<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
- --- Exchange Act of 1934 for the quarterly period ended September 30, 1996.
------------------
or
X 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 0-20619
Matria Healthcare, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-2205984
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 Parkway Place, 12th Floor, Marietta, Georgia 30067
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 423-4500
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (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
------- -------
The number of shares outstanding of the issuer's only class of Common Stock, $
.01 par value, as of November 1, 1996 was 36,224,116 .
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PART I - FINANCIAL INFORMATION
MATRIA HEALTHCARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1996 1995
------------- -----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,599 4,793
Short-term investments 22,211 3,273
Trade accounts receivable, less allowances of $16,469
and $7,600 in 1996 and 1995, respectively 23,457 17,767
Inventories 1,899 1,288
Prepaid expenses and other current assets 3,977 708
------------- -----
Total current assets 56,143 27,829
Property and equipment, less accumulated depreciation of
$15,391 and $16,130 in 1996 and 1995, respectively 15,530 7,858
Excess of cost over net assets of businesses acquired, less
accumulated amortization of $21,368 and $1,967 in
1996 and 1995, respectively 149,874 4,556
Software and other intangibles, less accumulated amortization
of $1,668 and $587 in 1996 and 1995, respectively 6,705 1,034
Other assets 3,256 3,306
------------- -----
$ 231,508 44,583
============= ======
</TABLE>
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<PAGE> 3
MATRIA HEALTHCARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 31,
1996 1995
--------- -------
<S> <C> <C>
Current Liabilities:
Accounts payable, principally trade $ 4,620 2,625
Current installments of long-term debt
and obligations under capital leases 2,374 1,914
Accrued expenses and other current liabilities 20,988 8,431
--------- -------
Total current liabilities 27,982 12,970
Long-term debt and obligations under capital leases, excluding
current installments 4,040 2,124
Other long-term liabilities 12,733 --
--------- -------
Total liabilities 44,755 15,094
Shareholders' equity:
Preferred stock, $.01 par value, 50,000 shares authorized at September 30,
1996; $.001 par value 2,000 shares authorized at December 31, 1995;
none issued at September 30, 1996 and December 31, 1995 -- --
Common stock, $.01 par value, 100,000 shares authorized, 36,211 shares
issued at September 30, 1996; $.001 par value, 60,000 shares authorized,
17,660 shares issued at December 31, 1995 362 18
Additional paid-in capital 280,734 87,608
Notes receivable and accrued interest from officers (3,374) (3,630)
Accumulated deficit (90,969) (53,968)
--------- -------
186,753 30,028
Treasury stock, at cost -- (539)
--------- -------
Total shareholders' equity 186,753 29,489
--------- -------
$ 231,508 44,583
========= =======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
MATRIA HEALTHCARE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months ended September 30, Nine Months ended September 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 36,594 21,062 96,933 66,993
Cost and expenses:
Cost of revenues 15,275 9,064 41,321 28,959
Selling and administrative 17,539 11,256 51,572 36,274
Provision for doubtful accounts 2,057 1,262 5,611 4,020
Amortization of goodwill and other intangibles 9,274 336 20,973 1,059
Restructuring costs - 215 15,025 2,268
Settlement of litigation - - - 4,300
------------- ------ ------ ------
44,145 22,133 134,502 76,880
------------- ------ ------ ------
Operating loss ( 7,551) (1,071) (37,569) (9,887)
Interest expense (86) (104) (341) (297)
Interest income 277 189 927 588
Other income (expense), net 16 (9) (18) 79
------------- ------ ------ ------
Loss before income taxes (7,344) (995) (37,001) (9,517)
Income tax expense - - - 150
------------- ------ ------ ------
Net loss $ (7,344) (995) (37,001) (9,667)
============= ====== ====== ======
Net loss per common share
and common share equivalent $ (.20) (.06) (1.19) (.56)
============= ====== ====== ======
Weighted average number of common shares
and common share equivalents 36,044 17,406 31,018 17,343
============= ====== ====== ======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
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MATRIA HEALTHCARE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months ended September 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (37,001) (9,667)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Restructuring costs and asset write-downs 15,025 --
