SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1995
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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
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NATIONAL HOME HEALTH CARE CORP.
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(Exact name of Registrant as Specified in Its Charter)
Delaware 22-2981141
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(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
700 White Plains Road, Scarsdale, New York 10583
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(Address of Principal Executive Offices with Zip Code)
Registrant's Telephone Number Including Area Code: 914-722-9000
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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
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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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of common stock outstanding as of December 14, 1995 was
4,718,075.
<PAGE>
NATIONAL HOME HEALTH CARE CORP.
FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 31, 1995
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of October 31, 1995
and July 31, 1995 (Unaudited) 3-4
Consolidated Statements of Operations for the three
months ended October 31, 1995 and October 31, 1994
(Unaudited) 5
Consolidated Statements of Cash Flows for the three
months ended October 31, 1995 and October 31, 1994
(Unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
SIGNATURES 10
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<PAGE>
NATIONAL HOME HEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED
<TABLE>
<CAPTION>
October 31, 1995 July 31, 1995
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $7,764,000 $9,237,000
Investments 813,000 813,000
Accounts receivable -
less allowance for doubtful accounts of
$411,000 at October 31, 1995 and $99,000
at July 31, 1995 8,542,000 5,338,000
Notes receivable 345,000 349,000
Income taxes receivable 72,000
Prepaid expenses and other assets 394,000 354,000
Deferred taxes 190,000 80,000
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Total current assets 18,048,000 16,243,000
Furniture, equipment and leasehold
improvements, net 473,000 445,000
Notes receivable - noncurrent 605,000 690,000
Excess of cost over fair value of net
assets of businesses acquired, net 2,872,000 1,036,000
Other intangible assets, net 301,000 342,000
Deposits and other assets 121,000 109,000
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TOTAL $22,420,000 $18,865,000
============ ===========
</TABLE>
(Continued)
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<PAGE>
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED
<TABLE>
<CAPTION>
October 31, 1995 July 31, 1995
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<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses $1,470,000 $ 910,000
Income taxes payable 180,000
Capital lease obligations-current 33,000 27,000
Estimated third-party payor settlements 2,370,000
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Total current liabilities 4,053,000 937,000
Capital lease obligations-noncurrent 1,000 14,000
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Total liabilities 4,054,000 951,000
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Stockholders' equity:
Common stock, $.001 par value; authorized
20,000,000 shares, issued 5,673,075 shares 6,000 6,000
Additional paid-in capital 15,552,000 15,552,000
Retained earnings 3,759,000 3,307,000
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19,317,000 18,865,000
Less treasury stock (891,000 shares) at cost (951,000) (951,000)
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Total stockholders' equity 18,366,000 17,914,000
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TOTAL $22,420,000 $18,865,000
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</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
For the three months ended
October 31,
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1995 1994
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<S> <C> <C>
Patient service revenues $10,074,000 $5,730,000
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Operating expenses:
Cost of revenues 6,300,000 3,535,000
General and administrative 2,939,000 1,740,000
Amortization 73,000 36,000
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Total operating expenses 9,312,000 5,311,000
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Income from operations 762,000 419,000
Interest income 104,000 76,000
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Income before taxes 866,000 495,000
Provision for income taxes 414,000 230,000
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NET INCOME $ 452,000 $ 265,000
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Net income per share of common stock: $0.10 $0.06
===== =====
Weighted average shares outstanding 4,718,075 4,779,075
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
For the three months ended
October 31,
---------------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 452,000 $ 265,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 124,000 75,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (276,000) 33,000
Decrease in income taxes receivable 351,000 151,000
(Increase) in prepaid expenses and other
assets (38,000) (23,000)
(Decrease) in accounts payable and
accrued expenses (238,000) (6,000)
Increase in income taxes payable 180,000
Increase in estimated third party payor
settlements 498,000
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Net cash provided by operating activities 1,053,000 495,000
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Cash flows from investing activities:
Purchase of property, plant and equipment (13,000) (34,000)
Purchase of investments (12,000)
Purchase of Nurse Care, Inc., net of cash acquired (2,595,000)
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Net cash (used in) investing activities (2,608,000) (46,000)
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Cash flows from financing activities:
Decrease in notes receivable 89,000 5,000
Principal payments under capital lease obligations (7,000) (7,000)
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Net cash provided by (used in) financing
activities 82,000 (2,000)
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NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (1,473,000) 447,000
Cash and cash equivalents-beginning of period 9,237,000 5,017,000
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CASH AND CASH EQUIVALENTS-END OF PERIOD $7,764,000 $5,464,000
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Taxes $298,000 $ 80,000
Interest 5,000 2,000
</TABLE>
See accompanying notes to consolidated financial statements
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<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 month period ended October 31,
1995 are not necessarily indicative of the results that may be expected for the
year ended July 31, 1996. 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, 1995.
NOTE 2 - ACQUISITION
On August 4, 1995, the Company acquired all of the outstanding common
shares of Nurse Care, Inc., the parent company of New England Home Care, Inc.
