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 September 30, 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
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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 September 30, 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
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Part 1. Financial information Page
Consolidated balance sheets- 2
September 30, 1996 unaudited and
December 31, 1995 audited.
Consolidated income statements- 3
nine months ended September 30, 1996 and 1995
unaudited and three months ended
September 30, 1996 and 1995 unaudited.
Consolidated statements of cash flows- 4
nine months ended September 30, 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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September 30, December 31,
1996 1995
ASSETS (Unaudited) (Audited)
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Current assets:
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Cash $ 685,828 $ 440,989
Investments - available for sale 884,020 691,509
Accounts receivable 416,037 426,459
Notes receivable - current portion 18,100 17,050
Other receivables 9,371 22,933
Prepaid expenses 3,400 0
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Total current assets 2,016,756 1,598,940
Fixed assets, net of depreciation 831,976 867,890
Notes receivable - long term 63,824 77,533
Investments - available for sale 625,830 758,243
Security deposits 43,165 24,138
Goodwill, less accumulated amortization 15,236 16,251
Officers' loans receivable 94,000 0
Other assets 7,278 7,278
Loan to Dentcare Delivery Systems, Inc. 515,820 515,820
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$ 4,213,885 $ 3,866,093
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable $ 421,889 $ 437,126
Current portion of capitalized lease obligations 113,467 140,391
Accrued expenses and taxes 192,762 179,462
Due to Dentcare Delivery Systems, Inc. 382,013 134,199
Federal income tax payable 134,730 35,748
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Total current liabilities 1,244,861 926,926
Capitalized lease obligations, net of current portion 81,735 160,104
Deferred federal income tax payable 36,875 37,941
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Total liabilities 1,363,471 1,124,971
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Stockholders' equity:
Common stock $.001 par value, authorized
20,000,000 shares issued & outstanding
3,586,682 in 1996 and 1995 3,587 3,587
Paid-in capital 1,971,328 1,971,328
Unrealized gain (loss) on investments-available for ( 33,810) 39,249
sale
Retained earnings 911,959 726,958
Treasury stock ( 2,650) 0
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Total stockholders' equity 2,850,414 2,741,122
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$ 4,213,885 $ 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
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(UNAUDITED)
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For the For the
Nine Months Ended Three Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
1996 1995 1996 1995
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Revenues
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Service fee income $ 1,872,877 $ 1,695,408 $ 661,350 $ 511,557
Administrative service income 2,160,855 1,584,400 762,517 597,797
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Total service fee income 4,033,732 3,279,808 1,423,867 1,109,354
Premium income 5,386,771 5,129,010 1,771,943 1,709,847
Sales-computer services 25,976 72,567 23,453 2,925
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Total Revenues 9,446,479 8,481,385 3,219,263 2,822,126
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Cost of Revenues
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Direct expenses - 1,593,341 1,535,167 544,956 623,871
related to service fees
Dental expenses - 4,426,010 4,264,236 1,505,766 1,420,817
related to premium income
Cost of sales-computer services 4,754 32,930 1,811 3,611
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6,024,105 5,832,333 2,052,533 2,048,299
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Gross Margin on Revenues 3,422,374 2,649,052 1,166,730 773,827
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Interest expense 31,479 28,784 9,958 10,493
Selling, general and 3,116,711 2,606,749 1,050,639 791,176
administrative expense
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3,148,190 2,635,533 1,060,597 801,669
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Income (loss)before other income 274,184 13,519 106,133 ( 27,842)
and income taxes
Gain on sale of securities 4,601 0 0 0
Dividend income 11,376 13,260 7,206 6,237
Interest income 71,642 78,360 22,411 23,847
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Income before income taxes 361,803 105,139 135,750 2,242
Provision for income taxes 176,801 54,473 67,503 ( 3,648)
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Net income $ 185,002 $ 50,666 $ 68,247 $ 5,890
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Earnings per share
Primary $ 0.051 $ 0.014 $ 0.019 $ 0.002
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Fully diluted $ 0.049 $ 0.014 $ 0.017 $ 0.002
