SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q\A
AMENDMENT NO. 1
(MARK ONE)
X Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended November 30, 1994.
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 1-10426
THE HILLHAVEN CORPORATION
(Exact name of registrant as specified in its charter)
FOR THE QUARTER ENDED NOVEMBER 30, 1994
Nevada 91-1459952
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1148 Broadway Plaza
Tacoma, WA 98402
(Address of principal executive offices)
(206) 572-4901
(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 of Common Stock, par value $.75 per share,
outstanding on January 1, 1995: 28,624,463.
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THE HILLHAVEN CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets as of
November 30, 1994 and May 31, 1994 1
Consolidated Statements of Income for
the Three Months and Six Months Ended
November 30, 1994 and 1993 3
Consolidated Statements of Cash Flows
for the Six Months Ended
November 30, 1994 and 1993 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
Signature 16
NOTE: Items 2 - 5 of Part II are omitted because they are
not applicable.
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<TABLE>
THE HILLHAVEN CORPORATION
CONSOLIDATED BALANCE SHEETS
November 30, 1994 and May 31, 1994
(Unaudited)
(In thousands)
<CAPTION>
November 30, May 31,
1994 1994
(restated)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 43,501 $ 49,888
Accounts and notes receivable, less
allowance for doubtful accounts of
$11,337 at November 30, 1994 and
$10,337 at May 31, 1994 156,656 152,962
Inventories 18,465 20,772
Prepaid expenses and other current assets 38,565 35,011
Total current assets 257,187 258,633
Long-term notes receivable, less allowance
for doubtful accounts of $15,334 at
November 30, 1994 and $14,608 at May 31, 1994 83,615 84,944
Property and equipment, net 793,135 784,337
Intangible assets, net of accumulated
amortization of $21,729 at November 30, 1994
and $19,336 at May 31, 1994 29,892 31,331
Other noncurrent assets, net 38,093 33,248
$ 1,201,922 $ 1,192,493
</TABLE>
See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
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<TABLE>
THE HILLHAVEN CORPORATION
CONSOLIDATED BALANCE SHEETS
November 30, 1994 and May 31, 1994
(Unaudited)
(In thousands, except share information)
<CAPTION>
November 30, May 31,
1994 1994
(restated)
<S> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 38,234 $ 46,389
Accounts payable 51,268 65,150
Employee compensation and benefits 59,104 52,444
Other accrued liabilities 49,474 56,977
Total current liabilities 198,080 220,960
Convertible debentures 133,593 134,223
Other long-term debt 444,011 444,812
Other long-term liabilities 33,115 28,751
Stockholders' equity:
Series C Preferred Stock, $0.15 par value;
35,000 shares authorized, issued and
outstanding (liquidation preference
of $35,000) 5 5
Series D Preferred Stock, $0.15 par value;
300,000 shares authorized, 62,388 and
60,546 issued and outstanding at
November 30, 1994 and May 31, 1994
(liquidation preference of $62,388) 10 9
Common stock, $0.75 par value; 60,000,000
shares authorized; 28,623,663 and
28,434,756 issued and outstanding at
November 30, 1994 and May 31, 1994 21,468 21,326
Additional paid-in capital 336,569 329,537
Retained earnings 40,114 16,081
Unearned compensation (5,043) (3,211)
Total stockholders' equity 393,123 363,747
$ 1,201,922 $1,192,493
</TABLE>
See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
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<TABLE>
THE HILLHAVEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months and Six Months Ended November 30, 1994 and 1993
(Unaudited)
(In thousands, except per share)
<CAPTION>
Three Months Six Months
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net operating revenues $ 392,982 $367,189 $ 775,047 $726,899
Expenses:
General and
administrative 332,106 315,270 660,321 622,815
Depreciation and
amortization 14,261 13,555 28,194 27,181
Rent 13,337 13,847 27,203 27,728
Interest 12,189 13,242 24,556 29,104
Restructuring --- (21,904) --- (20,225)
Total expenses 371,893 334,010 740,274 686,603
Operating income 21,089 33,179 34,773 40,296
Interest income 3,093 3,245 6,426 7,135
Income before income taxes
and extraordinary charge 24,182 36,424 41,199 47,431
Income tax expense 7,990 10,309 13,613 13,136
Income before extraordinary
