UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended December 31, 1995
-----------------
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 1-13722
------------------
WHITMAN MEDICAL CORP.
- -----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2246554
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
485E US Route 1 South, Suite 100, Iselin, New Jersey 08803
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(Address of principal executive offices) (Zip Code)
(908) 636-3640
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(Registrant's telephone number, including area code)
N/A
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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 (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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
Securities under a plan confirmed by a court.
Yes No
----- -----
<PAGE>
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
class of common stock, as of the latest practicable date.
Class Outstanding at February 2, 1996
----- -------------------------------
Common stock, no par value 4,396,762
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Whitman Medical Corp. and Subsidiaries
Consolidated Balance Sheets
December 31, March 31,
1995 1995*
------------ -------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents ............. $ 517,399 $ 1,658,104
Restricted cash ....................... 100,000 312,000
Accounts receivable less allowance
for doubtful accounts of $1,416,190
in December 1995 and $1,000,864
in March 1995 ..................... 13,626,816 14,216,126
Inventories ........................... 546,079 290,450
Other current assets .................. 416,639 520,044
----------- -----------
Total current assets ..................... 15,206,933 16,996,724
Equipment and leasehold improvements,
net ................................... 5,363,631 3,678,239
Marketable securities - related party .... 855,000 750,000
Deferred costs, net of accumulated
amortization of $728,058 in December
1995 and $553,434 in March 1995 ....... 356,134 624,205
Deposits and other assets, net of
amortization of $74,210 in December
1995 and $58,998 in March 1995 ........ 796,571 449,872
Goodwill, net of accumulated
amortization of $167,816 in December
1995 and $113,762 in March 1995 ....... 2,546,828 2,572,979
Restricted cash - escrow ................. 2,400,000 2,400,000
----------- -----------
$27,525,097 $27,472,019
=========== ===========
* As restated - See Note 4
See accompanying notes
3
<PAGE>
Whitman Medical Corp. and Subsidiaries
Consolidated Balance Sheet - Continued
December 31, March 31,
1995 1995*
------------- ---------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ..................... $ 999,645 829,959
Accrued expenses ..................... 825,364 764,881
Income taxes payable ................. 34,253
Bank notes payable ................... 7,200,000
Current portion of capitalized
lease obligations ................ 691,586 391,496
Deferred tuition revenue ............. 10,445,356 9,910,213
------------ ------------
Total current liabilities ............... 20,196,204 11,896,549
Capitalized lease obligations ........... 2,173,571 1,620,453
Long-term bank notes .................... 7,623,621
Commitments and contingencies
Stockholders' equity:
Common stock, no par value,
authorized 50,000,000 shares,
issued and outstanding, excluding
shares held in escrow, 3,885,956
shares in December 1995
and 3,854,748 shares in March 1995 7,373,789 7,008,878
Additional paid-in capital ........... 280,500 280,500
Retained deficit ..................... (1,626,694) (324,982)
Treasury stock, 116,357 shares in
December 1995 and 58,374 shares
in March 1995 .................... (774,773) (430,500)
Net unrealized loss on noncurrent
marketable securities ............ (97,500) (202,500)
------------ ------------
Total stockholders' equity .............. 5,155,322 6,331,396
------------ ------------
$ 27,525,097 $ 27,472,019
============ ============
* As restated - See Note 4
See accompanying notes
4
<PAGE>
Whitman Medical Corp. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For The Three Months Ended
December 31,
1995 1994
------------ --------
<S> <C> <C>
REVENUES
Tuition ................................................................ $ 7,408,069 $ 2,099,990
Educational materials and other ........................................ 749,643 72,915
----------- -----------
Total revenues ............................................................ 8,157,712 2,172,905
COSTS AND EXPENSES
Cost of educational services ........................................... 4,431,410 1,217,302
General and
administrative expenses ............................................ 2,865,083 1,039,292
Bad debt expense ....................................................... 401,837 164,553
----------- -----------
Total costs and expenses .................................................. 7,698,330 2,421,147
----------- -----------
Income (loss) from operations ............................................. 459,382 (248,242)
Interest Income ........................................................... 3,732 10,472
Interest Expense .......................................................... (282,106) (32,682)
----------- -----------
Income (loss) before income taxes ......................................... 181,008 (270,452)
Income tax provision (benefit) ............................................ 29,591 (33,640)
----------- -----------
Net income (loss) ......................................................... $ 151,417 $ (236,812)
=========== ===========
Net income (loss)
per share of common stock .............................................. $ .03 $ (.07)
=========== ===========
Weighted average number of common and common equivalent shares outstanding,
