UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Help at Home, Inc.
- --------------------------------------------------------------------------------
Delaware 36-4033986
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
223 W. Jackson, Suite 500
Chicago, IL 60606
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Address of principal executive offices) (Zip Code)
(312) 663-4244 (Registrant's telephone number,
- --------------
including area code)
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of exchange on which registered
- ------------------- ------------------------------------
Common Stock, Par Value $0.02 NASDAQ National Market
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.02 per share
---------------------------------------
(Title of Class)
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Sections 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 .
-------- ------
As of May 9, 1996, there were 1,869,375 shares of the registrant's common stock
outstanding.
<PAGE>
Help at Home, Inc.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1 FINANCIAL STATEMENTS
Consolidated Balance Sheets at March 31, 1996 (Unaudited) 1
Consolidated Statements of Operations for the three month
periods ended March 31, 1995 and 1996 (Unaudited) 2
Consolidated Statements of Operations for the nine month
periods ended March 31, 1995 and 1996 (Unaudited) 3
Consolidated Statements of Cash Flows for the three month
periods ended March 31, 1995 and 1996 (Unaudited) 4
Consolidated Statements of Changes in Stockholders' 5
Equity (Unaudited)
Notes to the Consolidated Financial Statements 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 7
PART II: OTHER INFORMATION
Signatures 11
Financial Data Schedule 12
<PAGE>
Help at Home, Inc.
Balance Sheet
June 30 March 31
1995 1996
---- ----
ASSETS (Audited) (Unaudited)
------
Current Assets:
Cash and cash equivalents $ 24,994 $5,229,480
Accounts receivable (net of allowance
For doubtful accounts of $25,000 and $39,000) 2,258,139 1,817,098
Prepaid Expenses 57,864 151,340
---------- ----------
Total current assets 2,340,997 7,197,918
Property and equipment, net 178,071 238,110
Due from stockholder 142,556 150,845
Security deposits and other assets 85,299 87,848
Goodwill (net of amortization of $5,130) 217,602
---------- ----------
$2,746,923 $7,892,323
========== ==========
LIABILITIES
-----------
Current Liabilities:
Accounts payable $ 205,363 $ 121,062
Accrued expenses 250,818 953,154
Income taxes payable 54,092 471,000
Current portion of long-term debt 12,395 13,261
Deferred taxes 628,000 474,000
---------- ----------
Total Current Liabilities 1,150,668 2,032,477
Long-term debt, less current portion 39,075 42,349
---------- ----------
Total Liabilities 1,189,743 2,074,826
STOCKHOLDERS' EQUITY
--------------------
Preferred stock, par value $.01 per share; 1,000,000
shares
authorized, none issued and outstanding
Common stock, par value $.02 per share; 14,000,000
shares authorized, 1,050,000
and 1,869,375 shares issued and
outstanding 21,000 37,388
Additional Paid in Capital 3,680,735
Retained Earnings 1,536,180 2,099,374
---------- ----------
Total Stockholders' Equity 1,557,180 5,817,497
---------- ----------
$2,746,923 $7,892,323
========== ==========
The accompanying notes to the financial statements
are an integral part hereof.
1
<PAGE>
Help at Home, Inc.
Statements of Operations
Three Months Ended March 31
1995 1996
---- -----
(Unaudited) (Unaudited)
----------- -----------
Service fees $2,040,139 $3,049,039
Direct costs of services 1,356,803 2,100,252
---------- ----------
683,336 948,787
Selling, general and administrative expenses 432,502 623,309
---------- ----------
Income from operations 250,834 325,478
Financial Income (Expense) 63,148
---------- ----------
Income before income taxes 250,834 388,626
Federal and state income taxes 95,317 192,510
---------- ----------
NET INCOME $ 155,517 $ 196,116
========== ==========
Earnings per common share $ .15 $ .11
========== ===========
Weighted average number of common shares 1,050,000 1,850,584
========== ===========
The accompanying notes to financial statements are
an integral part hereof.
2
<PAGE>
Help at Home, Inc.
