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, 1997
[ ] 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 0-14236
Healthplex, Inc.
______________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Delaware 11-2714365
______________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 Charles Lindbergh Blvd., Uniondale, New York 11553
______________________________________________________________________
(Address of principal executive offices)
516-542-2200
______________________________________________________________________
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: 3,585,082 shares of common
stock, par value $.001 per share, outstanding at June 30, 1997.
Not applicable
______________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
-------------------------------
INDEX
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Part I. Financial information Page
Consolidated balance sheets - 2
June 30, 1997 unaudited and
December 31, 1996 audited.
Consolidated income statements - 3
six months ended June 30, 1997 and 1996
unaudited and three months ended June 30, 1997
and 1996 unaudited.
Consolidated statements of cash flows 4
six months ended June 30, 1997 and 1996
unaudited.
Notes to consolidated financial statements 5
Management's discussion and analysis of 6
financial condition and results of operations.
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
- -------------------------------
CONSOLIDATED BALANCE SHEETS
- ---------------------------
June 30, December 31,
1997 1996
(Unaudited) (Audited)
----------- ------------
ASSETS
Current assets:
- --------------
Cash and cash equivalents $ 475,357 $ 268,340
Investments-available for sale 912,910 957,055
Accounts receivable 451,316 420,482
Notes receivable-current portion 52,549 51,793
Other receivables 39,258 28,978
Prepaid expenses 24,458 10,655
----------- -----------
Total current assets 1,955,848 1,737,303
Fixed assets, net of depreciation 993,593 1,034,158
Investments-available for sale 580,654 633,936
Notes receivable-less current portion 85,380 111,846
Security deposits 31,906 31,056
Goodwill, less accumulated amortization 14,200 14,897
Other assets 17,610 17,610
Loan to Dentcare Delivery Systems, Inc. 515,820 515,820
----------- -----------
$ 4,195,031 $ 4,096,626
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 400,627 $ 411,437
Current portion of capitalized lease 115,585 169,435
obligations
Accrued expenses and taxes 206,314 105,038
Due to Dentcare Delivery Systems, Inc. 132,917 164,694
Income taxes payable 123,031 132,045
----------- -----------
Total current liabilities 978,474 982,649
Capitalized lease obligations, less current 144,287 204,806
portion
Deferred rent payable 121,053 117,369
Deferred income taxes payable 75,062 75,062
----------- -----------
Total liabilities 1,318,876 1,379,886
Stockholders' equity:
Common stock $.001 par value, 3,587 3,587
authorized 20,000,000 shares;
issued 3,586,682 in 1997 and 1996
Paid-in capital 1,971,328 1,971,328
Unrealized (loss) on investments-available
for sale (49,083) (40,236)
Retained earnings 952,973 784,711
Less: Treasury stock, 1,600 shares 2,650 2,650
----------- -----------
Total stockholders' equity 2,876,155 2,716,740
----------- -----------
$ 4,195,031 $ 4,096,626
=========== ===========
See notes to financial statements which are an integral part hereof.
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
- -------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
- -------------------------------------
(UNAUDITED)
- -----------
For the Six Months Ended For the Three Months Ended
June 30 June 30, June 30, June 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
Revenues $1,337,676 $1,211,527 $ 691,156 $ 590,280
- --------
Administrative service 1,769,999 1,398,338 892,862 742,023
income ---------- ---------- ---------- ----------
Total service fee income 3,107,675 2,609,865 1,584,018 1,332,303
Premium income 3,556,955 3,614,828 1,785,532 1,871,621
Sales-computer services 1,923 2,523 0 2,523
---------- ---------- ---------- ----------
Total revenues 6,666,553 6,227,216 3,369,550 3,206,447
---------- ---------- ---------- ----------
Cost of Revenues
- ----------------
Direct expenses-related to
service fees 1,139,613 1,048,385 614,950 529,571
Dental expenses-related to
premium income 3,014,905 2,920,244 1,504,176 1,484,614
Cost of sales-computer
services 8,061 2,943 3,072 2,943
---------- ---------- ---------- ----------
4,162,579 3,971,572 2,122,198 2,017,128
---------- ---------- ---------- ----------
Cost Margin on Revenues 2,503,974 2,255,644 1,247,352 1,189,319
- ----------------------- ---------- ---------- ---------- ----------
Selling, general and
administrative expense 2,231,771 2,066,072 1,106,132 1,060,660
Interest expense 28,518 21,521 14,708 10,996
---------- ---------- ---------- ----------
2,260,289 2,087,593 1,120,840 1,071,656
---------- ---------- ---------- ----------
Income from operations 243,685 168,051 126,512 117,663
Other income
Gain on sale of securities 0 4,601 0 4,601
Interest income 51,475 49,231 23,736 28,807
Dividend income 5,151 4,170 3,012 1,518
---------- ---------- ---------- ----------
Income before income taxes 300,311 226,053 153,260 152,589
Provision for income taxes 132,049 109,298 67,087 74,031
---------- ---------- ---------- ----------
Net income $ 168,262 $ 116,755 $ 86,173 $ 78,558
========== ========== ========== ==========
Earnings per share
Basic $ 0.047 $ 0.033 $ 0.024 $ 0.022
========== ========== ========== ==========
Fully diluted $ 0.045 $ 0.032 $ 0.023 $ 0.022
========== ========== ========== ==========
Weighted average number of
shares of common stock
outstanding
Basic 3,585,082 3,586,682 3,585,082 3,586,682
========== ========== ========== ==========
Fully diluted 3,716,508 3,627,500 3,716,508 3,627,500
========== ========== ========== ==========
See notes to financial statements which are an integral part hereof.
