FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1994
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 1-7008
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COMMUNITY PSYCHIATRIC CENTERS
(Exact name of registrant as specified in its charter)
NEVADA 94-1599386
- -------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
6600 West Charleston Boulevard, Suite #118, Las Vegas, NV 89102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 259-3600
--------------------------
24502 Pacific Park Drive, Laguna Hills, CA 92656
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(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 and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock, as of the latest practicable date: 43,568,672 as of
August 31, 1994
Total number of pages: 14
Exhibit Index at page: 13
Page 1 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<CAPTION>
Nine Months Ended Three Months Ended
August 31 August 31
1994 1993 1994 1993
--------------------------------------
(In thousands except per share data)
REVENUES:
<S> <C> <C> <C> <C>
Operating revenues, net $305,591 $249,034 $105,001 $ 79,573
Investment income and other 1,400 1,813 659 436
-------- -------- -------- --------
306,991 250,847 105,660 80,009
-------- -------- -------- --------
OPERATING COSTS AND EXPENSES:
Operating costs exclusive of
depreciation 171,882 126,717 58,474 37,828
General and administrative
expense 93,812 90,256 31,502 26,884
Provision for doubtful
accounts 18,019 13,680 7,267 4,648
Depreciation and amortization 13,937 10,487 5,026 3,012
Interest, principally on
long-term debt 2,364 1,840 564 703
Restructuring charge (credit) (875) 54,950
-------- -------- -------- --------
299,139 297,930 102,833 73,075
-------- -------- -------- --------
EARNINGS (LOSS) BEFORE TAXES 7,852 (47,083) 2,827 6,934
Income taxes (benefit) 3,171 (16,706) 1,160 2,866
-------- -------- -------- --------
NET EARNINGS (LOSS) $ 4,681 $(30,377) $ 1,667 $ 4,068
======== ======== ======== ========
EARNINGS (LOSS) PER SHARE $ .11 $ (.71) $ .04 $ .09
WEIGHTED AVERAGE COMMON SHARES 43,378 42,939 43,390 42,941
DIVIDENDS PER COMMON SHARE $ .01 $ 0.09 $ .00 $ 0.00
See notes to condensed consolidated financial statements.
</TABLE>
Page 2 of 14
<PAGE>
<TABLE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
August 31 November 30
1994 1993
(Unaudited) (Audited)
------------------------
ASSETS (in thousands)
CURRENT:
<S> <C> <C>
Cash and cash equivalents $ 27,516 $ 24,640
Short-term investments 13,751 10,932
Accounts receivable, less allowances
for doubtful accounts
1994 - $25,310/1993 - $22,658 97,457 80,024
Assets held for sale 7,774 10,551
Refundable and deferred income taxes 10,986 5,763
Other assets 16,740 18,327
-------- --------
TOTAL CURRENT ASSETS 174,224 150,237
PROPERTY, BUILDINGS & EQUIPMENT-at
cost less allowances for depreciation
1994 - $86,487/1993 - $77,851 362,310 339,078
DEFERRED TAXES 1,031 1,126
OTHER ASSETS 27,300 24,178
EXCESS OF INVESTMENTS IN SUBSIDIARIES
OVER NET ASSETS ACQUIRED 16,105 15,721
-------- --------
$580,970 $530,340
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT:
Accounts payable and accrued expenses $ 45,657 $ 38,365
Dividends payable 111 111
Income taxes payable 2,255 2,641
Payable to third parties under
reimbursement contracts 2,038 4,990
Accrued restructuring costs 3,210 8,666
Current maturities on long-term debt 13,187 940
-------- --------
TOTAL CURRENT LIABILITIES 66,458 55,713
LONG-TERM DEBT, EXCLUSIVE OF CURRENT
MATURITIES 66,716 40,718
DEFERRED COMPENSATION 1,746 1,814
DEFERRED INCOME TAXES 12,678 9,603
STOCKHOLDERS' EQUITY:
Preferred stock, par value $1.00,
authorized 2,000 shares; none issued
Common Stock, par value $1.00, authorized
100,000 shares; issued 1994 - 46,856
shares 1993 - 46,856 shares 46,856 46,856
Additional paid-in capital 61,246 65,341
Less due from employees for exercise
of stock options (35) (35)
Retained earnings 363,592 359,345
Foreign currency translation adjustment (2,531) (3,815)
Less treasury stock-at cost 1994 - 3,292
shares and 1993 - 3,763 shares (35,756) (45,200)
433,372 422,492
-------- --------
$580,970 $530,340
======== ========
</TABLE>
NOTE: The balance sheet at November 30, 1993 has been derived from
the audited financial statement at that date.
