SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 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: 0-20881
HEALTHCOR HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 75-2294072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5720 LBJ Freeway, Suite 550, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 233-7744
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 [ ] No [X]
As of September 20, 1996, approximately 9,857,100 shares
of Common Stock were issued and outstanding.
Total number of sequentially numbered pages 14
Exhibit Index on sequentially numbered page 12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
- --------------------------------------------------------------------------------
The unaudited condensed consolidated financial statements include the
accounts of HealthCor Holdings, Inc. and subsidiaries (the "Company"), and have
been prepared in accordance with generally accepted accounting principles for
interim financial information. 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
considered necessary for a fair presentation in the following financial
statements have been included. These condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
and the related notes for the year ended December 31, 1995, included in the
Company's Registration Statement on Form S-1, as filed with the Securities and
Exchange Commission.
HEALTHCOR HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996
JUNE 30, DECEMBER 31,
1996 1995
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents ..................... $ -- $ 1,627,940
Accounts receivable, net of allowance for
doubtful accounts ............................. 19,997,291 11,465,655
Supplies inventory ............................ 1,850,260 1,709,355
Prepaid expenses and other .................... 2,385,507 1,456,958
Deferred income taxes ......................... 2,474,095 2,003,328
----------- -----------
Total Current Assets ....................... 26,707,153 18,263,236
Property and equipment, net ....................... 16,856,892 11,054,255
Excess of cost of acquired businesses over fair
values of net assets acquired, net ........ 32,352,950 23,220,167
Other assets ...................................... -- 35,290
----------- -----------
Total Assets ...................................... $75,916,995 $52,572,948
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Cash deficit .................................. $ 1,811,983 $ --
Accounts payable and accrued expenses ......... 5,980,189 5,934,404
Accrued payroll and related expenses .......... 6,290,628 4,836,735
Estimated settlements with third-party payors . -- 322,566
Line of credit payable ........................ 6,400,000 2,475,000
Current portion of long-term debt and
capital lease obligations ................ 3,937,581 5,119,478
Income taxes payable .......................... 548,656 1,311,920
----------- -----------
Total Current Liabilities .................. 24,969,037 20,000,103
Deferred income taxes and other liabilities ....... 4,519,611 2,905,809
Long-term debt and capital lease obligations ...... 26,875,029 12,265,236
----------- -----------
Total Liabilities .......................... 56,363,677 35,171,148
Redeemable convertible preferred stock ............ 5,339,814 5,339,814
Stockholders' Equity:
Common stock, $.01 par value .................. 30,190 30,628
Additional paid-in capital .................... 2,476,388 2,471,129
Retained earnings ............................. 11,706,926 9,560,229
----------- -----------
Total Stockholders' Equity ........................ 14,213,504 12,061,986
----------- -----------
Total Liabilities and Stockholders Equity ......... $75,916,995 $52,572,948
=========== ===========
See accompanying notes to condensed consolidated financial statements
HEALTHCOR HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Net revenues .................................. $25,967,943 $ 8,368,995 $50,222,433 $35,921,542
Direct expenses .................................... 11,694,800 10,050,963 23,215,583 19,442,680
----------- ----------- ----------- -----------
Gross profit ....................................... 14,273,143 8,318,032 27,006,850 16,478,862
Other costs and expenses:
General and administrative .................... 10,097,078 6,546,795 19,655,233 12,855,535
Depreciation and amortization
expense ....................................... 712,930 252,091 1,248,705 502,598
Provision for doubtful accounts ............... 943,248 290,213 1,449,377 632,434
----------- ----------- ----------- -----------
Total costs and expenses ................... 11,753,256 7,089,099 22,353,315 13,990,567
----------- ----------- ----------- -----------
Income from operations ............................. 2,519,887 1,228,933 4,653,535 2,488,295
Interest, net ...................................... 652,027 133,792 1,137,927 252,758
----------- ----------- ----------- -----------
Income before income taxes ......................... 1,867,860 1,095,141 3,515,608 2,235,537
Provision for income taxes ......................... 692,449 419,019 1,368,911 856,732
=========== =========== =========== ===========
Net income ......................................... $ 1,175,411 $ 676,122 $ 2,146,697 $ 1,378,805
=========== =========== =========== ===========
