SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
- - - - - ---- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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 0-11895
--------
CONTINENTAL HEALTH AFFILIATES, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2362097
- - - - - ------------------------------- -------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
910 Sylvan Avenue, Englewood
Cliffs, NJ 07632
- - - - - ------------------------------- -------------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (201) 567 - 4600
----------------
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 short 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
---- ----
Number of Shares of Registrant's Common Stock Outstanding
May 12, 1995: 7,825,059
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Index
-----
Page Number
-----------
PART I FINANCIAL INFORMATION:
Item 1 Consolidated Balance Sheets (Unaudited) at March 31, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Operations (Unaudited) for the
three months ended March 31,
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows (Unaudited) for the
three months ended March 31,
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . 4
Note to Unaudited Consolidated Financial Statements . . . . 5
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 6
PART II OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . 13
1
<PAGE>
<TABLE>
<CAPTION>
CONTINENTAL HEALTH AFFILIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets March 31 December 31,
------ 1995 1994
------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $515,000 $1,161,000
Patients' funds 203,000 205,000
Accounts receivable, net of allowances for uncollectible
accounts of $3,418,000 and $3,137,000 6,460,000 6,264,000
Inventories 1,691,000 1,407,000
Deferred income taxes 849,000 849,000
Prepaid expenses and other current assets 957,000 1,231,000
------------- --------------
Total current assets 10,675,000 11,117,000
Property and equipment, at cost, net of accumulated depreciation
and amortization of $3,710,000 and $3,564,000 9,966,000 9,903,000
Mortgage note receivable 7,399,000 7,399,000
Goodwill, net of accumulated amortization of $580,000 and $558,000 360,000 382,000
Deferred income taxes 220,000 220,000
Other assets 1,397,000 1,464,000
------------- --------------
Total assets $30,017,000 $30,485,000
============= ==============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current portion of long-term debt $3,520,000 $3,165,000
Accounts payable 8,107,000 7,451,000
Other current liabilities 4,672,000 4,893,000
------------- --------------
Total current liabilities 16,299,000 15,509,000
Long-term debt, net of current portion 10,791,000 10,806,000
Deferred income 904,000 1,194,000
Other liabilities 360,000 471,000
Minority interest in subsidiary 1,645,000 1,877,000
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.02 par value; $100 liquidation preference;
1,000,000 shares authorized; 13,884 shares outstanding 1,000 1,000
Common stock, $.02 par value; 15,000,000 shares authorized;
7,825,059 shares outstanding 156,000 156,000
Additional paid-in capital 20,191,000 20,226,000
Accumulated deficit (20,330,000) (19,755,000)
------------- --------------
Total stockholders' equity 18,000 628,000
------------- --------------
Total liabilities and stockholders' equity $30,017,000 $30,485,000
============= ==============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
-------------------------------
1995 1994
-------------- -------------
<S> <C> <C>
Revenues:
Nursing home services $8,957,000 $11,074,000
Infusion therapy and other medical services 5,004,000 3,268,000
-------------- -------------
Total revenues 13,961,000 14,342,000
-------------- -------------
Operating expenses:
Personnel 7,073,000 7,602,000
Medical and nutritional product 2,535,000 1,355,000
Health care and lodging 2,754,000 3,263,000
Selling, general and administrative 1,617,000 1,340,000
Provision for uncollectible accounts 498,000 460,000
Depreciation and amortization 182,000 310,000
-------------- -------------
Total operating expenses 14,659,000 14,330,000
-------------- -------------
Income (loss) from operations (698,000) 12,000
Interest and dividend income 92,000 29,000
Interest and other financing costs (319,000) (556,000)
Other income, net 118,000 171,000
Minority interest in loss of subsidiary 232,000 96,000
-------------- -------------
Loss before income taxes and extraordinary gains (575,000) (248,000)
Benefit for income taxes --- (330,000)
-------------- -------------
Income (loss) before extraordinary gains (575,000) 82,000
Extraordinary gains on extinguishment of debt (net of income
taxes of $171,000) --- 1,058,000
-------------- -------------
Net income (loss) (575,000) 1,140,000
Preferred dividends (35,000) (35,000)
-------------- -------------
Net income (loss) applicable to common shareholders ($610,000) $1,105,000
============== =============
Earnings (loss) per share:
Before extraordinary items ($0.08) $0.01
Extraordinary items --- 0.13
-------------- -------------
Net income (loss) applicable to common shareholders $0.08 $0.14