See notes to condensed consolidated financial statements.
Page 3 of 14
<PAGE>
<TABLE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
August 31
1994 (Unaudited) 1993
----------------------
(thousands of dollars)
CASH FLOWS FROM
OPERATING ACTIVITIES:
<S> <C> <C>
Net earnings (loss) $ 4,681 $(30,377)
Items not resulting in cash flows:
Depreciation and amortization 13,937 10,487
Provision for uncollectible accounts 18,019 13,680
Restructuring charge (credit) (875) 54,950
(Gain) on sale of property,
buildings and equipment (264) (176)
Deferred income taxes (20,044)
Other (3,592) (1,297)
Changes in assets and liabilities:
Short-term investments (2,819)
Accounts receivable (35,452) (9,671)
Payable to third parties under
reimbursement contracts (2,952) 291
Prepaid expenses and other current assets 1,587 1,544
Accounts payable and accrued expense 7,292 1,177
Accrued restructuring costs (9,307) (5,633)
Dividend payable -- (3,842)
Income taxes (2,439) 669
------- -------
Net cash provided from (used for) operations (12,184) 11,758
FINANCING:
Proceeds from revolving credit facilities 39,311 --
Dividends paid (435) (3,864)
Purchase of treasury shares -- (838)
Payments of deferred compensation -- (6,286)
Net proceeds from exercise of stock options,
payments on loans and related transactions 5,349 103
Payments on long-term debt (1,274) (635)
------- -------
Net cash provided from (used for) financing
activities 42,951 (11,520)
INVESTING:
Payments received on notes 3,306 578
Loans made to officers (533) --
Purchase of property, buildings and equipment (32,633) (32,461)
Proceeds from sale of property, buildings
and equipment 5,035 585
Investment in affiliate -- (1,602)
Payment for business acquisitions:
Property, buildings and equipment (2,517) --
Excess of purchase price over fair value of
assets acquired (549) --
------- -------
Net cash used for investing activities (27,891) (32,900)
------- -------
Net increase (decrease) in cash and
cash equivalents 2,876 (32,662)
Beginning cash and cash equivalents 24,640 67,837
------- -------
Ending cash and cash equivalents $27,516 $35,175
======= ========
See notes to condensed consolidated financial statements.
</TABLE>
Page 4 of 14
<PAGE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 1994
NOTE A: 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 Rule
10-01 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. For further
information, refer to the consolidated financial statements
and footnotes thereto included in the registrant's annual
report on Form 10-K for the year ended November 30, 1993.
NOTE B: RESTRUCTURING CHARGE (CREDIT)
Effective February 28, 1993, the Company recorded a pre-
tax charge of $55.0 million ($35.0 million after tax) in
connection with the decision to close seven of its psychiatric
hospitals. The charge comprised $35.3 million to write down
buildings and other fixed assets, $2.1 million to write off
intangibles, $14.4 million for future operating losses of the
seven hospitals and related corporate restructuring costs
associated with terminating employees, and $3.2 million for
additional accounts receivable allowances at the seven
hospitals. Six of the restructured hospitals have ceased
operations. The seventh hospital, which returned to operating
status effective March 1, 1994, has been reconstituted under
new management into a rapid stabilization facility. Of the
six closed hospitals, two have been sold, three are being held
for sale or lease and one is being converted into a THC
facility. The Company received cash proceeds of approximately
$5.0 million in January and February of 1994 from the sale of
two of these hospitals.
Effective February 28, 1994, the Company recorded a
restructuring credit totalling $7.2 million ($4.3 million
after tax) from the resolution of the previously restructured
psychiatric assets. The restructuring credit resulted from
the Company's success in controlling hospital closure costs
and in divesting one of its restructured properties at a
higher price than the year-ago writedown of the facility
anticipated.
Effective February 28, 1994, the Company recorded a
restructuring charge of $6.3 million ($3.8 million after tax)
in connection with the decision to close three addition
psychiatric facilities. The charge comprised $3.7 million for
future operating losses and $2.6 million for additional
accounts receivable allowances and reserves for other assets
at the three hospitals. Of the three closed hospitals, one is
being held for sale and two will be converted into THC
facilities.