Net income per common share ........................ $ .18 $ .10 $ .33 $ .21
=========== =========== =========== ===========
Weighted average common shares
outstanding ........................................ 6,591,749 6,611,693 6,591,749 6,611,693
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements
HEALTHCOR HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS
ENDED JUNE 30,
----------------------------
1996 1995
------------ ------------
Cash flows from operating activities:
Net income ................................ $ 2,146,697 $ 1,378,805
Adjustments to reconcile net income to cash
provided by
(used in) operating activities:
Depreciation and amortization ..... 2,112,776 962,730
Prepaid expenses and other ........ (947,424) (214,164)
Accounts receivable ............... (6,212,805) (661,448)
Payroll liabilities ............... 858,712 1,293,558
Income taxes payable .............. (805,553) 395,674
Non-current liabilities ........... 1,678,477 700,000
Other ............................. (321,533) 342.309
------------ -----------
Net cash provided by (used in)
operating activities ............................ (1,490,653) 4,197,464
Cash flows from investing activities:
Purchases of property and equipment ......... (5,917,392) (2,389,089)
Cash paid for acquisitions, net of cash
received .................................... (13,389,775) (6,275,924)
------------ -----------
Net cash used in investing activities ... (19,307,167) (8,665,013)
Cash flows from financing activities:
Proceeds from issuance of long-term debt .... 32,472,569 5,905,441
Payments on long-term debt .................. (15,119,672) (1,287,996)
Issuance of common stock .................... 5,000 4,165
------------ -----------
Net cash provided by financing activities 17,357,897 4,621,610
Net increase (decrease) in cash and cash
equivalents ..................................... (3,439,923) 154,061
Cash and cash equivalents at beginning of period 1,627,940 3,774,848
Amount reflected as a cash deficit .............. 1,811,983 --
------------ -----------
Cash and cash equivalents at end of period ...... $ 0 $ 3,928,909
============ ===========
See accompanying notes to condensed consolidated financial statements
HEALTHCOR HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The unaudited condensed consolidated financial statements include the
accounts of HealthCor Holdings, Inc. and subsidiaries (the "Company") for the
six months ended June 30, 1996 and 1995. All significant intercompany
transactions have been eliminated. Direct expenses on the statements of income
include all costs directly related to the production of net revenues, such as
salary and related benefit costs, depreciation of hand-held point-of-care
computers, billable medical supplies, product purchase costs, and rental
equipment depreciation. Depreciation costs not directly attributable to the
generation of net revenues are included in other costs and expenses.
2. Acquisition
Effective May 1, 1996, the Company acquired, for $11,750,000 in cash and
$566,000 in debt, the net assets of I Care of Arkansas, Inc. and all of the
outstanding capital stock of I Care, Inc. (d/b/a I Care Health Services) and I
Care Home IV Affiliates, Inc. (collectively "I Care"), which provide infusion
therapy services and respiratory therapy equipment throughout Arkansas. The
acquisition was accounted for using the purchase method of accounting. The
purchase price and costs associated with the acquisition exceeded the fair value
of the net assets acquired by approximately $8,800,000, which has been recorded
as costs in excess of net assets acquired. The results of operations of I Care
have been included in the condensed consolidated statement of income from the
date of acquisition.
The following unaudited pro forma information reflects the effect on the
consolidated statements of income assuming that significant acquisitions were
consummated as of January 1, 1995 and 1996. This information does not purport to
be indicative of the results that would have actually been obtained if the
acquisitions had occurred on such dates. Therefore, pro forma information cannot
be considered indicative of future operations. The unaudited pro forma
information for the six months ended June 30, 1996 is as follows:
SIX MONTHS ENDED
-------------------------------
JUNE 30, 1996 JUNE 30, 1995
------------- ---------------
Net revenues ............................... $55,186 $53,237
Net income ................................. 2,395 1,969
Net income per common share ................ $ .36 $ .30
3. Initial Public Offering
On August 8, 1996, the Company consummated an initial public offering
(the "IPO") of 3,000,000 shares of common stock, and on September 11, 1996, the
underwriters exercised their overallotment option for an additional 300,000
shares. Net proceeds from the IPO (after expenses) were approximately $30.0
million, and were used to repay (i) outstanding indebtedness under the Company's
bank acquisition credit facility, and (ii) outstanding indebtedness to certain
individuals, incurred in connection with acquisitions. The remaining proceeds of
approximately $3.8 million is available for general corporate purposes. In
connection with the IPO, the Company's convertible preferred stock was converted
to common stock.
