________________________________________________________ Revenues: Patient care, net $ 5,583,625 $ 5,341,816 $16,323,589 $15,863,921 Contract support services 733,411 393,328 2,240,550 943,513 Pharmaceutical study 155,152 136,690 500,044 711,957 __________ ____________ ___________ ___________ Total revenues 6,472,188 5,871,834 19,064,183 17,519,391 __________ ____________ ___________ ___________ Operating expenses: Patient care expenses 3,201,426 2,638,772 9,033,540 7,877,313 Cost of contract support services 546,667 354,632 1,667,041 855,862 Provision for doubtful accounts 227,196 196,195 1,113,033 818,652 Website expenses 73,191 54,770 219,537 168,345 Administrative expenses 3,096,804 2,369,205 7,446,760 6,631,883 __________ ____________ ___________ ___________ Total operating expenses 7,145,284 5,613,574 19,479,911 16,352,055 __________ ____________ ___________ ___________ Income (loss) from operations (673,096) 258,260 (415,728) 1,167,336 __________ ____________ ___________ ___________ Other expenses: Interest income 20,888 3,119 26,070 10,943 Other income 26,059 22,830 77,472 75,206 Interest expense and financing costs (219,116) (127,324) (466,150) (419,455) __________ ____________ ___________ ___________ Total other expenses (172,169) (101,375) (362,608) (333,306) __________ ____________ ___________ ___________ -- 8 -- Income (loss) before provision for income taxes (845,265) 156,885 (778,336) 834,030 Provision for income taxes -- 26,074 11,121 36,074 __________ ____________ ___________ ___________ Income (loss) applicable to common shareholders * $ (845,265) $ 130,811 $ (789,457) $ 797,956 __________ ____________ ___________ ___________ Income (loss) per share information: Basic income per common share $ (0.06) $ 0.01 $ (0.06) $ 0.06 __________ ____________ ___________ ___________ Basic weighted average number of shares outstanding 14,402,988 14,099,929 14,149,261 13,963,138 __________ ____________ ___________ ___________ Diluted income per common share $ (0.06) $ 0.01 $ (0.06) $ 0.05 __________ ____________ ___________ ___________ Diluted weighted average number of shares outstanding 14,402,988 14,814,570 14,149,261 14,577,540 __________ ____________ ___________ ___________ * Includes one-time expenses of $947,500
-- 9 -- BALANCE SHEET HIGHLIGHTS March 31st June 30th 2004 2003 Cash $ 963,737 $494,991 Total Current Assets 7,287,710 6,145,489 Net Property and Equipment 1,296,454 1,295,113 Total Assets $ 10,537,082 $ 9,411,723 Total Current Liabilities $7,934,987 $ 5,409,312 Total Long Term Debt 432,301 2,030,285 Total Liabilities $8,390,950 $ 7,476,466 Shareholder's Equity $2,146,132 $ 1,935,257 Total Liabilities and Equity $ 10,537,082 $ 9,411,723 -- 10 -- -----END PRIVACY-ENHANCED MESSAGE-----