U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[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
------------------
[ ] 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 1-14386
----------
STAT HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0496236
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
12450 GREENSPOINT DRIVE SUITE 1200 HOUSTON, TEXAS 77060
(Address of principal executive offices)
(713)872-6900
(Issuer's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Check 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
14,975,412 SHARES OF COMMON STOCK OUTSTANDING AS OF NOVEMBER 11, 1996.
- ----------------------------------------------------------------------
<PAGE>
STAT HEALTHCARE, INC.
FORM 10-Q
Quarter Ended September 30, 1996
Table of Contents
PART I
Item 1. Financial Statements ............................ 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ............. 1
PART II
Item 1. Legal Proceedings ............................... 6
Item 4. Submission of Matters to a Vote of
Security Holders ................................ 6
Item 6. Exhibits and Reports on Form 8-K ................ 7
SIGNATURES .............................................. 8
INDEX TO FINANCIAL STATEMENTS ........................... F-1
(ii)
<PAGE>
PART I
Item 1. Financial Statements
The unaudited financial statements commencing on page F-1 include the
accounts of STAT Healthcare, Inc. and all majority owned subsidiaries (the
Company) and have been prepared pursuant to the rules and regulations of the
Securities Exchange Commission. Certain information in footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to these
rules and regulations. In the opinion of management, all adjustments, consisting
only of normal recurring accruals, considered necessary for a fair presentation
have been included. Operating results for interim periods are not necessarily
indicative of the results that may be expected for a full year. For further
information, reference is made to the supplemental consolidated financial
statements and notes thereto included in the Company's Current Report on Form
8-K dated August 9, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This report contains forward-looking statements that involve risks and
uncertainties. The actual future results of the Company could differ materially
from those statements. Factors that could cause or contribute to such
differences include, but are not limited to, uncertainties regarding changes in
governmental regulation, continued reimbursement for the Company's services from
third-party payors and risks associated with managing the Company's growth, as
well as the risk factors discussed in the Company's Prospectus dated October 23,
1996 relating to the offering of securities upon the exercise of warrants.
General
The following discussion and analysis reviews consolidated financial
data which reflects the June 1996 merger of Old STAT and the AmHealth Companies
into STAT Healthcare, Inc. (the Company). This merger has been accounted for as
a pooling of interests.
Old STAT was incorporated on July 29, 1994, and commenced active
operations effective September 1, 1994, pursuant to a management agreement with
South Texas Acute Trauma Physicians, P.A. (STAT Physicians) which had been in
operations since January 1, 1986.
The AmHealth Companies are comprised of a group of corporations and
partnerships with common ownership which were formed at various dates starting
in October 1992 and which commenced operating activities in April 1993.
From a historical perspective, Old STAT's operations were limited to a
single business segment, emergency medical management services. AmHealth's
operations were focused on integrated disease management services comprised of
two identifiable segments, kidney dialysis services and medical management
services which encompass hyperbaric oxygen (HBO) and home healthcare management
services.
1
<PAGE>
The following discussion should be read in conjunction with the audited
supplemental consolidated financial statements of the Company included in its
Current Report on Form 8-K dated August 9, 1996.
Results of Operations
For purposes of this discussion, the term "same store" refers to
facilities which were open for the duration of each comparable period.
Three months Ended September 30, 1996 Compared to Three Months Ended September
30, 1995.
Net Service Revenues. Net service revenues increased by $4.5 million, or
73%, to $10.6 million in 1996 from $6.1 million in 1995. This increase is
comprised of a $1.2 million (50%) increase in disease management revenues and a
$3.3 million (88%) increase in emergency medical management revenues.
The increase in disease management revenues, to $3.6 million in 1996
from $2.4 million in 1995, is primarily attributable to the introduction of new
services and facilities. Kidney dialysis services accounted for approximately
$2.2 million of 1996 revenues and approximately $1.7 million of 1995 revenues,
while medical management services accounted for $1.4 million of 1996 revenues
compared to $0.7 million of 1995 revenues.