charge 16,192 26,115 27,586 34,295
Extraordinary charge -
early extinguishment
of debt, net of income
taxes (52) (940) (174) (940)
Net income $ 16,140 $ 25,175 $ 27,412 $ 33,355
Income available to common
stockholders (net income
less preferred stock
dividends $ 14,404 $ 22,503 $ 24,033 $ 29,961
</TABLE>
See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
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<TABLE>
THE HILLHAVEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months and Six Months Ended November 30, 1994 and 1993
(Unaudited)
(In thousands, except per share amounts)
<CAPTION>
Three Months Six Months
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Primary income per common share:
Income before extraordinary
charge $ .50 $ .95 $ .85 $ 1.25
Extraordinary charge --- (.04) (.01) (.04)
Net income $ .50 $ .91 $ .84 $ 1.21
Fully diluted income per
common share:
Income before extraordinary
charge $ .44 $ .75 $ .75 $ 1.02
Extraordinary charge --- ( .03) --- ( .03)
Net income $ .44 $ .72 $ .75 $ .99
Weighted average common
shares and equivalents
outstanding:
Primary 28,866 24,863 28,747 24,731
Fully diluted 36,891 33,515 36,791 33,505
</TABLE>
See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
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<TABLE>
THE HILLHAVEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended November 30, 1994 and 1993
(Unaudited)
(In thousands)
<CAPTION>
1994 1993
<S> <C> <C>
Net cash provided by operating activities
(including changes in all operating
assets and liabilities) $ 52,792 $ 35,976
Cash flows from investing activities:
Purchases of property and equipment (24,535) (18,569)
Purchase of previously leased
nursing centers (3,923) (1,575)
Proceeds from sales of property
and equipment 4,238 490
Proceeds from collection of notes
receivable 2,705 15,908
Investments in joint ventures
and partnerships (2,673) (863)
Distributions from joint ventures and
partnerships 784 1,332
Increase in other noncurrent assets (5,846) (12,647)
Net cash used in
investing activities (29,250) (15,924)
Cash flows from financing activities:
Net increase in borrowings under
revolving lines of credit 10,000 16,000
Proceeds from long-term debt 6,221 356,035
Payments of principal on long-term debt (31,472) (462,446)
Proceeds from sale of preferred stock --- 63,399
Increase in intangible assets (1,604) (14,683)
Other, items (13,074) (3,807)
Net cash used in financing
activities (29,929) (45,502)
Net decrease in cash (6,387) (25,450)
Cash and cash equivalents at beginning
of period 49,888 73,253
Cash and cash equivalents at end of period $ 43,501 $ 47,803
</TABLE>
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<TABLE>
THE HILLHAVEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended November 30, 1994 and 1993
(Unaudited)
(In thousands)
<CAPTION>
1994 1993
<S> <C> <C>
Supplemental disclosures
Cash paid for:
Interest $ 25,932 $ 21,118
Income taxes 11,713 6,983
Noncash investing and financing activities:
Long-term debt incurred in connection with
purchase of previously leased properties --- 13,705
Adjustment to property and equipment and
capital lease obligations --- 23,600
Notes receivable issued in connection
with sale of nursing centers 500 ---
Preferred stock issued to retire debt --- 56,601
Financing for equipment purchases 2,535 ---
</TABLE>
See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
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THE HILLHAVEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. The unaudited financial information furnished herein, in the
opinion of management, reflects all adjustments which are
necessary to state fairly the financial position, cash flows
and results of operations of The Hillhaven Corporation
("Hillhaven" or "the Company") as of and for the periods
indicated. Hillhaven presumes that users of the interim
financial information herein have read or have access to the
Company's audited financial statements and Management's
Discussion and Analysis of Financial Condition and Results
of Operations for the preceding fiscal year and that the
adequacy of additional disclosure needed for a fair
presentation, except in regard to material contingencies,
may be determined in that context. Accordingly, footnote
and other disclosures which would substantially duplicate
the disclosures contained in Hillhaven's most recent annual
report to stockholders have been omitted.
