-----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, HKomZB4k/MdbjC5ohoWhnuclyyAMk0ozC5x2qFJ0C5lhCWFIrazjRLvo1Mdkimhn k8FEUU2lKDUEZ999xQ4ghA== 0000915127-06-000013.txt : 20060215 0000915127-06-000013.hdr.sgml : 20060215 20060215130210 ACCESSION NUMBER: 0000915127-06-000013 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060215 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060215 DATE AS OF CHANGE: 20060215 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-22916 FILM NUMBER: 06621009 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/A 1 k8a_021506.txt CORRECTED PRESS RELEASE UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A 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 15, 2006 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 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)) -- 1 -- Item 2.02. Results of Operations and Financial Condition The Registrant is providing the following information pursuant to Item 2.02. The information being provided consists of the attached corrected press release relating to the Registrant's results of operations and financial condition for the quarter ended December 31, 2005. The text of the press release is included as Exhibit 99.1 to this report. The information furnished pursuant to this Current Report on Form 8-K/A (including the exhibits hereto) shall not be considered "filed" under the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the registrant's filings under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Registrant expressly states in such filing that such information is to be considered "filed" or incorporated by reference therein. Item 9.01 Financial Statements and Exhibits (c) The following exhibit is being furnished herewith: Exhibit No. Exhibit Description 99.1 Press release text of PHC, Inc. dated February 15, 2006. -- 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: February 15, 2006 By: /s/ Bruce A. Shear ______________________ Bruce A. Shear President -- 3 -- EX-99 2 ex99_1.txt PRESS RELEASE (CORRECTED) Exhibit 99.1 /C O R R E C T I O N -- PHC, Inc. / Wednesday February 15, 10:04 am ET In the news release, PHC, Inc. (OTC Bulletin Board: PIHC - News) Announces Fiscal 2006 Second Quarter Financial Results, issued yesterday, Feb. 14, by PHC, Inc. over PR Newswire, we are advised by a representative of the company that the second paragraph, second sentence should read, "24.7 percent increase in patient days" rather than "7.9 percent increase" and the second paragraph, fourth sentence should read "tobacco cessation services which began in November of 2005 for a major government contractor" rather than "for a United States Government Agency" as originally issued inadvertently. Complete corrected release follows: PHC, INC. ANNOUNCES FISCAL 2006 SECOND QUARTER FINANCIAL RESULTS FOR IMMEDIATE RELEASE Company Contact: Investor Relations Contact: - --------------- -------------------------- PHC, Inc. Hayden Communications, Inc. Bruce A. Shear Matthew Hayden 978-536-2777 843-272-4653 >> Q2FY06 REVENUE OF $8.7 MILLION VS. $8.1 MILLION IN Q2FY05 >> Q2FY06 EPS OF $.02 VS. $.02 IN Q2 FY05 >> Q2FY06 NON-PATIENT OPERATIONS REVENUE INCREASED 5.6% VS. Q2FY05 >> YEAR-TO-DATE REVENUES UP 10.1% FROM THE SAME PERIOD LAST YEAR >> GROUND BREAKING FOR LAS VEGAS HOSPITAL SCHEDULED FOR MARCH 15, 2006 Peabody, Mass., February 14, 2006 -- PHC, Inc., d.b.a. Pioneer Behavioral Health (OTC Bulletin Board: PIHC), a leading provider of inpatient and outpatient behavioral health services and pharmaceutical research, today announced its fiscal 2006 second quarter financial results, for the quarter ended December 31, 2005. Total net revenue from operations increased 7.8 percent to $8.7 million for the three months ended December 31, 2005 compared to $8.1 million for the second quarter of fiscal 2005. Net patient care revenue increased 8.6 percent to $6.5 million from $6.0 million for the second quarter of fiscal 2005, due primarily to the addition of the 30 adjudicated juvenile beds at Detroit Behavioral Institute, which helped generate a 24.7 percent increase in patient days. Revenue from pharmaceutical studies decreased 9.2 percent to $1.1 million for the quarter compared to $1.2 million for the same quarter last year. Contract support services revenue provided by Wellplace increased 24.9 percent to $1.2 million for the quarter compared to $923,323 for the same quarter