At September 30, 1996, the Company operated five kidney dialysis centers
compared with four centers at September 30, 1995. Revenues during 1996
attributable to the new centers approximated $0.2 million while revenues
attributable to centers open during both periods increased to $2.0 million from
$1.7 million or a same store growth rate of approximately 15%. Per patient
revenue rates remained relatively constant between the periods. At September 30,
1996, the Company had approximately 280 dialysis patients compared with
approximately 190 patients at September 30, 1995.
At September 30, 1996, the Company provided management services to one
home healthcare agency, which services commenced in June 1995, and operated two
HBO facilities, one opened in May 1995 and the second opened in April 1996. The
increase in comparative revenues of $0.7 million is attributable to the short
operating history as of September 30, 1995 and the opening of the second HBO
facility in April 1996. In July 1996, the Company announced contracts for three
additional HBO facilities which are expected to be opened during the fourth
quarter of 1996.
The increase in emergency medical management revenues, to $7.0 million
in 1996 from $3.7 million in 1995, is primarily attributable to an increase in
the number of patients treated in 1996 (79,000) compared with 1995 (46,000). The
increase in patients relates to an increase in the number of emergency
departments being served, 20 as of September 30, 1996 compared with 12 at
September 30, 1995. Also contributing to the increase in revenues is an 8%
increase, to $84.42 in 1996 from $77.89 in 1995, in average revenue per patient.
The increase in per patient revenue is due to a pricing increase implemented in
February 1996.
2
<PAGE>
Operating Expenses. Operating expenses increased by $3.7 million, or
70%, to $8.9 million in 1996 from $5.2 million in 1995. This percentage increase
closely parallels the comparative increase in net service revenues.
Significant elements comprising operating expenses include: (1)
professional medical fees which increased $2.4 million or 100%; (2) human
resources costs which increased $0.6 million or 48%; (3) billing and collection
costs which increased $0.2 million or 56%; and (4) supplies costs which
increased $0.1 million or 25%. Other combined costs accounted for the remaining
increase of $0.3 million. Comments relating to significant changes are as
follows:
Professional medical fees and billing and collection costs which
increased by 100% and 56%, respectively, are directly related to emergency
medical services, which revenues increased by 88%. The percentage increase in
professional medical fees exceeded the percentage increase in related revenues
because of rate increases in fees paid to independent contract physicians. The
rate of increase in billing and collection costs was less than the rate of
increase in revenues because of a May 1996 negotiated reduction in the cost of
this contracted service which is based on a percentage of collections.
The rate of increase in human resources costs was less than the rate of
increase in revenues because of the significant increase in emergency medical
services which do not result in proportionate administrative personnel
increases. Such costs increased by 48% versus a revenue increase of 73%.
Nine months Ended September 30, 1996 Compared to Nine Months Ended September 30,
1995.
Net Service Revenues. Net service revenues increased by $10.8 million,
or 65%, to $27.3 million in 1996 from $16.5 million in 1995. This increase is
comprised of a $4.3 million (72%) increase in disease management revenues and a
$6.5 million (61%) increase in emergency medical management revenues.
The increase in disease management revenues, to $10.2 million in 1996
from $5.9 million in 1995, is primarily attributable to the introduction of new
services and facilities. Kidney dialysis services accounted for approximately
$6.0 million of 1996 revenues and approximately $4.3 million of 1995 revenues,
while medical management services accounted for $4.2 million of 1996 revenues
compared to $1.6 million of 1995 revenues.
At September 30, 1996, the Company operated five kidney dialysis centers
compared with four centers at September 30, 1995. Revenues during 1996
attributable to the new centers approximated $1.2 million while revenues
attributable to centers open during both periods increased to $4.8 million from
$4.3 million or a same store growth rate of approximately 12%. Per patient
revenue rates remained relatively constant between the periods. At September 30,
1996, the Company had approximately 280 dialysis patients compared with
approximately 190 patients at September 30, 1995.
At September 30, 1996, the Company provided management services to one
home healthcare agency, which services commenced in June 1995, and operated two
HBO facilities, one opened in May 1995 and the second opened in April 1996. The
increase in comparative revenues of $2.6 million is attributable to a
3
<PAGE>
combination of the short operating history as of September 30, 1995 and the
opening of the second HBO facility in April 1996.
