Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] 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 000-21505
INTENSIVA HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 43-1690769
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7733 FORSYTH BLVD., 8TH FLOOR, ST. LOUIS, MISSOURI 63105
(Address of principal executive offices) (Zip Code)
(314) 725-0112
(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 registrant's Common Stock, par value
$0.001 per share, at October 31, 1998, was 10,078,838 shares.
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
<CAPTION>
September 30,
1998 December 31,
Assets (Unaudited) 1997
------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,457,048 $ 247,943
Accounts receivable, less allowance for doubtful
accounts of $2,997,000 and $1,736,000,
respectively 48,560,880 31,376,641
Inventories 1,427,722 781,317
Prepaid expenses 502,143 855,429
----------- -----------
Total current assets 52,947,793 33,261,330
Property and equipment, net 9,873,990 6,882,957
Organizational and preopening costs, net 766,629 382,777
Other assets 849,328 1,047,842
----------- -----------
$64,437,740 $41,574,906
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term obligations $ 862,880 $ 781,315
Current portion of revolving credit facility 5,654,080 463,525
Accounts payable and accrued expenses 9,305,499 7,589,180
Accrued salaries, wages and benefits 3,330,333 2,245,741
Accrued third-party payor settlements 11,514,689 2,152,911
----------- -----------
Total current liabilities 30,667,481 13,232,672
Long-term obligations, less current portion 1,550,542 1,312,234
Revolving credit facility, less current portion 3,954,037 1,935,575
Deferred rent expense 1,511,973 1,301,984
Stockholders' equity:
Common stock, $0.001 par value, 70,000,000
shares authorized, 10,078,838 and 9,969,045
shares issued and outstanding, respectively 10,079 9,969
Additional paid-in capital 30,212,240 30,193,647
Accumulated deficit (3,468,612) (6,411,175)
----------- -----------
Total stockholders' equity 26,753,707 23,792,441
----------- -----------
$64,437,740 $41,574,906
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 2
<PAGE>
<TABLE>
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net patient service revenues $29,310,421 $19,495,330 $81,394,083 $46,154,593
Costs and expenses:
Operating expenses 24,874,752 16,796,644 68,934,928 39,692,260
General and administrative 1,353,412 1,215,239 4,001,947 3,415,799
Provision for doubtful accounts 252,253 370,002 1,421,161 1,428,960
Depreciation and amortization 741,355 426,725 1,968,859 1,033,237
----------- ----------- ----------- -----------
Total costs and expenses 27,221,772 18,808,610 76,326,895 45,570,256
----------- ----------- ----------- -----------
Operating income 2,088,649 686,720 5,067,188 584,337
Interest income - 74,282 - 399,540
Interest expense (340,792) (59,722) (863,527) (170,633)
---------- ----------- ----------- -----------
Income before income taxes 1,747,857 701,280 4,203,661 813,244
Provision for income taxes 524,356 - 1,261,098 -
----------- ----------- ----------- -----------
Net income $ 1,223,501 $ 701,280 $2,942,563 $ 813,244
=========== =========== ========== ===========
Basic income per share $ 0.12 $ 0.07 $ 0.29 $ 0.08
=========== =========== ========== ===========
Diluted income per share $ 0.12 $ 0.07 $ 0.28 $ 0.08
=========== =========== ========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3
<PAGE>
<TABLE>
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,942,563 $ 813,244
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 1,968,859 1,033,237
Provision for doubtful accounts 1,421,161 1,428,960
Increase in accounts receivable (18,605,400) (17,258,487)
Decrease (increase) in inventories, prepaid expenses
and other assets (322,659) 74,284
Increase in accounts payable and accrued expenses 1,716,319 2,382,972
Increase in accrued salaries, wages and benefits 1,084,592 672,856
Increase in accrued third-party payor settlements 9,361,778 1,381,096
Increase in deferred rent expense 209,989 23,166
------------- ------------
Net cash used in operating activities (222,798) (9,448,672)
Cash flows from investing activities: ------------- ------------
Additions to property and equipment (3,258,826) (2,517,280)
Organizational and preopening costs (802,109) (382,648)
Maturities of short-term investments - 10,403,626
------------- ------------
