<PAGE>
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 and
Exchange Act of 1934 For the Period Ended June 30, 1993
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 1-8756
AMERICAN HEALTHCARE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1636788
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
660 American Avenue, Suite 200
King of Prussia, Pennsylvania 19406-0909
(Address of principal executive offices) (Zip Code)
(215) 768-5900
(Registrant's telephone number, including area code)
Not Applicable
(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 / /
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 the court. Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 Par Value -- 27,138,858 shares as of July 30, 1993
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Index
AMERICAN HEALTHCARE MANAGEMENT, INC.
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets --
June 30, 1993 and December 31, 1992 3-4
Condensed consolidated statements of income --
Three and six months ended June 30, 1993 and 1992 5
Condensed consolidated statements of cash
flows -- Six months ended June 30, 1993 and 1992 6
Notes to condensed consolidated financial
statements -- June 30, 1993 7-8
SIGNATURE 9
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN HEALTHCARE MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1993 1992
____________ ____________
(Unaudited) (Note A)
(In thousands)
<S> <C> <C>
ASSETS
Current Assets:
Accounts receivable, net $ 44,515 $ 44,400
Supplies, at cost 4,496 4,267
Funds held by trustee--current portion 1,048 1,058
Other 3,790 3,471
________ ________
TOTAL CURRENT ASSETS 53,849 53,196
Funds held by trustee 3,494 4,349
Other assets 10,939 12,007
Property, plant, and equipment, net 273,163 268,284
________ ________
$341,445 $337,836
________ ________
________ ________
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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AMERICAN HEALTHCARE MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1993 1992
__________ ___________
(Unaudited) (Note A)
(In thousands)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank checks outstanding, less cash in bank $ 1,953 $ 3,364
Accounts payable 24,862 22,893
Accrued compensation 8,312 7,959
Accrued interest 1,404 1,767
Other payables and accruals 2,923 3,481
Current portion of long-term debt 10,894 10,932
________ _________
TOTAL CURRENT LIABILITIES 50,348 50,396
Other liabilities 12,763 15,534
Long-term debt 141,168 143,822
Stockholders' Equity:
Common stock, $.01 par; authorized
60,000,000 shares; 27,138,850 and
27,073,280 issued and outstanding
June 30,1993 and December 31, 1992,
respectively 271 271
Additional paid-in capital 138,351 138,291
Deficit ( 1,456) ( 10,478)
________ _________
137,166 128,084
________ _________
$341,445 $337,836
________ _________
________ _________
</TABLE>
Note: The balance sheet at December 31, 1992 has been derived
from the audited financial statements at that date but does not
include all the information and footnotes required by generally
accepted accounting principles for complete financial
statements.
See Notes to Condensed Consolidated Financial Statements
<PAGE>
AMERICAN HEALTHCARE MANAGEMENT, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1993 1992 1993 1992
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net revenue $ 84,650 $ 77,966 $171,601 $156,506
Operating expenses:
Salaries, benefits and other 67,815 62,459 136,136 124,953
Provision for bad debts 4,821 4,470 9,906 8,365
Depreciation 4,596 3,994 9,265 8,007
Interest 3,199 1,668 6,573 3,346
________ ________ ________ ________
80,431 72,591 161,880 144,671
Income before income taxes and
extraordinary item 4,219 5,375 9,721 11,835
Income tax expense 316 209 698 461
________ ________ ________ ________
Income before extraordinary item 3,903 5,166 9,023 11,374
Gain on early extinguishment
of debt -- 55,571 -- 55,571
________ ________ ________ ________
Net Income $ 3,903 $ 60,737 $ 9,023 $ 66,945
________ ________ ________ ________
________ ________ ________ ________
Weighted average number of
shares and equivalents 28,536 28,578 28,580 28,598
________ ________ ________ ________
________ ________ ________ ________
Earnings per share:
Before extraordinary item $ 0.14 $ 0.18 $ 0.32 $ .40
Extraordinary item -- 1.94 -- 1.94
________ ________ ________ ________
Net Income $ 0.14 $ 2.12 $ 0.32 $ 2.34
________ ________ ________ ________
________ ________ ________ ________
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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AMERICAN HEALTHCARE MANAGEMENT, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1993 1992
________ _________
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 9,023 $ 66,945
Adjustments to reconcile net income to net
cash provided by operations:
Extraordinary gain on early extinguishment
of debt -- ( 55,571)
Depreciation and amortization 9,707 8,007
Troubled debt interest -- 495
Troubled debt interest paid in cash -- ( 6,410)
Provision for bad debts 9,906 8,365
Operations charged against reserve for losses
on disposal -- 61
Effect of changes in operating assets and liabilities:
Accounts receivable ( 15,635) ( 7,259)
Supplies and other ( 438) ( 543)
Accounts payable 1,443 ( 1,603)
Other current liabilities ( 909) 120
________ _________
NET CASH PROVIDED BY OPERATING ACTIVITIES 13,097 12,607
INVESTING ACTIVITIES
Purchases of property and equipment ( 6,137) ( 13,509)
Funds held by trustee and other ( 1,066) ( 1,419)
________ _________
NET CASH USED BY INVESTING ACTIVITIES ( 7,203) ( 14,928)
FINANCING ACTIVITIES
Repayments of long-term debt ( 35,990) ( 100,834)
Proceeds from issuance of long-term debt 31,447 99,467
Proceeds from issuance of stock 60 --
Bank checks outstanding, less cash in bank ( 1,411) --
________ _________
NET CASH USED BY FINANCING ACTIVITIES ( 5,894) ( 1,367)
________ _________
Decrease in cash and cash equivalents -- ( 3,688)
Cash and cash equivalents at beginning of period -- 15,749
________ _________
Cash and cash equivalents at end of period $ -- $ 12,061
________ _________
________ _________
Supplemental disclosure of cash flow information:
Interest paid (net of $139 capitalized in 1993) $ 6,631 $ 9,303
Income taxes paid 1,105 15
Capitalized lease obligations, principally
equipment 1,851 --
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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AMERICAN HEALTHCARE MANAGEMENT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1993
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The accompanying unaudited condensed 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 six months
ended June 30, 1993 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1993. 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 December 31, 1992.