Page 5 of 14
<PAGE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 1994
NOTE C: STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 109
The Company implemented the provisions of SFAS No. 109,
"Accounting for Income Taxes", effective December 1, 1992.
The implementation had no material effect on the financial
statements of the Company.
NOTE D: CREDIT AGREEMENT
On May 6, 1994, the Company, Transitional Hospitals
Corporation (THC - the Company's wholly-owned long-term care
subsidiary) and Bank of America National Trust and Savings
Association ("the Bank") entered into a credit agreement ("the
Agreement") whereby the Company or THC may borrow, repay and
reborrow up to $50 million through December 31, 1994.
Interest is payable at LIBOR plus 2.75% during the revolving
loan period.
Borrowings are unsecured and are guaranteed by the Company's
domestic subsidiaries. The Agreement contains provisions
which, among other things, place restrictions on borrowing,
capital expenditures and the payment of dividends, and
requires the maintenance of certain financial ratios including
tangible net worth, fixed charge coverage and funded debt.
NOTE E: CONCENTRATIONS OF CREDIT RISK
Concentrations of credit risk with respect to accounts
receivable are limited due to the large number of entities
comprising the Company's payor mix and their dispersion across
the country. The Company's policy is designed to limit
exposure to any one payor.
As of August 31, 1994, accounts receivable from one of
the Company's largest state government payors increased to
$6.0 million from $4.5 million at November 30, 1993. During
the current year, this state government payor temporarily
ceased payment of Medicaid claims to all providers (due to
fiscal budget constraints), including the Company, and has
resumed payment of unpaid claims in the current quarter. The
Company has increased business with this payor in the current
year due to the addition of new programs and an increase in
patient days. The Company does not believe that any
significant collection problems will be experienced with this
payor.
NOTE F: Certain amounts have been reclassified to conform with
1994 presentations.
Page 6 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
Results of Operations
Nine Months August 31, 1994
The following table represents selected unaudited pro forma income
statement data for the nine months ended August 31, 1994 and 1993,
adjusted as if the restructuring for the seven hospitals restructured in
fiscal year 1993 had occurred on November 30, 1992. The table also
excludes the results of operations for the three hospitals restructured
effective February 28, 1994 and includes the results of operations of the
hospital that was returned to operating status effective March 1, 1994.
The data presented below may not be indicative of the results that would
have been obtained had the transactions described above actually occurred
on the dates assumed. In the opinion of management, this data includes
all adjustments, consisting of normal recurring adjustments that the
Company considers necessary for a fair presentation of the data set forth
therein.
<TABLE>
<CAPTION>
Nine Months Ended
August 31,
1994 (Unaudited) 1993
---------------------
(thousands of dollars)
<S> <C> <C>
Net operating revenues $303,999 $226,791
Investment income and other 1,400 1,813
-------- --------
305,399 228,604
Costs and expenses:
Operating 170,762 114,899
General and Administrative 93,039 82,236
Provision for doubtful accounts 17,556 12,904
Depreciation and amortization 13,812 10,043
Interest expense 2,364 1,840
-------- --------
Total costs and expenses 297,533 221,922
Earnings before income taxes 7,866 6,682
Income taxes 3,146 2,673
-------- --------
Net earnings $ 4,720 $ 4,009
======== ========
</TABLE>
The following discussion excludes the restructuring charges and the
operating results (with the exception of the hospital returned to
operations effective March 1, 1994) for the fiscal year 1993 and 1994
Restructured Hospitals.
Net operating revenues for the nine months ended August 31, 1994
increased by approximately 34.0% to $304.0 million from $226.8 million for
the period ending August 31, 1993. This increase was due primarily to the
addition of $55.1 million of THC revenue in the first nine months of 1994
as compared to the first nine months of 1993.
Net operating revenues from the United States psychiatric hospitals
increased by 7.3% or approximately $14.1 million as a result of a 12.3%
increase in adjusted patient days to 464,490 from 413,679 which was offset
by a decrease in the net revenue per adjusted patient day. The increase
in adjusted patient days was due in large part to the success of program
introductions and expansions, resulting in an increase in residential
treatment patient days and in partial hospitalization visits. Adjusted
patient days increased despite a 11.0% decrease in average length of stay.