The increase in emergency medical management revenues, to $17.1 million
in 1996 from $10.6 million in 1995, is primarily attributable to an increase in
the number of patients treated in 1996 (203,000) compared with 1995 (136,000).
The increase in patients relates to an increase in the number of emergency
departments being served, 20 as of September 30, 1996 compared with 12 at
September 30, 1995. Also contributing to the increase in revenues is an 8%
increase, to $84.42 in 1996 from $77.89 in 1995, in average revenue per patient.
The increase in per patient revenue is due to a pricing increase implemented in
February 1996.
Operating Expenses. Operating expenses increased by $8.8 million, or
64%, to $22.7 million in 1996 from $13.8 million in 1995. This percentage
increase closely parallels the comparative increase in net service revenues.
Significant elements comprising operating expenses include: (1)
professional medical fees which increased $4.5 million or 65%; (2) human
resource costs which increased $2.5 million or 85%; (3) billing and collection
costs which increased $0.5 million or 48%; and (4) supplies costs which
increased $0.4 million or 33%. Other combined costs accounted for the remaining
increase of $0.8 million. Comments relating to significant changes are as
follows:
Professional medical fees and billing and collection costs which
increased by 65% and 47%, respectively, are all directly related to emergency
medical services, which revenues increased by 61%. The percentage increase in
professional medical fees exceeded the percentage increase in related revenues
because of rate increases in fees paid to independent contract physicians. The
increase in billing and collection costs was slightly less than the increase in
revenues because of a May 1996 negotiated reduction in the cost of this
contracted service which is based on a percentage of collections.
The rate of increase in human resource costs exceeded the rate of
increase in revenues. Such costs increased by 85% (vs. revenue increase of 65%)
or $2.5 million. The increase is attributable to the hiring of administrative
and support personnel to accommodate the expanded operations and contracted
future business. Additionally, the home healthcare and HBO management services
businesses which were started late in the 1995 period are highly labor intensive
and contribute to an increase in these costs as a percentage of revenues.
Reorganization Costs. The reorganization costs incurred during 1996
relate entirely to the merger between Old STAT and the AmHealth Companies and
consist of legal, accounting and other transactional costs associated with the
merger.
Income Taxes and Proforma Income Taxes. Combined income taxes and
proforma income taxes have been calculated using estimated effective tax rates
of 36% for 1996 and 34% for 1995. Because the AmHealth Companies were S
corporations or partnership entities for federal income tax purposes, no income
taxes were provided on their pre merger incomes. Proforma income taxes represent
the additional taxes which would have been provided had they been subject to
income taxes at the established rates.
4
<PAGE>
Shares Used in Computing Net Income Per Share. Shares used in computing
net income per share are based on the weighted average common shares and common
share equivalents outstanding during the periods presented. For 1996, this
includes 14,975,412 shares outstanding plus approximately 468,000 common share
equivalents relating to warrants and options. For 1995, there were no common
share equivalents because the Company's outstanding warrants and options were
anti dilutive. Additionally, merger shares allocable to AmHealth business units
included in the merger but operational for only a portion of the period were
weighted into the 1995 average.
Liquidity and Capital Resources.
Capital requirements of the Company relate principally to three areas.
These are (1) funds required to purchase capital assets for dialysis centers and
equipment for the expansion of existing and opening of new hyperbaric oxygen
facilities; (2) working capital needs associated with the start-up of new
emergency department contracts; and (3) availability of funds for acquisitions
which complement the Company's growth strategy.
Management is actively evaluating new markets for the expansion of the
Company's disease management business and considers either dialysis centers or
HBO facilities to be the optimum vehicles for market entry. These ventures are
the most capital intensive of the Company's businesses and require funds to
purchase dialysis and HBO equipment. At September 30, 1996, the Company had
commitments for approximately $1.0 million of hyperbaric oxygen equipment for
new facilities expected to open during the fourth quarter of 1996.
In evaluating individual business segments of the Company, working
capital needs are most extensive as they relate to increases in emergency
department contracts. Experience indicates that upon commencement of new
contracts, periods ranging from 90 to 150 days are required to achieve normal
cash flows. Accordingly, the more rapidly the Company is able to add new
contracts, the greater the working capital needs.