============== =============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
-------------------------------
1995 1994
-------------- -------------
<S> <C> <C>
Operating activities:
Net income (loss) ($575,000) $1,140,000
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 182,000 310,000
Amortization of deferred financing costs 16,000 18,000
Provision for uncollectible accounts 498,000 460,000
Amortization of deferred income (290,000) (290,000)
Loss on translation of foreign currency debt 360,000 104,000
Minority interest (232,000) (96,000)
Extraordinary gains --- (1,058,000)
Increase (decrease) from changes in:
Accounts receivable (694,000) (439,000)
Inventories (284,000) 29,000
Prepaid expenses and other current assets 274,000 (173,000)
Other assets 45,000 63,000
Accounts payable 656,000 (358,000)
Other current liabilities (219,000) (271,000)
Other liabilities (111,000) (101,000)
-------------- -------------
Net cash used in operating activities (374,000) (662,000)
-------------- -------------
Investing activities:
Expenditures for property and equipment (170,000) (31,000)
-------------- -------------
Financing activities:
Net proceeds from not-for-profit borrowings --- 12,905,000
Net proceeds from long-term borrowings --- 790,000
Payments of short-term borrowings --- (13,750,000)
Payments of long-term borrowings (67,000) (73,000)
Payment of preferred dividends (35,000) (35,OO0)
-------------- -------------
Net cash used in financing activities (102,000) (163,O00)
-------------- -------------
Net decrease in cash and cash equivalents (646,000) (856,000)
Cash and cash equivalents, beginning of period 1,161,000 3,527,000
-------------- -------------
Cash and cash equivalents, end of period $515,000 $2,671,000
============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Unaudited information
---------------------
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to
present fairly the Company's financial position as of March
31, 1995, and the results of its operations and changes in
cash flows for the three month periods ended March 31, 1995
and 1994. These consolidated financial statements should be
read in conjunction with the annual consolidated financial
statements of the Company. The results of operations for the
three months ended March 31, 1995 are not necessarily
indicative of the results to be expected for the full year.
5
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Three Months Ended March 31, 1995 Compared with
-----------------------------------------------
Three Months Ended March 31, 1994
---------------------------------
Total revenues decreased by $381,000, or 3%, as revenues of the
Heritage Facility were included through March 16 in 1994, but 1995
revenues include only fees for managing the Heritage Facility.
Excluding revenues pertaining to the Heritage Facility in both
years, total revenues increased by $1,478,000, or 12%.
Nursing home services revenues decreased by $2,117,000, or 19%.
Excluding revenues pertaining to the Heritage Facility in both
years, nursing home services revenues decreased by $257,000, or 3%,
primarily due to a $339,000 retroactive Medicaid rate adjustment
included in 1994 related to a prior period. Excluding the Heritage
Facility in both years, total patient days decreased 2%, due to a
40 bed reduction in the number of available beds at one of the
Company's nursing homes during the third quarter of 1994, but the
occupancy percentage increased from 92.0% in 1994 to 94.2% in 1995.
The decrease in volume was offset by higher per diem rates.
Infusion therapy and other medical services revenues increased by
$1,736,000, or 53%, primarily due to a $1,737,000, or 108%,
increase in home infusion division revenues. This increase is
partially attributed to a 68% increase in the number of patients
serviced. Most of the additional home infusion patients were
obtained through successful marketing efforts directed at managed
care companies. These patients are normally serviced under
agreements with significant price discounts or under other
arrangements which substantially reduce prices. The increase in
home infusion revenues was also affected by the Company beginning
to provide in the second quarter of 1994 Ceredase(R) enzyme and
Cerezyme(TM) infusion therapy ("Ceredase(R)") to patients with
Gaucher's disease. Sales of Ceredase(R) in 1995 were $856,000.
Ceredase(R) is a very high priced drug therapy (approximately
$20,000 per month per patient), but due to its high product cost
per revenue dollar, it has a very low gross profit margin
percentage.
Personnel costs decreased by $529,000, or 7%. Excluding the
Heritage Facility, personnel costs increased by $517,000, or 8%,
primarily attributed to normal cost of living increases, higher
Infu-Tech nursing costs incurred to support the 68% increase in
home infusion volume and increased Infu-Tech pharmacy payroll costs
due to new pharmacy operations and the higher home infusion volume.
In addition, Infu-Tech hired additional marketing and sales
personnel as part of the strategy to aggressively pursue new
managed care contracts, as well as to implement recently signed
managed care contracts.