excluding common shares held in escrow for the three months ended
December 31, 1994 ...................................................... 4,434,877 3,379,398
=========== ===========
</TABLE>
See accompanying notes
5
<PAGE>
Whitman Medical Corp. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For The Nine Months Ended
December 31,
1995 1994
------------ -------------
<S> <C> <C>
REVENUES
Tuition .............................. $ 19,793,127 $ 5,501,422
Educational materials and other ...... 1,774,704 166,395
------------ ------------
Total revenues .......................... 21,567,831 5,667,817
COSTS AND EXPENSES
Cost of educational services ......... 12,587,040 3,415,749
General and
administrative expenses .......... 7,835,710 2,264,843
Bad debt expense ..................... 1,537,558 241,108
------------ ------------
Total costs and expenses ................ 21,960,308 5,921,700
------------ ------------
Loss from operations .................... (392,477) (253,883)
Interest Income ......................... 29,366 34,789
Interest Expense ........................ (871,389) (80,260)
------------ ------------
Loss before income taxes ................ (1,234,500) (299,354)
Income tax provision .................... 67,212 15,992
------------ ------------
Net loss ................................ $ (1,301,712) $ (315,346)
============ ============
Net loss
per share of common stock ............ $ (.34) $ (.09)
============ ============
Weighted average number of common and
common equivalent shares outstanding,
excluding common shares held in escrow 3,865,583 3,379,398
============ ============
See accompanying notes
6
<PAGE>
Whitman Medical Corp. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
For The Nine Months Ended
December 31,
1995 1994
------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ...................................... $(1,301,712) $ (315,346)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization .............. 813,895 338,744
Bad debt expense ........................... 1,537,558 241,108
Loss on sale of equipment .................. 26,425
Changes in operating assets and
liabilities:
Restricted cash ........................ 212,000
Accounts receivable .................... (948,248) (4,907,560)
Inventory .............................. (255,629) (131,763)
Other current assets ................... 103,405 (605,434)
Deferred costs ......................... (4,878) (213,050)
Deposits and other assets .............. (357,064) (21,593)
Accounts payable ....................... 169,686 587,294
Accrued expenses ....................... 60,483 313,856
Income taxes payable ................... 34,253 (50,724)
Deferred tuition revenue ...................... 535,143 3,985,481
----------- -----------
Net cash provided from (used in)
operating activities ....................... 625,317 (778,987)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment & leasehold
improvements ............................... (947,100) (244,834)
Proceeds from sale of equipment ............... 11,300
----------- -----------
Net cash used in investing
activities ................................. (947,100) (233,534)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term bank loan ............. 6,000,000
Payment into escrow for acquisition of SBC .... (5,900,000)
Issuance of common stock for acquisition of SBC 500,000
Proceeds from revolving line of credit
and long-term borrowings ................... 4,800,000 225,000
Principal payment on revolving line of
credit and long-term borrowings ............ (5,223,621) (225,000)
Principal payments of capitalized
lease obligations .......................... (415,939) (125,519)
Proceeds from exercise of options-
common stock ............................... 20,638 94,800
----------- -----------
Net cash (used in) provided by
financing activities ....................... (818,922) 569,281
----------- -----------
See accompanying notes
7
<PAGE>
Whitman Medical Corp. and Subsidiaries
Consolidated Statements of Cash Flows - continued
(Unaudited)
For The Nine Months Ended
December 31,
1995 1994
------------ ------------
Decrease in cash and
cash equivalents ................. $(1,140,705) $ (443,240)
Cash and cash equivalents at
beginning of period .............. 1,658,104 1,369,462
----------- -----------
Cash and cash equivalents
at end of period ................. $ 517,399 $ 926,222
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Interest paid .................... $ 518,086 $ 75,465
=========== ===========
Income taxes paid ................ $ 7,389 $ 92,380
=========== ===========
Equipment and leasehold
improvements financed through
capital leases ............... $ 1,323,758 $ 1,081,660
=========== ===========
See accompanying notes
8
<PAGE>
Whitman Medical Corp. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995
-----------------
(Unaudited)
Reference is made to the financial statements included in the Company's Annual
Report on Form 10K for the year ended March 31, 1995.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, in the opinion
of the management of the Company, include all adjustments, which are of a
normal recurring nature, necessary for a fair presentation of financial
position and the results of operations and cash flows for the periods
presented. However, the financial statements do not include all information
and footnotes required for a presentation in accordance with generally
accepted accounting principles. These consolidated financial statements should
be read in conjunction with the consolidated financial statements and the
notes thereto included or incorporated by reference in the Company's 1995
Annual Report on Form 10-K. The results of operations for the interim periods
are not necessarily indicative of the results of operations to be expected for
the full year.