In evaluating growth opportunities, Management expects to consider
acquisitions as well as growth through internal development. Some acquisitions
may be accomplished through the issuance of additional stock; however, it is
expected that cash will be a significant medium in the Company's acquisition
strategy.
Historically, capital requirements have been met through a combination
of sources including: (1) operating cash flows; (2) proceeds from Old STAT's
initial public offering in April 1995; and (3) lease and bank financings. To
posture the Company for future growth, a new bank credit facility totaling $6.5
million was negotiated in August 1996 (including $1.5 million under a term
feature and $6.0 million under a revolving feature). Additionally, on November
11, 1996 the Company announced its intention to redeem its outstanding Class A
redeemable common stock purchase warrants. The expected exercise of the warrants
prior to redemption in December 1996 is expected to generate net proceeds of
approximately $3.5 million. No assurances can be made that the Company will be
able to achieve this objective.
5
<PAGE>
On October 7, 1996, the Company entered into an Agreement and Plan of
Merger with American Medical Response, Inc. ("American"). If the merger is
consummated, the Company will become a wholly owned subsidiary of American. Each
share of the Company's common stock will be converted into 0.25 of a share of
American common stock and each outstanding option to acquire the Company's
common stock will be assumed by American. The merger is subject to the approval
of the Company's stockholders and other customary approvals. A special meeting
of the Company's stockholders is scheduled to be held on December 10, 1996 to
consider a proposal to approve the merger.
If the merger is not consummated, the Company intends to seek additional
bank financing and/or raise additional capital through the sale of equity
securities. No assurances can be given that the Company will be successful in
these efforts. If the Company is unsuccessful in these efforts, it will likely
be required to significantly curtail its growth objectives.
Inflation has not had, nor is it expected to have, a material impact on
the operations and financial condition of the Company.
PART II
Item 1. Legal Proceedings
The Company is not presently a party to any material litigation, nor, to
the knowledge of Management, is any such litigation presently threatened.
Item 4. Submission of Matters to a Vote of Security Holders
The 1996 annual meeting of stockholders of the Company's predecessor,
Old STAT, Inc. (named STAT Healthcare, Inc. prior to the merger with the
AmHealth Companies), was held on June 13, 1996. Matter presented to the
stockholders for voting were (I) approval of the Amended and Restated Agreement
and Plan of Reorganization, dated March 15, 1996, among the Company, STAT
Acquisition Corp and the AmHealth Companies, (ii) election of directors, (iii)
ratification of the appointment of independent auditors, and (iv) approval of
the Company's 1996 Stock Incentive Plan. The Amended and Restated Agreement and
Plan of Reorganization received 2,174,104 shares voted for, 3,300 shares voted
against, 500 abstentions and 913,617 broker non-votes. Each nominee for election
as director received 3,090,721 shares voted for election and 800 shares
withheld. The ratification of the appointment of independent auditors received
3,090,021 shares voted for, 1,400 shares voted against and 100 abstentions. The
approval of the Company's 1996 Stock Incentive Plan received 1,162,004 shares
voted for, 9,800 shares voted against, 4,100 abstentions and 915,617 broker
non-votes.
6
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
The registrant filed a Current Report on Form 8-K dated August 9,
1996 (Item 5) to include therein the supplemental consolidated
financial statements of the registrant required following the
consummation of the Exchange which was accounted for using the
pooling of interests method.
The registrant filed a Current Report on Form 8-K dated October
8, 1996 (Item 5) to report the execution of an Agreement and Plan
of Merger with American Medical Response, Inc., and STAT
Acquisition Corp.
8
<PAGE>
SIGNATURES
In accordance with 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.
STAT HEALTHCARE, INC.
Date: November 11, 1996 By: /S/ RUSSELL D. SCHNEIDER
------------------------
Russell D. Schneider
Chairman of the Board and Chief Executive
Officer (Principal Executive Officer)
Date: November 11, 1996 By: /S/ NED E. CHAPMAN
------------------
Ned E. Chapman
Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
STAT HEALTHCARE, INC.