Costs of medical and nutritional products sold to patients and
other customers increased by $1,180,000, or 87%. As a percentage
of infusion therapy and other medical services revenues, medical
and nutritional product costs increased from 41% in 1994 to 51% in
1995. The increase is primarily attributed to the lower home
infusion pricing and the Ceredase(R) sales discussed above.
Health care and lodging expenses, which are incurred in connection
with nursing home services, decreased by $509,000, or 16%.
Excluding the Heritage Facility, health care and lodging expenses
decreased by $38,000, or 1%, primarily attributed to the reduction
in the number of available beds discussed above.
Selling, general and administrative costs increased by $277,000, or
21%. Excluding the Heritage Facility, selling, general and
administrative costs increased by $327,000, or 25%, primarily
attributed to additional Infu-Tech costs incurred to support the
68% increase in home infusion volume, start-up costs associated
with new businesses and higher rent, travel and entertainment
costs.
Excluding the Heritage Facility, the provision for uncollectible
accounts was 4% of revenues in both 1995 and 1994.
Depreciation and amortization expenses decreased by $128,000.
Excluding the Heritage Facility, depreciation and amortization
expenses decreased by $10,000, as certain leasehold improvements
became fully amortized during the second quarter of 1994.
6
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
Interest and dividend income increased by $63,000, primarily due to
$74,000 of interest income earned on the $7.4 million mortgage note
receivable which has been outstanding since March 16, 1994.
Interest and other financing costs decreased by $237,000, primarily
due to lower debt balances.
Other income of $118,000 in 1995 and $171,000 in 1994 primarily
consists of amortization of deferred income of $290,000 in both
1995 and 1994, $188,000 of income in 1995 resulting from an
adjustment to accruals related to the deconsolidation of the
Heritage Facility, partially offset by unrealized foreign currency
translation losses of $360,000 in 1995 and $104,000 in 1994.
Minority interest in loss of subsidiary of $232,000 in 1995 and
$96,000 in 1994 represents the portion of the net loss of Infu-Tech
allocable to minority stockholders.
The benefit for income taxes of $330,000 in 1994 consists of the
benefit of the $171,000 income tax provision related to the
extraordinary gains and the $159,000 benefit for income taxes for
Infu-Tech, a 59% owned subsidiary which files its own Federal
income tax return.
The 1995 loss was $575,000 ($.08 per share) compared to prior year
income before extraordinary gains of $82,000 ($.01 per share). The
extraordinary gains of $1,058,000 in 1994 represented the amounts
by which bank loans were satisfied for less than their principal
amounts, net of transaction costs and income taxes.
The preferred stock dividend relates to the 5% exchangeable
preferred stock.
The net loss applicable to common shareholders in 1995 was $610,000
($.08 per share) compared to net income applicable to common
shareholders in 1994 of $1,105,000 ($.14 per share).
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995, the Company had stockholders' equity of $18,000
and total liabilities of $28,354,000. The total liabilities at
March 31, 1995 included debt of $14,311,000, which included SFr
2,900,000 (equal to $2,575,000) principal amount of 6% Swiss franc
denominated convertible bonds due June 27,1995 (the "Bonds");
$705,000 principal amount of a secured loan ("Secured Loan") due
June 30, 1995 as amended; $1,200,000 principal amount of 14 1/8%
subordinated debentures due September 1996 (the "Subordinated
Debentures"); $1,213,000 principal amount of 8% notes due 1999; and
$5,006,000 principal amount of 6% notes and 6% convertible notes
due 2003.
Pursuant to a management agreement entered into in January 1994,
the Company is entitled to fees for managing the Heritage Facility.
However, the mortgage loan entered into by Senior Care Foundation,
Inc. ("SCF"), the owner of the Heritage Facility, prohibits any
payments (including management fees and principal and interest on
a second mortgage note) to the Company until the Heritage Facility
attains specified financial levels (coverage ratio of 1.25 to 1,
current ratio of 1.1 to 1 and net worth of $100,000). In 1994, the
Company did not receive any payments from SCF and the Company
waived all management fees and interest through December 31, 1994.
Because the Heritage Facility attained the specified financial
levels at December 31, 1994, the Company received and recorded in
the first quarter of 1995 management fees of $128,000 and interest
income of $74,000. Based upon current and anticipated operating
levels of the Heritage Facility, SCF should be able to pay the
management fees and interest which become due for the remainder of
1995. At March 31, 1995 the Company was not in compliance with
certain financial covenants of the SCF mortgage loan (which the
Company had guaranteed $2.0 million), which were waived by the
lender.
