<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from ____________________to__________________
Commission file No. 0-13849
---------------------------
RAMSAY HEALTH CARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-0857352
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE POYDRAS PLAZA
639 LOYOLA AVENUE, SUITE 1700
NEW ORLEANS, LOUISIANA 70113
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (504) 525-2505
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 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
----- ------
The number of shares of the Registrant's Common Stock outstanding at
February 10, 1995 follows:
Common Stock, par value $0.01 per share - 7,801,745 shares
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets - March 31, 1995
and June 30, 1994 (unaudited)........................................... 1
Consolidated statements of income - quarter and nine months ended
March 31, 1995 and 1994 (unaudited)..................................... 3
Consolidated statements of cash flows - nine months ended
March 31, 1995 and 1994 (unaudited)..................................... 4
Notes to consolidated financial statements - March 31, 1995 (unaudited).. 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................ 9
Part II. OTHER INFORMATION
Item 6. Exhibits and Current Reports on Form 8-K............................... 18
SIGNATURES..................................................................... 19
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
MARCH 31 JUNE 30
1995 1994
------------ --------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents.................................. $ 3,732,000 $ 6,207,000
Restricted cash............................................ -- 5,311,000
Patient accounts receivable, less allowances for doubtful
accounts of $4,852,000 and $3,925,000 at
March 31, 1995 and June 30, 1994, respectively.......... 23,673,000 23,019,000
Amounts due from third-party contractual agencies.......... 7,374,000 6,604,000
Other accounts receivable.................................. 3,358,000 2,139,000
Other current assets....................................... 2,715,000 3,040,000
------------ ------------
TOTAL CURRENT ASSETS..................................... 40,852,000 46,320,000
OTHER ASSETS
Cash held in trust......................................... 2,770,000 1,805,000
Cost in excess of net asset value of purchased businesses.. 11,422,000 12,042,000
Unamortized preopening and loan costs...................... 2,911,000 3,731,000
Other intangible assets.................................... 2,888,000 3,048,000
Real estate held for sale.................................. 264,000 1,150,000
Other non-current assets................................... 7,408,000 4,911,000
------------ ------------
27,663,000 26,687,000
PROPERTY AND EQUIPMENT
Land....................................................... 8,532,000 9,009,000
Building and improvements.................................. 115,445,000 118,555,000
Equipment, furniture and fixtures.......................... 22,197,000 20,626,000
------------ ------------
146,174,000 148,190,000
Less accumulated depreciation.............................. 42,026,000 38,029,000
------------ ------------
104,148,000 110,161,000
------------ ------------
$172,663,000 $183,168,000
============ ============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
MARCH 31 JUNE 30
1995 1994
---------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable............................................... $ 3,356,000 $ 2,306,000
Accrued salaries and wages..................................... 3,929,000 4,291,000
Other accrued liabilities...................................... 2,239,000 4,386,000
Amounts due to third-party contractual agencies................ 4,885,000 4,729,000
Current portion of long-term debt.............................. 12,167,000 9,460,000
------------ -----------
TOTAL CURRENT LIABILITIES................................... 26,576,000 25,172,000
DEFERRED INCOME TAXES............................................. 3,822,000 4,932,000
LIABILITIES FOR SELF-INSURANCE CLAIMS, less
current portion................................................ 1,176,000 1,341,000
LONG-TERM DEBT, less current portion.............................. 57,869,000 67,707,000
MINORITY INTERESTS................................................ 5,999,000 3,548,000
STOCKHOLDERS' EQUITY
Class A convertible preferred stock, $1 par value--authorized
800,000 shares; issued 22,910 shares........................ 23,000 23,000
Class B convertible preferred stock, Series C, $1 par value
--authorized 152,321 shares; issued 142,486 shares
(liquidation value of $7,244,000) including accrued
dividends of $91,000........................................ 233,000 233,000
Common Stock, $.01 par value--authorized 20,000,000
shares; issued 8,271,295 shares at March, 31 1995 and
8,200,760 shares at June 30, 1994........................... 83,000 82,000
Additional paid-in capital..................................... 100,140,000 100,048,000
Retained earnings (deficit).................................... (19,779,000) (16,483,000)
Treasury Stock, at cost--489,050 shares and 481,750
shares at March 31, 1995 and June 30, 1994,
respectively................................................ (3,479,000) (3,435,000)
------------ -----------
77,221,000 80,468,000
------------ -----------
$172,663,000 $ 183,168,000
============ ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
MARCH 31 MARCH 31
-------------------------- ---------------------------------
1995 1994 1995 1994
------------ ------------ ------------------ -------------
<S> <C> <C> <C> <C>
NET REVENUES $33,547,000 $36,179,000 $105,004,000 $100,723,000
Operating Expenses:
Salaries, wages and benefits...................... 17,390,000 16,468,000 53,336,000 47,624,000
Other operating expenses.......................... 11,270,000 11,608,000 33,513,000 31,158,000
Provision for doubtful accounts................... 1,183,000 1,632,000 3,765,000 4,660,000
Depreciation and amortization..................... 1,927,000 1,714,000 5,737,000 5,011,000
Interest and other financing charges.............. 2,161,000 2,090,000 6,472,000 6,592,000
Loss on sales and closure of facilities........... 5,260,000 -- 5,260,000 --
----------- ----------- ------------ ------------
TOTAL OPERATING EXPENSES....................... 39,191,000 33,512,000 108,083,000 95,045,000
----------- ----------- ------------ ------------
INCOME (LOSS) BEFORE MINORITY INTERESTS,
INCOME TAXES AND EXTRAORDINARY ITEM............... (5,644,000) 2,667,000 (3,079,000) 5,678,000
Minority interests................................... 134,000 1,504,000 1,147,000 3,108,000
----------- ----------- ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM................................ (5,778,000) 1,163,000 (4,226,000) 2,570,000
Provision (benefit) for income taxes................. (1,457,000) 341,000 (930,000) 665,000
----------- ----------- ------------ ------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM.............. (4,321,000) 822,000 (3,296,000) 1,905,000
Loss from early extinguishment of debt, net of
applicable income taxes......................... -- (155,000) -- (155,000)
----------- ----------- ------------ ------------
NET INCOME (LOSS).................................... $(4,321,000) $ 667,000 $ (3,296,000) $ 1,750,000
=========== =========== ============ ============
INCOME (LOSS) PER COMMON AND DILUTIVE
COMMON EQUIVALENT SHARE...........................