2. The provision for doubtful accounts and notes receivable is
included in general and administrative expenses. Provisions
totalled $1,727, $3,300, $1,589 and $2,882 for the three
months and six months ended November 30, 1994 and 1993,
respectively.
3. On September 30, 1994, the Company sold its 30% ownership
interest in a closely-held institutional pharmacy and
recognized a pretax gain of $8,077.
4. On October 31, 1994, the Company acquired closely-held CPS
Pharmaceutical Services, Inc. (CPS) and Advanced Infusion
Systems, Inc. (AIS) in a business combination accounted for
as a pooling of interests. CPS and AIS, which provide
diversified pharmaceutical and infusion services through
locations in Northern California, became part of the
Company's Medisave Pharmacies subsidiary through the
exchange of 1,262,062 shares of the Company's common stock
valued at approximately $29,000. The accompanying financial
statements for the three and six months ended November 30,
1994 are presented on the basis that the companies were
combined for the entire period, and financial statements of
the prior-year periods have been restated to give effect to
the combination.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Summarized results of operations of the separate companies
for the period from June 1, 1994 through October 31, 1994,
the date of acquisition, are as follows:
<TABLE>
<CAPTION>
Hillhaven CPS/AIS
<S> <C> <C>
Net operating revenues $ 636,305 $ 10,164
Income (loss) before
extraordinary item $ 23,790 $ (240)
Net income (loss) $ 23,616 $ (240)
</TABLE>
Following is a reconciliation of the amounts of net
operating revenues and net income previously reported for
the three and six months ended November 30, 1993:
<TABLE>
<CAPTION>
Three Six
Months Months
<S> <C> <C>
Net operating revenues:
As previously reported $ 361,427 $ 716,241
Acquired companies 5,762 10,658
As restated $ 367,189 $ 726,899
Net income:
As previously reported $ 24,872 $ 32,896
Acquired companies 303 459
As restated $ 25,175 $ 33,355
</TABLE>
5. On October 28, 1994, the Company restructured its bank
financing and increased its available borrowing capacity by
$20,000. The amended $320,000 commercial bank facility,
with a syndicate of 22 major banks, lowers borrowing costs,
extends the term of the agreement to five years, reduces
principal repayment requirements and relaxes many covenants.
Proceeds and enhanced cash flow from reduced repayment terms
will be used to expand subacute programs, repay higher cost
debt and fund future acquisition opportunities.
6. The extraordinary charges resulted from the write-off of
capitalized financing costs in connection with the
refinancing of certain of the Company's industrial revenue
bonds and are shown net of the tax effect of $30 and $85 in
the three and six months ended November 30, 1994,
respectively, and $426 in both the three and six months
ended November 30, 1993.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Dollars in thousands)
The following material should be read in conjunction with the
consolidated financial statements of the Company and the related
notes thereto. All references in this discussion and analysis to
years are to fiscal years of the Company ended May 31 of such
year.
Acquisitions
On October 31, 1994, the Company acquired closely-held CPS
Pharmaceutical Services, Inc. (CPS) and Advanced Infusion
Systems, Inc. (AIS) in a business combination accounted for as a
pooling of interests. CPS and AIS, which provide diversified
pharmaceutical and infusion services through locations in
Northern California, became part of the Company's Medisave
Pharmacies subsidiary (Medisave) through the exchange of
1,262,062 shares of the Company's common stock valued at
approximately $29,000. The accompanying financial statements for
the three and six months ended November 30, 1994 are presented on
the basis that the companies were combined for the entire period,
and financial statements of the prior-year periods have been
restated to give effect to the combination. See Note 4 of Notes
to Consolidated Financial Statements.
Results of Operations
In the 1995 second quarter, Hillhaven realized earnings of
$16,140 compared to $25,175 in the prior-year period. Net income
for the six months ended November 30, 1994 and 1993 amounted to
$27,412 and $33,355, respectively. Prior-year earnings include a
$21,904 credit resulting from the conclusion of the Company's
facility disposition program. Net operating revenues were
$392,982, $775,047, $367,189 and $726,899 in the three and six
months ended November 30, 1994 and 1993, respectively.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
The following table summarizes selected operating statistics:
<TABLE>
<CAPTION>
At November 30,
1994 1993
<S> <C> <C>
Nursing Centers
Number of nursing centers 272 284
Number of licensed beds 34,186 35,141
Centers managed for others 15 17
Pharmacy Outlets 57 83
Retirement Housing Communities 19 20
</TABLE>
The following table identifies the Company's sources of net
operating revenues.
