<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/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
------------------------------
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 1-8865
SIERRA HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0200415
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2724 NORTH TENAYA WAY 89128
LAS VEGAS, NV (Zip Code)
(Address of principal executive offices)
(702) 242-7000
(Registrant's telephone number, including area code)
N/A
(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
--- ---
As of April 30, 1995 there were 14,719,000 shares of common stock outstanding.
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART I - FINANCIAL INFORMATION
Item l. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1995, and December 31, 1994. . . . . . . . . . . 3
Condensed Consolidated Statements of Operations -
Three months ended March 31, 1995, and March 31, 1994. . . 4
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 1995, and March 31, 1994. . . 5
Notes to Condensed Consolidated Financial Statements. . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . 7
PART II - OTHER INFORMATION
Item l. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 11
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . . 11
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
MARCH 31 DECEMBER 31
1995 1994
-------------- --------------
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . $ 28,014,000 $ 17,227,000
Short-term Securities . . . . . . . . . . . 90,024,000 87,350,000
Accounts Receivable - Net . . . . . . . . . 6,340,000 6,571,000
Prepaid Expenses and Other Assets . . . . . 8,352,000 7,683,000
------------- -------------
Total Current Assets. . . . . . . . . . 132,730,000 118,831,000
------------- -------------
LAND, BUILDING AND EQUIPMENT . . . . . . . . 91,239,000 88,449,000
Less-Accumulated Depreciation . . . . . . . 24,309,000 22,386,000
------------- -------------
Land, Building and Equipment - Net. . . 66,930,000 66,063,000
------------- -------------
OTHER ASSETS:
Funds Withheld by Ceding Insurance Company. 9,855,000 10,234,000
Long-term Securities. . . . . . . . . . . . 12,626,000 18,824,000
Restricted Cash and Securities. . . . . . . 4,184,000 3,771,000
Other . . . . . . . . . . . . . . . . . . . 5,963,000 5,527,000
------------- -------------
Total Other Assets. . . . . . . . . . . 32,628,000 38,356,000
------------- -------------
TOTAL ASSETS . . . . . . . . . . . . . . . . $ 232,288,000 $ 223,250,000
------------- -------------
------------- -------------
CURRENT LIABILITIES:
Accounts Payable and Other Accrued
Liabilities . . . . . . . . . . . . . . . $ 8,193,000 $ 6,987,000
Accrued Payroll and Taxes. . . . . . . . . 8,715,000 8,216,000
Medical Claims Payable . . . . . . . . . . 30,574,000 31,122,000
Unearned Premium Revenue . . . . . . . . . 9,714,000 10,637,000
Current Portion of Long-term Debt. . . . . 2,186,000 2,179,000
------------- -------------
Total Current Liabilities . . . . . . . 59,382,000 59,141,000
FUTURE POLICY BENEFITS . . . . . . . . . . . 9,855,000 10,234,000
LONG-TERM DEBT--LESS CURRENT PORTION . . . . 18,688,000 18,409,000
MINORITY INTERESTS . . . . . . . . . . . . . 457,000 1,094,000
------------- -------------
TOTAL LIABILITIES. . . . . . . . . . . . . . 88,382,000 88,878,000
------------- -------------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 Par Value,
1,000,000 Shares Authorized,
None Issued
Common Stock, $.005 Par Value,
40,000,000 Shares Authorized;
Shares Issued: 1995 - 14,817,000;
1994 - 14,677,000; . . . . . . . . . . . . 74,000 73,000
Additional Paid-in Capital. . . . . . . . . 81,866,000 79,256,000
Treasury Stock, 100,000 Common Shares . . . (130,000) (130 000)
Unrealized Holding Loss on
Available-for-Sale Securities. . . . . . . (889,000) (1,565,000)
Retained Earnings . . . . . . . . . . . . . 62,985,000 56,738,000
------------- -------------
Total Stockholders' Equity. . . . . . . 143,906,000 134,372,000
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 232,288,000 $ 223,250,000
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