Primary:
Before extraordinary item......................... $ (0.57) $ 0.09 $ (0.46) $ 0.20
Extraordinary item................................ -- (0.02) -- (0.02)
----------- ----------- ------------ ------------
$ (0.57) $ 0.07 $ (0.46) $ 0.18
=========== =========== ============ ============
Fully Diluted:
Before extraordinary item $ (0.57) $ 0.09 $ (0.46) $ 0.20
Extraordinary item -- (0.02) -- (0.02)
----------- ----------- ------------ ------------
$ (0.57) $ 0.07 $ (0.46) $ 0.18
=========== =========== ============ ============
Weighted average number of shares outstanding:
Primary 7,759,000 9,661,000 7,737,000 9,660,000
Fully diluted 7,759,000 9,661,000 7,737,000 9,692,000
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED MARCH 31
----------------------------------------
1995 1994
------------ ---------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income (loss)................................................... $(3,296,000) $ 1,750,000
----------- ------------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................... 6,331,000 5,625,000
Deferred income tax benefit...................................... (1,110,000) (660,000)
Provision for doubtful accounts.................................. 3,765,000 4,660,000
Minority interests............................................... 1,147,000 3,108,000
Write-off of deferred loan costs................................. 229,000 258,000
Valuation allowance/loss (gain) on sales of facilities and land.. 4,112,000 (264,000)
Cash flows from (increase) decrease in operating assets:
Accounts receivable........................................... (4,419,000) (3,048,000)
Amounts due from third-party contractual agencies............. (770,000) ---
Other current and non-current assets.......................... (2,113,000) (4,169,000)
Cash flows from increase (decrease) in operating liabilities:
Accounts payable.............................................. 1,050,000 (1,886,000)
Accrued salaries, wages and other liabilities................. (2,509,000) 1,298,000
Unpaid self-insurance claims.................................. (165,000) (773,000)
Amounts due to third-party contractual agencies............... 156,000 (158,000)
----------- ------------
Total adjustments.......................................... 5,704,000 3,991,000
----------- ------------
Net cash provided by operating activities............... 2,408,000 5,741,000
----------- ------------
Cash Flows from Investing Activities:
Proceeds from sales of facilities and real estate
held for sale................................................. 550,000 16,195,000
Acquisitions of businesses....................................... --- (4,907,000)
Expenditures for property and equipment, net..................... (2,126,000) (3,754,000)
Preopening costs................................................. (294,000) (1,217,000)
Restricted cash (reserved) used for debt payments................ 5,311,000 (5,271,000)
Cash held in trust............................................... (965,000) 798,000
----------- ------------
Net cash provided by investing activities............... 2,476,000 1,844,000
----------- ------------
Cash Flows from Financing Activities:
Loan costs....................................................... (230,000) (211,000)
Payment of costs related to distribution of subsidiary........... (1,350,000) ---
Proceeds from exercise of options and employee stock purchases... 364,000 437,000
Distributions to minority interests.............................. (2,016,000) (1,857,000)
Proceeds from private placement of shares of subsidiary.......... 3,320,000 ---
Proceeds from working capital facility........................... 2,500,000 ---
Payments on debt................................................. (9,631,000) (11,370,000)
Payments of preferred stock dividends............................ (272,000) (184,000)
Purchase of treasury stock....................................... (44,000) (544,000)
----------- ------------
Net cash used in financing activities................. (7,359,000) (13,729,000)
----------- ------------
Net decrease in cash and cash equivalents........................... (2,475,000) (6,144,000)
Cash and cash equivalents at beginning of period.................... 6,207,000 10,682,000
----------- ------------
Cash and cash equivalents at end of period.......................... $ 3,732,000 $ 4,538,000
=========== ============
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest......................................................... $ 5,117,000 $ 6,597,000
Income taxes..................................................... 1,410,000 240,000
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1995
NOTE 1
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-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation of the interim information are, unless
otherwise discussed in this report, of a normal recurring nature and have been
included. The Company's business is seasonal in nature and subject to general
economic conditions and other factors. Accordingly, operating results for the
quarter and nine months ended March 31, 1995 are not necessarily indicative of
the results that may be expected for the year. For further information, refer
to the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1994.
NOTE 2
At March 31, 1995, the Company's credit facilities included $41,668,750 in
senior secured notes, approximately $22,000,000 in letters of credit (to support
the Company's variable rate demand revenue bonds), $2,308,000 in subordinated
secured notes and $4,000,000 in a working capital facility. However, in
connection with the sale and leaseback of two inpatient facilities in April 1995
(see Note 5), $7,500,000 of the senior secured notes outstanding were prepaid
and the working capital facility was reduced to $2,000,000.