Net cash provided by (used in) investing activities (4,060,935) 7,503,698
-------------- ------------
Cash flows from financing activities:
Proceeds from issuance of stock options 18,703 7,988
Net borrowings under revolving credit facility 7,209,017 -
Debt issuance costs incurred (81,702) -
Payments on long-term obligations (653,180) (559,142)
------------- ------------
Net cash provided by (used in) financing activities 6,492,838 (551,154)
------------- ------------
Increase (decrease) in cash and cash equivalents 2,209,105 (2,496,128)
Cash and cash equivalents, beginning of period 247,943 2,884,977
------------- ------------
Cash and cash equivalents, end of period $ 2,457,048 $ 388,849
============= ============
Supplemental cash flow information:
Cash paid for interest $ 863,527 $ 170,633
Cash paid for income taxes 509,241 -
Supplemental information - noncash activity:
Acquisition of equipment through capital leases $ 973,053 $ 1,540,381
============= ============
</TABLE>
See accompanying notes to condensed consolidated inancial statements.
Page 4
<PAGE>
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
The condensed consolidated balance sheet as of September 30, 1998 and the
related condensed consolidated statements of operations and cash flows for
the three and nine month periods ended September 30, 1998 and 1997
contained in this Form 10-Q, which are unaudited, include the accounts of
Intensiva HealthCare Corporation and its wholly-owned subsidiaries
("Intensiva" or the "Company"). All significant intercompany accounts have
been eliminated in consolidation. In the opinion of management, all
adjustments, consisting of normal recurring items, necessary for a fair
presentation of such financial statements have been included. The results
of operations for the three and nine month periods ended September 30, 1998
are not necessarily indicative of the results to be expected for the year
ended December 31, 1998.
The condensed consolidated financial statements do not include all
information and footnotes necessary for a complete presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. Reference is made to the
Company's audited financial statements and the related notes, included in
the registrant's annual report on Form 10-K for the year ended December 31,
1997.
(2) Net Income Per Share
Basic and diluted income per share was computed using net income and the
weighted average number of shares of common stock and common stock
equivalents. The weighted average numbers of shares of common stock and
common stock equivalents used in the computation of income per share for
each of the periods presented is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
Shares Used in Computation of: 1998 1997 1998 1997
- - ------------------------------------- ----------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Basic income per share 10,057,356 9,945,916 10,001,905 9,918,680
Diluted income per share 10,457,404 10,466,714 10,468,994 10,460,742
</TABLE>
For each of the periods presented, the difference between the amounts
relates to the effect of dilutive stock options and warrants.
(3) Comprehensive Earnings
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income", on January 1, 1998,
which requires reporting of comprehensive income (earnings) and its
components in the statement of operations and statement of equity,
including net income as a component. Comprehensive income is the change in
equity of a business from transactions and other events and circumstances
from non-owner sources.
Page 5
<PAGE>
(4) Start-Up Activities
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-5, "Reporting on the Costs of
Start-Up Activities". SOP 98-5 requires costs of start-up activities and
organizational costs to be expensed as incurred. The Company is required to
adopt SOP 98-5 on January 1, 1999 as a cumulative effect of a change in
accounting principle. The total amount of unamortized organizational and
preopening costs at September 30, 1998 was $766,629.
(5) Reclassifications
Certain prior year amounts have been reclassified to conform with current
year presentation.
(6) Subsequent Event
On November 10, 1998, the Company announced that it had entered into a
definitive agreement to be acquired by Select Medical Corporation. The
acquisition is subject to a number of conditions, including the expiration
of the waiting period under the Hart-Scott-Rodino Act.