<TABLE>
<CAPTION>
Three months ended Six months ended
November 30, November 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Percentage of net
operating revenues:
Nursing Centers:
Long term care 58.1% 62.2% 58.9% 62.6%
Subacute medical and
rehabilitation 24.5 19.9 23.7 19.8
Other operating
revenues 1.9 2.5 2.2 2.3
Total nursing
centers 84.5 84.6 84.8 84.7
Pharmacies 13.3 13.3 13.0 13.2
Retirement Housing 2.2 2.1 2.2 2.1
Total 100.0% 100.0% 100.0% 100.0%
Net patient revenues
per patient day:
Long term care $ 89.58 $ 84.54 $ 88.72 $ 83.91
Subacute medical and
rehabilitation $275.43 $243.67 $266.78 $239.96
Combined $112.02 $100.45 $109.78 $ 99.41
Average number of
beds available 34,252 35,195 34,247 35,169
Average occupancy 93.0% 93.8% 93.1% 93.6%
</TABLE>
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Nursing center net operating revenues, comprised primarily of
patient revenues, increased 6.9% and 6.7% in the three and six
months ended November 30, 1994 and 1993 to $332,072 and $656,897,
respectively, from $310,544 and $615,537 in the same periods in
the prior year.
Patient revenues are affected by changes in Medicare and Medicaid
reimbursement rates, private pay and other rates charged by
Hillhaven, occupancy levels, the nature of services provided and
the payor mix.
Data for nursing center operations with respect to sources of net
patient revenues and patient mix by payor type are set forth
below. Included in private and other revenues are per diem
amounts received from managed care contracts.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net Patient Revenues
Medicaid 47.1% 51.6% 47.6% 51.7%
Private and other 26.5 26.4 26.8 26.5
Medicare 26.4 22.0 25.6 21.8
Patient Census
Medicaid 65.7% 67.6% 65.8% 67.6%
Private and other 23.3 23.0 23.4 23.0
Medicare 11.0 9.4 10.8 9.4
</TABLE>
In the past year, Hillhaven received rate increases from Medicare
and Medicaid and increased its private pay rates.
The Company is continuing its strategy of improving its quality
mix of private pay and Medicare patients by expanding its
subacute medical and rehabilitation programs and services. These
higher revenue services include physical, occupational, speech
and respiratory therapy and subacute care services, such as
stroke therapy and wound care. The Company has increased the
number of managed care contracts it maintains with insurance
companies and other payors to provide subacute medical and
rehabilitation care to their insureds, offering a less expensive
alternative to acute care hospitals. The average daily number of
managed care patients in Hillhaven's nursing centers, including
long term care patients, was approximately 525 in the first six
months of 1995 compared to 380 in 1994.
<PAGE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Net operating revenues from pharmacy operations increased to
$52,336 and $101,179 in the three and six months ended
November 30, 1994, respectively, from $48,743 and $95,819 in the
prior-year periods. Revenues for the three and six months ended
November 30, 1994 include an $8,077 gain on the sale of a
closely-held institutional pharmacy and costs associated with the
acquisition of AIS and CPS amounting to $1,038.
Institutional revenues accounted for approximately 95% and 91% of
pharmacy net operating revenues in the three and six months ended
November 30, 1994, respectively, versus 79% and 78% in the same
periods in the prior year. The growing contribution from
institutional operations reflects the Company's increasing focus
on the nursing home market, disposition of retail outlets and
continuing pricing pressure in the retail operations. The leases
of the remaining 14 Wal-Mart outlets were terminated in the 1995
first quarter. Institutional revenues increased by 29.0% and
22.1% to $49,516 and $91,644 in the three and six months ended
November 30, 1994, respectively, from $38,380 and $75,061 in the
prior-year periods. These increases are the result of an
increase in the number of nursing center beds serviced and higher
sales volumes per bed. The increase in per bed sales reflects
the Company's strategy of aggressively marketing higher-margin
ancillary products and services, such as respiratory and
intravenous therapies and enteral and urological supplies.
