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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, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 000-21515
AMERICAN MEDSERVE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3925637
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
184 SHUMAN BLVD., SUITE 200, NAPERVILLE, ILLINOIS 60563
(Address of principal executive offices) (Zip Code)
(630) 717-2904
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 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
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The number of the registrant's shares of common stock outstanding as of
December 26, 1996 was 11,720,175.
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AMERICAN MEDSERVE CORPORATION
FORM 10-Q
TABLE OF CONTENTS
Page No.
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Part I - Financial Information
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets - December 31, 1995
and September 30, 1996 . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Operations - three
months and nine months ended September 30, 1995 and 1996 . 4
Condensed Consolidated Statements of Cash Flows - nine
months ended September 30, 1995 and 1996 . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements . . . . 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . 9
Part II - Other Information
Item 2 - Changes in Securities. . . . . . . . . . . . . . . . . . 12
Item 4 - Submission of Matters to a Vote of Security Holders. . . 12
Item 5 - Other Information. . . . . . . . . . . . . . . . . . . . 13
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN MEDSERVE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31 SEPTEMBER 30
1995 1996
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(NOTE) (UNAUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,437 $195
Accounts receivable, net 8,403 17,485
Income taxes receivable - 622
Inventories 3,939 5,966
Prepaid expenses and other current assets 338 1,140
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Total current assets 14,117 25,408
Equipment, net 2,084 3,914
Excess of cost over net assets acquired, net 27,829 43,575
Deferred financing costs, net 871 1,389
Investment in affiliate - 5,968
Other assets 96 1,897
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Total assets $44,997 $82,151
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,170 $4,836
Other current liabilities 2,407 5,382
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Total current liabilities 4,577 10,218
Long-term debt 23,505 41,733
Minority interest 2,168 -
Deferred income taxes 174 115
Stockholders' equity
Common stock:
Common Stock -- $.01 par value; 30,000,000 shares authorized;
5,526,005 shares issued and outstanding at September 30, 1996 - 55
Class A -- $.01 par value; 56,500 shares issued and
outstanding at December 31, 1995; liquidation preference
of $24,618 at September 30, 1996 1 -
Class B -- $.01 par value; 7,714 shares issued and outstanding
at December 31, 1995 - -
Other shareholders' equity 14,572 30,030
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Total stockholders' equity 14,573 30,085
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Total liabilities and stockholders' equity $44,997 $82,151
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</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.
See notes to condensed consolidated financial statements.
3
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AMERICAN MEDSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------ ---------------------
1995 1996 1995 1996
------------------------ ---------------------
<S> <C> <C> <C> <C>
Revenues $12,897 $22,114 $29,599 $54,471
Cost of revenues 9,330 15,831 21,235 39,090
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Gross profit 3,567 6,283 8,364 15,381
Selling, general and administrative expenses 2,824 5,387 6,578 12,677
Noncash compensation expense - 1,229 - 1,229
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Operating income (loss) 743 (333) 1,786 1,475
Other (income) expenses:
Interest expense 513 936 1,222 2,149
Minority interest (23) (52) (125) (127)
Other, net (19) 26 18 22
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Income (loss) before income taxes and extraordinary
item 272 (1,243) 671 (569)
Income taxes 143 11 433 335
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Income (loss) before extraordinary item 129 (1,254) 238 (904)
Write off of deferred financing costs, net of income
taxes of $404 - - - 437
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Net income (loss) $129 ($1,254) $238 ($1,341)
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------------------------ ---------------------
Net income (loss) per share:
Before extraordinary item $0.02 ($0.18) $0.04 ($0.14)
Extraordinary item - - - (0.06)
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Net income (loss) $0.02 ($0.18) $0.04 ($0.20)
------------------------ ---------------------
------------------------ ---------------------
Shares used in computing net income (loss)
per share 6,466 6,803 6,466 6,580
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------------------------ ---------------------
</TABLE>
See notes to condensed consolidated financial statements.
