SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 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 0-12927
NATIONAL HOME HEALTH CARE CORP.
(Exact name of registrant as specified in its charter)
Delaware 22-2981141
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization
850 Bronx River Road, Yonkers, New York 10708
(Address of principal executive offices with zip code)
Registrant's telephone number including area code: 914-776-6800
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 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
Applicable only to corporate issuers:
The number of shares of common stock outstanding as of March 15,
1995 was 4,779,075.<PAGE>
NATIONAL HOME HEALTH CARE CORP.
FORM 10-Q
FOR THE QUARTER ENDED JANUARY 31,1995
PART 1. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of January 31,
1995 and July
31, 1994 (unaudited) 3-4
Consolidated Statements of Operations for the three
months
ended January 31, 1995 and January 31,
1994 and six months ended January 31, 1995
and January 31, 1994 (unaudited) 5-6
Consolidated Statements of Cash Flows for the six months
ended January 31, 1995 and January 31, 1994 (unaudited) 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition
and Results of Operations 9-10
PART 11. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12<PAGE>
<TABLE>
<CAPTION>
NATIONAL HOME HEALTH CORP. CARD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED
<S> <C> <C>
January 31,1995 July31,1994
ASSETS
Current assets:
Cash and cash equivalents $3,474,000 $5,017,000
Investments 3,792,000 1,553,000
Accounts receivable - patients
less allowance for doubtful
accounts of $77,000 at
January 31, 1995 and $84,000
at July 31, 1994 5,093,000 4,823,000
Notes receivable 356,000 271,000
Income taxes receivable 2,517,000 2,625,000
Prepaid expenses and other assets 248,000 193,000
Deferred taxes 80,000 200,000
Total current assets 15,560,000 14,682,000
Furniture, equipment and leasehold
improvements, net 484,000 512,000
Notes receivable - noncurrent 860,000 11011,000
Restricted cash 260,000 260,000
Excess of cost over fair value of net
assets of businesses acquired, net 1,055,000 1,073,000
Other intangible assets, net 194,000 248,000
Deposits and other assets 103,000 140,000
TOTAL $18,516,000 $17,926,000
(continued)<PAGE>
NATIONAL HOME HEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED
<S> <C> <C>
January 31, 1995 July 31,1994
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 640,000 $ 667,000
Capital lease obligations-current 28,000 31,000
Reserve for state income tax settlement 333,000 300,000
Estimated losses on discontinued
operations 200,000 200,000
Total current liabilities 1,201,000 1,198,000
Capital lease obligations-noncurrent 27,000 40,000
Total liabilities 1,228,000 1,238,000
Stockholders, equity:
Common stock, $.001 par value;
authorized 20,000,000 shares,
issued 5,670,075 shares 6,000 6,000
Additional paid-in capital 15,544,000 15,544,000
Retained earnings 2,481,000 1,881,000
18,031,000 17,431,000
Less treasury stock (891,000 shares)
at cost (743,000) (743,000)
Total stockholders' equity 17,288,000 16,688,000
TOTAL $18,516,000 $17,926,000
See accompanying notes to consolidated financial statements.<PAGE>
NATIONAL HOME HEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
<S> <C> <C>
For the three months ended
January 31,
1995 1994
Income:
Patient fee income $6,044,000 $4,922,000
Operating expenses:
Personnel costs 4,692,000 3,620,000
General and administrative 795,000 606,000
Amortization of intangibles 36,000 45,000
Total operating expenses 5,523,000 4,271,000
Income from operations 521,000 651,000
Other income:
Interest income 89,000 34,000
Income from continuing
operations before taxes 610,000 685,000
Provision for income taxes 275,000 319,000
Income from continuing
operations 335,000 366,000
Discontinued operations:
(Loss) from discontinued
operations (net of income
tax benefit of $771,000
in 1994) --- (6,854,000)
NET INCOME (LOSS) $ 335,000 $(6,488,000)
Net income per share of
common stock:
Continuing operations $ 0.07 $ 0.08
Discontinued operations --- (1.44)
Net income (loss) $ 0.07 $ (1.36)
Weighted average shares
outstanding 4,779,075 4,779,075
See accompanying notes to consolidated financial statements.<PAGE>
NATIONAL HOME HEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
<S> <C> <C>