THREE MONTHS ENDED
MARCH 31 MARCH 31
1995 1994
----------- -----------
<S> <C> <C>
OPERATING REVENUES:
Premiums . . . . . . . . . . . . . . . . . . $75,548,000 $63,356,000
Professional Fees. . . . . . . . . . . . . . 3,818,000 2,975,000
Specialty Product Revenue. . . . . . . . . . 2,791,000 2,431,000
Investment and Other Revenue . . . . . . . . 1,472,000 641,000
----------- -----------
Total. . . . . . . . . . . . . . . . . . . 83,629,000 69,403,000
----------- -----------
OPERATING EXPENSES:
Medical Expenses . . . . . . . . . . . . . . 57,720,000 47,496,000
General, Administrative and Other. . . . . . 15,109,000 13,221,000
Specialty Product Expenses . . . . . . . . . 1,600,000 1,339,000
----------- -----------
Total. . . . . . . . . . . . . . . . . . . 74,429,000 62,056,000
----------- -----------
OPERATING INCOME . . . . . . . . . . . . . . . 9,200,000 7,347,000
OTHER INCOME AND EXPENSE:
Minority Interests in Subsidiary
Loss (Income) . . . . . . . . . . . . . . . 501,000 (26,000)
Interest Expense and Other, Net. . . . . . . (307,000) (437,000)
----------- -----------
Total. . . . . . . . . . . . . . . . . . . 194,000 (463,000)
----------- -----------
INCOME BEFORE INCOME TAXES . . . . . . . . . . 9,394,000 6,884,000
PROVISION FOR INCOME TAXES . . . . . . . . . . 3,147,000 2,409,000
----------- -----------
NET INCOME . . . . . . . . . . . . . . . . . . $ 6,247,000 $ 4,475,000
----------- -----------
----------- -----------
EARNINGS PER COMMON SHARE. . . . . . . . . . . $ .43 $ .36
------- -------
------- -------
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING. . . . . . . . . . 14,639,000 12,436,000
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 4
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
THREE MONTHS ENDED
MARCH 31 MARCH 31
1995 1994
-------------- ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . $ 6,247,000 $ 4,475,000
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization. . . . . . . . . 1,955,000 1,785,000
Provision for Doubtful Accounts. . . . . . . . 411,000 173,000
Increase in Other Assets . . . . . . . . . . . . (510,000) (90,000)
Decrease in Minority Interest. . . . . . . . . . (637,000) (22,000)
Changes in Working Capital Accounts:
Accounts Receivable . . . . . . . . . . . . (180,000) (412,000)
Other Current Assets. . . . . . . . . . . . (1,062,000) 11,000
Medical Claims Payable. . . . . . . . . . . (548,000) 1,207,000
Other Current Liabilities . . . . . . . . . 1,597,000 2,207,000
------------ -----------
Net Cash Provided by Operating Activities. . . . 7,273,000 9,334,000
------------ -----------
Cash Flows From Investing Activities:
Capital Expenditures . . . . . . . . . . . . . . . (2,755,000) (2,126,000)
Land, Building and Equipment Dispositions, Net . . 7,000 70,000
Increase in Short-term Securities. . . . . . . . . (2,196,000) (5,152,000)
Decrease (Increase) in Long-term Securities. . . . 6,789,000 (6,922,000)
Increase in Restricted Cash and Securities . . . . (413,000) (17,000)
Corporate Acquisitions, Net. . . . . . . . . . . . (4,000,000)
------------ -----------
Net Cash Provided by (Used for)
Investing Activities. . . . . . . . . . . . . . 1,432,000 (18,147,000)
------------ -----------
Cash Flows From Financing Activities:
Proceeds from Long-term Borrowings . . . . . . . . 875,000
Reductions in Debt and Payments
on Capital Leases . . . . . . . . . . . . . . . . (589,000) (3,616,000)
Exercise of Stock Options. . . . . . . . . . . . . 1,796,000 1,455,000
------------ -----------
Net Cash Provided by (Used for)
Financing Activities. . . . . . . . . . . . . . 2,082,000 (2,161,000)
------------ -----------
Net Increase (Decrease) in Cash and Cash
Equivalents . . . . . . . . . . . . . . . . . . . . 10,787,000 (10,974,000)
Cash and Cash Equivalents at Beginning of Year . . . 17,227,000 23,188,000
------------ ------------
Cash and Cash Equivalents at End of Period . . . . . $ 28,014,000 $12,214,000
------------ -----------
------------ -----------
<CAPTION>
Three Months Ended
Supplemental condensed consolidated statements March 31 March 31
of cash flows information: 1995 1994