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
- -------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
- -----------------------------------------------
(UNAUDITED)
- -----------
June 30, June 30,
1997 1996
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities: $ 168,262 $ 116,755
Net income
Adjustments to reconcile net income to net cash
provided by opererating activities:
Depreciation and amortization 108,633 98,435
Deferred rent expense 3,684 0
Deferred federal income tax payable 0 (1,066)
(Increase) decrease in:
Accounts receivable (30,834) (24,955)
Other receivables (10,280) 7,200
Prepaid expenses (13,803) (11,259)
Increase (decrease) in:
Accounts payable (10,810) (8,525)
Accrued expenses and taxes 101,276 15,699
Due to Dentcare Delivery Systems, Inc. (31,777) 210,409
Income taxes payable (9,014) 55,505
--------- ---------
Net cash provided by operating activities 275,337 458,198
--------- ---------
Cash flows from investing activities:
Purchase of investments 0 (279,961)
Proceeds from sale of investments 88,580 146,804
Capital expenditures (67,391) (92,598)
Repayment of notes receivable 25,710 8,355
Increase in security deposits (850) (23,000)
--------- ---------
Net cash provided by (used in) investing
activities 46,049 (240,400)
--------- ---------
Cash flows from financing activities
Purchase of treasury stock 0 (2,650)
Repayment of long-term debt (114,369) (70,196)
--------- ---------
Net cash used in financing activities: (114,369) (72,846)
--------- ---------
Net increase (decrease) in cash 207,017 144,952
Cash and cash equivalents at beginning of period 268,340 440,989
--------- ---------
Cash and cash equivalents at end of period $ 475,357 $ 585,941
========= =========
Cash paid during the period For:
Interest $ 28,518 $ 21,521
========= =========
Income Taxes $ 140,058 $ 50,725
========= =========
Schedule of Non-Cash Investing and Financing
Transactions:
Unrealized (loss) on investments-available
for sale $ (8,847) $ (63,088)
========= =========
See notes to financial statements which are an integral part hereof.
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
-------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
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-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, 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 10-KSB for
the year ended December 31, 1996.
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
Results of Operations
- ---------------------
Net income increased 44.1% to $168,262 during the first six months of 1997, as
compared with $116,755 during the comparable period of 1996. Gross margins
increased 11.0% or $248,330 to $2,503,974 during 1997 as compared to $2,255,644
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 $152,534, resulting from
increasing claims utilization.
During the first six months of 1997 the Company recognized interest and dividend
income of $56,626 as compared to $53,401 during 1996.
Liquidity and Capital Resources
- -------------------------------
During the first six months of 1997 the Company had an increase in cash and cash
equivalents of $207,017. Operating activities accounted for a $275,337 increase
in cash. Offsetting this increase were expenditures by the Company during this
period of $67,391 to purchase equipment and $114,369 to repay long-term debt. In
addition, the Company increased cash and cash equivalents by reducing its
investments by $88,580.
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
-------------------------------
PART II OTHER INFORMATION
-------------------------
Item 1. Legal Proceedings
- -------------------------
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
- -----------------------------
None
Item 3. Defaults Upon Senior Securities
- ---------------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
At the Annual Meeting of Stockholders, held on July 1, 1997, the
approval of Libero & Kappel as independent auditors for the
fiscal year ended December 31, 1997 was ratified. 3,209,761 votes
were cast for, 20,700 votes were cast against and 9,750 votes
abstained with respect to such proposal.
Item 5. Other Information
- -------------------------
None
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
Exhibit Description
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27 Financial Data Schedule
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
-------------------------------
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.
Healthplex, Inc.
------------------------------
Registrant
Date August 13, 1997 By /s/ Martin Kane
--------------- ---------------------------
Martin Kane
President
Date August 13, 1997 By /s/ John Forte
--------------- ---------------------------
John Forte
Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
27 Financial Data Schedule
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 475
<SECURITIES> 1,494
<RECEIVABLES> 629
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,956
<PP&E> 2,104
<DEPRECIATION> 1,111
<TOTAL-ASSETS> 4,195
<CURRENT-LIABILITIES> 978
<BONDS> 0
0
0
<COMMON> 4
<OTHER-SE> 2,872
<TOTAL-LIABILITY-AND-EQUITY> 4,195
<SALES> 6,667
<TOTAL-REVENUES> 6,667
<CGS> 4,163
<TOTAL-COSTS> 4,163
<OTHER-EXPENSES> 2,260
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28
<INCOME-PRETAX> 300
<INCOME-TAX> 132
<INCOME-CONTINUING> 168
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 168
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
