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 June 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
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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 June 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
June 30, 1996 unaudited and
December 31, 1995 audited.
Consolidated income statements- 3
six months ended June 30, 1996 and 1995
unaudited.
Consolidated statements of cash flows- 4
six months ended June 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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June 30, December 31,
1996 1996
ASSETS (Unaudited) (Audited)
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Current assets:
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Cash $ 585,951 $ 440,989
Investments - available for sale 795,037 691,509
Accounts receivable 451,414 426,459
Notes receivable - current portion 17,743 17,050
Other receivables 15,733 22,933
Prepaid expenses 11,259 0
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Total current assets 1,877,137 1,598,940
Fixed assets, net of depreciation 862,719 867,890
Notes receivable - long term 68,485 77,533
Investments - available for sale 724,784 758,243
Security deposits 47,138 24,138
Goodwill, less accumulated amortization
of $11,170 in 1996 and $10,832 in 1995 15,574 16,251
Other assets 7,278 7,278
Loan to Dentcare Delivery Systems, Inc. 515,820 515,820
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$ 4,118,935 $ 3,866,093
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable $ 428,601 $ 437,126
Current portion of capitalized lease
obligations 140,391 140,391
Accrued expenses and taxes 195,161 179,462
Due to Dentcare Delivery Systems, Inc. 344,608 134,199
Federal income tax payable 91,253 35,748
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Total current liabilities 1,200,014 926,926
Capitalized lease obligations, net
of current portion 89,908 160,104
Deferred federal income tax payable 36,875 37,941
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Total liabilities 1,326,797 1,124,971
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Stockholders' equity:
Common stock $.001 par value, authorized
20,000,000 shares issued & outstanding
3,586,682 in 1996 and 1995 3,587 3,587
Paid-in capital 1,971,328 1,971,328
Unrealized gain (loss) on
investments-available for sale (23,839) 39,249
Retained earnings 843,712 726,958
Treasury stock (2,650) 0
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Total stockholders' equity 2,792,138 2,741,122
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$ 4,118,935 $ 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 Six Months For the Three Months
Ended Ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
Revenues
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Service fee income $ 1,211,527 $ 1,183,851 $ 590,280 $ 488,413
Admin. service income 1,398,338 986,603 742,023 501,701
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Total service fee income 2,609,865 2,170,454 1,332,303 990,114
Premium income 3,614,828 3,419,163 1,871,621 1,758,237
Sales-computer services 2,523 69,642 2,523 66,374
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Total Revenues 6,227,216 5,659,259 3,206,447 2,814,725
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Cost of Revenues
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Direct expenses - related
to service fees 1,048,385 911,296 529,571 382,753
Dental expenses - related
to premium income 2,920,244 2,843,419 1,484,614 1,453,681
Cost of sales-computer
services 2,943 29,319 2,943 26,941
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3,971,572 3,784,034 2,017,128 1,863,375
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Gross Margin on Revenues 2,255,644 1,875,225 1,189,319 951,350
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Interest expense 21,521 18,291 10,996 10,503
Selling, general and
administrative expense 2,066,072 1,815,573 1,060,660 955,663
---------- ---------- ---------- ----------
2,087,593 1,833,864 1,071,656 966,166
---------- ---------- ---------- ----------
Income (loss)before other
income and income taxes 168,051 41,361 117,663 (14,816)
Gain on sale of securities 4,601 0 4,601 0
Dividend income 4,170 7,023 1,518 3,606
Interest income 49,231 54,513 28,807 24,167
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Income before income taxes 226,053 102,897 152,589 12,957
Provision for income taxes 109,298 58,121 74,031 12,212
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Net income $ 116,755 $ 44,776 $ 78,558 $ 745
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Earnings per share
Primary $ 0.033 $ 0.013 $ 0.022 $ ----
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Fully diluted $ 0.032 $ 0.012 $ 0.022 $ ----
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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
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Fully diluted 3,627,500 3,627,500 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
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FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
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(UNAUDITED)
- ----------- For the Six months ended
June June
1996 1995
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Net income $ 116,755 $ 44,776
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 98,435 104,523
Deferred federal income tax payable (1,066) (2,029)
(Increase) decrease in:
Accounts receivable (24,955) 33,419
Inventory 0 (2,423)
Other receivables 7,200 382
Prepaid expenses (11,259) 0
Increase (decrease) in:
Accounts payable (8,525) 63,405
Accrued expenses and taxes 15,699 (32,213)
Due to Dentcare Delivery Systems, Inc. 210,409 187,510
Federal income tax payable 55,505 43,162
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Net cash provided by operating activities 458,198 440,512
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Cash flows from investing activities:
Security deposits 23,000 0
Capital expenditures (92,598) (211,162)
Purchase of investments (279,961) (46,262)
Sale of Investments 146,804 0
Reduction of notes receivable 8,355 0
Net cash used in investing activities (240,400) (257,424)
Cash flows from financing activities:
Purchase of treasury stock (2,650) 0
Repayment of long-term debt (70,196) (62,022)
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Net cash provided by (used in)
financing activities: (72,846) (62,022)
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Net increase (decrease) in cash and cash
equivalents 144,962 279,429
Cash and cash equivalents at beginning of period 440,989 462,942
Cash and cash equivalents at end of period 585,951 742,371
Cash Paid During the Period For:
Interest $ 21,521 $ 18,291
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Income taxes $ 50,725 $ 4,080
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Scheduled of Non-Cash Investing and Financing
Unrealized gain (loss) on investments-
available for $ (63,088) $ 19,625
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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 six months ended June 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 SIX MONTHS ENDED JUNE 30,1996 AND 1995
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Results of Operations
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Net income increased to $116,755 during the first six months of 1996, as
compared with $44,776 during the comparable period of 1995. Gross margins
increased 20.3% or $380,419 to $2,255,644 during 1996 as compared to $1,875,225
in 1995. Contributing to the increase in total gross margin was an $302,322
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
$118,840, resulting from stabilization of claims utilization.
During the first six months of 1996 the Company recognized interest and dividend
income of $53,041 as compared to $61,536 during 1995.
Liquidity and Capital Resources
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During the first six months of 1996 the Company had a increase in cash and cash
equivalents of $144,962. Operating activities accounted for a $458,198 increase
in cash. Offsetting this increase were expenditures by the Company during this
period of $92,598 to purchase equipment and $70,196 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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At the Annual Meeting of Stockholders, held on July 2, 1996,
the approval of Libero & Kappel as independent auditors for
the fiscal year ended December 31, 1996 was ratified.
3,449,413 votes were cast for, 18,250 votes were cast against
and 10,700 votes abstained with respect to such proposal.
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
8
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 585,951
<SECURITIES> 1,519,822
<RECEIVABLES> 484,890
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,877,137
<PP&E> 1,747,172
<DEPRECIATION> 911,102
<TOTAL-ASSETS> 4,118,935
<CURRENT-LIABILITIES> 1,200,014
<BONDS> 0
0
0
<COMMON> 3,587
<OTHER-SE> 2,798,551
<TOTAL-LIABILITY-AND-EQUITY> 4,118,935
<SALES> 6,227,216
<TOTAL-REVENUES> 6,280,617
<CGS> 3,971,572
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,066,072
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,521
<INCOME-PRETAX> 226,053
<INCOME-TAX> 109,268
<INCOME-CONTINUING> 116,755
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 116,755
<EPS-PRIMARY> 0.033
<EPS-DILUTED> 0.032
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