The senior secured notes bear interest at 11.6% and are due in semi-annual
installments that began on March 31, 1993 and, after the above-mentioned
prepayment, resume semi-annual installments on September 30, 1996 through March
31, 2000. The subordinated secured notes bear interest at 15.6% and are due in
semi-annual installments that began on March 31, 1994 and end on March 31, 2000.
The variable rate demand revenue bonds were issued in 1984 and 1985, have terms
of 30 years, and require annual principal payments of $800,000 (through year
2000) and $900,000 to $1,300,000 (from years 2001 to maturity). Amounts
outstanding under the working capital facility, which bear interest at a
variable rate (currently 8.6%), totalled $2,000,000 at March 31, 1995. There
were no amounts outstanding under the working capital facility at June 30, 1994.
As part of the acquisition of Florida Psychiatric Management, Inc. ("FPM")
in October 1993, a subsidiary of the Company issued 7%, three-year debentures
totalling $2,500,000. As part of the acquisition of certain of the assets of
Human Dynamics Institute ("HDI") in June 1994, a subsidiary of the Company
issued an 8.25%, $1,000,000 three-year promissory note, payable in 36 equal
monthly installments. These
5
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - CONTINUED)
obligations, which are secured by the common stock of FPM and of a subsidiary of
the Company which purchased the HDI assets, ceased being liabilities of the
Company upon the distribution of shares of common stock of Ramsay Managed Care,
Inc. ("RMCI") held by the Company to the holders of the Company's common and
preferred stock on April 24, 1995 (see Note 4).
Restricted cash at June 30, 1994 represented remaining proceeds from the
sale of Cumberland Hospital in August 1993. These monies were held in trust and,
during the current fiscal year, were used to fund the September 30, 1994
principal payment and approximately 60% of the March 31, 1995 principal payment
due on the senior secured notes and the subordinated secured notes.
A summary of the Company's debt obligations is as follows:
<TABLE>
<CAPTION>
MARCH 31 JUNE 30
1995 1994
---------- -----------
<S> <C> <C>
11.6% senior secured notes.......... $ 41,669,000 $48,025,000
Variable rate demand revenue bonds.. 20,200,000 21,000,000
15.6% subordinated secured notes.... 2,308,000 2,769,000
7% debentures....................... * 1,667,000 2,292,000
8.25% note payable.................. * 750,000 1,000,000
Capital lease obligation............ 1,022,000 1,318,000
Working capital facility............ 2,000,000 --
Other notes payable................. 420,000 763,000
------------ -----------
70,036,000 77,167,000
Less amounts due within one year.... * 12,167,000 9,460,000
------------ -----------
$ 57,869,000 $67,707,000
============ ===========
</TABLE>
* See discussion in Note 4 below regarding the distribution of RMCI.
The Company has pledged as collateral substantially all of the real property
associated with its facilities.
NOTE 3
The provision for income taxes included in the consolidated statements of
income differs from the amounts computed by applying the normal statutory rates
to income before income taxes because such provision includes a) amounts
reportable as income for federal income tax purposes which are not income for
financial reporting purposes, b) amounts deducted for financial reporting
purposes that are not allowable deductions for federal and state income tax
purposes and c) amounts for state income taxes applicable to profitable
subsidiaries which do not utilize the operating losses generated by unprofitable
subsidiaries to offset taxable income. At March 31, 1995, the Company has
estimated operating loss carryforwards available to reduce future taxable income
of approximately $19 million subject to significant annual limitations pursuant
to Section 382 of the Internal Revenue Code of 1986, as amended.
6
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - CONTINUED)
NOTE 4
On October 27, 1994, the Company announced plans to distribute the stock of
its subsidiary, RMCI, held by the Company, to the holders of the Company's
common and preferred stock. RMCI, which was formed in October 1993 and manages
and provides the delivery of mental health care and substance abuse treatment,
includes primarily the operations of FPM and HDI. The distribution became
effective April 24, 1995, at which time RMCI ceased being a subsidiary of the
Company.
For the three and nine months ended March 31, 1995, net revenues of RMCI
totalled $4,400,000 and $11,400,000, respectively. Additionally, the net income
of RMCI for the three and nine months ended March 31, 1995 was not significant
to the consolidated operating results of the Company. Of the net outstanding
cash advances made by the Company to or on behalf of RMCI of approximately
$7,100,000, $6,000,000 is represented by an unsecured, interest-bearing,
subordinated promissory note due from RMCI and issued on October 25, 1994. From
and after the effective date of the distribution, the intangible assets and debt
obligations of RMCI, totalling approximately $10,000,000 and $2,600,000,
respectively, along with all other assets and liabilities of RMCI, will no
longer be reflected on the Company's consolidated balance sheet.
NOTE 5
On April 12, 1995, the Company consummated a sale/leaseback transaction
whereby the Company sold the land, buildings and fixed equipment of two of its
inpatient facilities for $12,500,000 and agreed to lease this property back over
a term of 15 years (with three successive renewal options of 5 years each). The
leases, which will be treated as operating leases under generally accepted
accounting principles, require aggregate annual rentals of $1,539,600, payable
monthly. Beginning April 1, 1996 (and annually thereafter), the lease payments
are subject to any upward adjustment (not to exceed 3%) in the Consumer Price
Index over the preceding 12 months.
Net sale proceeds associated with this transaction totalled $12,100,000
which, when compared to the net book value of assets sold of $15,650,000,
resulted in a loss of $3,550,000. On May 1, 1995, the Company utilized a portion
of the proceeds from this transaction and prepaid $7,500,000 of principal due on
the senior secured notes as follows: $3,531,250 due on September 30, 1995,
$3,531,250 due on March 31, 1996 and $437,500 due on September 30, 1996. In
connection with this prepayment, the Company wrote down a proportionate amount
of unamortized loan costs related to the senior secured notes, totalling
$229,000, and incurred a yield maintenance charge from the holders of the senior
secured notes, totalling $234,000.