last year, which resulted from the October 2004 expansion in Wellplace's Michigan call center contract and the tobacco cessation services which began in November of 2005 for a major government contractor. Total operating expenses for the quarter increased 10.3 percent to $8.2 million from $7.4 million during the second quarter of last year. Included in this increase was a 44.8 percent increase in the Company's bad debt expense to $475,768 compared to the year-ago period related to the previously announced technical issue in the Company's billing software at its Harbor Oaks Hospital facility during the first quarter of fiscal 2006. However, bad debt expense decreased 27.6 percent sequentially or by $181,119 compared to the first quarter. The failure of the billing software during the first quarter had a residual effect on the Company's billing and receipt of collections during the second quarter, resulting in an increase in the aging of those related receivables which was responsible for an increase in the Company's overall allowance for doubtful accounts and bad debt expenses. With the billing system properly operating, management expects the reserve requirement will decrease in future quarters as collection activity returns to more normalized levels. The Company expects to collect a significant portion of the receivables in the third fiscal quarter. Also impacting operating expenses was a 13.7 percent increase in administrative expenses, resulting from increased administrative payroll and employee benefits directly related to the opening of the new 20-bed unit at the Detroit Behavioral Institute. Income from operations for the quarter was $549,060 a decrease of 19.2 percent compared to the $679,895 reported for the same period last year. Cash flow from operations for the six months ended December 31, 2005 was $873,743 and the company incurred $627,776 in capital expenditures for the six month period related to the Company's expansion. Net income applicable to common shareholders for the three months was $346,782, or $0.02 per fully diluted share, compared to $408,804, or $0.02 per fully diluted share, for the second quarter of fiscal 2005. This was derived utilizing -- 4 -- 19.3 million fully diluted shares compared to 18.5 million fully diluted shares for the respective reporting periods. The Company's provision for income taxes decreased to $64,600 with an effective tax rate of 15.7 percent compared to 15.1 percent in the year-ago period. Bruce A. Shear, Pioneer's President and Chief Executive Officer, commented, "Building off our record performance last year, the Company continues to report top-line growth and consistent profitability. We are focused on laying the foundation for our next growth phase, which will be driven by the opening of our Seven Hills Medical Complex in Henderson, Nevada, the continued expansion at the Detroit Medical Center and further revenue contributions from our new smoking cessation program. Management has worked diligently to build a foundation which will contribute to solid operating results for the balance of the year while accelerating the momentum into fiscal 2007." For the first six months of fiscal 2006, the Company reported revenue of $17.6 million, an increase of 10.1 percent compared to the $16.0 million for the first six months of last year. Net patient care revenues were $13.2 million, an increase of 8.4 percent compared to the $12.2 million reported for the first six months of last year. Pharmaceutical study revenues increased 4.8 percent to $2.4 million from the $2.3 million reported for the same period last year. Contract support services revenue increased 31.1 percent to $2.1 million from $1.6 million last year. Total operating expenses were $16.5 million, an increase of 14.1 percent from the $14.5 million for the first six months of fiscal 2005, including a 94.4 percent increase in the Company's bad debt expense to $1.13 million due to the previously mentioned software billing issue and a 17.0 percent increase in administrative expenses. Income from operations was $1.1 million, a decrease of 26.5 percent compared to the $1.6 million reported last year. Net income applicable to common shareholders for the six-month period was $730,989 or $0.04 per fully diluted share, compared with net income of $1.2 million or $0.06 per fully diluted share for the same period last year. 19.3 million and 18.3 