-----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, FYVw0d/Iz+kYREeKFFqOp1b6ntHi9+Xlb+Afd/X0UtJpIhnNdPfFJXgxg8oMHdjC IWA8DsqAc9FRzF4dSqqAmg== 0001243432-06-000028.txt : 20060515 0001243432-06-000028.hdr.sgml : 20060515 20060515160746 ACCESSION NUMBER: 0001243432-06-000028 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060515 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060515 DATE AS OF CHANGE: 20060515 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: 06841158 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 k8051506.txt FORM 8K UNITED STATES 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 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)) 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 press release relating to the registrants results of operations and financial condition for the quarter ended March 31, 2006. 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 (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 May 15, 2006. -- 1 -- 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 15, 2006 By: /s/ Bruce A. Shear ________________________ Bruce A. Shear President -- 2 -- EX-99 2 exh99_1.txt REVENUES FOR FISCAL 2006 THIRD QUARTER PHC, INC. ANNOUNCES RECORD REVENUES AND NET INCOME FOR ITS FISCAL 2006 THIRD QUARTER FOR IMMEDIATE RELEASE Company Contact: Investor Relations Contact: ___________________ ___________________________ PHC, Inc. Hayden Communications, Inc. Bruce A. Shear Matthew Hayden 978-536-2777 843-272-4653 >> Q3FY06 REVENUE INCREASED 13.6% TO $10.0 MILLION VS. $8.8 MILLION OVER Q3FY05 >> Q3FY06 NET INCOME OF $950,549, $0.05 VS. $880,456, $0.05 FOR Q3FY05 >> Q3FY06 NON-PATIENT OPERATIONS REVENUE INCREASED 31.2% OVER Q3FY05 >> YEAR-TO-DATE REVENUES UP 11.3% FROM THE SAME PERIOD LAST YEAR >> COMPANY BREAKS GROUND ON LAS VEGAS HOSPITAL >> PIVOTAL RESEARCH SIGNS LARGEST CONTRACT IN COMPANY HISTORY - ENTERS PHASE I MARKET >> HARMONY AND WELLPLACE ANNOUNCE NEW CONTRACTS TO DRIVE INCREMENTAL GROWTH Peabody, Mass., May 15, 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 third quarter financial results, for the quarter ended March 31, 2006. Third Quarter and Recent Highlights: o Pioneer's Pivotal Research Centers subsidiary recently initiated a large Phase I study with a Fortune 500 global pharmaceutical company. The contract, which is the largest in Pivotal's history and Pivotal's first Major Phase I trial, involves the evaluation of a compound for the treatment of patients with Type 2 (insulin resistant) Diabetes and is anticipated to generate in excess of $1.1 million in revenue for Pivotal, and could be as much as $2 million. o Pioneer's Harmony Healthcare subsidiary was awarded a $300,000, 3-year annual contract for Member Assistance Program (MAP) and Mental Health Services for the Teamsters Local 631 Security Fund, effective June 1. The Teamsters Local 631 Security Fund is a multi-employer, Taft-Hartley Trust that provides benefits to approximately 4,900 employee participants in Southern Nevada. o Harmony was selected as the EAP and Behavioral Health provider for a number of the larger Casino's in Las Vegas. The new, multi-year contract is effective April 1, and will cover more than 6,500 total employees and more than 13,000 covered lives and is expected to generate in excess of $400,000 in incremental business additions to the existing Harmony Healthcare base of business. o Pioneer broke ground for its Seven Hills Behavioral Institute, a 60-bed acute care psychiatric and chemical dependency hospital, located in Henderson, Nevada on March 15, 2006. The facility will increase Pioneer's total number of beds to approximately 250 nationwide and is expected to contribute annualized revenue of approximately $8.5 million when fully operational. The Company expects the facility to be open during the first calendar quarter of 2007. Financial Results Total net revenue from operations increased 13.6 percent to $10.0 million compared to $8.8 million for the third quarter last year, and increased 14.4 percent sequentially compared to the $8.7 million for the second fiscal quarter -- 3 -- of 2006. Net patient care revenue increased 8.3 percent to $7.3 million from the $6.7 million for the same period last year, and increased 12.8 percent sequentially compared to the $6.5 million for the second quarter of fiscal 2006. The increase as compared to last year was primarily due to the addition of the 20 new beds at the Detroit Behavioral Institute, which contributed to a 14.5 percent increase in patient days. Revenue from pharmaceutical studies increased 38.1 percent to $1.5 million for the third quarter compared to $1.1 million for the third quarter last year. Contract support services revenue provided by Wellplace increased 22.9 percent to $1.1 million for the quarter compared to $925,000 for the same quarter last year, which resulted from the October 2005 commencement of a smoking cessation contract with a major government contractor. Total operating expenses for the quarter increased 13.6 percent to $8.8 million from $7.8 million during the third quarter of last year. Included in this increase, were expenses related to ramping up new programs and services associated with contracts signed during the previous two quarters. In addition, the Company's provision for doubtful accounts increased to $334,248 from $217,756 in the year ago period while the