Statements of Operations
Nine Months Ended March 31
1995 1996
---- -----
(Unaudited) (Unaudited)
Service fees $ 5,531,654 $ 8,128,256
Direct costs of services 3,940,385 5,734,892
----------- -----------
1,591,269 2,393,364
Selling, general and administrative expenses 949,715 1,570,788
----------- -----------
Income from operations 641,544 822,576
Financial Income (Expense) (679) 84,118
----------- -----------
Income before income taxes 640,875 906,694
Federal and state income taxes 271,838 363,000
----------- -----------
NET INCOME $ 369,037 $ 543,694
=========== ===========
Earnings per common share $ .35 $ .39
=========== ===========
Weighted average number of common shares 1,050,000 1,382,284
=========== ===========
The accompanying notes to financial statements are
an integral part hereof.
3
<PAGE>
<TABLE><CAPTION>
Help at Home, Inc.
Statements of Cash Flows
Nine Months Ended March 31
--------------------------
1995 1996
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(Unaudited) (Unaudited)
----------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 369,037 $ 543,694
Adjustments to reconcile net income
of cash provided by operating activities:
Depreciation and Amortization 23,045 68,271
Deferred taxes (154,000)
Changes in:
Accounts receivable (716,739) 589,709
Prepaid expenses and other 17,324 (93,476)
Accounts payable ( 7,613) (98,383)
Accrued expenses 170,490 422,930
Income taxes payable 271,838 471,000
--------- -------------
Net cash provided by
operating activities 127,382 1,749,745
--------- -------------
Cash flows from investing activities:
Purchase of property and equipment (81,238) (84,416)
Acquisitions of wholly owned subsidiaries (91,775)
Increase in shareholder loan (81,830) (8,289)
Other (8,008)
--------- ------------
Net cash used in investing
activities (163,068) (192,488)
--------- ------------
Cash flows from financing activities:
Reduction of long-term liabilities (69,394)
Net proceeds from issuance of common stock,
819,375 shares
3,716,623
--------- ------------
Net cash provided by financing
activities 0 3,647,229
--------- ------------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (35,686) 5,204,486
Cash and cash equivalents:
Beginning of period 49,768 24,994
--------- -----------
END OF PERIOD $ 14,082 $ 5,229,480
============== ===========
</TABLE>
The accompanying notes to the financial statements are an integral part hereof.
4
<PAGE>
Statement of Changes in Stockholders' Equity
(Unaudited)
<TABLE><CAPTION>
Preferred Stock Common Stock
1,000,000 Shares 14,000,000 Shares
Authorized Authorized
---------------- -----------------
Shares Shares Additional Retained Stockholders'
Issued Amount Issued Amount Pd in Capital Earnings Equity
------ ------ ------ ------ ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - June 30, 1994 1,050,000 $21,000 $ 988,754 $1,009,754
Net Income for the year
ended June 30, 1995 547,426 547,426
--------- ----------
Balance - June 30, 1995 1,050,000 21,000 1,536,180 1,557,180
--------- ----------
Effect of stock exchange with
wholly-owned subsidiary, Help at
Home, Inc. (IL) (19,500) 19,500
Sale of 819,375 shares
of common stock,
(net of offering costs
and commissions) 819,375 16,388 3,700,235 3,716,623
------- ------ ---------
Net income for the nine
months ended March 31, 1996 --------- ------ ---------
543,694 543,694
-------- -----------
BALANCE-March 31, 1996 1,869,375 37,388 3,680,735 2,099,374 5,817,497
========= ====== ========= ========= =========
</TABLE>
The accompanying notes to the financial statements
are an integral part hereof.
5
<PAGE>
Help at Home, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for the fair presentation of
the company's financial statements have been included herein. Operating results
for the three and nine month periods ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ended June 30, 1996.
For further information, refer to the consolidated financial statements and
footnotes thereto in the Company's registration statement on Form SB-2.
Note 2: Public Offering
In December, 1995 the Company effected an initial public offering of its
securities. A total of 813,375 units, comprised of one share of common stock and
two redeemable warrants, were issued for $6.30 per unit. Net proceeds from the
offering were approximately $3,697,000 after underwriting commissions and
expenses. Funds realized from the offering were deposited into a highly liquid
money market fund and are included in cash and cash equivalents in the
accompanying financial statements.
