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, 1997
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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)
516-542-2200
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Issuers 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 issuers classes of common
equity, as of the latest practical date: 3,585,082 shares of common stock, par
value $.001 per share, outstanding at March 31, 1997.
Not applicable
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(Former name, former address and former fiscal year, if changed since last
report)
1
HEALTHPLEX, INC. & SUBSIDIARIES
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INDEX
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Part 1. Financial information Page
Consolidated balance sheets - 2
March 31, 1997 unaudited and
December 31, 1996 audited.
Consolidated income statements 3
three months ended March 31, 1997 and 1996
unaudited.
Consolidated statements of cash flows 4
three months ended March 31, 1997 and 1996
unaudited.
Notes to consolidated financial statements 5
Management's discussion and analysis of 6
financial condition and results of operations.
2
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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March 31, December 31,
1997 1996
ASSETS (Unaudited) (Audited)
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Current assets:
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Cash and cash equivalents $ 394,675 $ 268,340
Investments - available for sale 849,752 957,055
Accounts receivable 327,932 420,482
Notes receivable - current portion 53,673 51,793
Other receivables 27,996 28,978
Prepaid expenses 0 10,655
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Total current assets 1,654,028 1,737,303
Fixed assets, net of depreciation 1,021,315 1,034,158
Notes receivable - less current portion 98,662 111,846
Investments - available for sale 619,868 633,936
Security deposits 31,906 31,056
Goodwill, less accumulated amortization 14,559 14,897
Other assets 17,610 17,610
Loan to Dentcare Delivery Systems, Inc. 515,820 515,820
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$ 3,973,768 $ 4,096,626
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LIABILITIES AND STOCKHOLDERS'EQUITY
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Current liabilities:
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Accounts payable $ 402,612 $ 411,437
Current portion of capitalized lease obligations 142,491 169,435
Accrued expenses and taxes 84,147 105,038
Due to Dentcare Delivery Systems, Inc. 151,528 164,694
Income taxes payable 56,748 132,045
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Total current liabilities 837,526 982,649
Capitalized lease obligations, less current portion 175,931 204,806
Deferred rent payable 119,211 117,369
Deferred income taxes payable 75,062 75,062
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Total liabilities 1,207,730 1,379,886
Stockholders'equity:
Common stock $.001 par value, authorized
20,000,000 shares; issued 3,586,682 3,587 3,587
in 1997 and 1996
Paid-in capital 1,971,328 1,971,328
Unrealized gain (loss) on investments-available (73,027) (40,236)
for sale
Retained earnings 866,800 784,711
Less: Treasury stock, 1,600 shares 2,650 2,650
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Total stockholders' equity 2,766,038 2,716,740
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$ 3,973,768 $ 4,096,626
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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 OPERATIONS
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FOR THE THREE MONTHS ENDED MARCH 31,1997 AND 1996
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(UNAUDITED)
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1997 1996
Revenues ----------------- -----------------
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Service fee income $ 646,520 $ 621,247
Administrative service income 877,137 656,315
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Total service fee income 1,523,657 1,277,562
Premium income 1,771,423 1,743,207
Sales-computer services 1,923 0
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Total revenues 3,297,003 3,020,769
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Cost of Revenues
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Direct expenses - related to service fees 524,663 518,814
Dental expenses - related to premium income 1,510,729 1,435,630
Cost of sales-computer services 4,989 0
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2,040,381 1,954,444
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Gross Margin on Revenues 1,256,622 1,066,325
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Selling, general and administrative expense 1,125,639 1,005,412
Interest expense 13,810 10,525
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1,139,449 1,015,937
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Income from operations 117,173 50,388
Other income
Interest income 27,739 20,424
Dividend income 2,139 2,652
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Income before income taxes 147,051 73,464
Provision for income taxes 64,962 35,267
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Net income $ 82,089 $ 38,197
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Earnings per share $ 0.022 $ 0.011
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Weighted average number of shares
of common stock outstanding 3,716,508 3,586,682
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See notes to financial statements which are an integral part hereof.
4
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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FOR THE THREE MONTHS ENDED MARCH 31,1997 AND 1996
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(UNAUDITED)
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1997 1996
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Net income $ 82,089 $ 38,197
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 53,645 48,608
Deferred rent expense 1,842
(Increase) decrease in:
Accounts receivable 92,550 (6,364)
Other receivables 982 14,286
Prepaid expenses 10,655 (9,124)
Increase (decrease) in:
Accounts payable (8,825) (3,572)
Accrued expenses and taxes (20,891) (23,963)
Due to Dentcare Delivery Systems, Inc. (13,166) 102,286
Income taxes payable (75,297) 4,351
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Net cash provided by operating activities 123,584 164,705
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Cash flows from investing activities:
Purchase of investments 0 (114,177)
Proceeds from sale of investments 88,580 0
Capital expenditures (40,462) (26,594)
Repayment of notes receivable 11,304 4,136
Increase in security deposits (850) 0
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Net cash provided by (used in )investing activities 58,572 (136,635)
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Cash flows from financing activities:
Repayment of long-term debt (55,821) (35,098)
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Net cash used in financing activities: (55,821) (35,098)
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Net increase (decrease) in cash 126,335 (7,028)
Cash and cash equivalents at beginning of period 268,340 440,989
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Cash and cash equivalents at end of period 394,675 433,961
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Cash paid during the period For:
Interest $ 13,810 $ 10,525
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Income Taxes $ 140,058 $ 50,725
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See notes to financial statements which are an integral part hereof.
5
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, 1997 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1997.
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 I O-KSB for
the year ended December 31, 1996.
6
HEALTHPLEX, INC. & SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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FOR THE THREE MONTHS ENDED MARCH 31,1997 AND 1996
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Results of Operations
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Net income increased 114.9% to $82,089 during the first three months of 1997, as
compared with $38,197 during the comparable period of 1996. Gross margins
increased 17.9% or $190,297 to $1,256,622 during 1997 as compared to $1,066,325
in 1996. These increases resulted from the Company's concentration on and
expansion of its administrative service business. Additionally, there was a
decrease in gross margin from premium income of $46,883, resulting from
increased claims utilization.
During the first three months of 1997 the Company recognized interest and
dividend income of $29,878 as compared to $23,076 during 1996.
Liquidity and Capital Resources
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During the first three months of 1997 the Company had an increase in cash and
cash equivalents of $126,335. Operating activities accounted for a $123,584
increase in cash. Offsetting this increase were expenditures by the Company
during this period of $40,462 to purchase equipment and $55,821 to repay long-
term debt. In addition, the Company increased cash and cash equivalents by
reducing its investments by $88,580.
7
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 subsidiaries 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
8
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 Financial Officer
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