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, 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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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:
3,590,082 shares of common stock, par value $.001 per share,
outstanding at September 30, 1997.
Not applicable
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(Former name, former address and former fiscal year, if changed
since last report)
<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
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INDEX
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Part I. Financial information Page
Consolidated balance sheets - 2
September 30, 1997 unaudited and
December 31, 1996 audited.
Consolidated income statements - 3
nine months ended September 30, 1997
and 1996 unaudited and three months
ended September 30, 1997 and 1996
unaudited.
Consolidated statements of cash flows 4
nine months ended September 30, 1997
and 1996 unaudited.
Notes to consolidated financial 5
statements
Management's discussion and analysis 6
of financial condition and results of
operations.
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<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED BALANCED SHEETS
----------------------------
September 30, December 31,
1997 1996
ASSETS (Unaudited) (Audited)
------ ------------- -------------
Current assets:
---------------
Cash and cash equivalents $ 774,388 $ 268,340
Investments - available for sale 829,419 957,055
Accounts receivable 378,798 420,482
Notes receivable - current portion 52,936 51,793
Other receivables 39,327 28,978
Prepaid expenses 222,421 10,655
----------- -----------
Total current assets 2,097,289 1,737,303
Fixed assets, net of depreciation 957,582 1,034,158
Investments - available for sale 590,499 633,936
Notes receivable - less current 71,999 111,846
portion
Security deposits 70,406 31,056
Goodwill, less accumulated 13,882 14,897
amortization
Other assets 17,610 17,610
Loan to Dentcare Delivery $ 515,820 $ 515,820
Systems, Inc. ----------- -----------
4,335,087 4,096,626
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
--------------------
Accounts payable $ 460,034 $411,437
Current portion of capitalized 115,585 169,435
lease obligations
Accrued expenses and taxes 80,150 105,038
Due to Dentcare Delivery Systems, 178,186 164,694
Inc.
Income taxes payable 218,238 132,045
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Total current liabilities 1,052,193 982,649
Capitalized lease obligations, 115,391 204,806
less current portion
Deferred rent payable 122,895 117,369
Deferred income taxes payable 75,062 75,062
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Total liabilities 1,365,541 1,379,886
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Stockholders' equity:
Common stock $.001 par value,
authorized 20,000,000 shares;
issued 3,951,682 in 1997 and
3,587,582 in 1996 3,592 3,587
Paid-in capital 1,976,769 1,971,328
Unrealized (loss) on investments- (23,582) (40,236)
available for sale
Retained earnings 1,015,417 784,711
Less: Treasury stock, 1,600 shares 2,650 2,650
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Total stockholders' equity 2,969,546 2,716,740
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$ 4,335,087 $ 4,096,626
=========== ===========
See notes to financial statements which are an integral part hereof.
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<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(UNAUDITED)
-----------
<TABLE>
<CAPTION>
For the Nine Months For the Three Months
Ended Ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
--------
Service fee income $1,940,672 $1,872,877 $ 602,996 $ 661,350
Administrative service 2,816,885 2,160,855 1,046,886 762,517
income ---------- ---------- ---------- ----------
Total service fee income 4,757,557 4,033,732 1,649,882 1,423,867
Premium income 5,335,864 5,386,771 1,778,909 1,771,943
Sales-computer services 6,948 25,976 5,025 23,453
---------- ---------- ---------- ----------
Total revenues 10,100,369 9,446,479 5,433,816 3,219,263
---------- ---------- ---------- ----------
Cost of Revenues
----------------
Direct expenses - 1,709,668 1,593,341 570,055 544,956
relaed to service fees
Dental expenses - 4,528,073 4,426,010 1,513,168 1,505,766
related to premium income
Cost of sales - computer 12,827 4,754 4,766 1,811
services --------- ---------- ---------- ----------
6,250,568 6,024,105 2,087,989 2,052,533
--------- ---------- ---------- ----------
Gross Margin on 3,849,801 3,422,374 1,345,827 1,166,730
Revenues --------- ---------- ---------- ----------
---------------
Selling, general and 3,418,482 3,116,711 1,186,711 1,050,639
administrative expense
Interest expense 34,709 31,479 6,191 9,958
--------- --------- --------- ---------
3,453,191 3,148,190 1,192,902 1,060,597
--------- --------- --------- ---------
Income from operations 396,610 274,184 152,925 106,133
Gain on sale of 854 4,601 854 0
securities
Interest income 73,312 71,642 21,837 22,411
Dividend income 9,367 11,376 4,216 7,206
--------- --------- --------- ---------
Income before income 480,143 361,803 179,832 135,750
taxes
Provision for income 249,437 176,801 117,388 67,503
taxes --------- --------- --------- ---------
Net income 230,706 185,002 62,444 68,247
========= ========= ========= =========
Earnings per share
Basic 0.064 0.051 0.017 0.019
========= ========= ========= =========
Fully diluted 0.062 0.049 0.017 0.017
========== ========= ========= =========
Weighted average number
of shares of common
stock outstanding
Basic 3,590,082 3,586,682 3,590,082 3,586,682
Fully diluted 3,749,622 3,793,055 3,749,622 4,000,000
========== ========== ========== ==========
</TABLE>
See notes to financial statements which are an integral part hereof.