Note 3: Earnings Per Share
The Company was incorporated in the State of Delaware on August 7, 1995. In
connection with the formation of the Company, the Company issued 2,100,000
shares of common stock to the shareholders of Help at Home, Inc., an Illinois
company ("HAH, IL"), in exchange for all of the common stock, 3,000 shares, of
HAH, IL. The accompanying financial statements present stockholder's equity
giving retroactive effect to this exchange. Further, in November 1995, the
Company effected a one-for-two reverse stock split. The financial statements
also give retroactive effect to this reverse stock split.
Earnings per common share have been determined by dividing earnings by the
weighted-average number of common shares outstanding during each year. Stock
warrants and stock options are not included in the earnings per share
calculation because they are anti-dilutive.
6
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW:
Help at Home, Inc. (the "Company") provides skilled nursing and therapeutic
services together with general homemaker services to the elderly, medically
fragile and disabled in their homes. The Company has engaged in the provision of
unskilled homemaker services for two decades, recently adding, through
acquisitions of two Medicare certified home health agencies, skilled care
capabilities. For the first three quarters of fiscal 1996, the Company realized
approximately 95 percent of its revenues from its general homemaker services and
5 percent from delivery of Medicare reimbursed home health services. For the
first three quarters of fiscal 1996, the Company derived 91 percent of its
general homemaker revenue from contracts with the Illinois Department of Aging
("IDOA") and other state and municipal agencies with which multiple-year
contracts are in force. With the exception of arrangements made with individuals
regarding payment for services (accounting for approximately 3 percent of total
revenues), virtually all of the Company's revenues are subject to established
rates of reimbursement. Medicare services are reimbursed based on the actual
cost of providing services, subject to cost limits. The Company's contracts for
provision of homemaker services establish rates of reimbursement for the life of
each contract.
The Company, in July, 1995, acquired all of the the stock of Lakeside Home
Health Agency, Inc. ("Lakeside") based in Fenton, MO. In January, 1996 the
company also acquired Rosewood Home Health Agency ("Rosewood") in Alton, IL in
furtherance of its strategy to expand its range of services to include medically
necessary, skilled care. Based on the
7
<PAGE>
methodology used to determine Medicare reimbursement, services provided by the
Company to its subsidiaries (including financial management and administrative
support services) are recoverable through allocations of home office costs to
the Medicare program.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1995:
Service fees for the three months ended March 31, 1996 increased by
$1,009,000 over the same quarter in the previous fiscal year. The 49 percent
revenue growth is attributable to the opening of new Illinois offices pursuant
to additional contract awards in 1995 ($347,000), the addition of Medicare home
health services ($173,000) and general expansion in volume ($488,000). Direct
costs of providing services increased by $743,000 and represented 69 percent of
revenues versus 67 percent for the third quarter of 1995. The increase is due to
a wage increase that took effect in fiscal 1995. The gross margin on services
provided increased by $265,000 for the quarter ended March 31, 1996 and
represents 31 percent of revenues. The gross margin for the third quarter of
1995 was 33 percent of revenues. The growth in expenses of $191,000 is
attributable to an increase in administrative salaries associated with expansion
of the corporate offices and function ($49,000), general office expense
associated with acquisitions and the establishment of new field offices
($87,000), corporate travel associated with potential acquisitions ($39,000) and
advertising/promotion attributable to general marketing efforts and shareholder
relations ($16,000). Selling, general and administrative expenses totaling
$623,000 represented 20 percent of the quarter's revenues. Selling, general and
administrative expenses for the same quarter of the preceding year amounted to
21 percent of revenues.
Income from operations increased by $75,000 as compared to the same quarter
in the
8
<PAGE>
preceding year. Third quarter financial income of $63,000 is largely comprised
of interest income on IPO proceeds netted against interest expense. The Federal
and state income taxes reflected in the quarter's results includes an
additional $45,000 attributable to the first two quarters of the fiscal year
for the purpose of bringing provisions for current taxes into line with the
Company's estimated effective tax rate. After the provision for income taxes,
net income grew by $41,000 and represented six percent of revenues. Earnings per
share were $.11 for the quarter as compared to $.15 for the same quarter last
year which was due to the increase in estimated taxes together with the
significant increase in the number of shares comprising the weighted average
(1,851,000 in 1996 versus 1,050,000 in 1995).