- ------------------------------------------------ ------------ -----------
<S> <C> <C>
Liabilities Assumed in Connection with
Acquisition . . . . . . . . . . . . . . . . . . . . $ 7,279,000
(Reductions) Additions to Funds Withheld by
Ceding Insurance Company and Future Policy
Benefits . . . . . . . . . . . . . . . . . . . . . $ (379,000) 87,000
Stock issued for exercise of options and
related tax benefits. . . . . . . . . . . . . . . 815,000 913,000
Cash paid during the period for interest
(net of amount capitalized) . . . . . . . . . . . 451,000 610,000
Cash paid during the period for Federal
Income Taxes. . . . . . . . . . . . . . . . 650,000
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited financial statements include the consolidated
accounts of Sierra Health Services, Inc. ("Sierra", a holding Company,
together with its subsidiaries collectively referred to as the "Company").
The financial statements include the operations of HMO Texas L.C. ("HMO
Texas"). The Company currently owns a 50% interest in HMO Texas and
manages the HMO's operations. However, HMO Texas has an agreement with a
key employee whereby he may be granted a nominal equity interest in HMO
Texas, if certain employment requirements are fulfilled in the future. This
agreement is subject to certain regulatory and other approvals. All
material intercompany balances and transactions have been eliminated.
These statements have been prepared in conformity with the generally
accepted accounting principles used in preparing the Company's annual
audited consolidated financial statements, but do not contain all of the
information and disclosures that would be required in a complete set of
audited financial statements. They should, therefore, be read in
conjunction with the Company's audited consolidated financial statements
and notes thereto for the years ended December 31, 1994 and 1993. In the
opinion of management, all adjustments, consisting only of recurring
adjustments necessary for a fair statement of the results of operations
for the three month period ended March 31, 1995, have been made.
2. On May 9, 1995, the Company filed a Registration Statement on Form
S-4 with the Securities and Exchange Commission for the listing of 700,000
shares of its Common Stock, $.005 par value. Once registered, these shares
may be offered, issued and sold from time to time by the Company in
connection with the expansion of the Company's business through various
acquisitions and other business combinations.
3. Amounts in the accompanying Condensed Consolidated Statement of Operations
for the three months ended March 31, 1994 have been reclassified to
conform with current year presentation.
Page 6
<PAGE>
SIERRA HEALTH SERVICES, 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 TO THREE
MONTHS ENDED MARCH 31, 1994.
The total operating revenues of the Company for the three months ended
March 31, 1995 increased 20.5% to $83.6 million, from $69.4 million for the
three months ended March 31, 1994. The increase was primarily due to premium
revenue increases of $12.2 million, or 19.2%, from the Company's HMO and
insurance subsidiaries. Such additional premium revenue resulted principally
from a 16.4% increase in member months (the number of months of each period
that an individual is enrolled in a plan). The Company's HMO and insurance
subsidiaries premium rates increased approximately 2.8% overall primarily due
to a 7.5% increase in its capitation rate for its Medicare members established
by the Health Care Financing Administration ("HCFA"). Professional fees
increased by $800,000, or 28.3%, primarily due to the acquisition of a
specialty practice as well as the opening of a new 44,000 square foot medical
facility in the third quarter of 1994 both of which contributed to increased
fee for service revenue. The Company's Specialty Product Revenue increased
$400,000, or 14.8%, primarily due to an increase in the Company's workers'
compensation product enrollment. Investment and other revenue increased
$800,000, or 130%, due to increased invested cash balances from the
Company's common stock offering completed in October, 1994.