4
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AMERICAN MEDSERVE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
---------------------
1995 1996
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OPERATING ACTIVITIES
<S> <C> <C>
Net cash provided by (used in) operating activities $474 ($280)
INVESTING ACTIVITIES:
Capital expenditures (432) (1,188)
Acquisition of entities, net of cash acquired (21,885) (16,026)
Investment in affiliate - (6,000)
Other (141) (391)
---------------------
Net cash used in investing activities (22,458) (23,605)
FINANCING ACTIVITIES:
Proceeds from (repayments of) revolving line of credit, net 2,000 (3,300)
Proceeds from long-term debt 13,945 41,530
Repayments of long-term debt and capital lease obligations (579) (21,008)
Capital contributions 8,535 8,350
Fees paid for financing arrangements (538) (1,515)
Other (500) (1,414)
---------------------
Net cash provided by financing activities 22,863 22,643
---------------------
Net increase (decrease) in cash and cash equivalents 879 (1,242)
Cash and cash equivalents, beginning of period 866 1,437
---------------------
Cash and cash equivalents, end of period $1,745 $195
---------------------
---------------------
</TABLE>
See notes to condensed consolidated financial statements.
5
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AMERICAN MEDSERVE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 1996 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1996. For further information, refer
to the consolidated financial statements of the Company for the six months ended
December 31, 1995 and footnotes thereto included in the Company's Registration
Statement on Form S-1 (File No. 333-11667).
2. ACQUISITIONS
During the nine months ended September 30, 1996, the Company acquired
substantially all of the assets of Pharmed, Inc., based in Alexandria,
Louisiana, Pharmed of Baton Rouge, Inc., based in Baton Rouge, Louisiana, Royal
Care of America, Inc., based in Malta, New York and four other less significant
acquisitions. The aggregate purchase price for these acquisitions was $18,024.
During the nine months ended September 30, 1995, the Company acquired
substantially all of the assets of Nihan & Martin, Inc., based in Rockford,
Illinois, Extended Care Associates, Inc., based in Lynchburg, Virginia, Dixon
Pharmacy, Inc., based in Dixon, Illinois, Sterling Healthcare Services, Inc.,
based in Shreveport, Louisiana and two other less significant acquisitions. The
aggregate purchase price for these acquisitions was $22,535.
For certain of these acquisitions, the sellers retained a minority interest in
the stock of the applicable subsidiary company.
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Unaudited pro forma data as if the Company had purchased each of these
businesses as of January 1, 1995 are set forth below:
Nine Months Ended
-----------------
September 30
------------
1995 1996
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Revenues $61,279 $68,902
Loss before extraordinary item (632) (746)
Net loss (A) (632) (1,183)
Loss per share before extraordinary item (.10) (.11)
Net loss per share (A) (.10) (.18)
(A) The pro forma results of operations for the nine months ended September 30,
1996 include a noncash compensation charge of $1,229 (with no income tax
benefit) related to the conversion of subsidiary company stock option plans and
the issuance of common stock of the Company to certain directors and members of
management (see Note 4), which had the effect of reducing net income per share
by $.19.
3. INVESTMENT IN AFFILIATE
In April 1996, the Company acquired a 40% equity interest in Good Samaritan
Supply Services, Inc. ("Good Samaritan") for cash of $6,000. At September 30,
1996, this investment was accounted for using the equity method of accounting.
The following summarizes the results of operations of Good Samaritan for the
period from May 1, 1996 to September 30, 1996:
Revenues $10,546
Gross profit 1,948
Net loss (77)
In November 1996, the Company acquired an additional 10.1% of the total
outstanding shares of Good Samaritan for cash of $2,000. The Company will begin
consolidating the results of Good Samaritan subsequent to this latter purchase.
