SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM 8-K
Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 27, 1999
Caretenders Health Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-9848 06-1153720
(Commission file number) (I.R.S. Employer Identification No.)
100 Mallard Creek Road, Louisville, KY 40207
(Address of principal executive offices) (Zip Code)
(502) 899-5355
(Registrant's telephone number, including area code)
<PAGE
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
FORM 8-K
INDEX
Item 2.Asset Disposition 3
Item 7.Pro-forma Financial Statements:
Interim Consolidated Statements of Operations
for the six-months ended September 30, 1999 4
Interim Consolidated Balance Sheet as of
September 30, 1999 5
Consolidated Statements of Operations
for the Year ended March 31, 1999 6
Consolidated Statements of Operations
for the Year ended March 31, 1998 7
Consolidated Statements of Operations
for the Year ended March 31, 1997 8
Notes to Consolidated Pro-forma Financial Statements 9
<PAGE>
Item 2. ASSET DISPOSITION
On November 12, 1999 sold its product operations (consisting of infusion
therapy and respiratory and medical equipment businesses) to Lincare
Holdings, Inc. in an asset sale for $14.5 million as part of a formal plan of
separation. The Company is pursuing available strategic alternatives relative
to its visiting nurse operations in order to complete this plan. Proceeds
from the sale are being used to repay obligations outstanding under the
Company's bank line of credit. As of November 19, 1999 approximately $2.5
million remained outstanding on the line of credit. The Company has retained
certain assets and liabilities associated with the product operations, the
liquidation of which is expected to generate additional proceeds of
approximately $2 million. The Company intends to use the borrowing capacity
available to it as a result of these actions to pursue further development
of its adult day care business.
As a result of the operational separations, the Company has recorded a one-time
net of tax loss of approximately $5 million or ($1.60) in the quarter ended
September 30, 1999. This charge reduces the book value of the operations to
their expected net realizable value and includes the estimated future operating
results of the visiting nurse operations prior to separation. These changes
have been accounted for as discontinued operations in the financial statements
for interim periods ended September 30, 1999.
<PAGE
Item 7. PRO-FORMA FINANCIAL STATEMENTS
On November 12, 1999 sold its product operations (consisting of infusion
therapy and respiratory and medical equipment businesses) to Lincare
Holdings, Inc. in an asset sale for $14.5 million as part of a formal plan of
separation. The Company is pursuing available strategic alternatives relative
to its visiting nurse operations in order to complete this plan. The accomp-
anying pro-forma financila statements present the Company's results of
operations for the six-months ended September 30, 1999, the years ended March
31, 1999, 1998 and 1997 and its financial condition as of September 30, 1999,
as if the plan (more fully described in Note 2 below) had been adopted at the
beginning of each period or as of September 30, 1999 in the case of the
pro-forma balance sheet.
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
PROFORMA INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Actual Pro-forma Pro-forma
Results Adjustments Notes Results
------------ ------------ ------- -----------
<S> <C> <C> <C> <C>
Net revenues $ 21,440,145 - $ 21,440,145
Cost of sales
and services 17,697,807 - 17,697,807
Selling, general
and administrative
expenses 2,208,719 - 2,208,719
Depreciation and
amortization
expense 448,245 - 448,245
Provision for
uncollectible
accounts 410,725 - 410,725
------------ ------------ ----------
Income (loss) from
continuing operations
before other income
(expense) and income
taxes 674,649 - 674,649
Other income
(expense):
Interest expense (233,452) 178,606 (1) (54,846)
Loss on sale of
building (91,701) (91,701)
------------ ------------ ----------
Income (loss)
from
continuing
operations
before provision
for income
taxes 349,496 178,606 528,102
Provision (benefit)
for income taxes 146,789 75,015 (2) 221,804
------------ ------------ ---------
Net income (loss)
from continuing
operations $ 202,707 $ 103,591 $ 306,298
============ ============ =========
Per Share Amounts
- Basic and Diluted
Average shares
outstanding 3,120,413 - 3,120,413
------------ ------------ ---------
Net income (loss)
from
continuing
operations $ 0.06 $ 0.04 $ 0.10
============ =========== =========
Notes to pro-forma adjustments:
(1) Reflects reduction of debt with proceeds of sale of product operations
(2) Reflects income tax effect of (1) at 42% effective tax rate.
See accompanying notes to consolidated pro-forma financial statements.