NINE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE NINE MONTHS
ENDED MARCH 31, 1995:
Revenues derived from services rendered to clients for the first three
quarters of 1996 exceeded revenues for the corresponding period in 1995 by
$2,597,000 representing overall growth in revenues of 47 percent. As noted in
the preceding section, revenues increased due to an expansion in the number of
Illinois offices ($560,000), increased volume from various IDOA contracts
($1,637,000) and the addition of Medicare home health revenues ($400,000).
Direct costs associated with providing client services grew to $5,735,000, an
increase of $1,795,000. The growth in direct costs is the result of increased
client services requiring employment of additional field staff. However, direct
costs, as a percentage of revenues, were unchanged at 71 percent for the nine
month period in both fiscal years. The gross profit margins for both nine month
periods were 29 percent of revenues. Selling, general and administrative
expenses grew by $621,000 in 1996, and represented 19 percent of revenues as
opposed to 17 percent for the nine
9
<PAGE>
month period in 1995. The increase in general expense is attributable to
increases in corporate staff ($81,000), professional fees ($41,000), corporate
office expansion ($97,000), office expenses in new operating locations
($109,000) and general administrative expense associated with increased revenue
volume ($293,000). Operating income for the nine months ended March 31, 1996
grew by $182,000 to $823,000. Financial income of $84,000 for the nine month
period brought pre-tax income to $907,000 (11% of revenues) versus $641,000
(12% of revenues) one year earlier. Net income of $544,000 for the nine months
ended March 31, 1996 represents an increase of $175,000 over the previous year,
although the percentage relationship between revenues and net income remains
unchanged at seven percent. Earnings per share for the nine months of 1996 were
$.39 based 1,382,000 shares versus $.35 for the prior nine months when only
1,050,000 shares were outstanding.
LIQUIDITY AND CAPITAL RESOURCES:
The Company has net working capital of $5,165,000 as of March 31, 1996. The
Company has, historically, funded its cash requirements entirely from
operations. The two acquisitions made in this fiscal year, to date, have been
funded through proceeds from operations, as well. The Company, at the end of
March, 1996 had one bank loan in the approximate amount of $56,000. In December,
1995 the Company completed an initial public offering consisting of 819,375
units, each of which consisted of one share of common stock and two redeemable
common stock purchase warrants at $6.30 per unit. The offering generated net
proceeds of approximately $3,687,000 after deduction of underwriters' discounts,
commissions and related expenses. The Company anticipates the proceeds from the
offering will be sufficient to satisfy cash requirements for the next twelve
months.
10
<PAGE>
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.
Help at Home, Inc.
Registrant
Date: May 9, 1996 /s/ Louis Goldstein
------------------------------------
Louis Goldstein
CEO/Chairman
Date: May 9, 1996 /s/ Sharon S. Harder
------------------------------------
Sharon S. Harder
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Jun-30-1995
<PERIOD-END> MAR-31-1996
<CASH> 5,229,480
<SECURITIES> 25,000
<RECEIVABLES> 1,817,098
<ALLOWANCES> 39,000
<INVENTORY> 0
<CURRENT-ASSETS> 7,197,918
<PP&E> 402,132
<DEPRECIATION> 164,022
<TOTAL-ASSETS> 7,892,323
<CURRENT-LIABILITIES> 2,032,477
<BONDS> 42,349
0
0
<COMMON> 1,869,375
<OTHER-SE> 5,780,109
<TOTAL-LIABILITY-AND-EQUITY> 7,892,323
<SALES> 0
<TOTAL-REVENUES> 8,128,256
<CGS> 0
<TOTAL-COSTS> 5,734,892
<OTHER-EXPENSES> 1,570,788
<LOSS-PROVISION> 18,301
<INTEREST-EXPENSE> 84,118
<INCOME-PRETAX> 906,694
<INCOME-TAX> 363,000
<INCOME-CONTINUING> 543,694
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 543,694
<EPS-PRIMARY> .39
<EPS-DILUTED> 0
</TABLE>