("New England"). New England is a licensed Medicare certified home health care
agency providing services in Fairfield and New Haven counties in the State of
Connecticut. The purchase price of $3,150,000 was generated from internal funds.
The acquisition was accounted for as a purchase and the excess of purchase price
over the fair value of the assets acquired, $1,869,000, was allocated to
goodwill and is being amortized over a twenty year period.
The following unaudited pro forma consolidated statement of operations
information gives effect to the acquisition described above as though it had
occurred on August 1, 1994, after giving effect to certain adjustments.
Unaudited
October 31, 1994
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Patient fee income $ 9,728,000
Operating expenses 9,152,000
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Income from operations $ 576,000
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Net income $ 317,000
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Net income per share $ .07
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NOTE 3 - RECLASSIFICATION
Certain amounts in the October 31, 1994 consolidated statement of
operations have been reclassified to conform to the October 31, 1995
consolidated statement of operations.
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<PAGE>
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations and Effects of Inflation
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For the three months ended October 31, 1995, revenues increased by
$4,344,000, or 76% from $5,730,000 for the three months ended October 31, 1994
to $10,074,000 for the three months ended October 31, 1995. Approximately
$3,692,000 or 85% of this increase is attributable to the acquisition of New
England. In addition, revenues from Health Acquisition Corp., the subsidiary
providing home health care services in the New York metropolitan area, increased
$637,000 or 11% from the corresponding period of 1994. This increase was the
result of additional volume from existing contracts with certified home health
care agencies and other long-term provider programs. In addition, approximately
$225,000 of this increase is attributable to the expansion of services by Health
Acquisition Corp., in April 1995 to include home care pediatric skilled nursing
services for medically fragile children and their families.
Cost of revenues as a percentage of revenue increased from 62% for the
three months ended October 31, 1994 to 63% for the three months ended October
31, 1995. This increase is primarily attributable to the acquisition of New
England, which has higher cost of revenues as a result of its revenue generated
from Medicare patients being limited to cost reimbursement principles.
General and administrative expenses as percentage of revenue decreased from
30% as a percentage of revenue for the three months ended October 31, 1994 to
29% for the three months ended October 31, 1995. General and administrative
expenses excluding those relating to New England, decreased $79,000 from the
corresponding period of 1994. This decrease is primarily due to certain
non-recurring professional fees incurred in the quarter ended October 31, 1994.
Amortization increased from $37,000 to $73,000 for the three months ended
October 31, 1995 as a result of the recognition of goodwill in connection with
the acquisition of New England.
As a result of the foregoing, net income for the three months ended October
31, 1995 was $452,000 as compared to a net income of $265,000 for the three
months ended October 31, 1994.
The rate of inflation had no material effect on operations for the three
months ended October 31, 1995.
Financial Condition and Capital Resources
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Current assets and current liabilities increased to $18,048,000 and
$4,053,000, respectively, at October 31, 1995 representing an increase of
$1,805,000 and $3,116,000, respectively, over July 31, 1995. The current ratio
decreased to 4.45x at October 31, 1995 versus 17.34x at July 31, 1995. This
decrease is primarily attributable to the acquisition of New England.
Net cash provided by operating activities was $1,053,000 for the three
months ended October 31, 1995, as compared to net cash provided by operating
activities of $495,000 for the three months ended October 31, 1994. This
increase is primarily attributable to increases in net income, depreciation and
amortization and estimated third party payor settlements. Historically, the
Company has financed its working capital requirements through cash flows from
operating activities. Net cash
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<PAGE>
used in investing activities for the three months ended October 31, 1995
reflects the purchase of equipment and the purchase of New England. For the
three months ended October 31, 1994, net cash used in investing activities
consists of the purchase of equipment and the purchase of investment. Net cash
provided by financing activities for the three months ended October 31, 1995 and
1994 reflects the decrease in notes receivable offset by the principal payments
under capital lease obligations.
The Company believes that it has sufficient cash to fund its operations for
at least the ensuing twelve month period. The Company has available a $2,000,000
secured offering line of credit with the Bank of New York. In addition, New
England has a secured advised line of credit with the Bank of New York, the
maximum amount of which shall not exceed the lesser of eligible accounts
receivable or $2,000,000. Both facilities are at the alternate base commercial
lending rate of the bank. As of October 31, 1995, there were no outstanding
balances under either line of credit.
The Company has agreed in principle that a subsidiary comprised of
substantially all of its Florida operations, consisting of the operations of
Brevard Medical Center, Inc., and First Health, Inc., will conduct an
underwritten initial public offering of 1,200,000 shares of common stock at a
proposed price of $5.00 per share. Upon completion of the offering, the public
would own approximately 50%, and the Company would retain approximately 36% of
the outstanding common stock of the issuer on a fully-diluted basis. The
planning for the proposed offering is in initial stages and planning for the
proposed offering is in initial stages and there can be no assurance that the
offering will be consummated as currently contemplated, if at all. The offering
would be made only by means of a prospectus.
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<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 22, 1996 /s/ ROBERT P. HELLER
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Robert P. Heller
Vice President of Finance,
Chief Financial
and Accounting Officer
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