The accompanying financial statements include the accounts of Whitman Medical
Corp., and its subsidiaries, all of which are wholly owned. All intercompany
accounts and transactions have been eliminated.
Certain December 31, 1994 balances have been reclassified to conform to the
current year's presentation.
1. ACQUISITION
On December 21, 1994, the Company completed the purchase of Sanford-Brown
College, a privately held proprietary business and allied healthcare college.
Sanford-Brown was acquired for $3.5 million in cash and $500,000 (98,232
shares) in common stock and contingent consideration of $2.4 million in cash
and 510,806 shares of common stock held in escrow at December 31, 1995.
The following table summarizes, on an unaudited pro forma basis, the combined
results of operations of the Company and its subsidiaries for the nine months
ended December 31, 1994 as though the acquisition described above was made at
the beginning of the fiscal year:
1994
------------
Revenues ..................... $ 16,660,030
Loss before taxes ............ (124,196)
Net loss ..................... (175,416)
Net loss per share ........... $ (.05)
9
<PAGE>
2. PROBABLE ACQUISITION
On September 12, 1995, the Company entered into an Agreement and Plan of
Merger with MDJB, Inc. ("MDJB") pursuant to which MDJB will merge into a
wholly owned subsidiary of the Company. Upon the merger of MDJB into the
subsidiary, 1,250,000 registered shares of the Company's common stock will be
exchanged for all of the outstanding MDJB stock.
The following table summarizes, on an unaudited pro forma basis, the first
nine months of operations of MDJB for fiscal 1995 and 1994 combined with the
results of operations of the Company and SBC based on the pooling of interests
method of accounting of the Company and its subsidiaries for the nine months
ended December 31, 1995 and 1994 as though the acquisition described above was
made at the beginning of each fiscal year:
1995 1994
------------ ------------
Revenues .......................... $ 27,988,654 $ 22,327,517
(Loss) income before taxes ........ (918,896) 174,131
Net (loss) income ................. (1,009,863) (2,809)
Net (loss) income per share ....... $ (.20) $ (.01)
3. DEFERRED COSTS
Effective January 1, 1996, the Company changed the amortization period of
deferred costs from a 36 month period to a 12 month period. This change in
estimate will be accounted for on a prospective basis and will increase
amortization expense in the fourth quarter ended March 31, 1996 by
approximately $16,000 and in fiscal year 1997 by approximately $129,000.
Had this change in accounting estimate been implemented in the prior period,
the estimated effect on the amortization expense for the nine months ended
December 31, 1995 and Decemeber 31, 1994 would have approximated an increase
$1,500 and a decrease $71,000, respectively.
4. RESTATEMENT
The March 31, 1995 Consolidated Balance Sheet and Consolidated Statement of
Changes in Stockholder's Equity have been restated to reflect $105,500 of
additional deferred interest expense associated with the Stock Warrants issued
to the Chairman in connection with his guarantee of the Company's debt.
10
<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.
Whitman Medical Corp.