During the quarter Hillhaven announced plans to form the MediLife
Pharmacy Network (MediLife), a joint venture between Medisave and
Life Care Centers of America (Life Care). Beginning February 1,
1995, MediLife will provide pharmaceutical and consulting
services to certain of Life Care's long term and subacute care
facilities. Medisave will contribute four of its existing
institutional pharmacies to the joint venture and will account
for its 50% ownership interest by the equity method. Medisave
will receive a management fee for managing MediLife. As a result
of it's contribution of four pharmacies to the joint venture,
subsequent to February 1, 1995, the Company will report a
decrease in pharmacy net operating revenues. However, this
transaction is not expected to result in a material decrease in
income for the Company for the year ended May 31, 1995.
Net operating revenues from retirement housing operations
increased to $8,574 and $16,971 in the three and six months ended
November 30, 1994 respectively, from $7,902 and $15,543 in the
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
prior-year periods. These increases were due to increases in
rates charged. Retirement housing average occupancy was 95.3% in
both the three an six months ended November 30, 1994 and 96.7%
and 95.6% in the three and six months ended November 30, 1993,
respectively.
General and administrative expenses of the Company's nursing
centers increased by 7.6% and 7.8% in the three and six months
ended November 30, 1994 to $288,111 and $569,686, respectively,
from $267,797 and $528,252 in the same periods in the prior year.
These increases were attributable primarily to the expansion of
subacute and medical rehabilitation services, as previously
discussed. Labor and related benefits, which represented
approximately 77% of nursing centers general and administrative
expenses in both the current three-and six-month periods,
increased by 6.1% and 6.6% to $220,585 and $437,859 in the three
and six months ended November 30, 1994, respectively from
$207,994 and $410,866 in the prior-year periods. These increases
were the result of an increase in the number of therapists in the
Company's nursing centers to accommodate the increase in the
number of medically complex patients, as well as general wage
rate increases. Hillhaven employed approximately 4,000
therapists at November 30, 1994 compared to 2,900 at November 30,
1993. Nursing wages and benefits, accounting for approximately
52% of total nursing center labor costs in both the three and six
months ended November 30, 1994, increased by 2.2% in the 1995
second quarter and by 2.4% in the six months ended November 30,
1994 as compared to the prior-year periods.
The increase in the non-labor components of general and
administrative expenses, including ancillary supplies, reflects
the higher costs associated with caring for higher acuity
patients. Nursing center supplies increased by 13.6% and 14.2%
to $15,152 and $29,577 in the three and six months ended November
30, 1994, respectively, compared to $13,336 and $25,893 in the
prior-year periods.
Interest expense decreased by $1,053 to $12,189 in the current
quarter and by $4,548 to $24,556 in the current six-month period.
This decrease is due to the refinancing of certain of the
Company's indebtedness as part of the recapitalization program
completed in 1994 as well as the restructuring of the Company's
bank financing in October 1994.
Cash Flows and Financial Condition
Cash provided by operations in the first six months of 1995
amounted to $52,792, compared to $35,976 in the prior year. The
increase is due primarily to higher operating income before
property-related expenses and fluctuations in current assets and
liabilities.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Net cash used in investing activities amounted to $29,250 in the
first six months of 1995 compared to $15,924 in the prior-year
period. In the prior year, the Company received cash proceeds
from unscheduled notes receivable payoffs totalling $14,621.
Capital expenditures for routine replacements and refurbishment
of facilities and capital additions amounted to $24,535 in the
current six-month period compared to $18,569 in the prior year.
Net cash used in financing activities decreased to $29,929 from
$45,502 in the prior year. During the six months ended November
30, 1993, Hillhaven expended $14,816 for financing costs
associated with the recapitalization program.
The Company has an $85,000 revolving bank line of credit which
had an outstanding balance of $18,000 at November 30, 1994. The
Company also has an accounts receivable-backed revolving bank
line of credit which provides for borrowings of up to $40,000,
all of which was available at November 30, 1994.