million fully diluted shares were used to calculate earnings per share for the respective periods. The Company's balance sheet reported a current ratio of 1.6:1 on December 31, 2005. Shareholders' equity increased 9.8 percent to $10.0 million on December 31, 2005 from $9.1 million on June 30, 2005. The Company reported $1.0 million in cash as of December 31, 2005, up from $917,630 on June 30, 2005. Total receivables for the second quarter of 2006 were $8.7 million versus $5.9 million during the comparable period in fiscal 2005. Bad debt expense increased 44.8% to $475,768 for the second quarter from $328,638 last year, but were down sequentially from $656,887 recorded during the first quarter of 2006. DSO's, allowance for doubtful accounts and bad debt expense all increased due to the software problems which slowed the billing process and diverted staff attention from collections, while we reentered the receivables into the new software. Since the Company's policy is to maintain reserves based on the age of its receivables, this delay in the billing and collection process increased the amount and age of the Company's receivables therefore, increasing the reserves required by formula and the bad debt expense. The system is now operating and management expects the reserve requirement will decrease in future quarters as collection activity has now become more normalized. The Company expects bad debt expense in the third quarter to be below our previously reported levels. Mr. Shear continued, "While the accounts receivables balance reported on December 31st were still at elevated levels, we have made significant progress in the resolution of the technical issue which impacted collections at our largest inpatient facility, and required the increase in our allowance for doubtful accounts and bad debt expense. We expect the reserve requirement will decrease in future quarters as collection activity has now become more normalized and anticipate bad debt expense in the third quarter to be below our second quarter reported levels. The billing platform is operating properly and the new software system which will be implemented later this year is expected to ensure this issue will not reoccur, while providing incremental benefits to our organization." Teleconference Information The Company will conduct a conference call to discuss the fiscal 2006 second quarter results on Tuesday, February 14, 2006, at 9 a.m. Eastern Time. Interested parties within the United States can access the call by dialing 866-510-0710, and international callers may dial 617-597-5378. Please use passcode 10821525. A replay of the call also will be available until February 21, 2006 at 888-286-8010 for callers within the United States, and 617-801-6888 for international callers. Please use passcode 99645912 for the replay. This call is being webcast by CCBN, and can be accessed at PHC, Inc.'s web site at www.phc-inc.com. The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com, or by visiting any of the investor sites in CCBN's -- 5 -- Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents, at www.streetevents.com. About Pioneer Behavioral Health Pioneer Behavioral Health operates companies that provide inpatient and outpatient behavioral health care services, clinical research, Internet and telephonic-based referral services. The companies contract with national insurance companies, government payors, and major transportation and gaming companies, among others, to provide such services. For more information, please visit www.phc-inc.com or www.haydenir.com. Statement under the Private Securities Litigation Reform Act of 1995: 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. For a discussion of these factors and risks, see the company's annual report on Form 10-K for the most recently ended fiscal year. - tables follow - -- 6 -- PHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS December 31, June 30, ASSETS 2005 2005 (unaudited) _____________ ___________ Current assets: Cash and cash equivalents $ 1,028,610 $ 917,630 Accounts receivable, net of allowance for doubtful accounts of $3,173,004 at December 31,2005 and $1,956,984 at June 30, 2005 6,673,756 6,265,381 Pharmaceutical receivables 1,361,227 1,414,340 Prepaid expenses 496,153 146,988 Other receivables and advances 561,959 638,654 Deferred income tax asset 1,415,344 1,375,800 ___________ ____________ Total current