4. STOCKHOLDERS' EQUITY
In August 1996, the Company converted the minority interests retained by the
former owners of the acquired businesses ("Retained Stock") into 794,581 shares
of the Company's common stock, based on a conversion formula as defined in each
of the respective acquisition agreements. The conversion of the Retained Stock
is accounted for using the purchase method of accounting and resulted in
additional goodwill of $4,488. Concurrent with the conversion of the Retained
Stock, the Company also converted the stock issuable under stock option plans of
its subsidiary companies from stock of the subsidiary companies to common stock
of the Company. The difference between the fair value of the underlying stock
and the exercise price of the options ($101 for vested options) was
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recorded as a noncash compensation charge (with no income tax benefit) in the
three months ended September 30, 1996.
In September 1996, the Company issued 310,208 shares of common stock to
certain directors and members of management for a purchase price of $1.41 per
share. The Company received $44 in cash proceeds and $394 of demand notes
receivable in connection with this sale. The fair value of the shares at
issuance was $2,823. The difference between the purchase price and the fair
value of the shares, $2,385, was recorded as a noncash compensation charge to
the extent the shares are vested. The shares were approximately 47% vested
at September 30, 1996 and will be fully vested at December 31, 1996.
Accordingly the compensation charge related to this item is $1,128 (with no
income tax benefit) in the three months ended September 30, 1996 and will be
$1,257 (with no income tax benefit) in the three months ended December 31,
1996.
In November and December 1996, the Company issued 6,160,550 shares of Common
Stock at $15 per share in an initial public offering. The net proceeds of the
offering were used to make a mandatory preferential distribution of
approximately $20,795 to the Company's principal stockholder, to make a payment
of $475 to an affiliate of the Company's principal stockholder for accrued
management fees and to terminate a professional services agreement, to repay
approximately $46,074 of outstanding debt under long- and short-term borrowings,
and to make an additional investment of $2,000 in Good Samaritan, which amount
was used by Good Samaritan to repay a portion of its outstanding indebtedness.
In November 1996, in advance of the initial public offering, the Company adopted
an Amended and Restated Certificate of Incorporation, pursuant to which the
Company authorized 30,000,000 shares of a new class of common stock with a par
value of $.01 per share (Common Stock) and each previously issued share of the
Company's Class A Common Stock and Class B Common Stock was reclassified as
69.65 shares of the newly-authorized Common Stock. Accordingly, all references
in these condensed financial statements to income (loss) per share have been
restated to reflect this reclassification. Retroactive effect has been given
thereto in the September 30, 1996 condensed balance sheet.
Shares used in computing income (loss) per share in these condensed financial
statements include 146,635 shares issuable under the stock option plans of the
subsidiary companies, 310,208 shares issued to certain directors and management
and 1,655,417 shares whose proceeds will be used to pay the mandatory
preferential distribution to the Company's principal stockholder, all as if they
were outstanding the entire period for each of the periods presented.
5. EXTRAORDINARY ITEM
In March 1996 the Company recorded an extraordinary charge of $841 ($437, net of
income taxes) reflecting the write off of deferred financing costs in connection
with the refinancing of the Company's credit facility.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
RESULTS OF OPERATIONS
Revenues for the three months ended September 30, 1996 increased 71% to $22.1
million from revenues of $12.9 million for the comparable 1995 period. Of this
$9.2 million increase, $6.4 million was due to acquisitions and $2.8 million was
due to internal growth. For the nine months ended September 30, 1996, revenues
increased 84% to $54.5 million from revenues of $29.6 million in the comparable
1995 period. Of this $24.9 million increase, $17.4 million was due to
acquisitions and $7.5 million was due to internal growth. Increased revenues
reflect the acquisitions of Nihan & Martin, Inc. in March 1995, Extended Care
Associates, Inc. and Dixon Pharmacy, Inc. in April 1995, Sterling Healthcare
Services, Inc. in August 1995, Pharmed, Inc. and Pharmed of Baton Rouge, Inc. in
May 1996 and Royal Care of America, Inc. in August 1996, as well as six other
less significant acquisitions. The Company's "internal growth" consists of
increased market penetration in existing markets, fold-in acquisitions in
established areas that are assimilated into existing operations, start-up
facilities in new areas in states where the Company was already established, and
sales of new products and services to existing customers.