Page 6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Intensiva provides highly specialized, acute long-term care for critically
ill or injured patients who require intensive medical monitoring and treatment,
and who often have multiple medical conditions and are medically unstable. The
Company provides high quality, cost effective, specialized care for its
patients, who typically require an average length of stay of greater than 25
days in an intensive inpatient setting. Intensiva's medical staffs provide
specialized medical services, as well as nursing and respiratory care, and the
Company is expanding disease-specific pathways to treat pulmonary, cancer, renal
and cardiac conditions, among others. The Company's clinical programs utilize
specialized staff, equipment and protocols for the treatment of its patients.
Intensiva leases underutilized space from general acute care hospitals
("Host Hospitals") in underserved markets, creating a separate "hospital within
a hospital." By leasing space from the Host Hospital, Intensiva is able to
minimize capital and overhead costs, including the costs to purchase and operate
the physical plant and expensive medical and diagnostic equipment. The Company
is able to purchase certain services from its Host Hospitals, such as laboratory
and radiology (MRI, CAT Scan, X-Ray), as well as hotel services such as laundry,
housekeeping, dietary and property management. The Company's business model
contemplates that each of its specialized hospitals will become certified by
Medicare as "long-term care hospitals" exempt from the Prospective Payment
System ( PPS) after approximately seven months of operations. This exemption
will enable the hospitals to receive cost-based reimbursement (subject to
certain caps), which the Company believes is more appropriate given the medical
condition of its patients. In addition, the Company's business model seeks to
maintain the anticipated payor mix which includes both non-governmental and
governmental payors. The Company is reimbursed by non-governmental payors on per
diem or per discharge basis, through fee for service arrangements, or through
negotiated discounts from established charges.
Operations begin approximately four to five months after an agreement is
executed (and a Certificate of Need is approved, if necessary) with a Host
Hospital. During the qualification period, the Company spends approximately one
million dollars per facility on renovation costs, equipment purchases,
pre-opening costs and working capital before the facility becomes eligible for
certification as a long-term care hospital. Patient volumes are lower during the
qualification phase while physicians, case managers, and payors are educated as
to the benefits of the Company's clinical services.
As of September 30, 1998, the Company operated 21 facilities in nine
states. Another facility began operations in October 1998. The Company
anticipates opening one additional facility during 1998. In addition, as of
September 30, 1998, the Company had signed agreements involving seven other
facilities.
Page 7
<PAGE>
Sources of Revenues
The Company receives payment for health care services primarily from the
federal government and state governments under the Medicare, Medicaid and other
governmental programs and from non-governmental payors such as managed care
organizations (e.g. preferred provider and health maintenance organizations) and
other commercial health insurance carriers (e.g. traditional indemnity insurance
plans). Consistent with initiatives to control health care costs, the Company
generally negotiates payments with non-governmental payors based upon the type
and extent of services to be provided to individual patients. The following
table sets forth the approximate percentages of the Company's net patient
service revenues derived from the specified payor sources indicated:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Medicare 63.1% 78.5% 64.3% 78.9%
Medicaid 6.6 4.2 7.9 2.5
HMO 4.4 4.0 4.1 3.1
PPO 4.9 1.9 4.2 6.3
Other negotiated arrangements 21.0 11.4 19.5 9.2
----- ----- ----- -----
100.0% 100.0% 100.0% 100.0%
====== ====== ====== ======
</TABLE>
The level of Medicare net revenues as a percentage of total net revenues is
a reflection of the maturation of a number of the Company's hospitals. Other
consists of traditional indemnity insurance and all other arrangements with
third-party payors (primarily those negotiated on a case by case basis).
Results of Operations
Net Revenues. Net revenues for the three and nine month periods ended
September 30, 1998 increased $9.8 million, or 50.4%, and 35.2 million, or 76.4%,
respectively, from the comparable periods in 1997. This growth is primarily a
result of the increase in the number of operational facilities, as the Company
had 21 operational facilities at September 30, 1998 as compared to 15
operational facilities at September 30, 1997. In addition, increased census at
maturing facilities has been a significant factor in the increase in net
revenues. The 15 facilities in operation at September 30, 1997 had patient days
of 26,798 and 18,093 during the third quarters of 1998 and 1997, respectively.