7
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - CONTINUED)
The overall loss on the above-mentioned transaction, including the write
down of loan costs and the yield maintenance charge, was recorded in the
accompanying March 31, 1995 statement of income as "Loss on sales and closure of
facilities". In the accompanying March 31, 1995 balance sheet, a valuation
allowance was recorded against the cost basis in the assets sold.
NOTE 6
During the quarter ended March 31, 1995, the Company sold and committed to
sell certain real estate located in Flagstaff, Arizona and Houston, Texas,
respectively. These properties were initially acquired for development
approximately 10 years ago and, as of the date the Company committed to the
sales, the properties had an aggregate book value of $1,150,000. Total net
proceeds from the sale (and pending sale) of this real estate will approximate
$750,000.
During the quarter ended March 31, 1995, the Company recorded cost report
settlements and asset write-downs related to outpatient clinics which were
closed in late fiscal 1994 totalling approximately $600,000.
The above losses were included in "Loss on sales and closure of facilities"
in the accompanying March 31, 1995 statement of operations. In addition, the
Company reclassified other write-downs related to the outpatient clinics which
were recorded in the quarter ended December 31, 1994 and totalled approximately
$250,000, to "Loss on sales and closure of facilities" in the current quarter.
The latter write-down was reflected in other operating expenses in the December
31, 1994 statement of operations due to the immaterial nature of the amount in
relation to total other operating expenses reported in the December 31, 1994
quarter.
8
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company pursues business expansion opportunities which are consistent
with its overall strategic plan and disposes of operations no longer considered
viable or consistent with this plan. In February 1994, the Company sold its
inpatient facility (Atlantic Shores Hospital) in Daytona Beach, Florida due to,
among other reasons, restrictive state certificate of need laws that precluded
the Company from expanding services at this location. Also, in June 1994, three
outpatient day treatment centers were closed due to poor operating performance.
The Company's strategic plan also calls for the development of medical
subacute units in certain of its inpatient facilities. Four such units opened
between January 1994 and December 1994.
In October 1993, the Company entered the managed mental healthcare business
through its acquisition of FPM. This business subsequently expanded through an
additional acquisition in June 1994 and through on-going development efforts.
As noted elsewhere in this report, in April 1995, the Company distributed the
common stock held by it of the subsidiary operating this business to the holders
of its common and preferred stock.
In August 1993, the Company sold its inpatient facility (Cumberland
Hospital) in Fayetteville, North Carolina. The decision to sell this facility
occurred in June 1993, at which time the facility's basis of accounting was
changed from the going concern basis to the liquidation basis. As a result, the
July and August 1993 operating results of Cumberland Hospital were recorded as
part of the loss on sale of this facility in the Company's June 1993 financial
statements and the net revenues and expenses of Cumberland Hospital were not
included in the Company's operating results for the quarter and nine months
ended March 31, 1994. Accordingly, the sale of this facility had no impact on
the comparison of the Company's operating results between the quarters and nine
months ended March 31, 1995 and 1994.
See also Notes 4, 5 and 6 to the Consolidated Financial Statements above.
9
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
The following table sets forth, for the period indicated, certain items of
the Company's consolidated statements of income as a percentage of the Company's
net revenues. The discussion following this table quantifies the significant
fluctuations in amounts reported in the Company's consolidated statements of
income between periods.
<TABLE>
<CAPTION>
PERCENTAGE OF NET REVENUES
QUARTER ENDED NINE MONTHS ENDED
MARCH 31 MARCH 31
1995 1994 1995 1994
-------- ---- ------- ---------
<S> <C> <C> <C> <C>
Net revenues................................. 100.0 %100.0% 100.0 % 100.0 %
------ ------ ------ ------
Operating expenses:
Salaries, wages and benefits............... 51.8 45.5 50.8 47.3
Other operating expenses................... 33.6 32.1 31.9 30.9
Provision for doubtful accounts............ 3.5 4.5 3.6 4.6
Depreciation and amortization.............. 5.7 4.7 5.5 5.0
Interest expense........................... 6.5 5.8 6.1 6.6
Loss on sales and closure of facilities.... 15.7 -- 5.0 --
------ ---- ----- ----
Total operating expenses..................... 116.8 92.6 102.9 94.4
------ ---- ----- ----
Income (loss) before minority interests and
income taxes............................... (16.8) 7.4 (2.9) 5.6
Minority interests........................... .4 4.2 1.1 3.0
------ ---- ----- ----
Income (loss) before income taxes............ (17.2) 3.2 (4.0) 2.6
====== ==== ===== ====
</TABLE>
QUARTER ENDED MARCH 31, 1995
COMPARED TO QUARTER ENDED MARCH 31, 1994
Net revenues in the quarter ended March 31, 1995 were $33.5 million,
compared to $36.2 million in the comparable quarter of the prior fiscal year.
The material changes in net revenues between these periods consisted of (a) a
$5.3 million decrease in same facility net inpatient revenues, (b) a $1.1
million increase in net revenues related to the Company's subacute operations,
(c) a $2.2 million increase (from $2.2 million to $4.4 million) in net revenues
related to managed care businesses acquired after September 30, 1993 and (d) a
$0.5 million decrease in net patient revenues due to the sale of the Atlantic
Shores Hospital facility and the closure of three outpatient day treatment
centers (the "sold/closed facilities").