Gross profit for the three months ended September 30, 1996 was $6.3 million
compared to $3.6 million for the comparable 1995 period. For the nine months
ended September 30, 1996, gross profit was $15.4 million compared to $8.4
million for the comparable 1995 period. Gross profit as a percentage of
revenues was 28.4% and 27.7% for the three months ended September 30, 1996 and
1995, respectively. The increase in gross profit as a percentage of revenues
was primarily the result of acquisitions of companies with higher gross margins
and more favorable reimbursement rates in the states in which such acquired
companies operate. For the nine months ended September 30, 1996 and 1995, gross
profit as a percentage of revenues was 28.2% and 28.3%, respectively. This
decrease was primarily the result of Medicaid reimbursement rate reductions
in certain states in the latter half of 1995. The effect of these reductions
was partially offset by the positive effect of the acquisitions of certain
companies with higher margin products.
Selling, general and administrative expenses for the three months ended
September 30, 1996 were $5.4 million, excluding a noncash compensation charge of
$1.2 million, compared to $2.8 million for the comparable 1995 period. For the
nine months ended September 30, 1996, selling, general and administrative
expenses were $12.7 million, excluding the noncash compensation charge, compared
to $6.6 million in the comparable 1995 period. As a percentage of revenues,
selling, general and administrative expenses, excluding the noncash compensation
charge, increased to 24.4% from 21.9% in the three months ended September 30,
1996 and 1995, respectively, and increased to 23.3% from 22.2% in the nine
months ended September 30, 1996 and 1995, respectively. The increase in
selling, general and administrative expenses is primarily the result of the
acquisitions completed throughout the periods, including increased
amortization of goodwill and increased ongoing professional fees associated
with the acquired companies, and increased expenses associated with the
expansion of the corporate office staff in the
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latter half of 1995 and the first half of 1996 to support the Company's
growth.
The noncash compensation charge of $1.2 million in the three months ended
September 30, 1996 relates to the conversion in August 1996 of shares issuable
under various subsidiary company stock option plans from common stock of the
underlying subsidiary companies to common stock of the Company, and the sale in
September 1996 of shares of common stock of the Company to certain directors and
members of management at a price that was less than the fair value of the stock,
as measured by the initial public offering price. There is no income tax benefit
associated with this noncash charge.
Interest expense for the three months ended September 30, 1996 was $0.9 million
compared to $0.5 million for the comparable 1995 period. For the nine months
ended September 30, 1996, interest expense was $2.1 million compared to $1.2
million in the comparable 1995 period. The increased interest expense reflects
higher debt levels related to acquisitions.
In March 1996, the Company recorded an extraordinary item in the amount of $0.4
million (net of an income tax benefit of $0.4 million) reflecting the write-off
of deferred financing charges in connection with the refinancing of the
Company's credit facility.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $0.3 million in the nine months ended
September 30, 1996, as compared to $0.5 million net cash provided by operations
in the comparable 1995 period. The net use of cash in the 1996 period was
primarily related to an increase in accounts receivable related to internal
sales growth, as well as slower payments at certain of the Company's operating
subsidiaries. These increases in the net use of cash were partially offset by
increases in accounts payable and accrued expenses related to the Company's
internal growth.
Net cash used in investing activities was $23.6 million in the nine months ended
September 30, 1996, as compared to $22.5 million in the comparable 1995 period.
The majority of the expenditures in both periods were related to acquisitions
completed in the respective periods, including a $6.0 million, 40% equity
investment in Good Samaritan. Capital expenditures were $1.2 million and $0.4
million in the nine months ended September 30, 1996 and 1995, respectively. The
capital expenditures in the nine months ended September 30, 1996 increased as a
result of leasehold improvements at one location and increases in equipment
leased to customers and medication carts used in locations served.
Net cash provided by financing activities decreased to $22.6 million in the nine
months ended September 30, 1996 from $22.9 million in the comparable 1995
period. The primary source of funds in the nine months ended September 30, 1996
were additional capital contributions from the Company's principal stockholder
($8.4 million) and funds available from the Company's credit facility for
acquisitions and operating needs of the Company. The net cash provided by
financing
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activities has been reduced by approximately $1.5 million of expenses related
to the Company's initial public offering which were paid in advance of the
offering.