Depreciation and amortization 24,559 5,048
Provision for doubtful accounts 5,611 4,020
Unrealized losses (gain) on short-term investments 117 (99)
Purchase of short-term investments (14,158) (526)
Sales of short-term investments 23,990 920
Other 145 (199)
Changes in operating assets and liabilities, net of effect of acquisitions:
Decrease (increase) in accounts receivable (382) 1,124
Decrease in prepaids and other current assets 2,113 836
Decrease (increase) in other assets 106 (102)
Increase (decrease) in accounts payable 346 (1,988)
Increase (decrease) in accrued expenses and other current liabilities (22,604) 2,980
--------- -------
Net cash provided by (used in) operating activities (2,133) 2,347
--------- -------
Cash Flows from Investing Activities:
Purchases of property and equipment (3,531) (1,100)
Disposition of property and equipment 621 --
Acquisition of businesses, net of cash acquired 2,378 44
Payment of note receivable and interest from officer -- 121
--------- -------
Net cash used in investing activities (532) (935)
--------- -------
Cash Flows from Financing Activities:
Proceeds from issuance of debt 1,559 --
Principal repayments of debt and capital lease obligations (3,180) (5,454)
Proceeds from issuance of common stock 4,092 914
--------- -------
Net cash provided by (used in) financing activities 2,471 (4,540)
--------- -------
Decrease in cash and cash equivalents (194) (3,128)
Cash and cash equivalents at beginning of period 4,793 9,149
--------- -------
Cash and cash equivalents at end of period $ 4,599 6,021
========= =======
See accompanying notes to consolidated condensed financial statements.
</TABLE>
5
<PAGE> 6
MATRIA HEALTHCARE, INC.
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(Unaudited)
1. General
The consolidated condensed financial statements as of September 30,
1996 are unaudited. Certain reclassifications of prior period
information have been made to conform to current year presentation. On
March 8, 1996 Tokos Medical Corporation (Delaware)("Tokos") and
Healthdyne, Inc. ("Healthdyne") merged with and into Matria Healthcare,
Inc.("Matria" or the "Company") (see Note 3 - Acquisitions). The merger
was accounted for using the purchase method of accounting with Tokos
deemed to be the acquirer, and accordingly, the financial statements
include the results of operations for Tokos only for 1995 and the first
two months of 1996 and for Tokos and Healthdyne combined since such
date. Effective June 1, 1996 the Company also acquired National
Reproductive Medical Centers, Inc. ("NRMC") (see Note 3). The NRMC
acquisition was accounted for using the purchase method of accounting,
and the results of operations of NRMC since June 1, 1996 are included
in the consolidated operations of the Company. The results for the
three and nine months ended September 30, 1996 are not necessarily
indicative of the results for the full year ending December 31, 1996.
The consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and related
notes of Tokos and Healthdyne incorporated by reference into the
Company's Form 10-K for the year ended December 31, 1995 from the
Company's Report on Form 8-K/A filed on March 29, 1996.
2. Loss Per Share of Common Stock
The loss per common share and common share equivalent was based on the
weighted average number of common shares outstanding. The inclusion of
additional shares assuming the exercise of stock options would have
been antidilutive. The computation of fully diluted net loss per share
was antidilutive in each of the periods presented; therefore, the
amounts reported for primary and fully diluted loss per share are the
same.
3. Acquisitions
On March 8, 1996, the Company completed a merger (the "Merger") with
Tokos and Healthdyne, national providers of specialized obstetrical
home healthcare and risk assessment services, following the approval of
the respective shareholders of
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<PAGE> 7
each company. Under the terms of the Agreement and Plan of Merger, each
share of common stock outstanding on March 8, 1996, of Tokos and
Healthdyne was exchanged for one share of Common Stock, par value $.01
per share, of Matria, a newly created Delaware corporation. In the
Merger, Matria issued approximately 17.0 million shares of its Common
Stock to Healthdyne shareholders and approximately 17.7 million shares
of its Common Stock to Tokos shareholders. The Merger was accounted for
using the purchase method and Tokos has been deemed the acquirer since
Tokos shareholders received approximately 51% of the newly issued
shares.
