UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14236
Healthplex, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 11-2714365
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 Charles Lindbergh Blvd., Uniondale, New York 11553
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(Address of principal executive offices)
516-794-3000
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Issuer's telephone number, including area code
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: 3,586,682 shares of common stock, par
value $.001 per share, outstanding at March 31, 1996.
Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report)
HEALTHPLEX, INC. & SUBSIDIARIES
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INDEX
Part 1. Financial information Page
Consolidated balance sheets - 2
March 31, 1996 unaudited and
December 31, 1995 audited.
Consolidated income statements - 3
three months ended March 31, 1996 and 1995
unaudited..
Consolidated statements of cash flows - 4
three months ended March 31, 1996 and 1995
unaudited.
Notes to consolidated financial statements 5
Management's discussion and analysis of 6
financial condition and results of operations.
1
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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March 31, December 31,
1996 1995
ASSETS (Unaudited) (Audited)
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Current assets:
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Cash $ 433,961 $ 440,989
Investments - available for sale 811,935 691,509
Accounts receivable 432,823 426,459
Notes receivable - current portion 17,393 17,050
Other receivables 8,647 22,933
Prepaid expenses 9,124 0
------------ ------------
Total current assets 1,713,883 1,598,940
Fixed assets, net of depreciation 846,543 867,890
Notes receivable - long term 73,054 77,533
Investments - available for sale 719,626 758,243
Security deposits 24,138 24,138
Goodwill, less accumulated amortization
of $11,170 in 1996 and $10,832 in 1995 15,913 16,251
Other assets 7,278 7,278
Loan to Dentcare Delivery Systems, Inc. 515,820 515,820
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$ 3,916,255 $ 3,866,093
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LIABILITIES AND STOCKHOLDERS'EQUITY
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Current liabilities:
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Accounts payable $ 433,554 $ 437,126
Current portion of capitalized 140,391 140,391
lease obligations
Accrued expenses and taxes 155,499 179,462
Due to Dentcare Delivery Systems, Inc. 236,485 134,199
Federal income tax payable 40,099 35,748
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Total current liabilities 1,006,028 926,926
Capitalized lease obligations, 125,006 160,104
net of current portion
Deferred federal income tax payable 38,270 37,941
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Total liabilities 1,169,304 1,124,971
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Stockholders' equity:
Common stock $.001 par value, authorized
20,000,000 shares issued & outstanding
3,586,682 in 1996 and 1995 3,587 3,587
Paid-in capital 1,971,328 1,971,328
Unrealized gain on 6,881 39,249
investments-available for sale
Retained earnings 765,155 726,958
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Total stockholders' equity 2,746,951 2,741,122
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$ 3,916,255 $ 3,866,093
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See notes to financial statements which are an integral part hereof.
2
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
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Revenues
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Service fee income $ 621,247 $ 695,438
Administrative service income 656,315 484,902
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Total service fee income 1,277,562 1,180,340
Premium income 1,743,207 1,660,926
Sales-computer services 0 3,268
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Total Revenues 3,020,769 2,844,534
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Cost of Revenues
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Direct expenses - related to service fees 518,814 528,543
Dental expenses - related to premium income 1,435,630 1,389,738
Cost of sales-computer services 0 2,378
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1,954,444 1,920,659
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Gross Margin on Revenues 1,066,325 923,875
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Interest expense 10,525 7,788
Selling, general and administrative expense 1,005,412 859,910
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1,015,937 867,698
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Income before other income and income taxes 50,388 56,177
Dividend income 2,652 3,417
Interest income 20,424 30,346
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Income before income taxes 73,464 89,940
Provision for income taxes 35,267 45,909
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Net income $ 38,197 $ 44,031
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Earnings per share
Primary 0.011 0.012
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Fully diluted 0.011 0.012
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Weighted average number of shares
of common stock outstanding
Primary 3,586,682 3,586,682
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------------ -----------
Fully diluted 3,627,500 3,627,500
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See notes to financial statements which are an integral part hereof.