Operating Expenses. Operating expenses for the three and nine month periods
ended September 30, 1998 increased $8.1 million, or 48.1%, and $29.2 million, or
73.7%, respectively, from the comparable periods in 1997. This increase is
attributable to the same factors as those relating to the net revenues growth.
As a percentage of net revenues, operating expenses for the three months ended
September 30, 1998 increased to 84.9% from 83.1% during the three months ended
June 30, 1998 and decreased from 86.2% during the three months ended September
30, 1997. The increase in 1998 is related primarily to decreased net revenues
resulting from increased contractual adjustments during the quarter. See further
discussion in the Provision for Doubtful Accounts section below. The Company
expects this percentage to decline as more of its facilities mature.
General and Administrative. General and administrative expenses for the
three and nine month periods ended September 30, 1998 increased $138,000, or
11.4%, and $586,000, or 17.2%, respectively, from the comparable periods in
Page 8
<PAGE>
1997. The increase in expenses was primarily attributable to salaries, related
payroll taxes, and employee benefits relating to additional personnel retained
to support the Company's growth strategy. As a percentage of net revenues,
general and administrative expenses for the three months ended September 30,
1998 were 4.6%, down from 5.2% for the three months ended June 30, 1998 and 6.2%
for the three months ended September 30, 1997. The Company expects that its
general and administrative expenses will continue to decrease as a percentage of
net revenues as the Company grows and achieves certain economies of scale,
although at a slower rate.
Provision for Doubtful Accounts. The provision for doubtful accounts for
the three and nine month periods ended September 30, 1998 decreased $118,000, or
31.8%, and $8,000, or 0.6%, respectively, from the comparable periods in 1997.
As a percentage of net revenues, the provision for doubtful accounts for the
three months ended September 30, 1998 was 0.9%, down from 2.5% for the three
months ended June 30, 1998 and 1.9% for the three months ended September 30,
1997. Potential changes in the net realizable value of certain Medicare and
Medicaid accounts had previously been reserved for within the allowance for
doubtful accounts, but are now recorded as contractual adjustments reflected in
net revenues. Bad debt expense for the three months ended September 30, 1998 has
been adjusted accordingly. Prior to this adjustment, the provision for doubtful
accounts for the three months ended September 30, 1998 was 2.4% of net revenues.
Depreciation and Amortization. Depreciation and amortization for the three
and nine month periods ended September 30, 1998 increased $315,000, or 73.7%,
and $936,000, or 90.6%, respectively, from the comparable periods in 1997. The
increase relates primarily to depreciation and amortization related to the
property and equipment acquired for the six facilities opened between October 1,
1997 and September 30, 1998.
Provision for Income Taxes. The Company's provision for income taxes for
the three and nine month periods ended September 30, 1998 contemplates the
utilization of substantially all of the Company's available federal net
operating loss carryforwards during 1998. Such net operating loss carryforwards
offset all of the Company's taxable income for the three and nine month periods
ended September 30, 1997.
Selected Quarterly Financial Results
The following table presents unaudited quarterly operating results for each
of the eight quarters in the period from October 1, 1996 through September 30,
1998. The Company believes that all necessary adjustments have been included in
the amounts stated below to present fairly the following selected quarterly
information when read in conjunction with the financial statements included
elsewhere in this Form 10-Q.