For the six months ended
January 31,
1995 1994
Income:
Patient fee income $11,774,000 $ 9,812,000
Operating expenses:
Personnel costs 9,119,000 7,254,000
General and admini-
strative 1,643,000 1,151,000
Amortization of intan-
gibles 72,000 91,000
Total operating expenses 10,834,000 8,496,000
Income from operations 940,000 1,316,000
Other income:
Interest income 165,000 64,000
Income from continuing
operations before taxes 1,105,000 1,380,000
Provision for income taxes 505,000 628,000
Income from continuing
operations 600,000 752,000
Discontinued operations:
(Loss) from discontinued
operations (net of income
tax benefit of $761,000
in 1994) ---- (6,928,000)
NET INCOME (LOSS) $ 600,000 $(6,176,000)
Net income (loss) per share
of common stock:
Continuing operations $0.13 $ 0.16
Discontinued operations -- (1.45)
Net income (loss) $ 0.13 $ (1.29)
Weighted average shares
outstanding 4,779,075 4,779,075
See accompanying notes to consolidated financial statements.<PAGE>
NATIONAL HOME HEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
<S> <C> <C>
For the six months ended
January 31,
1995 1994
Cash flows from operating
activities;
Net income from continuing
operations $600,000 $752,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 151,000 160,000
Provision for state
income tax
settlement 33,000
Deferred tax 120,000
Changes in operating assets
and liabilities:
(Increase ) decrease
in accounts
receivable (270,000) 71,000
Decrease in income
taxes receivable 108,000
(Increase) in prepaid
expenses and other (18,000) (171,000)
(Decrease) in accounts
payable and accrued
expenses (27,000) (4,000)
Cash provided by
discontinued
operations 871,000
Net cash provided
by operating
activities 697,000 1,679,000
Cash flows from investing
activities:
Purchase of property,
plant and equipment (51,000) (25,000)
Proceeds (purchase)
of investments (2,239,000) 110,000
Net cash provided
by (used in)
investing
activities (2,290,000) 85,000
<PAGE>
<S> <C> <C>
For the six months ended
January 31,
1995 1994
Cash flows from financing activities:
Decrease in notes
receivable 66,000
Principal payments under
capital lease
obligations (16,000) (11,000)
Principal payments under
capital lease obligations
by discontinued
operations (12,000)
Net cash
provided by
(used in)
financing
activities 50,000 (23,000)
NET INCREASE (DECREASE) IN CASH
AND CASH
EQUIVALENTS (1,543,000) 1,741,000
Cash and cash
equivalents-beginning of
period 5,017,000 3,463,000
CASH AND CASH
EQUIVALENTS-END OF
PERIOD $3,474,000 $3,474,000
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Taxes $ 277,000 $ 507,000
Interest 6,000 7,000
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three and six-month periods ended January 31,
1995 are not necessarily indicative of the results that may be expected
for the year ended July 31, 1995. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended July 31,
1994.
NOTE 2 - SUBSEQUENT EVENT
In February 1995, the Company and the New York State Department of
Taxation and Finance entered into a Stipulation of Discontinuance
regarding all open taxable years for which the Company previously had
been assessed. In consideration for a payment of approximately
$333,000, this matter has been settled. The Company previously estab-
lished a provision sufficient to cover the payment and interest.
NOTE 3 - RECLASSIFICATION
Certain amounts in the January 31, 1994 consolidated statements of
operations have been reclassified to conform to the January 31, 1995
consolidated statements of operations. (See Management's Discussion
and Analysis of Financial Condition and Results of Operations).<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
In April 1994, the medical provider to which National HMO (New
York), Inc. and
National HMO Corp. of Elizabeth, Inc., wholly owned subsidiaries of
the Company, provided non-medical management services, terminated
its relationship with those subsidiaries. In addition, in July 1994,
National HMO (New York), Inc. terminated its relationship with the
dental practitioner to which it also provided administrative management
services. In connection therewith, the Company has reclassified its
financial statements to show separately the results of the discontinued
operations. Accordingly, results of operations as discussed below relate
to continuing operations of the Company.