7
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
The Company's cash and cash equivalents balance decreased from
$1,161,000 at December 31, 1994 to $515,000 at March 31, 1995.
Included in the March 31, 1995 balance is $438,000 held by Infu-
Tech. In connection with the initial public offering of Infu-Tech
common stock, the Company entered into a management and non-
competition agreement with Infu-Tech, expiring September 30, 1997,
which prohibits Infu-Tech from advancing money to (or borrowing
money from) the remainder of the Company subsequent to December 31,
1992. Therefore, at March 31, 1995, the Company (excluding Infu-
Tech) only had access to $77,000 of cash and cash equivalents.
During 1995, the Company used $374,000 of cash in operating
activities, primarily due to the net loss of $575,000, an increase
in inventories of $284,00 and an increase in net receivables of
$196,000. This was partially offset by a $437,000 increase in
accounts payable and other current liabilitites, and a $274,000
reduction in prepaid expenses and other current assets.
Although the Company used $374,000 of cash in operating activities,
Infu-Tech used $639,000 of cash in operating activities. The
Company (excluding Infu-Tech) generated $265,000 of cash from
operating activities. The Infu-Tech use of cash in operating
activities was primarily due to a net loss of $551,000, an increase
of $246,000 in net accounts receivable, and an increase of $284,000
in inventories, partially offset by a $480,000 increase in accounts
payable.
The increase in Infu-Tech's net accounts receivable is primarily
attributed to significant growth in first quarter Infu-Tech
revenues. Infu-Tech's overall outstanding accounts receivable has
decreased from 71 days' sales at December 31, 1994, to 68 days'
sales at March 31, 1995, but is still significantly higher than the
54 days' sales at December 31, 1993. The increase from December
31, 1993 is primarily the result of a slow-down in payments from
Medicare, because of changes in the Medicare claims processing
systems effective January 1, 1994. As a result of these changes,
Infu-Tech has experienced increased delays in having its claims
processed as well as an increase in the number of claims rejected.
This is an industry-wide problem, which is not unique to Infu-Tech.
Infu-Tech is confident that as both they and the Medicare
intermediaries adapt to the new systems, claims processing will
improve and the days' sales outstanding of accounts receivable will
decrease.
The increase in Infu-Tech's inventories is primarily to support the
higher Infu-Tech sales levels. The increase in Infu-Tech's
accounts payable is primarily attributed to the higher Infu-Tech
inventory purchases.
As of March 31, 1995, Infu-Tech's working capital was $3.9 million,
which was substantially lower than the December 31, 1994 working
capital of $4.5 million. Further, at March 31, 1995, Infu-Tech's
cash and cash equivalents of $438,000 were $658,000 less than the
nearly $1.1 million at December 31, 1994 and its accounts payable
of almost $2.2 million were $480,000 higher than the approximately
$1.7 million at December 31, 1994. Infu-Tech does not have the
resources to finance continued growth in sales without borrowings,
unless it can significantly accelerate collections of accounts
receivable. At May 12, 1995, Infu-Tech was in preliminary stages
of negotiating a line of credit secured primarily by its accounts
receivable and inventories.
During 1995, the Company invested $170,000 in property and
equipment, consisting mostly of nursing home facility improvements.
During 1995, the Company repaid $67,000 of long-term borrowings and
paid preferred dividends of $35,000.
Excluding Infu-Tech, the Company generated $265,000 of cash from
operating activities, which was invested in property and equipment
($155,000) and used in financing activities ($98,000), resulting in
a $12,000 increase in cash and cash equivalents, from $65,000 at
December 31, 1994 to $77,000 at March 31, 1995.
8
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
While the 1993 and 1994 debt transactions significantly improved
the Company's financial condition and decreased its interest costs,
the loss of cash flow from the Heritage Facility in 1994 adversely
effected the Company's liquidity. Because the Heritage Facility
had attained the specified financial levels at December 31, 1994
required to begin making payments to the Company, the Company began
receiving payments from the Heritage Facility in January 1995.
Based upon current and anticipated operating levels of the Heritage
Facility, the Company estimates it will receive approximately
$830,000 in management fees and interest income in 1995, of which
$202,000 was received in the first quarter of 1995. Additional
cash flow generated by the Heritage Facility, if any, will be used
to repay principal on its $7.4 million debt to the Company. If the
Heritage Facility is able to pay interest and management fees
throughout 1995, the cash flow from the Heritage Facility, together
with proceeds of an expected sale of eight acres of land in New
Jersey or borrowings against accounts receivable, should increase
the Company's cash flow to the point where the Company (excluding
Infu-Tech) will be able to meet its ongoing obligations, other than
debt maturities, without requiring dividends from Infu-Tech. In
March 1994, the Company signed a contract to sell the eight acres
to an unaffiliated person for $875,000. A suit attempting to
prevent local approvals needed to complete this transaction was
withdrawn in March 1995.