assets 11,537,049 10,758,793 Accounts receivable, non-current 50,000 65,000 Other receivable 120,213 84,422 Property and equipment, net 1,901,434 1,516,114 Deferred financing costs, net of amortization of $95,557 at December 31, 2005 and $76,234 June 30, 2005 126,615 145,938 Customer relationships, net of amortization of $200,000 at December 31, 2005 and $140,000 at June 30, 2005 2,200,000 2,260,000 Goodwill 2,704,389 2,648,209 Other assets 436,317 417,172 ___________ ____________ Total assets $19,076,017 $17,895,648 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,857,219 $ 907,569 Current maturities of long-term debt 843,409 769,599 Revolving credit note 2,523,035 2,385,629 Deferred revenue 80,479 85,061 Current portion of obligations under capital leases 46,312 29,777 Accrued payroll, payroll taxes and benefits 1,321,616 1,411,653 Accrued expenses and other liabilities 601,735 1,063,189 ___________ ____________ Total current liabilities 7,273,805 6,652,477 Long-term debt 1,505,567 1,900,022 Obligations under capital leases 55,304 12,210 Deferred tax liability 244,874 229,000 ___________ ____________ Total liabilities 9,079,550 8,793,709 ___________ ____________ Stockholders' equity: Preferred Stock, 1,000,000 shares authorized, none issued or outstanding -- -- Class A common stock, $.01 par value, 30,000,000 shares authorized, 17,603,118 and 17,490,818 shares issued at December 31, 2005 and June 30, 2005, respectively 176,031 174,908 Class B common stock, $.01 par value, 2,000,000 shares authorized, 776,991 issued and outstanding December 31, 2005 and June 30, 2005 each convertible into one share of Class A common Stock 7,770 7,770 Additional paid-in capital 23,576,088 23,377,059 Treasury stock, 191,098 shares and 181,738 shares of Class A common stock at December 31 and June 30, respectively, at cost (191,700) (155,087) Accumulated deficit (13,571,722) (14,302,711) ___________ ____________ Total stockholders' equity 9,996,467 9,101,939 ___________ ____________ Total liabilities and stockholders' equity $19,076,017 $17,895,648 =========== =========== -- 7 -- PHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended December 31, December 31, 2005 2004 2005 2004 _____________________ _____________________ Revenues: Patient care, net $6,465,356 $5,951,326 $13,178,336 $12,160,825 Pharmaceutical studies 1,084,084 1,194,552 2,390,093 2,281,142 Contract support services 1,153,073 923,323 2,078,910 1,584,749 __________ __________ __________ __________ Total revenues 8,702,513 8,069,201 17,647,339 16,026,716 __________ __________ __________ __________ Operating expenses: Patient care expenses 3,292,393 2,967,320 6,554,304 6,008,302 Patient care expenses, pharmaceutical 510,834 412,144 1,073,988 802,107 Cost of contract support services 587,067 558,094 1,184,862 1,075,003 Provision for doubtful accounts 475,768 328,638 1,132,655 582,747 Administrative expenses 2,749,100 2,418,501 5,378,776 4,598,162 Administrative expenses, pharmaceutical 538,291 704,609 1,172,290 1,395,665 __________ __________ __________ __________ Total operating expenses 8,153,453 7,389,306 16,496,875 14,461,986 __________ __________ __________ __________ Income from operations 549,060 679,895 1,150,464 1,564,730 __________ __________ __________ __________ Other income (expense): Interest income 15,397 17,492 38,261 34,531 Other income 21,263 13,683 32,048 26,492 Interest expense (174,338) (229,797) (329,556) (342,852) __________ __________ __________ __________ Total other expenses, net (137,678) (198,622) (259,247) (281,829) __________ __________ __________ __________ Income before provision for taxes 411,382 481,273 891,217 1,282,901 Provision for income taxes 64,600 72,469 160,228 98,469 __________ __________ __________ __________ Net income $346,782 $408,804 $730,989 $1,184,432 ========== ========== ========== ========== Basic net income per common share $ 0.02 $ 0.02 $ 0.04 $ 0.07 ========== ========== ========== ========== Basic weighted average number of shares Outstanding 18,159,188 17,417,238 18,125,265 17,388,921 ========== ========== ========== ========== Fully diluted net income per common share $ 0.02 $ 0.02 $ 0.04 $ 0.06 ========== ========== ========== ========== Fully diluted weighted average number of shares outstanding 19,301,486 18,471,375 19,302,592 18,274,631 ========== ========== ========== ==========
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