In November and December 1996, the Company issued 6,160,550 shares of Common
Stock in an initial public offering, resulting in net proceeds to the Company of
approximately $83.2 million. These proceeds were used primarily to make a
mandatory preferential distribution of approximately $20.8 million to the
Company's principal stockholder, to repay short- and long-term debt of
approximately $46.1 million and to make an additional investment of $2.0 million
in Good Samaritan, which amount was used by Good Samaritan to repay a portion of
its outstanding indebtedness. The Company expects that the remaining proceeds
of the offering of approximately $13.8 million, together with cash generated
from operations and funds available from its credit facility, will be adequate
to support the foreseeable capital requirements of the Company through 1998,
although a large acquisition or a number of smaller acquisitions may require
funds in excess of such availability.
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PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
During the period from July 1, 1996 through September 30, 1996, the Company
sold the following securities that were not registered under the Securities Act
of 1933, as amended:
On August 5, 1996, the Company issued a convertible promissory note,
convertible into shares of Common Stock of the Company at a conversion price of
$12.75 per share, in the principal amount of $2,000,000 to Royal Care of
America, Inc. ("Royal Care") as partial payment for the acquisition of certain
assets of Royal Care. Exemption from registration is claimed pursuant to
Section 4(2) of the Securities Act of 1933, no public sale having been involved.
On August 23, 1996, the Company issued shares of Class B common stock
(Common Stock as subsequently reclassified) to the following persons in the
following amounts in exchange for their shares in certain of the Company's
subsidiaries: William J. and Mary Jane Gatti (4,252.48 Class B shares/296,186
shares of Common Stock); Nelson L. Showalter (640.71 Class B shares/44,625
shares of Common Stock); G&Y Holdings, Inc. (2,655.97 Class B shares/184,988
shares of Common Stock); Ronald E. Keith (450.21 Class B shares/31,357 shares of
Common Stock); James Pietryga (112.76 Class B shares/7,854 shares of Common
Stock); Bruce Gerlich (98.84 Class B shares/6,884 shares of Common Stock); Mitch
Overstreet (98.84 Class B shares/6,884 shares of Common Stock); Sterling
Acquisition Partners, Inc. (1,686.56 Class B shares/117,470 shares of Common
Stock); Pharmed, Inc. (1,146.96 Class B shares/79,886 shares of Common Stock);
and Pharmed of Baton Rouge, Inc. (264.85 Class B shares/18,447 shares of Common
Stock). Exemption from registration is claimed pursuant to Section 4(2) of the
Securities Act of 1933, no public sale having been involved.
On September 5, 1996, the Company issued shares of Class B common stock
(Common Stock as subsequently reclassified) for a purchase price of $98.46 per
Class B share ($1.41 per share of Common Stock) to the following persons in the
following amounts, each of whom paid 10% of the purchase price for their shares
in cash and 90% in the form of interest-bearing demand notes: Timothy L.
Burfield (340 Class B shares/23,681 shares of Common Stock); Charles R. Wallace
(1,496.45 Class B shares/104,228 shares of Common Stock); Michael B. Freedman
(1,156.08 Class B shares/80,522 shares of Common Stock); J. Jeffrey Gephart
(750.72 Class B shares/52,288 shares of Common Stock); Thomas C. Loftus (100
Class B shares/6,965 shares of Common Stock); George E. Pepe (100 Class B
shares/6,965 shares of Common Stock); Charles C. Halberg (170.18 Class B
shares/11,853 shares of Common Stock); Mark A. Jerstad (170.18 Class B
shares/11,853 shares of Common Stock); and James H.S. Cooper (170.18 Class B
shares/11,853 shares of Common Stock). Exemption from registration is claimed
pursuant to Section 4(2) of the Securities Act of 1933, no public sale having
been involved.
