1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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 number 1-9848
ALMOST FAMILY, INC. TM
(Formerly Caretenders HealthCorp.)
(Exact name of registrant as specified in its charter)
Delaware 06-1153720
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
100 Mallard Creek Road, Suite 400 40207
(Address of principal executive offices) (Zip Code)
(502) 899-5355
(Registrant's telephone number, including area code)
Not Applicable (Former name, former address and former fiscal year, if changed
since last report.)
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 and 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 ____.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class of Common Stock $.10 par value
Shares outstanding at June 30, 2000 3,141,186
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2000
and March 31, 2000 3
Consolidated Statements of Operations for the Three
Months ended June 30, 2000 and 1999 4
Consolidated Statements of Cash Flows for the Three
Months ended June 30, 2000 and 1999 5
Notes to Interim Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 14
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 15
Part II. Other Information
Items 1 through 6 16
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS June 30, 2000 March 31, 2000
------ ------------- --------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 689,567 $1,427,537
Accounts receivable - net 6,463,534 6,459,004
Prepaid expenses and other current
assets 675,783 301,415
----------------- --------------
TOTAL CURRENT ASSETS 7,828,884 8,187,956
PROPERTY AND EQUIPMENT - net 3,123,420 3,079,636
COST IN EXCESS OF NET ASSETS ACQUIRED
- net 2,516,070 2,537,740
DEFERRED TAX ASSETS 3,429,093 3,429,093
OTHER ASSETS 971,714 916,482
----------------- --------------
$17,869,181 $18,159,907
================= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and
accrued liabilities $5,106,371 $5,309,359
----------------- -------------
TOTAL CURRENT LIABILITIES 5,106,371 5,309,359
----------------- -------------
LONG-TERM LIABILITIES:
Revolving Credit Facility 274,106 651,221
Other liabilities 1,044,959 1,037,296
----------------- -------------
TOTAL LONG-TERM LIABILITIES 1,319,065 1,688,517
----------------- -------------
TOTAL LIABILITIES 6,425,436 6,997,876
----------------- -------------
COMMITMENTS AND CONTINGENCIES
Stockholders' equity:
Common stock, par value $.10; authorized
10,000,000 shares;
3,141,186 issued and outstanding 315,119 315,119
Treasury stock, at cost, 10,000 shares (95,975) (95,975)
Additional paid-in capital 25,384,270 25,384,270
Accumulated deficit (14,159,669) (14,450,383)
--------------- ------------
TOTAL STOCKHOLDERS' EQUITY 11,443,745 11,153,031
--------------- ------------
$17,869,181 $18,150,907
=============== ============
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
June 30, 2000 June 30, 1999
------------- ---------------
<S> <C> <C>
Net revenues $11,776,440 $10,335,008
Cost of sales and services 9,666,253 8,617,912
General and administrative expenses 1,152,218 1,104,360
Depreciation and amortization expense 264,558 225,002
Provision for uncollectible accounts 133,873 179,378
------------- -------------
Income (loss) before other income
(expense) and income taxes 559,538 208,356
Other income (expense):
Interest expense (13,908) (110,931)
Loss on sale of building - (91,701)
------------- ------------
Income before income taxes 545,630 5,724
Income tax expense (benefit) 254,916 2,404
------------- ------------
Net income from Continuing Operations 290,714 3,320
Discontinued Operations:
Net Income from operations net of
applicable income taxes of $40,552 - 56,000
-------------- ------------
Net income (loss) $ 290,714 $ 59,320
============== ============
Per share amounts - Basic and Diluted:
Average shares outstanding - Basic 3,141,186 3,120,436
Average shares outstanding - Diluted 3,173,501 3,185,945
Net income from Continuing Operations $ 0.09 $ -
Net income from Discontinued Operations - 0.02
------------- -------------
Net income (loss) $ 0.09 $ 0.02
============= =============
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
June 30, 2000 June 30, 1999
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 290,714 $ 3,320
Adjustments to reconcile net income to
net cash provided
(used) by operating activities:
Depreciation and amortization 264,558 225,002
Provision for uncollectible accounts 133,873 179,378
Loss on sale of assets - 91,701
--------------- ---------------
689,145 499,401
Change in certain net assets (Increase)
decrease in:
Accounts receivable (138,403) 75,199