-------------------------------------
(Registrant)
Date: April 5, 1996 /s/ Randy S. Proto
-------------------------------------
Randy S. Proto, President
Date: April 5, 1996 /s/ Fernando Fernandez
-------------------------------------
Fernando Fernandez
Treasurer
</TABLE>
<PAGE>
WHITMAN MEDICAL CORP. AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
December 31, December 31,
1995 1994
-------------- --------------
<S> <C> <C>
Primary:
Average shares outstanding 3,872,141 3,379,398
Net effect of dilutive stock options and warrants based on the
treasury stock method using the average market price 51,930
Sanford Brown shares held in escrow 510,806
--------- ---------
Total 4,434,877 3,379,398
========== =========
Net income (loss) $ 151,417 $ (236,812)
Per share amount $.03 $(.07)
Fully diluted:
Average shares outstanding 3,872,141 3,379,398
Net effect of stock options and warrants based on the
treasury stock method using quarter-end market price 128,048 196,206
Sanford Brown shares held in escrow 510,806
--------- ---------
Total 4,510,995 3,575,604
========== =========
Net income (loss) $ 151,417 $ (236,812)
Per share amount $.03 $(.07)
</TABLE>
Net income (loss) per share of common stock for primary purposes is
computed by dividing net income (loss) by the weighted average number of shares
outstanding during the period adjusted for common stock equivalents when such
adjustments result in dilution of earnings per share. The Company has considered
all common stock equivalents for purposes of calculating fully diluted earnings
per share regardless of their dilutive effect. Included as common stock
equivalents for the three months ended December 31, 1995 for fully diluted
purposes are 510,806 shares issued in connection with the acquisition of
Sanford-Brown College that remain in escrow to be disbursed to the seller or
returned to the Company upon the occurrence of, or failure to achieve certain
events.
Exhibit 11
<PAGE>
WHITMAN MEDICAL CORP. AND SUBSIDIARIES
COMPUTATION OF NET LOSS PER SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
December 31, December 31,
1995 1994
-------------- --------------
<S> <C> <C>
Primary:
Average shares outstanding 3,865,583 3,379,398
--------- ---------
Total 3,865,583 3,379,398
========== =========
Net loss $(1,301,712) $(315,346)
Per share amount $(.34) $(.09)
Fully diluted:
Average shares outstanding 3,865,583 3,379,398
Net effect of stock options and warrants based on the
treasury stock method using quarter-end market price 128,048 196,206
Sanford Brown shares held in escrow 510,806
--------- ---------
Total 4,504,437 3,575,604
========== =========
Net loss $(1,301,712) $(315,346)
Per share amount $(.29) $(.09)
</TABLE>
Net loss per share of common stock for primary purposes is computed by
dividing net loss by the weighted average number of shares outstanding during
the period adjusted for common stock equivalents when such adjustments result in
dilution of earnings per share. The Company has considered all common stock
equivalents for purposes of calculating fully diluted earnings per share
regardless of their dilutive effect. Included as common stock equivalents for
the nine months ended December 31, 1995, for fully diluted purposes are 510,806
shares issued in connection with the acquisition of Sanford-Brown College that
remain in escrow to be disbursed to the seller or returned to the Company upon
the occurrence of, or failure to achieve certain events.
Exhibit 11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 617,399
<SECURITIES> 855,000
<RECEIVABLES> 13,626,816
<ALLOWANCES> 1,416,190
<INVENTORY> 546,079
<CURRENT-ASSETS> 15,206,933
<PP&E> 5,363,631
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,525,097
<CURRENT-LIABILITIES> 20,196,204
<BONDS> 0
0
0
<COMMON> 7,373,789
<OTHER-SE> 280,500
<TOTAL-LIABILITY-AND-EQUITY> 27,525,097
<SALES> 21,567,831
<TOTAL-REVENUES> 21,567,831
<CGS> 21,960,308
<TOTAL-COSTS> 21,960,308
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 871,389
<INCOME-PRETAX> (1,234,500)
<INCOME-TAX> 67,212
<INCOME-CONTINUING> (1,301,712)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,301,712)
<EPS-PRIMARY> (.34)
<EPS-DILUTED> (.34)
</TABLE>