No underwriters were involved in any of the foregoing sales of securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On July 22, 1996, the Company's two stockholders at the time, by unanimous
written consent, approved an amendment to the Company's Certificate of
Incorporation to increase the authorized Class B Common Stock from 20,000 to
30,000 shares and, correspondingly, to increase the total authorized common
stock from 80,000 to 90,000 shares.
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On August 21, 1996, the Company's two stockholders at the time, by
unanimous written consent, approved the setting of the number of members of the
Company's Board of Directors at six and elected the following persons to serve
as directors of the Company: Timothy L. Burfield, James H.S. Cooper, Bryan C.
Cressey, Charles C. Halberg and Mark A. Jerstad.
ITEM 5. OTHER INFORMATION
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company believes that a number of important
factors could cause the Company's actual results to differ from those that may
have been or may be projected in forward-looking statements made by or on behalf
of the Company from time to time. These factors are described under the heading
"Risk Factors" in the Company's Registration Statement on Form S-1 (File No.
333-11667) filed with the Securities and Exchange Commission on November 12,
1996. Specific reference is made to the Risk Factors set forth therein entitled
"Limited Operating History," "Impact of Acquisitions and Management of Growth,"
"Capital Requirements Relating to Growth Strategy," "Industry is Highly
Competitive," "Regulation and Reimbursement" and "Uncertainty Due to Potential
Changes in National and State Health Care Policies."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Description
------- -----------
3.1* Form of Amended and Restated Certificate of Incorporation
3.2* Amended and Restated By-laws
4.1* Specimen Common Stock Certificate
10.1* Form of 1996 Stock Incentive Plan
10.2* Stock Option Plan for Directors and Executive and Key
Employees of Gatti LTC Services, Inc.
10.3* Stock Option Plan for Directors and Executive and Key
Employees of Williamson Drug Company Incorporated
10.4* Stock Option Plan for Directors and Executive and Key
Employees of Nihan & Martin, Inc.
10.5* Stock Option Plan for Directors and Executive and Key
Employees of Dixon Pharmacy, Inc.
10.6* Form of Subsidiary Non-Qualified Stock Option Agreement
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10.7* Form of Subsidiary Participation Agreement
10.8* Senior Management Agreement, made as of September 5, 1996,
between the Company and Michael B. Freedman
10.9* Senior Management Agreement, made as of September 5, 1996,
between the Company and Charles R. Wallace
10.10* Senior Management Agreement, made as of September 5, 1996,
between the Company and J. Jeffrey Gephart
10.11* Director Stock Agreement, made as of September 5, 1996,
between the Company and James H.S. Cooper
10.12* Director Stock Agreement, made as of September 5, 1996,
between the Company and Charles C. Halberg
10.13* Director Stock Agreement, made as of September 5, 1996,
between the Company and Mark A. Jerstad
10.14* Amended and Restated Stockholders Agreement, dated as of
August 23, 1996, by and among the Company, Golder, Thoma,
Cressey, Rauner Fund IV, L.P. (the "GTCR Fund"), Timothy L.
Burfield, Michael B. Freedman, Charles R. Wallace, J.
Jeffrey Gephart, James H.S. Cooper, Charles C. Halberg, Mark
A. Jerstad, William J. and Mary Jane Gatti, Nelson L.
Showalter, Frank R. Gelafio, Lee R. Youngberg, Ronald E.
Keith, James Pietryga, Bruce Gerlich, Mitch Overstreet,
Sterling Acquisition Partners, Inc., Pharmed, Inc., Pharmed
of Baton Rouge, Inc., Joseph Dellantonio, Thomas C. Loftus
and George E. Pepe
10.15* Registration Agreement, dated as of August 23, 1996, by and
among the GTCR Fund, Timothy L. Burfield, Michael B.
Freedman, Charles R. Wallace, J. Jeffrey Gephart, James H.S.