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------------------------
Dec 31, Mar 31, June 30, Sept 30, Dec 31, Mar 31, June 30, Sept 30,
1996 1997 1997 1997 1997 1998 1998 1998
---- ---- ---- ---- ---- ---- ---- ----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues $8,009 $12,400 $14,259 $19,495 $23,435 $25,734 $26,350 $29,310
Operating income
(loss) (1,780) (227) 125 687 968 1,230 1,748 2,089
Income (loss) before
income taxes (1,639) (86) 198 701 918 1,063 1,393 1,748
Provision for income
taxes - - - - - - - -
Net income (loss) (1,639) (86) 198 701 824 744 975 1,224
</TABLE>
Page 9
<PAGE>
Liquidity and Capital Resources
Since November 1997, the Company has financed its operations primarily
through borrowings under its $20 million revolving credit facility. In April
1998, the Company terminated its existing Loan and Security Agreement and
entered into a Loan and Security Agreement with another lender to obtain a $20
million revolving credit facility with a term of three years. Although the
Company has begun to generate positive cash flows from certain of its mature
facilities, overall cash flows from operations have not been sufficient to
support ongoing operations primarily due to the time lag that is required to
obtain Medicare provider numbers at new facilities and the continuing
development of new facilities in accordance with the Company's growth strategy.
Cash flows used in investing activities have consisted primarily of capital
renovations, equipment purchases and organizational and pre-opening costs
incurred prior to providing patient services at each new facility.
The Company made capital expenditures of approximately $3,259,000 and
$2,517,000 during the nine months ended September 30, 1998 and 1997,
respectively. Additional equipment was acquired through capital leases,
amounting to approximately $973,000 and $1,540,000 for the nine months ended
September 30, 1998 and 1997, respectively.
During March 1996, the Company entered into a sale-leaseback agreement with
a third-party to take advantage of favorable borrowing rates and maintain
liquidity. As part of this agreement, the Company obtained a $1 million
commitment from the third-party to finance additional capital expenditures. In
May 1997, this agreement was amended to extend an additional commitment of
$500,000 through January 1998 (subsequently extended through February 1999).
Unutilized borrowing capacity under the commitment was approximately $294,000 at
September 30, 1998.
Accounts receivable at September 30, 1998 increased $17.2 million from
December 31, 1997. Accrued third-party payor settlements at September 30, 1998
increased $9.4 million from December 31, 1997. The majority of the increase in
accounts receivable since December 31, 1997 relates to increased census at the
Company's facilities and the time required in obtaining new Medicare provider
numbers from the Medicare fiscal intermediaries once a facility opens and upon
completion of the qualification period. The time lag can result in initial
Medicare payments being received in excess of six months after a facility opens.
Of the 21 facilities operating as of September 30, 1998, 15 have received
certification as long-term care hospitals and have received long-term care
provider numbers. One of the 15 received its provider number during the third
quarter of 1998 and therefore had not yet begun to receive long-term care
payments as of September 30, 1998. This facility had an accounts receivable
balance of $1.5 million at September 30, 1998. Of the remaining six facilities,
four have received initial provider numbers by September 30, 1998, but three of
the four received provider numbers during the third quarter and had therefore
received minimal payments by September 30, 1998. The combined accounts
receivable balance for these six facilities at September 30, 1998 was $5.6
million. In addition, the Company is continuing its efforts to collect Medicaid
balances at the two facilities that received Medicaid provider numbers during
the second quarter of 1998. The Medicaid accounts receivable balance for these
two facilities at September 30, 1998 was $5.2 million. The Company anticipates
that it will ultimately receive long-term care certification and provider
numbers for all existing facilities.
Page 10
<PAGE>
Working capital at September 30, 1998 was $22.3 million, representing a
$2.3 million increase from December 31, 1997. This increase resulted primarily
from the utilization of borrowings under the revolving credit facility to fund
operations.
The Company leases space from Host Hospitals under operating lease
agreements having initial terms of five or more years. The Company leases
corporate office space under a noncancellable operating lease which expires in
the year 2002. Minimum annual lease payments on noncancellable operating leases
with maturities in excess of one year are as follows: $2.1 million in 1998, $8.8
million in 1999, $8.8 million in 2000, $8.6 million in 2001, $6.5 million in
2002 and $2.8 million thereafter.
The Company estimates that borrowings under the revolving credit facility
will be sufficient to fund its continued development and meet anticipated cash
needs of the Company for at least the next 12 months.