Same facility net inpatient revenues decreased $5.3 million between
periods. Of this amount, $3.3 million related to a reduction in payments,
referred to as disproportionate share payments, by the Federal and State
governments to the Company's two Louisiana facilities which treat (relative to
other providers) a disproportionately high volume of Medicaid patients. The
methodologies utilized by the Federal and State governments in calculating the
amounts due providers for rendering such care has changed considerably in the
past year and management can not predict the amount of disproportionate share
funding it will receive in the future. It is management's expectation, however,
that such funding will be eliminated by June 30, 1995.
10
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
Excluding the change in disproportionate share payments between periods,
same facility net inpatient revenues decreased approximately $2 million. This
decrease is attributable to a significant decrease in census at one of the
Company's Louisiana facilities (referred to above) which treats the behavioral
and other disorders of adolescents. As a result of significantly more
restrictive admission criteria recently enacted by the State of Louisiana and
applicable to such facilities, the inpatient census at this facility decreased
from an average of 70 patients in the March 1994 quarter to an average of 20
patients in the current quarter. Management is considering various courses of
action with respect to this facility including a possible consolidation of this
facility with one of the Company's other facilities located less than five miles
away.
Excluding the above factors, net inpatient revenues related to all other
inpatient facilities were stable and patient days related to these facilities
increased 6% between periods. The resulting decrease in these facilities' net
inpatient revenue per patient day is due to a continued shift in patient mix
from charge-based payors to cost-based and negotiated per-diem rate payors. Net
revenue per patient day on cost-based and negotiated per-diem rate payors is
generally less than that for charge-based payors. In addition, the rates
received from per-diem rate payors has declined between periods. The percentage
of the Company's net revenues related to charge-based payors decreased from 22%
in the prior year comparable quarter to 17% in current quarter.
Salaries, wages and benefits in the quarter ended March 31, 1995 were $17.4
million, compared to $16.5 million in the comparable quarter of the prior fiscal
year. Same facility salaries, wages and benefits decreased $0.4 million (from
$14.2 million to $13.8 million) between periods, or 2.8%. This decrease relates
to the Louisiana facility which experienced the significant census decline in
the third quarter. In addition, salaries, wages and benefits attributable to
the managed care businesses and subacute operations totalled $2.5 million in the
current year quarter (approximately 43% of net revenues associated with these
businesses), compared to $0.8 million in the prior year comparable quarter
(approximately 31% of net revenues associated with these businesses). Finally,
salaries, wages and benefits attributable to the sold/closed facilities
decreased $0.4 million between periods.
Other operating expenses in the quarter ended March 31, 1995 were $11.3
million, compared to $11.6 million in the comparable quarter of the prior fiscal
year. Same facility other operating expenses decreased from $8.8 million in the
prior year quarter to $7.7 million in the current year quarter. Of this $1.1
million decrease, approximately $0.6 million relates to the Louisiana facility
which experienced the significant decline in census in the third quarter. Also,
other operating expenses attributable to managed care businesses and subacute
operations totalled $2.9 million in the current quarter, compared to $1.4
million in the prior year comparable quarter. Finally, other operating expenses
attributable to the sold/closed facilities decreased $0.6 million between
periods.
11
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
The provision for doubtful accounts in the quarter ended March 31, 1995
totalled $1.2 million, compared to $1.6 million in the prior year comparable
quarter. This difference related to the same facilities, since the amounts
related to the managed care businesses, subacute operations and sold/closed
facilities were not significant.
Depreciation and amortization in the quarter ended March 31, 1995 totalled
$1.9 million, compared to $1.7 million in the prior year comparable quarter.
This increase is due to the depreciation and amortization attributable to the
managed care businesses and subacute operations, which totalled $0.4 million in
the current year quarter and $0.2 million in the prior year comparable quarter.
Total depreciation and amortization attributable to the sold/closed facilities
was not significant between periods.
Interest expense increased slightly between periods ($2.2 million in the
current quarter compared to $2.1 million in the comparable quarter of the prior
year). Debt levels were reduced between periods through principal payments of
$5.65 million on the senior secured notes, $0.5 million on the subordinated
secured notes and $0.8 million on the variable rate demand revenue bonds. The
reduction in interest as a result of these reductions was offset by an increase
in the interest rates on the variable rate demand bonds, interest on the working
capital facility drawing and interest on debt associated with the managed care
businesses acquired after March 31, 1994.
Minority interests reflects the limited partners' share of net income of
Three Rivers Hospital and, since October 1994, the minority shareholders' share
of net income of RMCI. The amount related to RMCI was not material in the
quarter ended March 31, 1995.
In October 1994, the Company announced plans to distribute the stock held
by it of its managed care subsidiary (RMCI) to the holders of the Company's
common and preferred stock. This distribution, which was subject to the
declaration of effectiveness of a registration statement filed by RMCI with the
Securities and Exchange Commission and certain other conditions, became
effective April 24, 1995, at which time RMCI ceased being a subsidiary of the
Company. For the quarter ended March 31, 1995, net revenues of RMCI totalled
$4.4 million (13.1% of total consolidated net revenues of the Company).
However, the operating results of RMCI for the quarter ended March 31, 1995,
after management fees payable to the Company totalling $45,000, were not
material to the consolidated operating results of the Company. Management fees
paid to the Company by all of the Company's subsidiaries, including RMCI,
represent reimbursement to the Company of its indirect costs for providing
financial oversight by Company employees and information systems and other
support provided by the Company. The amount of such fees are determined based
upon an estimate of the amount of time spent by Company employees in providing
such services. These management fees are eliminated upon consolidation and have
no effect on the consolidated results of operations of the Company.