4. Credit Facilities
On September 3, 1996, the Company amended its bank credit agreement
dated May 16, 1996, to make an additional $10.0 million available under the Term
Loan portion of that agreement, for use in acquisitions of home health related
companies until November 1, 1996. The Company is finalizing a new credit
facility, expected to be in place by November 1, 1996.
The new agreement provides for an aggregate $75.0 million facility consisting of
$60.0 million term facility for acquisitions and a $15.0 million revolving
credit line (to replace the current $10.0 million revolving credit facility).
However, use of the facility is limited to $60.0 million at the current
shareholder equity levels, with the remaining $15.0 million available when the
Company's shareholder's equity increases $10.0 million.
5. Subsequent Event
Effective September 1, 1996, the Company acquired, for $5,000,000 in
cash and $600,000 in seller debt, the net assets of Southern Medical Mart, Inc.,
a respiratory therapy/medical equipment company with four locations in
Louisiana. The cash payment was financed using the amended credit facility (See
note 4). The acquisition will be accounted for using the purchase method of
accounting. The purchase price and costs associated with the acquisition are
expected to exceed the fair value of the net assets acquired by approximately
$3,600,000, which will be recorded as costs in excess of net assets acquired.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
- --------------------------------------------------------------------------------
OVERVIEW
HealthCor Holdings, Inc. (the "Company") provides fully-integrated home
health care services, including nursing, respiratory therapy/medical equipment
and infusion therapy in nine states in the southwestern and central United
States. The Company has made 12 acquisitions of home health care companies since
June 30, 1995, primarily in the respiratory therapy/ medical equipment and
infusion therapy disciplines, to augment the full integration of all types of
home health care throughout the Company. The following table summarizes these
acquisitions:
ACQUISITION DESCRIPTION OF APPROXIMATE
DATE BUSINESS ANNUAL REVENUES
----------- -------------- ---------------
(in thousands)
June 30, 1995 (2) Respiratory therapy/medical
equipment ...................... $ 1,800
July 31, 1995 Respiratory therapy/medical
equipment, Infusion therapy .... 5,900
August 31, 1995 Infusion therapy ................. 1,400
September 15, 1995 Nursing .......................... 300
September 30, 1995 Respiratory therapy/medical
equipment ...................... 400
October 31, 1995 (3) Respiratory therapy/medical
equipment ...................... 2,600
October 31, 1995 Nursing .......................... 3,500
April 1, 1996 Respiratory therapy/medical
equipment ...................... 900
May 1, 1996 Respiratory therapy/medical
equipment, Infusion therapy .... 12,400
-------
$29,200
When the Company acquires other health care providers, including
nursing, respiratory therapy or infusion therapy businesses, the Company seeks
to implement its full range of services throughout the acquired operations. In
addition, the Company seeks to accelerate growth in existing offices by
introducing additional specialized health care services, such as cardiac
monitoring, hospice and primary home care. The Company's strategy is to maximize
its revenue potential of the compliment of offices in a market, which at times
requires realignment of customers or services among existing and new offices.
As the following table demonstrates, the net revenue mix has changed
dramatically as a result of these acquisitions, shifting from predominantly
nursing services to higher margin respiratory therapy/medical equipment and
infusion therapy. Following is a breakdown of net revenue mix (dollars in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30
------------------------------------------ ------------------------------------------
1996 1995 1996 1995
-------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nursing ................................. $15,153 58.4% $14,627 79.6% $31,360 62.4% $28,275 78.7%
Respiratory therapy/medical
equipment ........................... 6,828 26.3 2,850 15.5 12,954 25.8 5,851 16.3
Infusion therapy ........................ 3,987 15.3 892 4.9 5,908 11.8 1,796 5.0
------- ------- ------- ------- ------- ------- ------- -------
$25,968 100.0% $18,369 100.0% $50,222 100.0% $35,922 100.0%
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
RESULTS OF OPERATIONS
The following table sets forth certain items included in the Company's
unaudited consolidated statements of income as a percentage of net revenues:
Three Months Six Months
Ended June 30, Ended June 30,
----------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
Net revenues ........................... 100.0% 100.0% 100.0% 100.0%
Direct expenses ........................ 45.0 54.7 46.2 54.1
----- ----- ----- -----
Gross profit ........................... 55.0 45.3 53.8 45.9
Other costs and expenses:
General and administrative ......... 38.9 35.6 39.1 35.8
Depreciation and amortization ...... 2.8 1.4 2.5 1.4
Provision for doubtful
accounts ............................... 3.6 1.6 2.9 1.8
----- ----- ----- -----
Total costs and
expenses ............................... 45.3 38.6 44.5 39.0
----- ----- ----- -----
Income from operations ................. 9.7 6.7 9.3 6.9
Interest, net .......................... 2.5 0.7 2.3 0.7
----- ----- ----- -----
Income before income taxes ............. 7.2 6.0 7.0 6.2
Provision for income taxes ............. 2.7 2.3 2.7 2.4
----- ----- ----- -----
Net income ............................. 4.5% 3.7% 4.3% 3.8%
===== ===== ===== =====
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
NET REVENUES. Net revenues increased from $18.4 million for the second
quarter of 1995 to $26.0 million for the same period in 1996, an increase of
$7.6 million, or 41.3%. This increase is primarily attributable to incremental
net revenues generated from the acquisitions made after June 30, 1995 and
integration of services through the office network.