Cooper, Charles C. Halberg, Mark A. Jerstad, William J. and
Mary Jane Gatti, Nelson L. Showalter, Frank R. Gelafio, Lee
R. Youngberg, Ronald E. Keith, James Pietryga, Bruce
Gerlich, Mitch Overstreet, Sterling Acquisition Partners,
Inc., Pharmed, Inc., Pharmed of Baton Rouge, Inc., Joseph
Dellantonio, Thomas C. Loftus and George E. Pepe
10.16* Agreement made and entered into as of October 9, 1996 by and
between the Company and the GTCR Fund.
10.17* Amendment No. 1 to the Equity Purchase Agreement, made and
entered into as of August 15, 1996, by and between the
Company and the GTCR Fund
14
<PAGE>
10.18* Agreement, dated as of August 15, 1996, between the Company
and the GTCR Fund relating to the Additional GTCR Shares
10.19* Termination Agreement, dated as of August 15, 1996, between
the Company and GTCR IV, L.P.
10.20* Reimbursement and Conversion Agreement between the Company
and the GTCR Fund dated August 2, 1996
11.1 Statement re: computation of per share earnings
27.1 Financial Data Schedule
--------------------
* Document incorporated by reference from the Company's
Registration Statement on Form S-1 (File No. 333-11667), filed
with the Securities and Exchange Commission on November 12, 1996.
(b) Reports on Form 8-K
None.
15
<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.
AMERICAN MEDSERVE CORPORATION
Dated: Dec. 26, 1996 By: /s/ Timothy L. Burfield
------------- --------------------------------
Timothy L. Burfield
Chief Executive Officer, President and
Director
Dated: Dec. 26, 1996 By: /s/ Charles R. Wallace
------------- --------------------------------
Charles R. Wallace
Vice President - Finance and
Chief Financial Officer (Principal
Financial and Accounting Officer)
16
<PAGE>
EXHIBIT 11.1
AMERICAN MEDSERVE CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------- --------------------
1995 1996 1995 1996
-------------------- --------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Average number of shares outstanding 4,421 4,758 4,421 4,535
Net effect of common shares and common
equivalent shares issued in an initial public
offering under SAB 83 390 390 390 390
Net effect of common shares issued in
connection with the preferential mandatory
distribution 1,655 1,655 1,655 1,655
---------------------------------------------------
Total 6,466 6,803 6,466 6,580
---------------------------------------------------
---------------------------------------------------
Income (loss) before extraordinary item $129 ($1,254) $238 ($904)
Write off of deferred financing costs, net of
income taxes of $404 - - - 437
---------------------------------------------------
Net income (loss) $129 ($1,254) $238 ($1,341)
---------------------------------------------------
---------------------------------------------------
Income (loss) before extraordinary item per share $0.02 ($0.18) $0.04 ($0.14)
Write off of deferred financing costs, net of
income taxes of $404, per share 0.00 0.00 0.00 (0.06)
---------------------------------------------------
Net income (loss) per share $0.02 ($0.18) $0.04 ($0.20)
---------------------------------------------------
---------------------------------------------------
</TABLE>
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN MEDSERVE CORPORATION AT
SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS THEN ENDED (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 195
<SECURITIES> 0
<RECEIVABLES> 19,066
<ALLOWANCES> 524
<INVENTORY> 5,966
<CURRENT-ASSETS> 25,408
<PP&E> 5,746
<DEPRECIATION> 1,832
<TOTAL-ASSETS> 82,151
<CURRENT-LIABILITIES> 10,218
<BONDS> 41,733
0
0
<COMMON> 55
<OTHER-SE> 30,030
<TOTAL-LIABILITY-AND-EQUITY> 82,151
<SALES> 54,471
<TOTAL-REVENUES> 54,471
<CGS> 39,090
<TOTAL-COSTS> 39,090
<OTHER-EXPENSES> 13,906
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,149
<INCOME-PRETAX> (569)
<INCOME-TAX> 335
<INCOME-CONTINUING> (904)
<DISCONTINUED> 0
<EXTRAORDINARY> (437)
<CHANGES> 0
<NET-INCOME> (1,341)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> (.20)
</TABLE>