The purchase price of Healthdyne was $186.697 million, of which
$156.922 million was allocated to goodwill and other intangibles and is
being amortized on a straight-line basis over 5 years.
The financial position and results of operations of Tokos and
Healthdyne were consolidated effective March 1, 1996.
In March 1995 Healthdyne made a $ 1.250 million cash payment to acquire
a 15% ownership interest in NRMC, a multi-site provider of infertility
treatment services. Effective June 1, 1996 the Company purchased the
remaining 85% ownership interest in NRMC. Total acquisition costs of
$14.207 million included the issuance of 779,679 shares of the
Company's Common Stock valued at $8.50 per share ($6.627 million),
assumption of NRMC common stock options and the substitution of options
to purchase 60,604 of the Company's Common Stock valued at $8.50 per
share ($ 515,134), and payment of $6.740 million payment in cash to
former NRMC shareholders (including the $1.250 million payment for the
initial 15% investment) and $325,000 of transaction costs.
As part of the NRMC transaction, the Company agreed to provide stock
price protection at $8.50 per share until the shares of Common Stock
issued in connection with the transaction were registered for resale.
The average closing price per share of the Company's Common Stock for
the five trading days prior to the September 16, 1996 effective date of
the Registration Statement for such resales was $7.30. Consequently,
this guarantee resulted in the issuance of 126,903 additional shares of
the Company's Common Stock in the third quarter of but 1996 did not
affect the recorded purchase price.
The NRMC acquisition has been accounted for using the purchase method
of accounting. The purchase price was allocated based on estimated fair
values at acquisition. The excess of purchase price over the fair
values of the net assets acquired was $14.034 million and is being
amortized on a straight-line basis over 5 years.
Results of operations of NRMC have been included in the consolidated
results of operations of the Company since June 1, 1996.
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<PAGE> 8
Pro forma unaudited consolidated operating results of the Company,
Healthdyne and NRMC for the nine month period ended September 30, 1996,
assuming the acquisitions had been made as of January 1, 1996 are
summarized below:
<TABLE>
<CAPTION>
(Amounts in thousands, except per share data)
Nine Months ended
September 30, 1996
------------------
<S> <C>
Revenue 113,858
Net loss (43,891)
Loss per share (1.23)
</TABLE>
The pro forma information includes certain adjustments such as
additional amortization expense as a result of goodwill. The pro forma
results do not purport to be indicative of the results of operations
which actually would have resulted had the combinations been in effect
on January 1, 1996 or the future results of operations of the
consolidated entities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL.
On March 8, 1996, Tokos and Healthdyne merged with and into the
Company, which had been created solely for the purpose of the Merger. Pursuant
to the terms of the Agreement and Plan of Merger, dated October 2, 1995, as
amended, among Tokos, Healthdyne and the Company, each share of common stock
outstanding on March 8, 1996 of Tokos and Healthdyne was exchanged for one share
of the Company's Common Stock. The Company issued approximately 17,007,000
shares of Common Stock to former Healthdyne shareholders and approximately
17,655,000 shares to former Tokos shareholders. The Merger was accounted for
using the purchase method of accounting, and Tokos was deemed to be the acquirer
since its shareholders received approximately 51% of the newly issued shares of
the Company's Common Stock.
In March 1995, Healthdyne acquired a 15% ownership interest in NRMC for
$1.250 million cash, and effective June 1, 1996 the Company acquired the
remaining 85% by the issuance of 906,582 shares of the Company's Common Stock
and the assumption of NRMC common stock options which were converted into
options to purchase 60,604 shares of the Company's Common Stock with a total
combined value of $7.142 million and cash payments of $5.815 million, including
transaction costs of $325,000. The acquisition was accounted for using the
purchase method of accounting.
The Company's present operations and future prospects may be influenced
by several factors, including developments in the healthcare industry,
third-party reimbursement policies and practices, and changes in regulatory
requirements or the manner in which such requirements are enforced. As a result
of the increasing cost of healthcare in the United States and overall efforts to
reduce or control government and
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<PAGE> 9
corporate spending, government and third-party payors are becoming increasingly
focused on promoting cost-effective healthcare services, and payors, in
particular, have become more involved in decisions regarding diagnosis and
treatment to ensure that care is delivered in a cost-effective manner.