On October 28, 1994, the Company restructured its bank financing
and increased its available borrowing capacity by $20,000. The
amended $320,000 commercial bank facility, with a syndicate of 22
major banks, lowers borrowing costs, extends the term of the
agreement to five years, reduces principal repayment requirements
and relaxes many covenants. Proceeds and enhanced cash flow from
reduced repayment terms will be used to expand subacute programs,
repay higher-cost debt and fund future acquisition opportunities.
<PAGE>
<PAGE>
Part II. OTHER INFORMATION
Item 1 Legal Proceedings
On August 22, 1994, the Company was served with a lawsuit
in the matter of Nita P. Heckendorn vs. The Hillhaven
Corporation et al. Ms. Heckendorn, who joined the
Company in 1992, alleged breach of implied employment
contract; discharge in violation of public policy (sex
and ethnic discrimination); tortious interference with
prospective economic advantage; and intentional
infliction of emotional distress. The suit sought
damages for wages, earnings and other benefits, punitive
damages, attorneys' fees and costs of suit. The Company
believed that Ms. Heckendorn's claims were without merit.
On November 18, 1994, the suit was voluntarily dismissed
with prejudice. Neither the Company nor the other named
defendants paid any amounts to the plaintiff in
connection with this lawsuit.
Items 2 - 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K
(A) Exhibits:
(10) Amendment No. 4 to Credit Agreement, dated as
of October 28, 1994, Amending (and Restating)
the $360,000,000 Credit Agreement dated as of
September 1, 1993.
(11) Statement Re: Computation of per share
earnings for the three months and six months
ended November 30, 1994 and 1993.
(27) Financial Data Schedule (included only in the
EDGAR filing)
(99) Hillhaven press release dated December 21,
1994.
(B) Reports filed on Form 8-K
A Form 8-K, dated October 11, 1994, was filed during
the quarter to disclose an agreement to acquire CPS
Pharmaceutical Services, Inc. and Advanced Infusion
Systems, Inc. as follows:
<PAGE>
<PAGE>
Part II. OTHER INFORMATION (Continued)
On October 11, 1994, The Hillhaven Corporation (the
"Company") signed a definitive agreement to acquire,
through a share for share exchange, CPS
Pharmaceutical Services, Inc. and Advanced Infusion
Systems, Inc. The purchase price will be
approximately $29 million, consisting of
approximately 1.3 million shares of the Company's
common stock, subject to certain adjustments. The
transaction will be structured as a pooling of
interests.
No financial statements were filed with the Form
8-K.
<PAGE>
<PAGE>
SIGNATURE
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.
THE HILLHAVEN CORPORATION
(Registrant)
Date: August 11, 1995 /s/ Michael B. Weitz
Michael B. Weitz*
Vice President and
Principal Accounting
Officer
* Michael B. Weitz is signing in the dual capacities as i)
principal accounting officer, and ii) a duly authorized
officer of the Company.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from The
Consolidated Financial Statements of The Hillhaven Corporation at and for the
Six Months Ended November 30, 1994 and the related notes thereto and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> NOV-30-1994
<CASH> 43,501
<SECURITIES> 0
<RECEIVABLES> 167,993
<ALLOWANCES> 11,337
<INVENTORY> 18,465
<CURRENT-ASSETS> 257,187
<PP&E> 1,033,651
<DEPRECIATION> 240,516
<TOTAL-ASSETS> 1,201,922
<CURRENT-LIABILITIES> 198,080
<BONDS> 577,604
<COMMON> 21,468
0
15
<OTHER-SE> 371,640
<TOTAL-LIABILITY-AND-EQUITY> 1,201,922
<SALES> 0
<TOTAL-REVENUES> 775,047
<CGS> 0
<TOTAL-COSTS> 657,021
<OTHER-EXPENSES> 55,397
<LOSS-PROVISION> 3,300
<INTEREST-EXPENSE> 24,556
<INCOME-PRETAX> 41,199
<INCOME-TAX> 13,613
<INCOME-CONTINUING> 27,586
<DISCONTINUED> 0
<EXTRAORDINARY> 174
<CHANGES> 0
<NET-INCOME> 27,412
<EPS-PRIMARY> .84
<EPS-DILUTED> .75
</TABLE>