12
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
NINE MONTHS ENDED MARCH 31, 1995
COMPARED TO NINE MONTHS ENDED MARCH 31, 1994
Net revenues in the nine months ended March 31, 1995 were $105.0 million,
compared to $100.7 million in the comparable period of the prior fiscal year.
The material changes in net revenues between these periods consisted of (a) a
$7.5 million decrease in same facility net inpatient revenues, (b) a $3.1
million increase in same facility net outpatient revenues between periods, (c)
an increase in net revenues of $3.0 million attributable to the Company's
subacute operations, (d) a $7.8 million increase (from $3.6 million to $11.4
million) in net revenues related to managed care businesses acquired after
September 30, 1993 and (e) a $2.3 million decrease in net patient revenues
related to the sold/closed facilities.
Same facility net inpatient revenues decreased $7.5 million between
periods. Of this amount, $4.5 million related to a reduction in payments,
referred to as disproportionate share payments, by the Federal and State
governments to the Company's two Louisiana facilities which treat (relative to
other providers) a disproportionately high volume of Medicaid patients. The
methodologies utilized by the Federal and State governments in calculating the
amounts due providers for rendering such care has changed considerably in the
past year and management can not predict the amount of disproportionate share
funding it will receive in the future. It is management's expectation, however,
that such funding will be eliminated by June 30, 1995.
Excluding the change in disproportionate share payments between periods,
same facility net inpatient revenues decreased approximately $3 million.
Approximately $2 million of this decrease is attributable to the previously
mentioned third quarter 1995 decrease in census at one of the Company's
Louisiana facilities (referred to above) which treats the behavioral and other
disorders of adolescents.
Excluding the above factors, net inpatient revenues related to all other
inpatient facilities were stable and patient days related to these facilities
increased 6% between periods. The resulting decrease in these facilities' net
inpatient revenue per patient day is due to a continued shift in patient mix
from charge-based payors to cost-based and negotiated per-diem rate payors. Net
revenue per patient day on cost-based and negotiated per-diem rate payors is
generally less than that for charge-based payors. In addition, the rates
received from per-diem rate payors has declined between periods. The percentage
of the Company's net revenues related to charge-based payors decreased from 21%
in the prior year comparable period to 18% in the current period.
Same facility net outpatient revenues increased from $10.2 million in the
prior year comparable period to $13.2 million in the current year period due to
payor demands for increased outpatient treatment protocols, an expansion of
service levels and a market focus by facility administrators to increase partial
hospitalization day services.
Salaries, wages and benefits in the nine months ended March 31, 1995 were
$53.3 million, compared to $47.6 million in the comparable period of the prior
fiscal year.
13
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
Same facility salaries, wages and benefits increased $0.8 million (from $42.4
million to $43.2 million) between periods, or 2%. In addition, salaries, wages
and benefits attributable to the managed care businesses and subacute operations
totalled $6.9 million in the current year period compared to $1.0 million in the
prior year comparable period. These increases were partially offset by a
decrease in salaries, wages and benefits of $1.2 million attributable to the
sold/closed facilities.
Other operating expenses in the nine months ended March 31, 1995 were $33.5
million, compared to $31.2 million in the comparable period of the prior fiscal
year. Same facility other operating expenses decreased $1.0 million between
periods ($23.6 million in the current period compared to $24.6 million in the
prior fiscal year period), or 4%. This decrease occurred primarily in the third
quarter (see comparison of third quarter results above). Also, other operating
expenses attributable to the managed care businesses and subacute operations
totalled $7.3 million in the current period, compared to $2.2 million in the
prior year comparable period. Finally, other operating expenses attributable to
the sold/closed facilities decreased $1.6 million between periods.
The provision for doubtful accounts in the nine months ended March 31, 1995
totalled $3.8 million, compared to $4.7 million in the prior year comparable
period. The overall provision for doubtful accounts associated with the same
facilities decreased $0.7 million while the provision for doubtful accounts
attributable to the sold/closed facilities decreased $0.2 million. The decrease
in the provision for doubtful accounts attributable to the same facilities is
due to the aforementioned shift in the Company's overall payor mix as the
patient portion of billings due from cost-based and negotiated per-diem rate
payors is substantially less than those of charge-based payors.
Depreciation and amortization in the nine months ended March 31, 1995
totalled $5.7 million, compared to $5.0 million in the prior year comparable
period. This increase is due to the depreciation and amortization attributable
to the managed care businesses acquired and subacute operations, which totalled
$1.2 million in the current year period and $0.3 million in the prior year
comparable period, net of a $0.3 million decrease in depreciation and
amortization attributable to the sold/closed facilities.
Interest expense decreased from $6.6 million in the nine months ended March
31, 1994 to $6.5 million in the comparable 1995 period. Debt levels were
reduced between periods through principal payments of $5.65 million on the
senior secured notes, $0.5 million on the subordinated secured notes and $0.8
million on the variable rate demand revenue bonds still outstanding. In
addition, in connection with the sale of Atlantic Shores Hospital in February
1994, the variable rate demand revenue bonds associated with that facility,
totalling $4.3 million, were repaid. The reduction in interest as a result of
these principal payments was offset by an increase in interest rates on the
variable rate demand bonds, interest on the working capital facility drawing,
interest on debt incurred in connection with the acquisition of HDI (acquired in
June 1994) and additional interest on debt incurred in connection with the
acquisition of FPM (acquired in October 1993).
14
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
Minority interests reflects the limited partners' share of net income of
Three Rivers Hospital and, since October 1994, the minority shareholders' share
of net income of RMCI. The amount related to RMCI was not material in the nine
month period ended March 31, 1995.