At March 31, 1995, the Company had approximately $3.5 million of
debt due in 1995 (consisting primarily of the Bonds and Secured
Loan) and approximately $1.4 million of debt due in 1996
(consisting primarily of the Subordinated Debentures). Beyond
1996, the next significant required debt repayment is not until
1999.
The Company has no arrangements under which it can make borrowings.
At March 31, 1995, the Company had a working capital deficit of
$5,624,000. Excluding Infu-Tech, which had working capital of
$3,871,000, the Company's working capital deficit was $9,495,000.
The Company has extended the maturity of the Secured Loan until
June 30, 1995. The Company is pursuing financing to replace the
Secured Loan on terms more favorable to the Company, including the
release of the security interest in accounts receivable.
The Company has no specific source of funds with which to pay the
principal of the Bonds when they mature in June 1995. The Company
may attempt to negotiate extensions or modifications of its
obligations with regard to at least some of these Bonds and may use
proceeds of asset sales or seek loans to meet its obligations with
respect to the Bonds.
The Company does not have any material commitments for capital
expenditures.
9
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Part II Other Information
Item 1 Legal Proceedings
There are no presently pending material legal
proceedings other than as reported in the Company's
1994 Form 10K.
Item 2 Changes in Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to Vote of Security Holders
None
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
A. Exhibits - The following exhibits are filled
herewith or incorporated herein.
11 Calculation of earnings per share - three
months ended March 31, 1995.
11.1 Calculation of earnings per share - three
months ended March 31, 1994.
27 Financial Data Schedule
B. Reports on Form 8-K during the quarter ended March
31, 1995: None.
10
<PAGE>
Exhibit 11
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Calculation of Earnings Per Share
Three Months ended March 31, 1995
(Unaudited)
Primary
------------
Net loss applicable to common shareholders $ (610,000)
============
Adjustment of shares outstanding:
Weighted average number of shares outstanding 7,825,059
Average net additional equivalent shares issuable ---
---------
Weighted average number of common shares and
common shares equivalent 7,825,059
=========
Loss per share $ (.08)
============
The above does not give effect to the assumed conversion of the
Swiss franc denominated convertible bonds issued on June 27, 1985
since the effect would be antidilutive.
11
<PAGE>
Exhibit 11.1
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
Calculation of Earnings Per Share
Three Months ended March 31, 1994
(Unaudited)
Primary
------------
Net loss applicable to common shareholders $ 1,105,000
===========
Adjustment of shares outstanding:
Weighted average number of shares outstanding 7,661,439
Average net additional equivalent shares issuable ---
---------
Weighted average number of common shares and
common shares equivalent 7,661,439
=========
Earnings per share $ .14
==========
The above does not give effect to the assumed conversion of the
Swiss franc denominated convertible bonds issued on June 27, 1985
since the effect would be antidilutive.
12
<PAGE>
CONTINENTAL HEALTH AFFILIATES, INC. AND SUBSIDIARIES
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.
Continental Health Affiliates, Inc.
Date May 15, 1995 JACK ROSEN
---------------------- ------------------------------------
Jack Rosen
Chairman, and Director
(Chief Executive Officer)
Date May 15, 1995 GARY S. FINKEL
---------------------- ------------------------------------
Gary S. Finkel
Vice President and Chief Financial
Officer
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 515,000
<SECURITIES> 0
<RECEIVABLES> 9,878,000
<ALLOWANCES> 3,418,000
<INVENTORY> 1,691,000
<CURRENT-ASSETS> 10,675,000
<PP&E> 13,676,000
<DEPRECIATION> 3,710,000
<TOTAL-ASSETS> 30,017,000
<CURRENT-LIABILITIES> 16,299,000
<BONDS> 14,311,000
<COMMON> 156,000
0
1,000
<OTHER-SE> (139,000)
<TOTAL-LIABILITY-AND-EQUITY> 30,017,000
<SALES> 13,961,000
<TOTAL-REVENUES> 13,961,000
<CGS> 2,535,000
<TOTAL-COSTS> 14,659,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 498,000
<INTEREST-EXPENSE> 227,000
<INCOME-PRETAX> (575,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (575,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (575,000)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> 0
</TABLE>