The decrease in net revenue per adjusted patient day was the result of the
continuing shift in reimbursement to negotiated rates and cost-based
reimbursement from private pay, as well as the growth of the residential
treatment and partial hospitalization programs. In addition, the prior
year's net revenue per day benefited from approximately $3 million of
favorable Medicare and Medicaid settlements recorded in the third quarter.
Page 7 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
Results of Operations (continued)
Nine Months Ended August 31, 1994 (continued)
Net operating revenues from the Company's United Kingdom operations
increased by 34.9% or approximately $8.5 million as a result of an
increase in inpatient admissions which was partially offset by a decline
in net revenue per adjusted patient day.
Operating expenses increased as a percentage of net operating
revenues to 56.2% in the nine months ended August 31, 1994 from 50.7% in
the nine months ended August 31, 1993. The year to year increase was
primarily attributable to expenses incurred in connection with expansion
of the Company's THC operations and an increase in personnel costs related
to the Company's development of an expanded continuum of care in its
psychiatric business.
General and administrative expenses as a percentage of net operating
revenues decreased to 30.6% from 36.3%. This change was due primarily to
the implementation of cost containment programs in the second quarter of
1993 and a management reorganization in the fourth quarter of 1993, which
included reduction of personnel and elimination of overhead.
The provision for doubtful accounts increased $4.7 million for the nine
months ended August 31, 1994 compared to the nine months ended August 31,
1993. The increase resulted from an increase in operations at THC as well
as a $2 million increase related to an unanticipated disruption in Medicare
reimbursement for partial psychiatric hospitalization in California which
is affecting other providers as well. This disruption could continue for an
undetermined length of time, pending the outcome of the Company's current
efforts to resolve the situation.
For the THC subsidiary, operating and general and administrative
expenses exceeded revenues for the nine months ended August 31, 1994
because a large majority (nine of twelve facilities) of these hospitals
opened in fiscal 1994. Long-term critical care hospitals such as those
operated by THC typically sustain significant start-up costs because there
is a six-month delay in receiving exemption from the Medicare Prospective
Payment System, during which time the reimbursement for treating Medicare
patients is less than the full cost. During the quarter ended August 31,
1994, four facilities received exemption from the Medicare Prospective
Payment System. As of August 31, 1994, three of the THC facilities are
still not exempt from the Medicare Prospective Payment System.
<TABLE>
Following is a summary of net income by business segment for the
nine months ended August 31, 1994:
<CAPTION>
(in thousands)
----------------------
1994 1993
------- --------
<S> <C> <C>
U.S. Psychiatric division $ 9,072 $(30,868)
U.K. Psychiatric division 4,640 2,997
Long-term critical care division (9,031) (2,506)
------- --------
Net income $ 4,681 $(30,377)
======= ========
</TABLE>
For the reasons described above, earnings before depreciation,
amortization, interest, other income and income taxes for the nine months
ended August 31, 1994 on a pro forma basis increased from $16.8 million in
the first nine months of 1993 to $22.6 million in the first nine months of
1994.
Depreciation expense increased as a result of property and equipment
additions by THC.
Interest expense, net of amounts capitalized, increased in 1994 as
a result of the increase in long-term debt.
Page 8 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
Results of Operations (continued)
Three Months Ended August 31, 1994
The following table represents selected unaudited pro forma income
statement data for the quarters ended August 31, 1994 and 1993, adjusted
as if the restructuring for the seven hospitals restructured in fiscal
year 1993 had occurred on November 30, 1992. The table also excludes the
results of operations for the three hospitals restructured effective
February 28, 1994 and includes the results of operations of the hospital
that was returned to operating status effective March 1, 1994. The data
presented below may not be indicative of the results that would have been
obtained had the transactions described above actually occurred on the
dates assumed. In the opinion of management, this data includes all
adjustments, consisting of normal recurring adjustments that the Company
considers necessary for a fair presentation of the data set forth therein.