</TABLE>
<PAGE>
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
PROFORMA INTERMIM CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Pro-forma Proforma
Actual Adjustments Notes Adjusted
-------- ----------- ----- --------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents $ 406,698 $ - $ 406,698
Accounts receivable
- - net 7,277,130 - 7,277,130
Prepaid expenses and
other current assets 582,881 - 582,881
Net assets of
discontinued
operations 7,991,358 (7,755,557) (1) 235,801
---------- ------------ -----------
TOTAL CURRENT
ASSETS 16,258,067 (7,755,557) 8,502,510
PROPERTY AND
EQUIPMENT - net 3,411,995 - 3,411,995
COST IN EXCESS OF
NET ASSETS
ACQUIRED - net 2,455,346 - 2,455,346
DEFERRED TAX
ASSETS 2,892,412 - 2,892,412
OTHER ASSETS 358,975 - 358,975
LONG TERM ASSETS
OF DISCONTINUE
OPERATIONS 5,344,443 (5,344,443) (1) -
---------- ----------- -----------
$30,721,238 $(13,100,000) $17,621,238
=========== ============ ===========
LIABILITIES AND
STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Accounts payable
and accrued
liabilities $ 3,682,639 $ - $ 3,682,639
Current portion
of term debt and
capital lease
obligations - - -
Other current
liabilities 159,320 - 159,320
------------ ---------- -----------
TOTAL CURRENT
LIABILITIES 3,841,959 - 3,841,959
------------- ---------- -----------
LONG-TERM
LIABILITIES:
Revolving Credit
Facility 15,601,949 (13,100,000) (1) 2,501,949
Other Liabilities 141,138 - 141,138
------------ ----------- ---------
TOTAL LONG-TERM
LIABILITIES 15,743,087 (13,100,000) 2,643,087
----------- ----------- ---------
TOTAL LIABILITIES 19,585,046 (13,100,000) 6,485,046
----------- ------------ ---------
Commitments and
Contingencies
Stockholders equity:
Common stock,
treasury stock
and additional paid
in capital 25,562,655 - 25,562,655
Accumulated deficit (14,426,463) - (14,426,463)
------------- ---------- ------------
TOTAL STOCKHOLDERS
EQUITY 11,136,192 - 11,136,192
----------- ------------ -----------
$30,721,238 $(13,100,000) $17,621,238
=========== ============ ===========
</TABLE>
Notes to pro-forma adjustments:
(1) Reflects sale of product operations and application of proceds against
debt.
See accompanying notes to consolidated pro-forma financial statements.
<PAGE>
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended March 31, 1999
<TABLE>
<CAPTION>
(UNAUDITED)
------------------------------------
Actual Pro-forma Continuing
Results Adjustments Notes Operations
------------- ------------ ------- -------------
<S> <C> <C> <C> <C>
Net revenues $ 97,161,643 $ (57,542,296) (1) $ 39,619,347
Cost of sales
and services 80,430,802 (46,779,687) (1) 33,651,115
Selling, general
and administra-
tive expenses 10,632,747 (6,046,074) (1) 4,586,673
Depreciation and
amortization
expense 2,414,472 (1,497,596) (1) 916,876
Provision for
uncollectible
accounts 2,337,373 (1,877,017) (1) 460,356
Restructuring
charges 550,000 (550,000) -
Goodwill write-
down 6,967,560 (6,854,364) 113,196
Loss on disposal
of certain
operations 1,648,538 (1,648,538) -
Litigation gain (1,350,000) 1,350,000 -
------------ ------------ ------------
Loss before
other income
(expense)
and income
taxes (6,469,849) 6,360,980 (108,869)
Other income
(expense):
Interest
expense (1,561,916) 1,325,633 (2) (236,283)
------------ ----------- ------------
Loss before
income tax
benefit (8,031,765) 7,686,613 (345,152)
Income tax
benefit (2,186,613) 2,044,238 (3) (142,375)
------------ ------------ ------------
Net loss from
operations
(5,845,152) 5,642,375 (202,776)
========== =========== ==========
Per Share Amounts
- - Basic
and Diluted
Average shares
outstanding 3,120,436 - 3,120,436
Net loss from
operations
$ (1.88) $ 1.82 $ (0.06)
============ ============ ============
Notes to pro-forma adjustments:
(1) Reflects reclassification of results of product and visiting nurse
operations as discontinued operations.
(2) Includes (1) plus reflects reduction of debt with proceeds of sale of
product operations
(3) Reflects income tax effect of pro-forma adjustments at 41.25% effective tax
rate.
See accompanying notes to consolidated pro-forma financial statements.
</TABLE>
<PAGE>
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended March 31, 1998
<TABLE>
<CAPTION>
(UNAUDITED)
------------------------------------
Actual Pro-forma Continuing
Results Adjustments Notes Operations
------------- ------------ ------- -------------
<S> <C> <C> <C> <C>
Net revenues $ 95,182,600 $ (64,799,029) (1) $ 30,383,571
Cost of sales
and services 76,644,012 (49,381,657) (1) 27,262,355
Selling, general
and administrative
expenses 10,117,882 (5,800,335) (1) 4,317,547
Depreciation and
amortization expense 2,389,036 (1,455,918) (1) 933,118
Provision for
uncollectible
accounts 2,634,985 (2,323,507) (1) 311,478
------------ ------------ ------------
Income (loss)
before other income
(expense) and
income taxes 3,396,685 (5,837,612) (2,440,927)
Other income
(expense):
Interest expense (993,602) 993,602 (2) 1
------------ ------------ ------------
Income (loss) before
provision for
income taxes 2,403,083 (4,844,010) (2,440,927)
Income tax provision
(benefit) 991,272 (1,998,154) (3) (1,006,882)
------------ ------------ ------------
Net income (loss) $ 1,411,811 $ (2,845,856) $ (1,434,045)
============ ============ ============
Per Share Amounts
Average shares
outstanding:
Basic 3,120,436 - 3,120,436
Diluted 3,161,706 - 3,161,706
Net income per share
basic and diluted $ 0.45 $ (0.91) $ (0.46)
============ ============ ============
Notes to pro-forma adjustments:
(1) Reflects reclassification of results of product and visiting nurse
operations as discontinued operations.