Total medical expenses increased by $10.2 million over the same three
month period last year. This 21.5% increase resulted primarily from the
consolidated member month growth as well as the additional fee for service
business discussed above. The medical expenses as a percentage of premium
revenues and professional fees ("Medical Loss Ratio") increased to 72.7% for the
three months ended March 31, 1995, compared to 71.6% for the same period last
year. This is due primarily to the new medical facility discussed above and an
increase in Medicare members as a percentage of total members. Medicare
enrollees have a higher Medical Loss Ratio and, accordingly,
a higher overall weighted average Medical Loss Ratio results. Specialty
product expenses increased $300,000, or 19.5%, primarily due to the additional
workers' compensation enrollees.
Page 7
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued).
RESULTS OF OPERATIONS, THREE MONTHS ENDED MARCH 31, 1995, COMPARED TO THREE
MONTHS ENDED MARCH 31, 1994 (continued).
General, administrative and other ("G&A") costs increased $1.9 million, or
14.3%, compared to the first quarter of 1994. As a percentage of revenues,
however, the G&A costs for the first quarter of 1995 decreased to 18.1% from
19.0% during the comparable period in 1994. The G&A increase includes a $1.0
million charge for certain pre-opening and operating costs associated with HMO
Texas, which became licensed and began marketing during the first quarter of
1995. The Company has an agreement to manage the operations of HMO Texas in
addition to its 50% ownership interest. Such operations are included in the
accompanying condensed consolidated financial statements with appropriate
adjustments made to minority interests. In addition, compensation costs
increased $700,000 primarily resulting from additional employees supporting
expanded services. Broker fees increased by $400,000 due to member growth.
These increases were partially offset by reductions in other G&A costs. The
Company markets its products primarily to employer groups and labor unions
through its internal sales personnel and independent insurance brokers. Such
brokers receive commissions based on the premiums received from each group. The
Company's agreements with its member groups are usually for twelve months and
are subject to an annual renewal. For the fiscal quarter ended March 31, 1995
the Company's ten largest employer groups were, in the aggregate, responsible
for approximately 20% of its total revenues. Although none of such employer
groups accounted for more than 5% of total revenues for that period, the loss
of one or more of the larger employer groups could have a material adverse
effect on the Company's business.
The Company's effective tax rate for the first quarter of 1995 approximated
33.5% compared to 35.0% in the first quarter of 1994. The decrease was due
primarily to increased investments in tax preferred municipal securities.
Net income for the three months ended March 31, 1995, increased 39.6% to
$6.2 million from $4.5 million for the comparable period in 1994. The
approximate $1.7 million increase in earnings was primarily due to increased
operating revenues, decreased G&A expenses as a percentage of revenues, and
a decrease in the effective tax rate. Such decreases were partially offset by
an increased Medical Loss Ratio.
LIQUIDITY AND CAPITAL RESOURCES
The Company's $7.3 million cash flow from operating activities during the
first three months of 1995 resulted primarily from $6.2 million of net income
and $2.0 million in depreciation and amortization, along with an increase in
other current liabilities of approximately $1.6 million. Such increases in cash
were offset by an approximate $2.5 million net change in other balance sheet
accounts.
Page 8
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued).