<TABLE>
<CAPTION>
Quarter Ended
August 31,
1994 (Unaudited) 1993
----------------------
(thousands of dollars)
<S> <C> <C>
Net operating revenues $105,001 $ 76,386
Investment income and other 659 436
-------- --------
105,660 76,822
Costs and expenses:
Operating 58,474 36,502
General and Administrative 31,502 26,016
Provision for doubtful accounts 7,267 4,333
Depreciation and amortization 5,026 2,914
Interest expense 564 703
-------- --------
Total costs and expenses 102,833 70,468
Earnings (loss) before income taxes 2,827 6,354
Income taxes 1,160 2,542
-------- --------
Net earnings $ 1,667 $ 3,812
======== ========
</TABLE>
The following discussion excludes the restructuring charges and the
operating results (with the exception of the hospital returned to
operations effective March 1, 1994) for the fiscal year 1993 and 1994
Restructured Hospitals.
Net operating revenues for the quarter ended August 31, 1994
increased by approximately 37.5% to $105.0 million from $76.4 million for
the prior quarter. This increase was due primarily to the addition of
$22.3 million of THC revenue in the third fiscal quarter of 1994 as
compared to the third fiscal quarter of 1993.
Net operating revenues from the United States psychiatric hospitals
increased by 5.8% or approximately $3.1 million as a result of a 16.3%
increase in adjusted patient days to 149,968 from 128,952 which was offset
by a decrease in the net revenue per adjusted patient day. The increase
in adjusted patient days was due in large part to the success of program
introductions and expansions, resulting in an increase in residential
treatment patient days and in partial hospitalization visits. Adjusted
patient days increased despite a 10.7% decrease in average length of stay.
The decrease in net revenue per adjusted patient day was the result of the
continuing shift in reimbursement to negotiated rates and cost-based
reimbursement from private payors, as well as the growth of the
residential treatment and partial hospitalization programs. In addition,
the prior year's net revenue per day benefited from approximately $3
million of favorable Medicare and Medicaid settlements recorded in the
third quarter.
Page 9 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
Results of Operations (continued)
Three Months Ended August 31, 1994 (continued)
Net operating revenues from the Company's United Kingdom operations
increased by 37.4% or approximately $3.2 million as a result of an
increase in inpatient admissions and in net revenue per adjusted patient
day.
Operating expenses increased as a percentage of net operating
revenues to 55.7% in the quarter ended August 31, 1994 from 47.8% in the
quarter ended August 31, 1993. The year to year increase was primarily
attributable to expenses incurred in connection with expansion of the
Company's THC operations and an increase in personnel costs related to the
Company's development of an expanded continuum of care in its psychiatric
business.
General and administrative expenses as a percentage of net operating
revenues decreased as a percentage of net operating revenues to 30.0% from
34.1%. This change was due primarily to a management reorganization in
the fourth quarter of 1993, which included reduction of personnel and
elimination of overhead.
The provision for doubtful accounts increased $2.9 million for the quarter
ended August 31, 1994 compared to the quarter ended August 31, 1993. The
increase resulted from an increase in operations at THC as well as a
$2 million increase related to an unanticipated disruption in Medicare
reimbursement for partial psychiatric hospitalization in California which is
affecting other providers as well. This disruption could continue for an
undetermined length of time, pending the outcome of the Company's current
efforts to resolve the situation.
<TABLE>
Following is a summary of net income by business segment for the
quarter ended August 31, 1994:
<CAPTION>
(in thousands)
----------------
1994 1993
------- -------
<S> <C> <C>
U.S. Psychiatric division $ 576 $ 2,995
U.K. Psychiatric division 1,401 1,155
Long-term critical care division (310) (82)
------- -------
Net income $ 1,667 $ 4,068
======= =======
</TABLE>
Earnings before depreciation, amortization, interest, other income
and income taxes for the quarter ended August 31, 1994 on a pro forma
basis decreased to $7.8 million in the third quarter of 1994 from $9.5
million in the third quarter of 1994.
Depreciation expense increased as a result of property and equipment
additions by THC.
Interest expense decreased due to the capitalization of interest
incurred in connection with the development and construction of certain
THC facilities.
Page 10 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
Results of Operations (continued)
Financial Condition at August 31, 1994 (continued)
At August 31, 1994, cash and equivalents were $27,516 and total
working capital was $107,766, net of the accrual for restructuring costs
of $3,210. Cash was principally used during the nine months ended August
31, 1994 to fund working capital and operating losses for THC facilities,
and for the purchase of equipment and improvements ($32.6 million). The
Company also acquired a residential treatment center in the United Kingdom
for a purchase price of $3.1 million. In March of 1994, the Company paid
a one time dividend to shareholders of record on March 1, 1994 totaling
$435,000 (.01 per share). The increase in accounts receivable at August
31, 1994, is due primarily to the expansion of THC's operation during the
first three quarters and an increase in U.S. Psychiatric division
receivables from a significant state governmental payor (see Note E to the
financial statements). Proceeds from borrowings on revolving credit
facilities totalled $39.3 million for the nine months ended August 31,
1994.