Prepaid expenses and other (396,298) (474,429)
current assets
Increase (decrease) in:
Accounts payable and accrued (202,988) (244,422)
liabilities --------------- ---------------
Net cash provided (used) by (48,544) (144,251)
operating activities --------------- ---------------
Cash flows from investing activities:
Capital expenditures (259,742) (296,411)
Other Assets (55,232) 44,971
Goodwill (5,000) -
Sale of Assets - 119,099
--------------- ---------------
Net cash provided (used) by (319,974) (132,341)
investing activities --------------- ---------------
Cash flows from financing activities:
Net revolving credit facility
borrowings (377,115) (1,048,300)
Other 7,663 (88,087)
--------------- ---------------
Net cash provided (used) by (369,452) (1,136,387)
financing activities --------------- ---------------
Cash Flows from discontinued operations - 618,719
--------------- ---------------
Net increase (decrease) in cash (737,970) (794,799)
Cash and cash equivalents at beginning of
period 1,427,537 1,036,951
--------------- ---------------
Cash and cash equivalents at end
of period $ 689,567 $ 242,152
=============== ===============
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying interim consolidated financial statements for the three
months ended June 30, 2000 and 1999 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 10-Q is referred to the Company's Form
10-K for the year ended March 31, 2000 for further information. In the
opinion of management of the Company, the accompanying unaudited interim
financial statements reflect all adjustments (consisting of normally
recurring adjustments) necessary to present fairly the financial position
at June 30, 2000 and the results of operations and cash flows for the
periods ended June 30, 2000 and 1999.
The results of operations for the three months ended June 30, 2000 are not
necessarily indicative of the operating results for the year.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reported period. Actual results could differ from those estimates.
2. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company, from time to time, is subject to claims and suits arising in
the ordinary course of its business, including claims for damages for
personal injuries. In the opinion of management, the ultimate resolution of
any of these pending claims and legal proceedings will not have a material
effect on the Company's financial position or results of operations.
Franklin
On January 26, 1994 Franklin Capital Associates L.P., Aetna Life and
Casualty Company and Aetna Casualty and Surety Company, shareholders, who
at one time held approximately 320,000 shares of the Company's common stock
(approximately 13% of shares outstanding) filed suit in Chancery Court of
Williamson County, Tennessee claiming unspecified damages not to exceed
three million dollars in connection with registration rights they received
in the Company's acquisition of National Health Industries in February
1991. The suit alleges the Company failed to use its best efforts to
register the shares held by the plaintiffs as required by the merger
agreement. The Company settled with Aetna shortly before the case went to
trial in February 2000. In mid-trial Franklin voluntarily withdrew its
complaint reserving its legal rights to bring a new suit as allowed under
Tennessee law. In May 2000, Franklin refiled its claim. The Company
believes it has meritorious defenses to the claims and does not expect
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
2. COMMITMENTS AND CONTINGENCIES (continued)
the ultimate outcome of the suit to have a material impact on the Company's
results of operations, liquidity or financial position. The Company plans
to vigorously defend its position in this case. Anticipated costs of
litigation have been included in the Company's one-time charge for
discontinuing its home health operations in September 1999.
3. FINANCIAL STATEMENT RECLASSIFICATIONS
Certain amounts have been reclassified in the 1999 financial statements in
order to conform to the 2000 presentation. Such reclassifications had no
effect on previously reported net income (loss).
4. LOSS ON SALE OF BUILDING
In May 1999, the Company sold an office building resulting in a
non-operating loss of $91,701. The transaction generated net cash of
$79,093 after repaying mortgage debt of approximately $40,000.
5. DISCONTINUED OPERATIONS
As part of a formal plan of separation, the Company 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 and is pursuing available strategic
alternatives to complete the separation of its visiting nurse operations.