AND SUBSIDIARIES
Index to Consolidated Financial Statements
Consolidated Balance Sheets F-2
Consolidated Statements of Income F-3
Consolidated Statement of Cash Flows F-4
Notes to Consolidated Financial Statements F-5
F-1
<PAGE>
STAT HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
Sep 30, Dec 31,
1996 1995
(unaudited) (audited)
----------- -----------
ASSETS
Cash and cash equivalents .......................... $ 1,376,000 $ 2,538,000
Accounts receivable, net ........................... 8,962,000 4,565,000
Notes receivable ................................... 200,000 266,000
Inventories ........................................ 102,000 103,000
Prepaid and other current assets ................... 148,000 709,000
----------- -----------
Total current assets ...................... 10,788,000 8,181,000
Property and equipment, net ........................ 3,494,000 2,261,000
Intangible assets, net ............................. 1,931,000 --
Other non-current assets ........................... 425,000 133,000
----------- -----------
Total assets .............................. $16,638,000 $10,575,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt .................. $ 2,482,000 $ 88,000
Current portion of capital lease obligations ....... 343,000 48,000
Accrued physicians' fees ........................... 1,346,000 706,000
Accounts payable ................................... 1,120,000 925,000
Accrued liabilities ................................ 1,401,000 513,000
Distributions payable .............................. -- 283,000
----------- -----------
Total current liabilities ................. 6,692,000 2,563,000
Long-term debt ..................................... 283,000 156,000
Long-term capital lease obligations ................ 1,620,000 1,484,000
----------- -----------
Total liabilities ......................... 8,595,000 4,203,000
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value. Authorized
5,000,000 shares; no shares outstanding ...... -- --
Common Stock, $.01 par value. Authorized
40,000,000 shares; issued and outstanding,
14,975,412 and 14,823,332, respectively ...... 150,000 148,000
Capital in excess of par value ................. 4,890,000 4,204,000
Retained earnings .............................. 3,003,000 2,020,000
----------- -----------
Total stockholders' equity ................ 8,043,000 6,372,000
Commitments and contingencies
Total liabilities and stockholders' equity $16,638,000 $10,575,000
=========== ===========
See accompanying notes to unaudited consolidated financial statements.
F-2
<PAGE>
STAT HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED SEPTEMBER 30, 1996 AND 1995
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Quarter Nine months Nine months
ended ended ended ended
Sep 30, 1996 Sep 30, 1995 Sep 30, 1996 Sep 30, 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net service revenues ........................ $ 10,643,000 $ 6,148,000 $ 27,304,000 $ 16,523,000
------------ ------------ ------------ ------------
Operating expenses:
Professional medical fees ............... 4,746,000 2,367,000 11,440,000 6,915,000
Human resources ......................... 2,000,000 1,352,000 5,513,000 2,979,000
Supplies ................................ 589,000 473,000 1,726,000 1,296,000
Billing and collection costs ............ 617,000 395,000 1,613,000 1,092,000
Liability insurance ..................... 254,000 195,000 707,000 519,000
Other costs ............................. 683,000 453,000 1,674,000 1,006,000
------------ ------------ ------------ ------------
Total operating expenses ........... 8,889,000 5,235,000 22,673,000 13,807,000
------------ ------------ ------------ ------------
Operating income ................... 1,754,000 913,000 4,631,000 2,716,000
Interest income ............................. 5,000 25,000 23,000 26,000
Interest expense ............................ (110,000) (81,000) (255,000) (130,000)
Reorganization costs ........................ -- -- (1,269,000) --
------------ ------------ ------------ ------------
Income before income taxes ......... 1,649,000 857,000 3,130,000 2,612,000
Income taxes ................................ 594,000 111,000 550,000 292,000
------------ ------------ ------------ ------------
Net income ......................... $ 1,055,000 $ 746,000 $ 2,580,000 $ 2,320,000
============ ============ ============ ============
Proforma income taxes ....................... -- 180,000 577,000 596,000
------------ ------------ ------------ ------------
Proforma net income ................ $ 1,055,000 $ 566,000 $ 2,003,000 $ 1,724,000
============ ============ ============ ============
Proforma net income per common share $ 0.07 $ 0.04 $ 0.13 $ 0.16
============ ============ ============ ============
Number of shares used in computing