3
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
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INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
Cash flows from operating activities:
Net income $ 38,197 $ 44,031
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 48,279 49,252
Deferred federal income tax payable 329 (1,570)
(Increase) decrease in:
Accounts receivable (6,364) 22,859
Inventory 0 (2,423)
Other receivables 14,286 6,366
Prepaid expenses (9,124) 0
Increase (decrease) in:
Accounts payable (3,572) 58,891
Accrued expenses and taxes (23,963) (5,794)
Due to Dentcare Delivery Systems, Inc. 102,286 152,479
Federal income tax payable 4,351 35,438
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Net cash provided by operating activities 164,705 359,529
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Cash flows from investing activities:
Security deposits 0 (7,702)
Capital expenditures (26,594) (13,975)
Purchase of investments (114,177) (32,766)
Reduction of notes receivable 4,136 0
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Net cash used in investing activities (136,635) (54,443)
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Cash flows from financing activities:
Repayment of long-term debt (35,098) (26,924)
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Net cash used in financing activities: (35,098) (26,924)
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Net increase (decrease) in cash (7,028) 278,162
and cash equivalents
Cash and cash equivalents at 440,989 462,942
beginning of period -------- --------
Cash and cash equivalents at end of period 433,961 741,104
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Cash Paid During the Period For:
Interest $ 10,525 $ 7,788
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Income Taxes $ 50,725 $ 4,080
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Schedule of Non-Cash Investing
and Financing Transactions:
Unrealized gain (loss) on $ (32,368) $ 9,812
investments-available for sale ----------- -----------
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See notes to financial statements which are
an integral part hereof.
4
HEALTHPLEX, INC. & SUBSIDIARIES
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NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - BASIS OF PRESENTATION
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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-QSB and rule 10-01
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 fair presentation have
been included. Operating results for the three months ended March 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ended March 31, 1996.
For a summary of significant accounting policies, refer to Note 2 of Notes to
Financial Statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995.
5
HEALTHPLEX, INC. & SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND 1995
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Results of Operations
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Net income decreased 13.2% to $38,197 during the first three months of 1996, as
compared with $44,031 during the comparable period of 1995. Gross margins
increased 15.4% or $142,450 to $1,066,325 during 1996 as compared to $923,875 in
1995. Contributing to the increase in total gross margin was an $106,951
increase in gross margin from service revenues. This increase resulted from the
Company's concentration on and expansion of its administrative service business.
Additionally, there was an increase in gross margin from premium income of
$36,389, resulting from stabilization of claims utilization.
During the first three months of 1996 the Company recognized interest and
dividend income of $23,076 as compared to $33,763 during 1995.
Liquidity and Capital Resources
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During the first three months of 1996 the Company had a decrease in cash and
cash equivalents of $7,028. Operating activities accounted for a $164,705
increase in cash. Offsetting this increase were expenditures by the Company
during this period of $26,594 to purchase equipment and $35,098 to repay long-
term debt. In addition, the Company increased its short term investments by
$114,177.
6
HEALTHPLEX, INC. & SUBSIDIARIES
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PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
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Neither the Registrant nor its subsidiary are a party,
nor is any of their property subject, to material
pending legal proceedings or material proceedings known
to be contemplated by governmental authorities.
Item 2. Changes in Securities
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None
Item 3. Defaults Upon Senior Securities
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None
Item 4. Submission of Matters to a Vote of Security Holders
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None
Item 5. Other Information
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None
Item 6. Exhibits and Reports on Form 8-K
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None
7
HEALTHPLEX, INC. & SUBSIDIARIES
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SIGNATURES
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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.
Healthplex, Inc.
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(Registrant)
Date --------- By --------------------------
Martin Kane
President
Date --------- By --------------------------
John Forte
Chief Accounting Officer
8
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<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 433,961
<SECURITIES> 1,531,561
<RECEIVABLES> 458,863
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,713,883
<PP&E> 1,718,036
<DEPRECIATION> 871,493
<TOTAL-ASSETS> 3,916,255
<CURRENT-LIABILITIES> 1,006,028
<BONDS> 0
0
0
<COMMON> 3,587
<OTHER-SE> 2,743,364
<TOTAL-LIABILITY-AND-EQUITY> 3,916,255
<SALES> 3,020,769
<TOTAL-REVENUES> 3,043,845
<CGS> 1,954,144
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,005,412
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,525
<INCOME-PRETAX> 73,464
<INCOME-TAX> 35,267
<INCOME-CONTINUING> 38,197
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,197
<EPS-PRIMARY> 0.011
<EPS-DILUTED> 0.011
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