DIRECT EXPENSES. Included in direct expenses are all costs directly
related to the production of net revenues, such as salary and related benefit
costs, depreciation of hand-held point-of-care computers, billable medical
supplies, product purchase costs, and rental equipment depreciation. Direct
expenses increased from $10.1 million in the three months ended June 30, 1995 to
$11.7 million in the three months ended June 30, 1996, an increase of $1.6
million, or 16.4%. This increase is primarily associated with the acquisitions.
As a percentage of net revenues, direct expenses declined from 54.7% in 1995 to
45.0% in 1996 primarily as a result of the change in product mix to a greater
percentage of respiratory therapy/medical equipment and infusion therapy, which
have lower direct expenses than nursing.
GENERAL AND ADMINISTRATIVE. Included in general and administrative
expenses are occupancy costs, field office administration, corporate office
salaries and benefits, general legal and accounting fees, and other nonpatient
care operating expenses. These costs increased from $6.5 million to $10.0
million, an increase of $3.5 million, or 54.2%. The acquisitions account for the
majority of this increase, as well as for the change in general and
administrative expense as a percent of net revenues from 35.6% to 38.9%.
Although the change in business mix has contributed to lower direct costs as
discussed above, the general and administrative portion of cost for respiratory
therapy/medical equipment and infusion therapy are proportionality higher as the
majority of all personnel costs for these businesses are classified in this
category. Additionally, central office overhead increased in order to support
Company growth, particularly in the information services areas.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased from $.2 million for the second quarter of 1995 to $.7 million for the
second quarter of 1996, an increase of $.5 million, or 250.0%. The increase is
primarily due to the acquisition activity as well as the investment in
information services equipment and costs capitalized as part of the development
of the Company's clinically-based management information system.
PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts
increased from $.3 million for the second quarter of 1995 to $.9 million for the
second quarter of 1996, an increase of $.6 million, or 200.0%. This increase is
primarily due to acquisitions and the resulting change in business mix as
respiratory therapy/medical equipment and infusion therapy businesses
historically carry a higher provision for doubtful accounts.
INTEREST, NET. Interest, net increased from $.1 million for the second
quarter of 1995 to $.7 million for the same period of 1996, an increase of $.6
million, or 600.0%. This increase relates primarily to the increased debt
associated with acquisitions, increased borrowings under the Company's operating
line of credit as a result of higher working capital needs, and interest on
leases associated with information systems development.
PROVISION FOR INCOME TAXES. The provision for income taxes increased
from $.4 million for the second quarter of 1995 to $.7 million for the second
quarter of 1996, an increase of $.3 million, or 75.0%, primarily related to the
increase in income before income taxes.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
NET REVENUES. Net revenues increased from $35.9 million for the first
six months of 1995 to $50.2 million for the same period in 1996, an increase of
$14.3 million, or 39.8%. This increase is primarily attributable to incremental
net revenues generated from the acquisitions made after June 30, 1995 and
integration of services through the office network.