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<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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For the Nine Months Ended
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September 30, September 30,
1997 1996
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INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
Cash flows from operating
activities
Net income $ 230,706 $ 185,002
Adjustments to reconcile net
income to net cash
provided by operating activities
Depreciation and amortization 163,399 149,205
Deferred rent expense 5,526 0
Deferred federal income tax 0 (1,066)
payable
(Increase) decrease in:
Accounts receivable 41,684 10,422
Other receivables (10,349) 13,562
Prepaid expenses (11,766) (3,400)
Increase (decrease) in:
Accounts payable 48,597 (15,237)
Accrued expenses and taxes (24,888) 13,300
Due to Dentcare Delivery 13,492 247,814
Systems, Inc.
Income taxes payable 86,193 98,982
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Net cash provided by operating 542,594 698,584
activities ---------- ----------
Cash flows from investing
activities:
Security deposits (39,350) (19,027)
Capital expenditures (85,808) (112,277)
Purchase of investments 0 (279,961)
Sale of investments 187,727 146,804
Reduction of notes receivable 38,704 18,659
---------- ----------
Net cash provided by (used in) 101,273 (245,802)
investing activities ---------- ----------
Cash flows from financing
activities:
Proceeds from issuance of 5,446 0
capital stock
Loans to officers 0 (100,000)
Purchase of treasury stock 0 (2,650)
Repayment of long-term debt (143,265) (105,293)
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Net cash used in financing (137,819) (207,943)
activities ---------- ----------
Net increase (decrease) in cash 506,048 244,839
and cash equivalents
Cash and cash equivalents at 268,340 440,989
beginning of period ---------- ----------
Cash and cash equivalents at end $ 774,388 $ 685,828
of period ---------- ==========
Cash Paid During the Period For:
Interest $ 34,709 $ 31,479
========== ==========
Income taxes $ 162,351 $ 94,202
========== ==========
Schedule of Non-Cash Investing and
Financing Transactions:
Unrealized gain (loss) on $ (23,582) $ 73,059
investments - available ========== ==========
for sale
See notes to financial statements which are an integral part hereof.
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<PAGE>
HEALTHPLEX, INC. & SUBSIDIARIES
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NOTES TO FINANCIAL STATEMENTS
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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 nine months ended September 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.
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<PAGE>
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, 1997 AND 1996
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Results of Operations
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Net income increased 24.7% to $230,706 during the first nine
months of 1997, as compared with $185,002 during the comparable
period of 1996. Gross margins increased 12.5% or $427,427 to
$3,849,801 during 1997 as compared to $3,422,374 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
$152,970 resulting from increasing claims utilization.
During the first nine months of 1997, the Company recognized
interest and dividend income of $82,679 as compared to $83,018
during 1996.
Liquidity and Capital Resources
-------------------------------
During the first nine months of 1997, the Company had an increase
in cash and cash equivalents of $506,048. Operating activities
accounted for a $542,594 increase in cash. Offsetting this
increase were expenditures by the Company during this period of
$85,808 to purchase equipment and $143,265 to repay long-term
debt. In addition, the Company increased cash and cash
equivalents by reducing its investments by $187,727.
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<PAGE>
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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Exhibit Description
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27 Financial Data Schedule
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<PAGE>
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: November 13, 1997 By: /s/ MARTIN KANE
--------------------------
Martin Kane
President
Date: November 13, 1997 By: /s/ JOHN FORTE
--------------------------
John Forte
Chief Financial Officer
-9-
<PAGE>
EXHIBIT INDEX
Exhibit Description
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27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 774
<SECURITIES> 1,420
<RECEIVABLES> 543
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,097
<PP&E> 2,122
<DEPRECIATION> 1,165
<TOTAL-ASSETS> 4,335
<CURRENT-LIABILITIES> 1,052
<BONDS> 0
0
0
<COMMON> 4
<OTHER-SE> 2,966
<TOTAL-LIABILITY-AND-EQUITY> 4,335
<SALES> 10,100
<TOTAL-REVENUES> 10,100
<CGS> 6,251
<TOTAL-COSTS> 6,251
<OTHER-EXPENSES> 3,418
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35
<INCOME-PRETAX> 480
<INCOME-TAX> 249
<INCOME-CONTINUING> 231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 231
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