Results of Operations and Effects of Inflation
For the three months ended January 31, 1995, total income was
$6,044,000 as compared to $4,922,000 for the three months ended
January 31, 1994, which represents an increase of $1,122,000 or 23%.
Health Acquisition Corp., the subsidiary providing home health care
services in the New York metropolitan area, had income increase
$819,000 or 21% from the corresponding period of 1994. This increase
is attributable to additional volume from existing contracts with certified
home health care agencies and other long-term provider programs.
Income from Brevard Medical Center, Inc. and First Health, Inc., the
two subsidiaries in Florida that operate outpatient medical centers in
Brevard County and Volusia County, Florida, respectively, increased
$303,000 from the corresponding period of 1994. First Health, Inc.
which commenced operations in May 1994, had income of $249,000 in
the current three-month period.
Total operating expenses as a percentage of total income was 91% for
the three months ended January 31, 1995 as compared to 87% for the
corresponding period of 1994. Personnel costs increased to 78% of total
income in the current fiscal quarter as compared to 73% from the
corresponding quarter of 1994. This result is primarily attributable to
an increase in medical personnel of the outpatient medical centers in
anticipation of the Company becoming a preferred provider for
additional managed care plans. In addition, the Company experienced
substantial increases in both health insurance and workers' compensation
premiums. General and administrative expenses increased $189,000
from the corresponding period of 1994, for which $80,000 related to the
operations of First Health, Inc. in the current fiscal quarter and the
balance was due to increased costs of operations.
Interest income for the current three-month period increased $55,000 or
162% to $89,000 from $34,000 for the corresponding period of 1994.
This increase is due to substantially higher interest rates and interest
earned on notes receivable in the current fiscal quarter.
Income from continuing operations before taxes for the three months
ended January 31, 1995 was $610,000 as compared to $685,000 for the
corresponding period of 1994.
For the six months ended January 31, 1995, total income was
$11,774,000 as compared to $9,812,000 for the six months ended
January 31, 1994, which represents an increase of $1,962,000 of 20%.
Health Acquisition Corp., the subsidiary providing home health care
services, accounted for $1,429,000 or 73% of this increase. Income
from outpatient medical centers increased $533,000 from the previous
six-month period. First Health, Inc., which commenced operations in
May 1994, accounted for $459,000 of the increase. Total operating
expenses as a percentage of income was 92% for the six months ended
January 31, 1995 as compared to 87% for the six months ended January
31, 1994. Personnel costs increased to 77% of income as compared to
74% for the corresponding period of 1994. This increase is explained
in the above three-month discussion. General and administrative
expenses increased $492,000 from the previous six-month period, of
which $200,000 was for professional fees in connection with a formerly-
proposed business merger, $153,000 related to First Health, Inc. in the
current fiscal year and the balance of $139,000 was due to increased
costs of operations. Interest income increased $101,000 or 158% from
the previous six-month period as explained in the above three-month
discussion.
Income from continuing operations before taxes for the six months ended
January 31, 1995 was $600,000 as compared to $752,000 for the
corresponding period of 1994.
The rate of inflation had no material effect on operations for the six
months ended January 31, 1995.
Liquidity and Capital Resources
The Company believes that it has sufficient cash to fund its operations
for at least the ensuing twelve month period. In this regard, the
Company received in February 1995 a refund for federal income tax
carryback claims in the amount of approximately $2,100,000. In
addition, the Company has renewed a $2,000,000 secured line of credit
with the Bank of New York with interest at the alternate base
commercial lending rate of the bank. As of January 31, 1995, the
Company had no outstanding balance under this line of credit.<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None<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.
National Home Health Care Corp.
Date: March_, 1995 /s/ Robert P. Heller
Robert P. Heller
Vice President of Finance
Chief Financial
and Accounting Officer<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.
National Home Health Care Corp.
Date: March_, 1995
Robert P. Heller
Vice President of Finance
Chief Financial
and Accounting Officer
