<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 September 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 a 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 -- 27,164,731 shares as of September 30, 1993
<PAGE>
AMERICAN HEALTHCARE MANAGEMENT, INC.
Index to Form 10-Q
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets --
September 30, 1993 and December 31, 1992 3-4
Condensed consolidated statements of income --
Three and nine months ended September 30, 1993
and 1992 5
Condensed consolidated statements of cash flows --
Nine Months ended September 30, 1993 and 1992 6
Notes to condensed consolidated financial
statements -- September 30, 1993 7-9
SIGNATURE 10
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN HEALTHCARE MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1993 1992
_____________ ___________
(Unaudited) (Note)
(In thousands, except share data)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 15,918 $ --
Accounts receivable, net 44,592 44,400
Supplies, at cost 4,616 4,267
Funds held by trustee--
current portion 1,038 1,058
Other 3,106 3,471
_____________ ___________
TOTAL CURRENT ASSETS 69,270 53,196
Funds held by trustee 2,435 4,349
Other assets 13,916 12,007
Property and equipment, net 272,084 268,284
_____________ ___________
$357,705 $337,836
_____________ ___________
_____________ ___________
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
AMERICAN HEALTHCARE MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1993 1992
_____________ ____________
(Unaudited) (Note)
(In thousands, except share data)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank checks outstanding, less cash in bank $ -- $ 3,364
Accounts payable 23,906 22,893
Accrued compensation 7,387 7,959
Accrued interest 2,513 1,767
Other payables and accruals 4,773 3,481
Current portion of long-term debt 6,423 10,932
_____________ ____________
TOTAL CURRENT LIABILITIES 45,002 50,396
Other liabilities 9,563 15,534
Long-term debt 168,478 143,822
Stockholders' Equity:
Common stock, $.01 par; authorized
60,000,000 shares; issued and
outstanding 27,164,731--1993,
27,073,280--1992 272 271
Additional paid-in capital 138,390 138,291
Retained earnings deficit ( 4,000) ( 10,478)
_____________ ____________
134,662 128,084
_____________ ____________
$357,705 $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 Nine Months Ended
September 30, September 30,
1993 1992 1993 1992
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net revenue $ 84,464 $ 75,808 $256,065 $232,314
Operating expenses
Salaries, benefits and other 67,389 61,757 203,526 186,710
Provision for bad debts 6,853 4,647 16,759 13,012
Depreciation 4,852 4,752 14,118 12,759
Interest 4,024 3,321 10,596 6,667
________ ________ ________ ________
Income before income taxes
and extraordinary item 1,346 1,331 11,066 13,166
Income tax expense (benefit) 48 ( 253) 746 208
________ ________ ________ ________
Income before
extraordinary item 1,298 1,584 10,320 12,958
Extraordinary item--(loss)
gain on early extinguish-
ment of debt ( 3,842) 0 ( 3,842) 55,571
________ ________ ________ ________
Net (Loss) Income ($ 2,544) $ 1,584 $ 6,478 $ 68,529
________ ________ ________ ________
________ ________ ________ ________
Weighted average number of
shares and equivalents 28,694 28,502 28,617 28,566
________ ________ ________ ________
________ ________ ________ ________
Earnings per share:
Before extraordinary item $ .05 $ .06 $ .36 $ .45
Extraordinary item ( .13) .00 ( .13) 1.95
________ ________ ________ ________
Net (Loss) Income ($ .09) $ .06 $ .23 $ 2.40
________ ________ ________ ________
________ ________ ________ ________
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
AMERICAN HEALTHCARE MANAGEMENT, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1993 1992
________ ________
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 6,478 $68,529
Adjustments to reconcile net income
to net cash provided by operations:
Extraordinary loss (gain) on early
extinguishment of debt 3,842 (55,571)
Depreciation and amortization 14,818 12,966
Troubled debt interest -- 884
Troubled debt interest paid in cash -- ( 13,718)
Provision for bad debts 16,759 13,012
Charges against reserve for losses
on disposal -- ( 146)
Effect of changes in operating assets
and liabilities:
Accounts receivable ( 22,565) ( 12,763)
Supplies and other 126 ( 232)
Accounts payable 487 ( 122)
Other current liabilities 608 ( 106)
________ ________
NET CASH PROVIDED BY OPERATING ACTIVITIES 20,553 12,733
INVESTING ACTIVITIES
Purchases of property and equipment ( 9,855) ( 20,152)
Funds held by trustee and other ( 3,308) ( 2,240)
________ ________
NET CASH USED BY INVESTING ACTIVITIES ( 13,163) ( 22,392)
FINANCING ACTIVITIES
Repayments of long-term debt ( 119,132) (111,921)
Proceeds from issuance of long-term debt 137,288 114,755
Proceeds from issuance of common stock 100 182
Refinancing costs incurred ( 6,364) ( 8,817)
Bank checks outstanding, less cash in bank ( 3,364) --
________ ________
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 8,528 ( 5,801)
________ ________
Increase (decrease) in cash and cash equivalents 15,918 ( 15,460)
Cash and cash equivalents at beginning of period -- 15,749
________ ________
Cash and cash equivalents at end of period $ 15,918 $ 289
________ ________
________ ________
Supplemental disclosure of cash flow information:
Interest paid (net of $255 capitalized in 1993) $ 9,405 $18,775
Income taxes paid 1,116 206
Capitalized lease obligations, principally equipment 1,991 --
</TABLE>
See notes to condensed consolidated financial statements
<PAGE>
AMERICAN HEALTHCARE MANAGEMENT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1993
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The accompanying 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 three and nine month periods ended
September 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.