Capital expenditures for the balance of 1994 are estimated at
approximately $5 million for the U.S. psychiatric division and $4 million
for the U.K. psychiatric division.
Capital expenditures for the THC operations for the same period are
estimated at approximately $10 million. In addition to these capital
expenditures, the Company expects to invest approximately $9 million over
the balance of fiscal year 1994 to fund the working capital needs of THC.
The Company has a $25.0 million revolving credit facility with Bank
of America National Trust and Savings Association ("BofA"). At August 31,
1994, $25.0 million has been borrowed under this facility. The Company
may borrow, repay and reborrow up to $25 million through November 30, 1995
(the revolving loan period), at which time any amount outstanding is
converted into a term loan payable in equal quarterly installments through
November 30, 1998. The Company's subsidiary in the U.K. has a credit
facility whereby the Company is allowed to borrow up to $15 million. At
August 31, 1994, approximately $7.6 million was outstanding under this
facility. On May 6, 1994, the Company entered into an additional
revolving credit facility with Bank of America for $50 million. As of
August 31, 1994, $20 million was outstanding under this facility. Any
amount outstanding under this facility is due and payable on December 31,
1994. The Company believes that its current cash and cash equivalent
balances, its operating cash flow, and the amounts available under its
revolving credit facilities will be sufficient to fund the Company's
operations and capital expenditures through the end of fiscal 1994. The
Company is also presently evaluating proposals for additional funding from
other financing sources. Additional funding sources will be needed to
support further expansion of THC and to repay outstanding borrowings under
the $50 million credit facility.
Page 11 of 14
<PAGE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
August 31, 1994
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Part I, Item 3 of the Company's Report on Form 10-K for the fiscal
year ended November 30, 1993.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
A) The following exhibit is included herein:
Exhibit 11: Computation of Earnings per Share
The registrant was not required to file a Form 8-K during the three
months ended August 31, 1994.
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.
COMMUNITY PSYCHIATRIC CENTERS
(Registrant)
Dated: October 13, 1994 /s/ STEVEN S. WEIS
------------------------
Steven S. Weis
Chief Financial Officer
Page 12 of 14
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
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11 Computation of Earnings Per Share 14
Page 13 of 14
<PAGE>
EXHIBIT 11
<TABLE>
COMMUNITY PSYCHIATRIC CENTERS AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<CAPTION>
Nine Months Ended Three Months Ended
August 31, August 31,
1994 1993 1994 1993
------------------- -----------------
(Amounts in thousands, except per share data)
Weighted average
<S> <C> <C> <C> <C>
common shares <F1> $43,378 $ 42,939 $ 43,390 $ 42,941
Net Earnings (Loss) $ 4,681 $(30,377) $ 1,667 $ 4,068
======= ======== ======== ========
Earnings (Loss) per share $ .11 $ (.71) $ .04 $ .09
======= ======== ======== ========
<FN> Dilutive common stock equivalents are less than 3% of weighted average
common shares outstanding.
</TABLE>
Page 14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC
Form 10Q 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> NOV-30-1994
<PERIOD-END> AUG-31-1994
<CASH> 27,516
<SECURITIES> 0
<RECEIVABLES> 97,457
<ALLOWANCES> 25,310
<INVENTORY> 0
<CURRENT-ASSETS> 174,224
<PP&E> 362,310
<DEPRECIATION> 86,487
<TOTAL-ASSETS> 580,970
<CURRENT-LIABILITIES> 66,458
<BONDS> 66,716
<COMMON> 46,856
0
0
<OTHER-SE> 386,516
<TOTAL-LIABILITY-AND-EQUITY> 580,970
<SALES> 306,991
<TOTAL-REVENUES> 306,991
<CGS> 171,882
<TOTAL-COSTS> 171,882
<OTHER-EXPENSES> 109,238
<LOSS-PROVISION> 18,019
<INTEREST-EXPENSE> 2,364
<INCOME-PRETAX> 7,852
<INCOME-TAX> 3,171
<INCOME-CONTINUING> 4,681
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,681
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