proforma net income per share ............... 15,444,000 14,465,000 15,402,000 10,893,000
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
F-3
<PAGE>
STAT HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months Nine months
ended ended
Sep 30, 1996 Sep 30, 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................ $ 2,580,000 $ 2,320,000
----------- -----------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:-
Depreciation and amortization .................... 412,000 237,000
Increase in deferred tax liability ............... 50,000 --
Changes in assets and liabilities:
Increase in net accounts receivable ........... (4,397,000) (1,850,000)
Decrease (increase) in inventories ............ 1,000 (18,000)
Decrease in prepaid and other current assets .. 561,000 59,000
Decrease (increase) in other non-current assets 133,000 (76,000)
Increase (decrease) in accrued physicians' fees 640,000 (16,000)
Increase in accounts payable .................. 195,000 78,000
Increase in accrued liabilities ............... 888,000 259,000
-----------
Increase (decrease) in distributions payable .. (283,000) 420,000
----------- -----------
Total Adjustments ............................. (1,800,000) (907,000)
----------- -----------
Net cash provided by
operating activities ...................... 780,000 1,413,000
----------- -----------
Cash flows from investing activities:
Purchase of HEMA assets ............................. (960,000) --
Purchase of Amedica assets .......................... (200,000) --
Increase (decrease) in notes receivable ............. 66,000 (56,000)
Purchase of property and equipment .................. (1,533,000) (518,000)
----------- -----------
Net cash used in investing activities ....... (2,627,000) (574,000)
----------- -----------
Cash flows from financing activities:
Proceeds from sale of common stock .................. 328,000 3,516,000
Distributions to shareholders ....................... (1,415,000) (1,426,000)
Net borrowings under line of credit agreement ....... 1,835,000 --
Issuance of long-term debt .......................... 317,000 228,000
Repayment of long-term debt ......................... (243,000) (552,000)
Repayments of capital lease obligations ............. (137,000) (131,000)
----------- -----------
Net cash provided by
financing activities ...................... 685,000 1,635,000
----------- -----------
Net decrease in cash and cash equivalents ................. (1,162,000) 2,474,000
Cash and cash equivalents at beginning of period .......... 2,538,000 470,000
----------- -----------
Cash and cash equivalents at end of period ................ $ 1,376,000 $ 2,944,000
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
F-4
<PAGE>
STAT HEALTHCARE, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(1) Financial Statement Presentation
The accompanying consolidated financial statements of STAT Healthcare,
Inc. and subsidiaries (the Company) present financial information as of
September 30, 1996 and December 31, 1995, and for the three and nine month
periods ended September 30, 1996 and 1995. Because these financial statements
are unaudited and do not include all disclosures required by generally accepted
accounting principles, they should be read in conjunction with the Company's
audited supplemental consolidated financial statements which were filed on the
Company's Form 8-K dated August 9, 1996. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) necessary for a fair
presentation of the financial information for the periods reported have been
made. Results of operations for the three and nine month periods ended September
30, 1996 are not necessarily indicative of the results that may be achieved for
the year ending December 31, 1996.
Consolidated income statement and cash flow information combines the
results of operations and cash flows of the Company, its subsidiaries and its
affiliated physician groups.
(2) Net Income Per Common Share
Net income per common share is computed based on the number of common
and common equivalent shares of the Company. Equivalent shares are attributable
to outstanding warrants and options to purchase common shares.
F-5
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,376,000
<SECURITIES> 0
<RECEIVABLES> 8,962,000
<ALLOWANCES> 0
<INVENTORY> 102,000
<CURRENT-ASSETS> 10,788,000
<PP&E> 3,494,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,638,000
<CURRENT-LIABILITIES> 6,692,000
<BONDS> 0
0
0
<COMMON> 150,000
<OTHER-SE> 7,893,000
<TOTAL-LIABILITY-AND-EQUITY> 16,638,000
<SALES> 0
<TOTAL-REVENUES> 10,643,000
<CGS> 0
<TOTAL-COSTS> 8,889,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 110,000
<INCOME-PRETAX> 1,649,000
<INCOME-TAX> 594,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,055,000
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