LIQUIDITY AND CAPITAL RESOURCES (continued)
The $3.5 million provided by investing and financing activities since
December 31, 1994, consisted principally of a $6.8 million reduction in
securities that mature beyond twelve months from March 31, 1995, offset by
increases totaling $2.6 million in short-term securities and restricted cash and
securities. Additional sources include $900,000 received from long-term
borrowings and $1.8 million received pursuant to the exercise of certain
outstanding Company stock options. Cash receipts discussed above were partially
offset by approximately $2.7 million used for net capital expenditures and
$600,000 used for the reduction of debt.
The holding company may receive dividends from its HMO and insurance
subsidiaries which generally must be approved by certain state insurance
departments. The Company's insurance subsidiary and HMO subsidiaries are
required by state regulatory agencies to maintain certain deposits and must
also meet certain net worth and reserve requirements. The insurance subsidiary
and both HMO subsidiaries had restricted assets on deposit in various states
totaling $3.5 million, as of March 31, 1995. The wholly-owned HMO, HMO Texas
and the insurance subsidiary also meet requirements
to maintain minimum stockholders' equity, on a statutory basis, of $200,000,
$500,000 and $3.0 million, respectively. Of the cash and cash equivalents and
short-term securities held at March 31, 1995, $12.6 million is designated for
use only by the insurance subsidiary, another $36.4 million only by the
wholly-owned HMO, and $2.2 million only by HMO Texas. Such amounts are
available for transfer to the holding Company from the insurance subsidiary
and the HMO subsidiaries only to the extent that they can be remitted in
accordance with terms of existing management agreements and by dividends.
Remaining amounts are available on an unrestricted basis.
The Company's liquidity needs over the next twelve months will primarily be
for certain new computer equipment, medical equipment and other items, the
acquisition and construction of medical facilities to support growing
membership, debt service and any expansion of the Company's operations. During
1994 the Company began construction of a 28,000 square foot outpatient surgical
facility in Las Vegas with an estimated total cost, including equipment, of
$6.5 million. Completion is expected in the third quarter of 1995.
In June, 1994, Sierra renewed its $5.0 million unsecured line of credit
from PriMerit Bank, F.S.B. for an additional one year term at an interest rate
of prime plus 1%. The line of credit, if drawn upon, will be used for general
corporate purposes and will be available for additional working capital, if
necessary.
The Company believes that existing working capital, operating cash flow
and, if necessary, amounts available under its line of credit will be sufficient
to fund its capital expenditures, debt service and any expansion activities
during the next twelve months.
Page 9
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued).
LIQUIDITY AND CAPITAL RESOURCES (continued)
The Company's membership at March 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
Number of Members at Period Ended
March 31, 1995 March 31, 1994
-------------- --------------
<S> <C> <C>
HMO
Commercial . . . . . . . . . . . . . . . . 107,874 95,222
Medicare . . . . . . . . . . . . . . . . . 20,607 16,339
Managed Indemnity. . . . . . . . . . . . . . 26,309 27,748
Medicare Supplement. . . . . . . . . . . . . 10,512 4,625
Administrative Services. . . . . . . . . . . 66,452 60,699
Workers' Compensation Services . . . . . . . 94,983 75,418
------- -------
Total Members. . . . . . . . . . . . . . . . 326,737 280,051
------- -------
------- -------
</TABLE>
HEALTH CARE REFORM
Numerous proposals relating to health care and insurance reform have been
and may continue to be introduced in the United States Congress and in state
legislatures. At this time, the Company cannot determine which legislation, if
any, will be enacted or what effect such legislation may have on the Company.
INFLATION
Health care costs generally continue to rise at a rate faster than the
Consumer Price Index. The Company has been able to somewhat lessen the impact
of such inflation by managing medical costs. There can be no assurance,
however, that in the future, the Company's ability to manage medical costs will
not be negatively impacted by items such as technological advances, utilization
changes and catastrophic items, which could, in turn, result in medical cost
increases equaling or exceeding premium increases.