Substantially all of the Company's current revenues are derived
directly from third-party payors for services rendered to patients by the
Company. The financial performance of all healthcare companies, including the
Company, could be adversely affected by the financial condition of certain
governmental and private payors and by their continuing efforts to reduce
healthcare costs by lowering reimbursement rates, increasing medical reviews of
invoices for services and negotiating for reduced contract rates. The Company
and its predecessor companies responded to these developments by attempting to
emphasize cost-effective therapies and procedures, pre-qualifying insurance
coverage prior to the delivery of services and educating third-party payors on
the benefits of Matria's home therapies. Although reduction in the reimbursement
rates that the Company receives for services rendered could have an adverse
impact on operations, it is hopeful that the overall cost-effective nature of
treatment in the home (as compared to hospitalization), coupled with the
potential benefits to be derived from prenatal care, will be recognized and
encouraged by any new healthcare initiatives.
The trend within the healthcare industry to deliver quality healthcare
services in a more cost-effective manner had an impact on the Company's
predecessor companies and is expected to continue to have an impact on the
Company. Driven by employers and third-party payors, as well as by legislation
and regulation, prices for services provided to patients, in general, are being
reduced, cost-effective preventative health care is being stressed and
vertically integrated networks of care providers (some of whom are accepting the
insurance risk of providing care through capitation contracts with third-party
payors) are being established. The Company anticipates that this trend will
continue and is attempting to focus its efforts on services, some of which are
offered in conjunction with third-party payors, which it believes can benefit
from this new environment. There can be no assurance, however, that either
additional changes or presently unforeseen consequences from this trend may not
develop.
The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the consolidated
financial statements and related notes of Tokos and Healthdyne incorporated into
the Company's Annual Report on Form 10-K for the year ended December 31, 1995 as
filed with the Securities and Exchange Commission (the "Commission"). Since the
results of Matria for the nine month period ended September 30, 1996 include the
results of Healthdyne only since March 1, 1996 and NRMC only since June 1, 1996
and also include certain costs and expenses associated with the Merger, the
historical results of operations are not necessarily indicative of the results
that will be achieved by the Company during future periods.
9
<PAGE> 10
RESULTS OF OPERATIONS.
Revenues increased $15.532 million or 73.7% and $29.940 million or
44.7% in the three and nine month periods ended September 30, 1996,
respectively, as compared to the same periods in 1995. The decline in revenues
experienced by Tokos throughout 1995 as a result of decreases in preterm labor
management patient service days continued into the first nine months of 1996;
however, this decline was offset by the additional Healthdyne revenues included
in the Company's revenues from March 1, 1996 and by the additional NRMC revenues
included in the Company's revenues from June 1, 1996.
Revenues of the Company are expected to increase in 1996 as a result of
the addition of Healthdyne's and NRMC's revenues to the revenues of Tokos
(Healthdyne's 1995 revenues were $69.600 million and NRMC's revenues for the
period January 1, 1996 through June 30, 1996 were $7.300 million). Additional
revenues are also expected in 1996 from the marketing of the fetal fibronectin
immunoassay, a new in vitro diagnostic test used as an aid in assessing the risk
of preterm delivery in women with symptoms of preterm labor. Through a marketing
agreement entered into by Tokos in 1991, the Company has exclusive rights to
market this test in the United States, Canada and Puerto Rico. The FDA approved
this product in September 1995 and the Company began marketing the test during
the second quarter of 1996 as a means of predicting whether preterm delivery was
likely in women with symptoms associated with preterm labor. The FDA recently
granted expedited review status to an additional application filed by the
manufacturer of the test in an effort to expand the marketing indication for the
fetal fibronectin immunoassay to asymptomatic patients - women who do not have
symptoms of preterm labor.
Cost of patient services as a percent of revenues for the three month
period ended September 30, 1996 declined to 41.7% from 43.0% in the same period
in 1995 and declined to 42.6% from 43.2% for the nine month period ended
September 30, 1996 from the same period in 1995. Reductions of these costs were
primarily achieved through consolidation of service sites and operating
efficiencies related to the Merger.