Earnings Per Share: The computation of earnings per share is based on the
weighted average number of outstanding shares and equivalents. Stock
equivalents consist of stock options and warrants representing 1,396,000
and 1,451,000 equivalent shares for the three and six months ended June
30, 1993, respectively, and 1,539,000 and 1,611,000 for the three and six
months ended June 30, 1992, respectively.
NOTE B -- PRO FORMA RESULTS OF OPERATIONS
Effective June 30, 1992, the Company refinanced approximately $100 million
of fixed-rate senior secured debt ("Old Debt") bearing a weighted average
annual interest rate (based on stated rate under the indenture for the Old
Debt) at June 30, 1992 of 12.8 percent with approximately $100 million of
bank-financed senior secured debt ("New Debt") with a floating rate of
interest (6.3 percent at June 30, 1993). The Old Debt was accounted for
in conformity with Financial Accounting Standards Board (FASB) Statement
No. 15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings," which under certain conditions prescribes the calculation
of interest expense for financial reporting purposes. Applications of
FASB Statement No. 15 rules had the effect of reducing reported interest
expense for the three and six months ended June 30, 1992 by $3.0 million
and $5.9 million, respectively. Upon refinancing of the Old Debt, the
required application of FASB Statement No. 15 rules to interest expense
was eliminated.
Pro forma income before an extraordinary item for the three and six months
ended June 30, 1992, assuming the refinancing occurred January 1, 1992,
would be $3.7 million or $.13 per share and $8.4 million or $.29 per
share, respectively.
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NOTE C -- SUBSEQUENT EVENT
On July 28, 1993 the Company issued $100 million aggregate principal
amount of 10 percent senior subordinated notes due July 2003 (the "Notes")
and on July 29, 1993 amended and restated its senior secured credit
facility (the "Credit Facility") with a syndicate of commercial bank
lenders (the "Lenders") increasing the total facility to $122.5 million.
The Credit Facility is secured by substantially all of the assets of the
Company.
The proceeds from the issuance of the Notes were used to repay $42.5
million of previously outstanding senior secured term debt, $13.0 million
representing all amounts outstanding under a previously outstanding senior
secured revolving credit facility, $20.5 million of subsidiary mortgages,
and transaction fees and expenses. The remainder of the proceeds were
invested in short-term investment grade, interest-bearing obligations
pending use for general corporate purposes, including capital
expenditures.
The Credit Facility consists of (i) a $42.5 million term loan facility,
payable in incremental, semiannual installments beginning January 31, 1994
and maturing July 31, 2000, (ii) a working capital revolving credit
facility limited to an aggregate principal amount of $20 million, and
(iii) a permitted acquisition facility limited to an aggregate principal
amount of $60 million. The working capital and permitted acquisition
facilities, which were undrawn upon completion of the transactions, are
due July 29, 1995 but may, upon the Company's request and approval by the
Lenders, be extended for one year periods, but in no event past
July 29, 1997.
The Company expects to record an extraordinary loss of approximately $3.5
million on early extinguishment of debt in the third quarter of 1993. The
loss primarily relates to the write-off of unamortized debt issuance costs
on the extinguished indebtedness.
Maturities of long-term debt, including capital lease obligations, over
the five years beginning January 1, 1993 and thereafter are as follows:
1993. . . . . . . . .$ 6,903
1994. . . . . . . . . 6,354
1995. . . . . . . . . 6,772
1996. . . . . . . . . 12,034
1997. . . . . . . . . 7,997
Thereafter. . . . . . 141,530
________
. . . . . . . . . . .$181,590
________
________
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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.
American Healthcare Management, Inc.
(Registrant)
February 4, 1994 /s/ Bruce J. Colburn
__________________ ___________________________________
(Date) Bruce J. Colburn
Vice President, Controller
Chief Accounting Officer