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Weighted average number of shares
of common stock outstanding
Primary 3,586,682 3,586,682 3,586,682 3,586,682
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Fully diluted 3,793,055 3,627,500 4,000,000 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
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FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
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(UNAUDITED)
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For the Nine Months Ended
September 30 September 30
1996 1995
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Net income $ 185,002 $ 50,666
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 149,205 157,410
Deferred federal income tax payable ( 1,066) ( 2,846)
(Increase) decrease in:
Accounts receivable 10,422 ( 83,196)
Inventory 0 ( 2,423)
Other receivables 13,562 6,033
Prepaid expenses ( 3,400) 0
Increase (decrease) in:
Accounts payable ( 15,237) 56,059
Accrued expenses and taxes 13,300 ( 66,559)
Due to Dentcare Delivery Systems, Inc. 247,814 124,140
Federal income tax payable 98,982 17,477
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Net cash provided by operating activities 698,584 256,761
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Cash flows from investing activities:
Security deposits ( 19,027) ( 7,107)
Capital expenditures ( 112,277) ( 62,570)
Purchase of investments ( 279,961) ( 9,217)
Sale of investments 146,804 0
Reduction of notes receivable 18,659 0
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Net cash used in investing activities ( 245,802) ( 78,894)
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Cash flows from financing activities:
Loans to officers ( 100,000) 0
Purchase of treasury stock ( 2,650) 0
Repayment of long-term debt ( 105,293) ( 97,120)
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Net cash provided by (used in) financing activities: ( 207,943) ( 97,120)
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Net increase in cash and cash equivalents 244,839 80,747
Cash and cash equivalents at beginning of period 440,989 462,942
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Cash and cash equivalents at end of period $ 685,828 $ 543,689
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Cash Paid During the Period For:
Interest $ 31,479 $ 28,784
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Income taxes $ 94,202 $ 43,158
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Scheduled of Non-Cash Investing and Financing Transactions:
Unrealized gain (loss) on investments
- available for sale $ ( 73,059) $ 29,436
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Purchase of equipment with
capitalized lease obligation $ 0 $ 163,470
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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 310 of
regulation S-B. 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 nine months ended
Setptember 30, 1996 are not necessarily indicative of the results that may be
expected for the year ended December 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 NINE MONTHS ENDED SEPTEMBER 30,1996 AND 1995
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Results of Operations
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Net income increased to $185,002 during the first nine months of 1996, as
compared with $50,666 during the comparable period of 1995. Gross margins
increased 29.2% or $773,322 to $3,422,374 during 1996 as compared to $2,649,052
in 1995. Contributing to the increase in total gross margin was a $695,750
increase in gross margin from service revenues. This increase resulted from
the Company's concentration on and expansion of its administrative service
business. Additionaly, there was an increase in gross margin from premium
income of $95,987, resulting from stabilization of claims utilization.
During the first nine months of 1996 the Company recognized interest and
dividend income of $83,018 as compared to $91,620 during 1995.
Liquidity and Capital Resources
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During the first nine months of 1996 the Company had a increase in cash and
cash equivalents of $244,839. Operating activities accounted for a $698,584
increase in cash. Offsetting this increase were expenditures by the Company
during this period of $112,277 to purchase equipment and $105,293 to repay
long-term debt. In addition, the Company increased its short term investments
by $133,157.
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
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Martin Kane
President
Date By
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John Forte
Chief Accounting Officer
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<CASH> 685,828
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<RECEIVABLES> 601,332
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0
0
<COMMON> 3,587
<OTHER-SE> 2,846,827
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<SALES> 9,446,479
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<INTEREST-EXPENSE> 31,479
<INCOME-PRETAX> 361,803
<INCOME-TAX> 176,801
<INCOME-CONTINUING> 185,002
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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