DIRECT EXPENSES. Direct expenses increased from $19.4 million for the
first six months of 1995 to $23.2 million for the first six months of 1996, an
increase of $3.8 million, or 19.6%. This increase is primarily associated with
the acquisitions. As a percentage of net revenues, direct expenses declined from
54.1% in 1995 to 46.2% in 1996 primarily as a result of the change in product
mix to a greater percentage of respiratory therapy/medical equipment and
infusion therapy, which have lower direct expenses than nursing.
GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased from $12.8 million for the first six months of 1995 to $19.6 million
for the first six months of 1996, an increase of $6.8 million, or 53.0%. This
increase is attributable primarily to costs associated with acquisitions and
additional central office overhead resulting from overall Company growth.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased from $.5 million for the first six months of 1995 to $1.2 million for
1996, an increase of $.7 million, or 140.0%. This increase is primarily due to
the acquisition activity and the investment in information services equipment
and costs capitalized as part of the development of the Company's
clinically-based management information system.
PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts
increased from $.6 million for the first six months of 1995 to $1.4 million for
the first six months of 1996, an increase of $.8 million, or 133.3%. This
increase is primarily due to the increase in net revenues. As a percentage of
net revenues, the provision for doubtful accounts has increased from 1.8% for
the six months ended June 30, 1995 to 2.9% for the six months ended June 30,
1996 primarily because of the change in business mix.
INTEREST, NET. Interest, net increased from $.3 million for the first
six months of 1995 to $1.1 million for the same period in 1996. This increase of
$.8 million, or 340.0%, relates to the increased debt incurred in connection
with acquisitions, interest cost on borrowings under the Company's line of
credit as a result of higher working capital needs, and interest on leases
associated with information systems development.
PROVISION FOR INCOME TAXES. The provision for income taxes increased
from $.8 million for the first six months of 1995 to $1.4 million for the same
period in 1996, an increase of $.6 million, or 75.0%. This increase is directly
related to the growth in income before income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements are for acquisition of
additional home health care companies and to a lesser extent for the expansion
of services provided through existing offices. Historically, the Company has
funded its working capital needs and capital expenditures from cash flows
provided from operations, supplemented by short-term borrowings.
At June 30, 1996, the Company had current assets of $26.7 million and
current liabilities of $25.0 million, resulting in working capital of $1.7
million as compared to a working capital deficit of $1.7 million as of December
31, 1995. As a result of the amendment to the Company's bank credit agreement on
May 16, 1996, working capital includes the effect of $2.4 million in debt being
reclassified from current to long-term. The remaining improvement is primarily a
result of net current assets acquired in recent acquisitions.
On August 8, 1996, the Company consummated an initial public offering
(the "IPO") of 3,000,000 shares of common stock, and on September 11, 1996, the
underwriters exercised their overallotment option for an additional 300,000
shares. Net proceeds from the IPO (after expenses) were approximately $30.0
million, and were used to (i) repay outstanding indebtedness under the Company's
bank acquisition credit facility, and (ii) repay outstanding indebtedness to
certain individuals, incurred in connection with acquisitions. The remaining
proceeds of approximately $3.8 million is available for general corporate
purposes. The IPO results in working capital being increased to $5.4 million on
a pro forma basis at June 30, 1996. In connection with the IPO, the Company's
convertible preferred stock was converted to common stock.
Accounts receivable at June 30, 1996 were $20.0 million, compared to
$11.5 million at December 31, 1995. Days of Sales Outstanding ("DSO"), defined
as accounts receivable divided by average daily net revenues for the preceding
three months, were 70.1 as of June 30, 1996, compared to 57.0 at December 31,
1995. The increase in DSO from December 31, 1995 to June 30, 1996 is
attributable primarily to: (i) timing delays in interim Medicare payments
resulting from procedural changes/interpretations by the Company's Medicare
fiscal intermediary; (ii) net revenue deferrals relating to the reimbursement of
certain re-engineering costs; (iii) changes in net revenue mix towards
respiratory therapy/medical equipment and infusion therapy, which historically
have higher DSO; and (iv) a slowdown by Medicare in paying for respiratory
therapy/medical equipment and infusion therapy.
Net cash provided by operating activities declined from $4.2 million for
the six months ended June 30, 1995 to a net cash used of $1.5 million for the
six months ended June 30, 1996 , or a cash outflow of $5.7 million. The increase
in accounts receivable and related DSO accounts were primarily responsible for
the reduction in operating cash during 1996. Net cash used in investing
activities increased from $8.6 million for the first six months of 1995 to $19.3
million for the same period in 1996. Of this increase of $10.7 million, $7.0
million relates to an increase in acquisition costs in 1996 as compared to 1995,
$2.0 million is a result of greater 1996 software acquisition costs related to
the re-engineering project, and the remaining $1.7 million relates to other
capital expenditures, primarily for information services equipment and medical
equipment needed to accommodate increased sales volume in the respiratory
therapy/medical equipment business.