Health Care Legislation
In recent years, an increasing number of legislative proposals have been
introduced or proposed in Congress and in some state legislatures which could
result in major changes in the health care system. Management cannot predict to
what extent such proposed legislation would affect long-term care hospitals,
whether such proposed legislation will be adopted, or if adopted, what effect,
if any, such proposed legislation would have on the operations of the Company.
Other Information
Currently, many computer systems and software products are coded to accept
only two digit entries in the date code field. These date code fields will need
to accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, many companies' software and computer systems may need to be
upgraded or replaced in order to comply with such "Year 2000" requirements.
The Company is currently taking steps to address potential Year 2000 issues
in the following four areas: 1) the Company's information systems; 2) the
Company's medical equipment and its ability to perform properly; 3) the
readiness of its host hospitals relative to Year 2000 issues; and 4) the
readiness of third parties, particularly the Medicare program, relative to Year
2000 issues. As part of its efforts in this area, the Company is in the process
of forming a Year 2000 Compliance Committee, which will be charged with the
design and execution of a plan to assess risks and test for Year 2000 compliance
in the four areas above. In addition, the Company is in the process of
evaluating proposals from outside firms to assist with this project.
Although the project is in its early stages, management does not expect
that the cost of the Year 2000 compliance project will be material to its
financial condition, or results of operations, nor does management anticipate
any material disruption in operations as a result of this issue.
Forward Looking Statements
Certain of the statements made herein are forward looking statements, as
that term is defined under Section 27(a) of the Securities Exchange Act of 1933,
Section 21(e) of the Securities Exchange Act of 1934, the Private Securities
Litigation Reform Act of 1995, and releases by the Securities and Exchange
Commission. The Company cautions readers that actual results could be materially
different as a result of various possibilities and differences between
anticipated and actual developments. Factors that could cause actual results to
Page 11
<PAGE>
differ from anticipated results include, but are not limited to changes in
health care regulation and/or health care reform, changes in the regulation of
relationships among health care providers, difficulty in obtaining necessary
licenses or certifications, ability to collect accounts receivable, changes in
reimbursement policies or procedures, changes in payor mix, changes in referral
source practices, changes in relationships with Host Hospitals and/or the leases
with such Host Hospitals, competition, and the adequacy of professional
liability insurance. Additional information concerning such factors is set forth
under "Risk Factors" in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, which information is incorporated herein by this
reference. The Company undertakes no obligation to publicly release the results
of any revisions to any forward looking statements contained herein which may be
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Item 2. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Page 12
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
There are no reportable proceedings.
Item 2. Change in Securities
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
Item 3. Defaults Upon Senior Securities
(a) Not applicable.
(b) Not applicable.
Item 4. Submission of Matters to Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index for list of Exhibits.
(b) Not applicable.
Page 13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTENSIVA HEALTHCARE CORPORATION
Date: November 16, 1998 By /s/ John P. Keefe
--------------------------------------------
John P. Keefe, Chief Financial Officer
(Principal Financial and Accounting Officer)
Page 14
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
------ -------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's interim unaudited consolidated financial statements as of and for
the nine months ended September 30, 1998, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Sep-30-1998
<CASH> 2,457,048
<SECURITIES> 0
<RECEIVABLES> 48,560,880
<ALLOWANCES> 2,997,000
<INVENTORY> 1,427,722
<CURRENT-ASSETS> 52,947,793
<PP&E> 12,624,764
<DEPRECIATION> 2,750,774
<TOTAL-ASSETS> 64,437,740
<CURRENT-LIABILITIES> 30,667,481
<BONDS> 0
0
0
<COMMON> 10,079
<OTHER-SE> 30,212,240
<TOTAL-LIABILITY-AND-EQUITY> 64,437,740
<SALES> 0
<TOTAL-REVENUES> 81,394,083
<CGS> 0
<TOTAL-COSTS> 68,934,928
<OTHER-EXPENSES> 4,001,947
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</TABLE>