Selling and administrative expenses increased $15.298 million to
$51.572 million (53.2% of revenues) for the nine month period ended September
30, 1996 compared with $36.274 million (54.1% of revenues) for the same period
in 1995. The increase was primarily related to maintaining duplicate facilities
and staffing during the transition phase of the Merger. Although these costs
increased in absolute dollars in the three month period ended September 30, 1996
to $17.539 million (47.9% of revenues) from $11.256 million (53.4% of revenues),
these costs declined as a percentage of revenues as facilities were consolidated
and staff reductions were made as a result of the Merger.
Excluding the amortization of the additional goodwill and other
intangibles associated with the Merger ($32.451 million per year for five
years), the Company expects to achieve annualized cost savings on a quarterly
run rate basis compared to the historical combined costs of Tokos and Healthdyne
of approximately $26.000 million by the end of 1996, primarily as a result of
reductions of patient services center expenses in
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overlapping geographic locations, elimination of duplicate facilities including
corporate headquarters, and synergies in staff and functional areas. An
additional $4.000 million of annualized cost savings also are expected to be
achieved by the end of the second quarter of 1997. No assurance can be given,
however, that unforeseen difficulties will not be encountered in completing the
integration of the operations of Tokos and Healthdyne or that the full benefits
and attendant cost savings expected from such integration will be realized or
achieved in the expected time frame.
As a result of the Merger and the acquisition of NRMC, a large
percentage of the assets reflected on the Company's balance sheet are intangible
assets or goodwill (as opposed to tangible assets such as cash, accounts
receivable, inventory and equipment). At September 30, 1996, the Company's total
assets were $231.508 million, of which $156.579 million, or 67.6% of total
assets, were goodwill and intangibles. In addition, the amortization or any
future write-down of such goodwill and intangibles by the Company could have a
material adverse effect on the results of operations of the Company.
The Company provides for estimated uncollectable accounts as revenues
are recognized. The provision for doubtful accounts as a percentage of revenues
was approximately 6% for the three and nine month periods ended September 30,
1996 and 1995. The provision is adjusted periodically based upon the Company's
quarterly evaluation of historical collection experience, recoveries of amounts
previously provided, industry reimbursement trends and other relevant factors.
Therefore, the provision rate could vary on a quarterly basis.
During 1995, as Tokos' revenues continued to decline, specific
decisions were made and communicated by management related to cost reduction
efforts. The cost reduction plan consisted of reductions in the workforce
(comprised of personnel within information systems, reimbursement,
administrative support and to a lesser extent clinical services) and termination
of several facility leases. In connection with these cost reduction activities,
Tokos incurred $2.268 million of restructuring costs in the first nine months of
1995. In connection with the Merger, the Company incurred approximately $15.025
million of restructuring costs which were charged to operations in the three
month period ended March 31, 1996. Of these costs, approximately $4.100 million
related to involuntary severance of employees, $2.500 million related to the
consolidation of facilities, $5.400 million related to the write-down of
software and equipment that will be obsolete as a result of the adoption of new
systems, and $3.025 million related to other miscellaneous Merger related costs.
Tokos recorded income tax expense of $150,000 related to state
franchise taxes in the nine month period ended September 30, 1995, but recorded
no state franchise tax expense in the three or nine month period ended September
30, 1996. Neither Tokos in 1995 nor the Company in 1996 recorded federal or
state income tax benefits. The net tax operating loss will be available to
offset future taxable income, if any.
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<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
As of September 30,1996 the Company had cash and short-term investments
of $26.810 million.
Net cash used by operating activities was $2.133 million for the nine
month period ended September 30,1996, compared with $2.347 million provided by
operating activities for the same period in 1995. For the nine month period
ended September 30, 1996, net cash flow was reduced by payments of approximately
$12.900 million for Merger related costs, $5.345 for the settlement of a former
Tokos Shareholders lawsuit and $5.535 million related to the purchase of NRMC.