total allowance for doubtful accounts was $3.1 million, compared to $3.2 million as of December 31, 2005. The percentage of bad debt expense to net patient care revenue decreased from 9.8 percent for the quarter ended September 30, 2005, to 7.4 percent for the quarter ended December 31, 2005 to 4.6 percent for the current quarter ended March 31, 2006. We have made incremental progress in our collection activity as we recognized a trend in sequentially lower bad debt expense as a percentage of patient revenue since the billing issue occurred in the first quarter, confirming our belief that the strength of our payer mix is intact" commented Bruce A. Shear, Pioneer's President and Chief Executive Officer. "We expect to have our new billing system installed by the end of this year and believe it will have a positive impact on operating efficiencies and functionality over the entire organization." Other notable increases in operating expenses were a 24.2 percent in patient care expense in the Company's pharmaceutical business, a 37.1 percent increase in cost of contract support services and a 16.8 percent increase in administrative expenses as compared to the year ago period. The increase in patient care expense in the pharmaceutical business was necessary to support the Company's over 38 percent revenue growth in this segment. Contract support expenses increased due to the new services provided under the previously announced contracts. Increases in administrative expenses related to personnel for the opening of Detroit Behavioral Institute and pre-construction expenses for the Las Vegas hospital. Income from operations for the quarter was $1,112,980, above the $982,872 reported for the same period last year. Net income for the three months was $950,549, or $0.05 per fully diluted share (based on 19.2 million shares) compared to net income of $880,456, or $0.05 per fully diluted share (based on 18.7 million shares) for the third quarter last year. The net income for the third quarter of 2006 increased 174.1 percent sequentially from $346,782 reported in the second quarter of 2006. The Company's provision for income taxes was $45,427 for the quarter, versus no provision for income taxes in the prior-year period due to the Company's net operating loss carry-forwards. "The third fiscal quarter and year-to-date periods represent some of the most important strategic events in the Company's history," Mr. Shear continued. "We reported major announcements in each of our three business units, which collectively will drive future top line growth and profitability, particularly as we enter our 2007 fiscal year. We broke ground on the Seven Hills Medical Complex, our biggest project in the Company's history, a 60-bed acute psychiatric hospital in Las Vegas, and we have already secured commitments from major referral sources to ensure a rapid utilization upon opening the new facility. Similar to our Detroit expansion, we anticipate high demand and census due to the lack of adequate facilities currently available. Our Clinical research division continues to grow, supported by signing its largest contract to date. This significant Phase I contract is expected to yield revenues over a $1 million, which could ultimately be as high as $2 million. Wellplace and Harmony have also contributed with previously announced contracts that will accelerate our growth rate. As our core business continues to grow we anticipate a moderation in overall operating expenses leading to higher future levels of profit and margin improvements." For the first nine months of fiscal 2006, the Company reported revenue of $27.6 million, an increase of 11.3 percent compared to the $24.8 million for the first nine months of last year. Net patient care revenues were $20.5 million, an -- 4 -- increase of 8.3 percent compared to the $18.9 million reported for the first nine months of last year. Pharmaceutical study revenues increased 15.6 percent to $3.9 million from the $3.4 million reported for the same period last year. Contract support services revenue increased 28.1 percent to $3.2 million from $2.5 million last year. Total operating expenses were $25.3 million, an increase of 13.9 percent from the $22.2 million for the first nine months of fiscal 2005, including a 83.2 percent increase in the Company's bad debt expense to $1.5 million due to the previously mentioned software billing issue and a 16.9 percent increase in administrative expenses. Income from operations was $2.3 million, a decrease of 11.2 percent compared to the $2.5 million reported last year. Net income for the nine-month period was $1.7 million or $0.09 per fully diluted share (based on 19.2 million shares), compared with net income of $2.1 million or $0.11 per fully diluted share (based on 18.2 million shares) for the same period last year. The Company reported $957,437 in cash as of March 31, 2006, up from $917,630 on June 30, 2005. Total net receivables from patient care for the third quarter of 2006, were $6.6 million which was a 5.0 percent increase from $6.3 million at June 30, 2005. The Company's balance sheet reported a current ratio of 1.7:1 on March 31, 2006. Stockholders' equity increased 19.1 percent to $10.8 million on March 31, 2006 from $9.1 million on June 30, 2005 Teleconference Information The Company will conduct a conference call to discuss the fiscal 2006 third quarter