As mentioned previously, effective April 24, 1995, the Company distributed
the common stock of RMCI held by it to the holders of the Company's common and
preferred stock. For the nine months ended March 31, 1995, net revenues of RMCI
totalled $11.4 million (10.9% of total consolidated net revenues of the
Company). However, the operating results of RMCI for the nine months ended
March 31, 1995, after management fees payable to the Company totalling $220,000,
were not material to the consolidated operating results of the Company.
Management fees paid to the Company by all of the Company's subsidiaries,
including RMCI, represent reimbursement to the Company of its indirect costs for
providing financial oversight by Company employees and information systems and
other support provided by the Company. The amount of such fees are determined
based upon an estimate of the amount of time spent by Company employees in
providing such services. These management fees are eliminated upon
consolidation and have no effect on the consolidated results of operations of
the Company.
FINANCIAL CONDITION
The Company records amounts due to or from third-party contractual agencies
(Medicare, Medicaid and Blue Cross) based on its best estimate, using the
principles of cost reimbursement, of amounts to be ultimately received or paid
under current and prior years' cost reports filed (or to be filed) with the
appropriate intermediaries. Ultimate settlements and other lump-sum adjustments
due from and paid to these intermediaries occur at various times during the
fiscal year. At March 31, 1995, amounts due from Medicare, Medicaid and Blue
Cross totalled $3.7 million, $2.2 million and $1.5 million, respectively. Also
at March 31, 1995, amounts due to Medicare, Medicaid and Blue Cross totalled
$4.1 million, $0.7 million and $0.1 million, respectively.
During the nine months ended March 31, 1995, amounts owed to minority
interests increased by a total of $2.5 million. During this period,
distributions to the minority partners in the Three Rivers Hospital Limited
Partnership reduced the amount owed by $2.0 million, compared to minority
interest expense during this period, which increased the amount owed, by $1.1
million. Also included in minority interests are minority stockholders of RMCI
resulting from a $3.3 million private placement of RMCI common stock made in
October 1994 by RMCI to a corporate affiliate of Paul J. Ramsay, Chairman of the
Board, and three officers of RMCI. Effective with this placement, the Company's
ownership in RMCI decreased to approximately 58%. Of the proceeds received by
RMCI from the private placement, $1 million was placed in restricted
certificates of deposits in connection with RMCI's application to obtain a
license to operate a health maintenance organization in the State of Louisiana,
which license was granted in December 1994. Accordingly, this amount is
reported as "Cash Held in Trust" in the accompanying balance sheet.
15
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
In March 1995, the Company sold and committed to sell certain real estate
in Flagstaff, Arizona and Houston, Texas, respectively. These properties were
reported as "Real estate held for sale" in the accompanying balance sheet. Upon
the sale of the Flagstaff land in March, its book value, totalling $0.85
million, was removed from the Consolidated Balance Sheet. In addition, an
immaterial valuation allowance was recorded on the Houston land as of March 31,
1995.
In April 1995, the Company consummated a sale/leaseback transaction whereby
the Company sold the land, buildings and fixed equipment of two of its inpatient
facilities for a net sale price of $12.1 million and agreed to lease this
property back over a term of 15 years (with three successive renewal options of
5 years each). The leases will be accounted for as operating leases under
generally accepted accounting principles and, accordingly, the Company's basis
in the assets sold, totalling $15.6 million, will be removed from its
Consolidated Balance Sheet in April. On May 1, 1995, the Company utilized
certain of the proceeds from this transaction and prepaid $7.5 million of
principal due on its senior secured notes outstanding. In connection with this
prepayment, the Company incurred a yield maintenance charge from the holders of
the senior secured notes, totalling $234,000. As of March 31, 1995, the losses
resulting from the above transactions, totalling approximately $3.8 million,
were recorded as a valuation allowance against the cost basis in the assets
sold.
During the nine months ended March 31, 1995, costs related to the
distribution of RMCI, the above mentioned private placement and the previously
announced rights offering by RMCI, totalled approximately $1.35 million. These
costs, which include accounting, legal, printing, investment banking and
distribution agent fees and expenses, are reported as "Other non-current assets"
in the accompanying balance sheet. Costs related to the distribution will be
charged to the operations of RMCI (and not the Company) effective on the date of
the distribution of RMCI on April 24, 1995 and costs related to the private
placement and rights offering by RMCI will be offset against additional paid-in
capital of RMCI (and not the Company) on the effective date of the distribution.
LIQUIDITY AND CAPITAL RESOURCES
The Company's credit facilities include, net of the aforementioned $7.5
million prepayment in April 1995, $34.2 million in senior secured notes,
approximately $22 million in letters of credit, $2.3 million in subordinated
secured notes and, after the sale/leaseback transaction, $2 million in a working
capital facility. The senior secured notes bear interest at 11.6% and, on
September 30, 1996, resume semi-annual principal payments of approximately $3.5
million through September 30, 1998 and semi-annual principal payments of $5.65
million from March 31, 1999 through March 31, 2000. The subordinated secured
notes bear interest at 15.6% and require semi-annual principal payments of $0.2
million through March 31, 2000. Required annual principal payments on the
variable rate demand revenue bonds total $0.8 million through year 2000 and $0.9
million to $1.3 million in years 2001 through 2015. Amounts outstanding under
the working capital facility, which bear interest at a variable rate, totalled
$2 million at
16
<PAGE>
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
March 31, 1995. The amount drawn is structured as a revolving credit loan, which
currently bears interest at 8.6% and is renewable in 30, 60, and 90-day
increments, at the option of the Company. Under the provisions of the Credit
Agreement, amounts outstanding under the working capital facility must be
reduced, effective with the reduction in the facility to $2 million in April
1995, to no more than $0.5 million for 45 consecutive days in each fiscal year.