Net cash used by investing activities was $532,000 in the nine month period
ended September 30, 1996, as compared to $935,000 cash used in the same period
in 1995. During 1995, Tokos purchased certain physician-owned companies for
which it originally provided services and during 1995 and the first quarter of
1996, Healthdyne purchased the minority interest of certain affiliated
partnerships. Notes issued in connection with these acquisitions have a balance
outstanding of $2.498 million at September 30, 1996. The remaining balances are
to be paid at various times over the next one to four years.
In July 1995, Tokos reached a $10.000 million settlement, subject to
court approval, with the plaintiffs in a class action securities lawsuit. Tokos
accrued an aggregate liability, net of insurance proceeds, of $5.750 million for
its portion of the settlement. Prior to the Merger, Tokos paid $750,000 cash
toward the settlement. Final court approval of the settlement was received in
June 1996 and in July 1996 the Company made the final $5.000 million payment in
cash, together with accrued interest of $344,623.
The Company incurred substantial costs in connection with the Merger.
These costs include: (i) restructuring costs incurred by Tokos of approximately
$15.025 million, consisting of $4.100 million relating to severance costs of
terminated employees, $2.500 million of lease termination costs for duplicate
facilities, $5.400 million for the write-off of computer equipment and $3.025
million for other Merger-related expenses; (ii) additional liabilities incurred
by Healthdyne as a result of the Merger of approximately $9.350 million,
consisting of $9.200 million relating to severance costs of terminated employees
and $150,000 for patient service centers specifically identified to be closed;
and (iii) transaction costs of approximately $3.700 million, consisting of
$2.275 million for investment banking fees, $1.000 million for legal and
accounting fees and $425,000 for other costs such as document printing and
mailing and filing fees. As of September 30, 1996 the remaining liability for
these estimated costs was approximately $8.285 million.
Additionally, the Company may be required to make additional severance
payments of approximately $7.900 million in accordance with employment
agreements with certain officers of Tokos and Healthdyne, and may be required to
place in trust approximately $3.200 million under a retirement benefit awards
program for such officers.
The Company believes that its current cash balances, including those
acquired from Healthdyne and NRMC, and expected cash flows from operations and
investing
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activities, will be sufficient to finance its current operations and fund any
expansion of NRMC's business for the foreseeable future.
This Management's Discussion and Analysis contains forward-looking
statements including statements concerning expected increases in revenues
arising from the Merger, expected increased revenues arising from the marketing
of fetal fibronectin immunoassay, expected synergies arising from the Merger,
the effect of goodwill on the Company's results of operations, capital
expenditures to be made in the future and the adequacy of the Company's sources
of cash to finance its current and future operations. These forward-looking
statements involve a number of risks and uncertainties. In addition to the
factors discussed above, among other factors that could cause actual results to
differ materially are the following: business conditions and growth in the home
healthcare industry and the general economy; competitive factors, such as the
possible entry of large diversified healthcare companies into the obstetrical
home healthcare business; new technologies and pricing pressures; changes in
third-party reimbursement policies and practices and regulatory requirements
applicable to the Company's business; management decisions to pursue new product
lines or lines of business which involve additional costs, risks or capital
expenditures; and the risk factors listed from time to time in the Company's SEC
reports, including but not limited to, its Annual Report on Form 10-K for the
year ended December 31, 1995.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(27) Financial Data Schedule (for SEC use only)
(b) The Company filed a Current Report on Form 8-K reporting the
merger of a wholly-owned subsidiary of the Company with and into
National Reproductive Medical Centers, Inc., a Delaware
Corporation ("NRMC"), on July 24, 1996 and amended the same by
Amendment No. 1 on Form 8-K/A filed August 28, 1996. The Form
8-K/A included pro forma financial information of the Company.
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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.
Matria Healthcare, Inc.
November 13, 1996 By: /s/ Donald R. Millard
----------------------
Donald R. Millard
Senior Vice President -Finance,
Chief Financial Officer and Treasurer
(duly authorized and principal
financial officer.)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MATRIA HEALTHCARE, INC. FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 4,599
<SECURITIES> 22,211
<RECEIVABLES> 39,926
<ALLOWANCES> (16,469)
<INVENTORY> 1,899
<CURRENT-ASSETS> 56,143
<PP&E> 30,921
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0
0
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</TABLE>