Page 10
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
On May 9, 1995, the Company filed a Registration Statement
on Form S-4 with the Securities and Exchange Commission for the
listing of 700,000 shares of its Common Stock, $.005 par value.
Once registered, these shares may be offered, issued and sold
from time to time by the Company in connection with the
expansion of the Company's business through various acquisitions
and other business combinations.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(3.1) Articles of Incorporation, together with amendments
thereto to date, incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990.
(3.2) Certificate of Division of Shares into Smaller
Denominations of the Registrant, incorporated by
reference to Exhibit 3.3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992.
(3.3) Amended and Restated Bylaws of the Registrant, as
amended through March 22, 1995, incorporated by
reference to Exhibit 3.3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1994.
(4) Rights Agreement dated as of June 14, 1994 between the
Registrant and Continental Stock Transfer & Trust
Company, incorporated by reference to Exhibit 3.4 to
the Registrant's Registration Statement on Form S-3
effective October 11, 1994 (Reg. No. 33-83664).
(11) Computation of earnings per share.
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated
March 2, 1995 with the Securities and Exchange Commission
in connection with the signing of a Business Affiliation
Agreement among the Registrant, the Galtney Group, Inc.
and HMO Texas Holdings Inc.; as well as the signing of
reinsurance agreements between Sierra Health & Life
Insurance and Allianz Life Insurance Company of North
America dated October 1, 1994.
Page 11
<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.
SIERRA HEALTH SERVICES, INC.
----------------------------
(Registrant)
Date May 12, 1995 /s/ James L. Starr
------------------ -----------------------------
James L. Starr
Vice President
Chief Financial Officer and
Treasurer
(Chief Accounting Officer)
<PAGE>
SIERRA HEALTH SERVICES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH MARCH
1995 1994
----------- ----------
<S> <C> <C>
NET INCOME . . . . . . . . . . . . . . . $ 6,247,000 $ 4,475,000
EARNINGS PER COMMON SHARE. . . . . . . . $.43 $.36
Weighted Average Common Shares
Outstanding . . . . . . . . . . . . . . 14,639,000 12,436,000
- ---------------------------------------------------------------------
PRIMARY EARNINGS PER COMMON
SHARE AND COMMON SHARE
EQUIVALENTS . . . . . . . . . . . . . . $.42 $.35
Weighted Average Common and Common
Equivalent Shares Outstanding . . . . . 14,853,000 12,765,000
- ---------------------------------------------------------------------
FULLY DILUTED PRIMARY EARNINGS
PER COMMON AND COMMON
SHARE EQUIVALENTS . . . . . . . . . . . $.42 $.35
Weighted Average Common and Common
Equivalent Shares Outstanding Assuming
Full Dilution . . . . . . . . . . . . . 14,872,000 12,768,000
</TABLE>
Note: Common Equivalent Shares represent the incremental effect of outstanding
stock options and stock appreciation rights.
Page 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 28,014,000
<SECURITIES> 106,834,000
<RECEIVABLES> 6,340,000
<ALLOWANCES> 2,400,000
<INVENTORY> 0
<CURRENT-ASSETS> 132,730,000
<PP&E> 91,239,000
<DEPRECIATION> 24,309,000
<TOTAL-ASSETS> 232,288,000
<CURRENT-LIABILITIES> 59,382,000
<BONDS> 18,688,000
<COMMON> 74,000
0
0
<OTHER-SE> 143,832,000
<TOTAL-LIABILITY-AND-EQUITY> 232,288,000
<SALES> 0
<TOTAL-REVENUES> 83,629,000
<CGS> 0
<TOTAL-COSTS> 74,429,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 411,000
<INTEREST-EXPENSE> 307,000
<INCOME-PRETAX> 9,394,000
<INCOME-TAX> 3,147,000
<INCOME-CONTINUING> 6,247,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,247,000
<EPS-PRIMARY> .43
<EPS-DILUTED> 0
</TABLE>