NOTE B -- LONG-TERM DEBT
A summary of long-term debt follows:
<TABLE>
<CAPTION>
September 30, December 31,
1993 1992
_____________ ____________
(000's)
<S> <C> <C>
Parent Company:
Credit Facility:
Revolving credit facility $ -- $ 12,000
Term Loan A 42,500 67,500
Term Loan B -- 20,000
10% Senior Subordinated Notes due 2003 100,000 --
________ ________
142,500 99,500
Subsidiaries:
Secured debt--other; rates, generally
fixed, average 10.3%; payable in periodic
installments through 2002 32,401 55,254
________ ________
174,901 154,754
Less current portion 6,423 10,932
________ ________
$168,478 $143,822
________ ________
________ ________
</TABLE>
<PAGE>
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 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 previously outstanding under a 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.
In connection with these transactions, the Company recorded an
extraordinary loss of $3.8 million on early extinguishment of debt in the
third quarter of 1993. The loss primarily related to the write-off of
unamortized debt issuance costs on the extinguished indebtedness.
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 revolving credit facility, restricted
for use for working capital purposes and reimbursement for drawings under
letters of credit, 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 revolving credit and permitted
acquisition facilities are due July 29, 1995 but may, upon approval by the
Lenders, be extended for one year periods through July 29, 1997. At
September 30, 1993, the permitted acquisition and revolving credit
facilities were undrawn; however, commitment availability under the
revolving credit facility had been reduced by $1.4 million for undrawn
letters of credit.
Funds advanced under the Credit Facility bear interest on the outstanding
principal at either a rate based on the Prime Rate or London Interbank
Borrowing Rate ("LIBOR") as elected from time to time by the Company.
Interest is payable monthly if a rate based on the Prime rate is elected or
at the end of the LIBOR period if a rate based on LIBOR is elected (but not
to exceed three months). The Company has elected various rates on the
initial term loan facility representing a weighted average annual interest
rate at September 30, 1993 of 6.0%.
In certain circumstances, the Company is required to make principal
prepayments on the term loan including the receipt of proceeds from certain
sales of material assets and the issuance of additional indebtedness. The
Company may prepay all or part of the outstanding Credit Facility without
penalty.
The Notes are subordinated to the Credit Facility and to indebtedness of
the Company's subsidiaries. Interest on the Notes is payable semi-annually
on February 1 and August 1 of each year. The Notes mature on
August 1, 2003 but may be redeemed in whole or in part at the option of the
Company on or after August 1, 1998 through July 31, 2000 at specified
redemption prices in excess of par and thereafter at par.
The Credit Facility Agreement and Note Indenture limit, under certain
circumstances, the Company's ability to incur additional indebtedness, sell
material assets, acquire the capital stock or assets of another business,
or pay dividends. The Credit Facility also requires the Company to
maintain a specified net worth and meet or exceed certain coverage,
leverage, and indebtedness ratios. Indebtedness under the Credit Facility
and under other secured debt and capital lease agreements of the Company is
secured by liens on substantially all real and personal property and
interests in real and personal property of the Company and its
subsidiaries.
The following table sets forth pro forma income and earnings per share
before extraordinary items for the three and nine months ended
September 30, 1993 and 1992 giving effect to (i) the refinancing and
related expenses effective June 30, 1992 of approximately $100 million of
fixed-rate senior secured debt ("Troubled Debt") and (ii) issuance of the
Notes on July 28, 1993 and the application of the estimated net proceeds
thereof as if such transactions had occurred on January 1, 1992.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1993 1992 1993 1992
________ ________ ________ ________
(in thousands)
<S> <C> <C> <C> <C>
Income before extra-
ordinary item $1,111 $ 373 $8,426 $7,133
Earnings per share
before extraordinary
item $ .04 $ .01 $ .29 $ .25
</TABLE>
Maturities of long-term debt, including capital lease obligations, over the
remainder of 1993 and for the four years beginning January 1, 1994 and
thereafter are as follows:
<TABLE>
<S> <C>
1993. . . . . . .$ 516
1994. . . . . . . 6,359
1995. . . . . . . 6,778
1996. . . . . . . 12,039
1997. . . . . . . 8,033
Thereafter. . . . 141,176
________
$174,901
________
________
</TABLE>
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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