At December 31, 1994, the amounts outstanding on debentures and notes
payable associated with RMCI totalled approximately $2.6 million. This
liability ceased being a liability of the Company upon the April 24, 1995
distribution of the RMCI common stock held by the Company to the Company's
common and preferred stockholders.
At the current time, the Company does not have any commitments to make any
material capital expenditures. The Company's current primary cash requirements
relate to its normal operating and debt service expenses, routine capital
improvements at its facilities and selective expansion of outpatient programs
and services. In addition, at the current time, the Company's specific
development projects include expansion of its management contract operations and
its network of affiliations with medical/surgical hospitals and other healthcare
providers. Construction costs in connection with the Company's subacute
business are complete as of March 31, 1995 and management expects this business
to generate positive cash flow from operations in the fourth quarter of fiscal
1995. Also, in June 1994, the Company closed three outpatient day treatment
centers which were experiencing negative cash flow.
On the basis of its historical cash collection experience and projected
cash needs, the Company believes that its internally generated funds from
operations, together with its working capital facility, remaining proceeds from
the sale/leaseback transaction ($4.4 million), and funds derived from any future
asset sales will be sufficient to fund its current cash requirements and future
identifiable needs. Other than the sales of assets previously mentioned, the
Company does not have any agreement to sell any of its assets.
17
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits required to be filed as part of this Quarterly
Report on Form 10-Q are as follows:
Exhibit 11 Computation of Net Income per Share
Exhibit 27 Financial Data Schedule
(b) Current Reports on Form 8-K
There were no Current Reports on Form 8-K filed with the
Commission during the quarter ended March 31, 1995.
18
<PAGE>
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 thereupon duly authorized.
RAMSAY HEALTH CARE, INC.
Registrant
/s/ Gregory H. Browne
______________________________
Gregory H. Browne
Chief Executive Officer and
Principal Financial and
Accounting Officer
Date: May 22, 1995
19
<PAGE>
Exhibit 11
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31
-------------------------
1995 1994
------------- ----------
<S> <C> <C>
PRIMARY
Weighted average common shares outstanding........... 7,758,719 8,213,407
Class A convertible preferred stock.................. -- 22,910
Class B convertible preferred stock, Series C........ -- 1,424,860
----------- ----------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES............................ 7,758,719 9,661,177
=========== ==========
Net Income (Loss) Available to Common Shareholders.. $*(4,412,000) $ 667,000
=========== ==========
NET INCOME (LOSS) PER SHARE......................... $ (0.57) $ 0.07
=========== ==========
FULLY DILUTED
Weighted average common shares outstanding........... 7,758,719 8,213,407
Class A convertible preferred stock.................. -- 22,910
Class B convertible preferred stock, Series C........ -- 1,424,860
----------- ----------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES............................ 7,758,719 9,661,177
=========== ==========
Net Income (Loss) Available to Common Shareholders.. $*(4,412,000) $ 667,000
=========== ==========
NET INCOME (LOSS) PER SHARE......................... $ (0.57) $ 0.07
=========== ==========
NINE MONTHS ENDED MARCH 31
---------------------------
1995 1994
----------- ----------
PRIMARY
Weighted average common shares outstanding........... 7,736,996 8,211,906
Class A convertible preferred stock.................. -- 22,910
Class B convertible preferred stock, Series C........ -- 1,424,860
----------- ----------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES............................ 7,736,996 9,659,676
=========== ==========
Net Income (Loss) Available to Common Shareholders.. $*(3,568,000) $1,750,000
=========== ==========
NET INCOME (LOSS) PER SHARE......................... $ (0.46) $ 0.18
=========== ==========
FULLY DILUTED
Weighted average common shares outstanding........... 7,736,996 8,243,842
Class A convertible preferred stock.................. -- 22,910
Class B convertible preferred stock, Series C........ -- 1,424,860
----------- ----------
TOTAL COMMON AND DILUTIVE
COMMON EQUIVALENT SHARES............................ 7,736,996 9,691,612
=========== ==========
Net Income (Loss) Available to Common Shareholders.. $*(3,568,000) $1,750,000
=========== ==========
NET INCOME (LOSS) PER SHARE......................... $ (0.46) $ 0.18
=========== ==========
</TABLE>
* Amount represents the net loss per the consolidated statements of income,
plus the dividends paid on the Class B convertible preferred stock, Series C.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 3,732,000
<SECURITIES> 0
<RECEIVABLES> 28,525,000
<ALLOWANCES> 4,852,000
<INVENTORY> 0
<CURRENT-ASSETS> 40,852,000
<PP&E> 146,174,000
<DEPRECIATION> 42,026,000
<TOTAL-ASSETS> 172,663,000
<CURRENT-LIABILITIES> 26,576,000
<BONDS> 57,869,000
<COMMON> 83,000
0
256,000
<OTHER-SE> 76,882,000
<TOTAL-LIABILITY-AND-EQUITY> 172,663,000
<SALES> 0
<TOTAL-REVENUES> 33,547,000
<CGS> 0
<TOTAL-COSTS> 28,660,000
<OTHER-EXPENSES> 7,321,000
<LOSS-PROVISION> 1,183,000
<INTEREST-EXPENSE> 2,161,000
<INCOME-PRETAX> (5,778,000)
<INCOME-TAX> (1,457,000)
<INCOME-CONTINUING> (4,321,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,321,000)
<EPS-PRIMARY> $(0.57)
<EPS-DILUTED> $(0.57)
</TABLE>