results on Monday, May 15, 2006, at 4:30 p.m. Eastern Time. Interested parties within the United States can access the call by dialing 866-825-3209 and international callers may dial 617-213-8061. Please use passcode 80392926. A replay of the call also will be available until May 22, 2006 at 888-286-8010 for callers within the United States, and 617-801-6888 for international callers. Please use passcode 12768524 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 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 - -- 5 -- PHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS March 31, June 30, ASSETS 2006 2005 _______ ___________ ___________ (unaudited) Current assets: Cash and cash equivalents $ 957,437 $ 917,630 Accounts receivable, net of allowance for doubtful accounts of $3,117,247 at March 31, 2006 and $1,956,984 at June 30, 2005 6,601,905 6,265,381 Pharmaceutical receivables 1,977,983 1,414,340 Prepaid expenses 521,297 146,988 Other receivables and advances 612,196 638,654 Deferred income tax asset 1,415,344 1,375,800 ___________ ___________ Total current assets 12,086,162 10,758,793 Accounts receivable, non-current 45,000 65,000 Other receivable 97,350 84,422 Property and equipment, net 1,865,042 1,516,114 Deferred financing costs, net of amortization of $110,910 at March 31, 2006 and $76,234 June 30, 2005 126,262 145,938 Customer relationships, net of amortization of $230,000 at March 31, 2006 and $140,000 at June 30, 2005 2,170,000 2,260,000 Goodwill 2,704,389 2,648,209 Other assets 506,139 417,172 ___________ ___________ Total assets $19,600,344 $ 17,895,648 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY ____________________________________ Current liabilities: Accounts payable $ 1,618,948 $ 907,569 Current maturities of long-term debt 881,832 769,599 Revolving credit note 2,040,605 2,385,629 Deferred revenue 225,290 85,061 Current portion of obligations under capital leases 59,265 29,777 Accrued payroll, payroll taxes and benefits 1,414,659 1,411,653 Accrued expenses and other liabilities 763,093 1,063,189 ___________ ___________ Total current liabilities 7,003,692 6,652,477 Long-term debt 1,281,275 1,900,022 Obligations under capital leases 75,446 12,210 Deferred tax liability 244,874 229,000 ___________ ___________ Total liabilities 8,605,287 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, 17,617,764 and 17,490,818 shares issued at March 31, 2006 and June 30, 2005, respectively 176,178 174,908 Class B common stock, $.01 par value, 2,000,000 shares authorized, 776,962 and 776,991 issued and outstanding at March 31, 2006 and June 30, 2005, respectively, each convertible into one share of Class A common Stock 7,769 7,770 Additional paid-in capital 23,623,983 23,377,059 Treasury stock, 199,098 shares and 181,738 shares of Class A common stock at March 31, 2006 and June 30, 2005 respectively, at cost (191,700) (155,087) Accumulated deficit (12,621,173) (14,302,711) ___________ ___________ Total stockholders' equity 10,995,057 9,101,939 Total liabilities and stockholders' equity $19,600,344 $17,895,648 ============ ============ -- 6 -- PHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2006 2005 2006 2005 __________ _________ __________ __________ Revenues: Patient care, net $7,292,804 $6,734,949 $20,471,140 $18,895,774 Pharmaceutical studies 1,523,277 1,103,205 3,913,370 3,384,347 Contract support services 1,137,878 925,528 3,216,788 2,510,277 __________ _________ __________ __________ Total revenues 9,953,959 8,763,682 27,601,298 24,790,398 __________ _________ __________ __________ Operating expenses: Patient care expenses 3,787,166 3,533,279 10,341,470 9,541,581 Patient care expenses, pharmaceutical 552,477 444,999 1,626,465 1,247,106 Cost of contract support services 713,438 520,475 1,898,300 1,595,478 Provision for doubtful accounts 334,248 217,756 1,466,903 800,503 Administrative expenses 2,815,164 2,410,474 8,193,940 7,008,636 Administrative expenses, pharmaceutical 638,486 653,827 1,810,776 2,049,492 __________ _________ __________ __________ Total operating expenses 8,840,979 7,780,810 25,337,854 22,242,796 __________ _________ __________ __________ Income from operations 1,112,980 982,872 2,263,444 2,547,602 __________ _________ __________ __________ Other income (expense): Interest income 11,281 15,004 49,542 49,535 Other income 25,309 31,568 57,357 58,060 Interest expense (153,594) (148,988) (483,150) (491,840) __________ _________ __________ __________ Total other expenses, net (117,004) (102,416) (376,251) (384,245) __________ _________ __________ __________ Income before provision for taxes 995,976 880,456 1,887,193 2,163,357 Provision for income taxes 45,427 -- 205,655 98,469 __________ _________ __________ __________ Net income $ 950,549 $880,456 $1,681,538 $2,064,888 ========== ========= ========== ========== Basic net income per common share $ 0.05 $ 0.05 $ 0.09 $ 0.12 ========== ========= ========== ========== Basic weighted average number of shares outstanding 18,187,750 17,648,412 18,145,789 17,474,155 ========== ========= ========== ========== Fully diluted net income per common share $ 0.05 $ 0.05 $ 0.09 $ 0.11 ========== ========= ========== ========== Fully diluted weighted average number of shares outstanding 19,212,589 18,690,012 19,242,777 18,234,480 ========== ========= ========== =========== - 7 - -----END PRIVACY-ENHANCED MESSAGE-----