(2) Includes (1) plus reflects reduction of debt with proceeds of sale of
product operations
(3) Reflects income tax effect of pro-forma adjustments at 41.25% effective tax
rate.
See accompanying notes to consolidated pro-forma financial statements.
</TABLE>
<PAGE>
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended March 31, 1997
<TABLE>
<CAPTION>
(UNAUDITED)
------------------------------------
Actual Pro-forma Continuing
Results Adjustments Notes Operations
--------- ----------- ----- ----------
<S> <C> <C> <C> <C>
Net revenues $ 76,773,039 $ (52,071,333) (1) $ 24,701,706
Cost of sales
and services 60,268,808 (39,108,784) (1) 21,160,024
Selling, general
and administrative
expenses 9,363,031 (5,442,833) (1) 3 ,920,198
Depreciation and
amortization expense 2,239,194 (1,078,598) (1) 1,160,596
Provision for
uncollectible accounts 2,215,537 (1,937,820) (1) 277,717
------------ ------------ -----------
Income before other income
(expense) and income taxes 2,686,469 (4,503,298) (1,816,829)
Other income (expense):
Interest expense (771,099) 535,978 (2) (235,121)
------------ ------------ -----------
Income before provision for
income taxes 1,915,370 (3,967,320) (2,051,950)
Provision for income taxes 156,000 (323,124) (3) (167,124)
------------ ------------ -----------
Net income (loss) $ 1,759,370 $ (3,644,196) $ (1,884,826)
============ ============ ===========
Per Share Amounts
Average shares outstanding:
Basic 3,119,413 - 3,120,413
Diluted 3,141,865 - 3,141,865
Net income per share
basic and diluted $ 0.56 $ 1.16 $ (0.60)
============ ============ ==========
Notes to pro-forma adjustments:
(1) Reflects reclassification of results of product and visiting nurse
operations as discontinued operations.
(2) Includes (1) plus reflects reduction of debt with proceeds of sale of
product operations.
(3) Reflects income tax effect of pro-forma adjustments at 8% effective tax
rate.
See accompanying notes to consolidated pro-forma financial statements.
</TABLE>
<PAGE>
CARETENDERS HEALTH CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED PRO-FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated pro-forma financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and
regulations. Accordingly, the reader of this Form 8-K is referred to the
Company's Form 10-Q for the quarter ended September 30, 1999 and Form 10-K
for the year ended March 31, 1999 for further information. In the opinion of
management of the Company, the accompanying unaudited pro-forma financial
statements reflect all adjustments (consisting of normally recurring
adjustments) necessary to present fairly the financial position and the
results of operations. The accompanying pro-forma financial statements presents
the Company's results of operations for the six-months ended September 30, 1999,
1998 and 1997 and its financial condition as of September 30, 1999, as if the
plan (more fully described in Note 2 below) had been adopted at the beginning of
each period or as of September 30, 1999 in the case of the pro-forma balance
sheet.
2. DISCONTINUED OPERATIONS
On November 12, 1999 sold its product operations (consisting of infusion therapy
and respiratory and medical equipment businesses) to Lincare Holdings, Inc. in
an asset sale for $14.5 million as part of a formal plan of separation. The
Company is pursuing available strategic alternatives relative to its visiting
nurse operations in order to complete this plan. Proceeds from the sale are
being used to repay obligations outstanding under the Company's bank line of
credit. As a result of the operational separations, the Company has recorded
a one-time net of tax loss of approximately $5 million or ($1.60) in the
quarter ended September 30, 1999. This charge reduced the book value of the
operations to their expected net realizable value and includes the estimated
future operating results of the visiting nurse operations prior to
separation. These changes have been accounted for as discontinued operations
in the Company's financial statements as of September 30, 1999 included in
Form 10-Q for the quarter then ended and three years ended March 31, 1999.
Accordingly, pro-forma adjustments to the statement of operations for the six
months then ended are limited to reflecting the reduction in interest expense
resulting from the pay down of debt with the proceeds of the sale of the product
operations.
<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 of the
undersigned thereunto duly authorized.
Date: November 27, 1999
CARETENDERS HEALTH CORP.
BY /s/ William B Yarmuth
William B. Yarmuth,
Chairman of the Board, President
and Chief Executive Officer
BY /s/ C. Steven Guenthner
C. Steven Guenthner,
Senior Vice President and
Chief Financial Officer