The Company completed the acquisition of Southern Medical Mart, Inc., a
respiratory therapy/medical equipment company located in Louisiana, effective
September 1, 1996 for $5.0 million in cash and $600,000 in seller debt. The
acquisition was financed through the Company's bank credit facility. The Company
continues to explore acquisition opportunities and has a commitment letter to
provide a term loan facility of $60.0 million and a revolving credit facility of
$15.0 million. Of the $60.0 million term loan facility available under the
committed bank facility, which is currently being finalized, $45.0 million will
be available immediately, with the remaining $15.0 million available to the
Company when the Company's shareholder's equity increases $10.0 million. The new
revolving credit facility will replace the current $10.0 million revolving
facility. This new credit agreement is expected to contain covenants similar to
those in the current credit agreement dated May 16, 1996. As of September 16,
1996, the Company had $5.2 million available under the current revolving
facility, and $5.0 million available under the extended long-term credit
facility.
RECENT DEVELOPMENTS
On September 16, 1996, the Company acquired Southern Medical Mart, Inc.,
a Louisiana home health company providing home medical equipment, rehabilitation
services, and respiratory therapy. Southern Medical Mart, Inc., operating out of
four offices located in Metairie, Bossier City, Baton Rouge, and Lafayette,
Louisiana, generated total revenues of approximately $6.3 million in 1995 and
$4.0 million for the seven months ended July 1996. Ken Leach, President of
Southern Medical Mart, Inc., will continue his management role for the four
Louisiana locations.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- --------------------------------------------------------------------------------
(a) Exhibits:
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
11 -- Computation of net income per common equivalent share
(b) No reports on Form 8-K were filed for the quarterly period ended
June 30, 1996.
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.
HEALTHCOR HOLDINGS, INC.
Date: September 18, 1996 By:
Susan L. Belske, Senior Vice
President and Chief
Financial Officer
EXHIBIT 11
HEALTHCOR HOLDINGS, INC. AND SUBSIDIARIES
NET INCOME PER COMMON EQUIVALENT SHARES
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------- ---------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income ..................................................... $1,175,411 $ 676,122 $2,146,697 $1,378,805
========== ========== ========== ==========
Shares:
Weighted average common shares issued ....................... 3,018,983 3,017,812 3,018,983 3,017,812
Assuming exercise of options, reduced by the
number of common shares which could have
been purchased with the proceeds from
exercised of such options ................................. 233,468 254,239 233,468 254,239
Assuming conversion of Series A preferred
stocks ...................................................... 2,000,000 2,000,000 2,000,000 2,000,000
Assuming conversion of Series B preferred
stocks ...................................................... 1,339,298 1,339,298 1,339,298 1,339,298
---------- ---------- ---------- ----------
Weighted average number of common shares
outstanding, as adjusted .................................. 6,591,749 6,611,349 6,591,749 6,611,349
========== ========== ========== ==========
Net income per common share .................................... $ 0.18 $ 0.10 $ 0.33 $ 0.21
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM JUNE 30, 1996 10-Q BALANCE SHEET & INCOME STATEMENT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 19,997,291
<ALLOWANCES> 0
<INVENTORY> 1,850,260
<CURRENT-ASSETS> 26,707,153
<PP&E> 16,856,892
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,916,995
<CURRENT-LIABILITIES> 24,969,037
<BONDS> 0
5,339,814
0
<COMMON> 30,190
<OTHER-SE> 14,183,314
<TOTAL-LIABILITY-AND-EQUITY> 75,916,995
<SALES> 25,967,943
<TOTAL-REVENUES> 25,967,943
<CGS> 11,694,800
<TOTAL-COSTS> 11,694,800
<OTHER-EXPENSES> 10,810,008
<LOSS-PROVISION> 943,248
<INTEREST-EXPENSE> 652,027
<INCOME-PRETAX> 1,867,860
<INCOME-TAX> 692,449
<INCOME-CONTINUING> 1,175,411
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,175,411
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