Proceeds from the sale were used to repay obligations outstanding under
the Company's bank line of credit. As a result of the operational
separations, the Company recorded a one-time net of tax loss of
approximately $5 million or ($1.60) in the quarter ended September 30,
1999. That charge reduced the book value of the operations to their
expected net realizable value, provided for losses on fulfilling certain
obligations and close down costs, and included the estimated future
operating results of the visiting nurse operations through disposition.
The implementation of Medicare's Prospective Payment System for home care
(PPS) may have a material impact on the disposal value of the visiting
nurse operations. Proposed rules for a home care PPS reimbursement system
were released by HCFA on October 1, 1999. On June 28, 2000 HCFA published
final rules. The final rules vary significantly from the proposed rules.
Among other changes, the rate of reimbursement per episode was increased
by approximately 4% as compared to the proposed rules. This system will go
into effect on October 1, 2000 replacing the current reimbursement system,
which is cost-based. Unlike the current cost-based system, which prohibits
profitable operation for the visiting nurse business, PPS will make it at
least possible to make a profit. However, there can be no assurance that
the visiting nurse business will operate profitably under PPS. Management
is evaluating the impact of these newly released rules and is currently
unable to predict what impact, if any, PPS may have on the disposal value
of the visiting nurse operations. Additionally, there can be no assurance
that HCFA will not make further significant changes to the published rules
that may impact the disposal value of the visiting nurse operations.
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
5. DISCONTINUED OPERATIONS (continued)
Revenue from visiting nurse operations was approximately $6.7 million for
the quarter ended June 30, 2000. Interest expense has been allocated to
continuing and discontinued operations on the basis of allocated debt
balances. Accordingly, interest expense of $47,000 has been allocated to
discontinued operations for the quarter ended June 30, 2000.
The accompanying balance sheet includes net current assets and liabilities
of discontinued operations, consisting primarily of accounts receivable,
inventory, accounts payable and accrued liabilities, and long term assets
of discontinued operations consisting primarily of property, and
equipment, net of accumulated depreciation and goodwill.
Visiting Nurse Operations-Statement of Operations For the Quarter Ended June 30,
2000
-------------
Revenues $ 6,669,234
Operating expenses 6,972,951
Interest expense 47,000
-------------
Pre-tax income (loss) (350,717)
Income taxes 161,330
-------------
Net income (loss) (189,387)
Less amounts previously provided 189,387
-------------
Shown in accompanying
statement of operations $ -
=============
Discontinued Operations - Balance Sheet - As Of June 30,
2000
-------------
Accounts receivable $ 7,410,303
Other current assets 1,093,256
Long-term assets -
Current liabilities 5,034,650
Revolving credit facility 2,943,820
Long-term liabilities 525,089
-------------
Net assets held for sale $ -
=============
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
6. SUBSEQUENT EVENT
The Company has been notified by the Medicaid programs of certain states
in which it operates that those programs have increased reimbursement
rates paid for adult day care services. In the aggregate the Medicaid
rates received by the Company for services provided on or after July 1,
2000 will be approximately 6.7% higher than the rates received for similar
services in the quarter ended June 30, 2000. During that quarter, the
Company's Medicaid program revenues in the affected states were
approximately $4 million.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
As described elsewhere herein, the Company has sold its product operations and
is pursuing strategic alternatives for its visiting nurse operations.
Accordingly, the results of continuing operations presented below include only
the result of the Company's adult day health services operations consisting of
in-center adult day care and personal care services provided in the patients'
homes.
RESULTS OF CONTINUING OPERATIONS
The financial tables that follow are presented for continuing operations
excluding non-recurring items.
Quarter Ended June 30, 2000 Compared with Year Ended June 30, 1999
------------------------------------------------------------------
<TABLE>
<CAPTION>
2000 1999 Change
------------------ ----------------- ----------------
Amount % Rev. Amount % Rev. Amount %
------ ------ ------ ------ ------ --
<S> <C> <C> <C> <C> <C> <C>
Net Revenues $11,776,440 100.0% $10,335,008 100.0% $1,441,432 13.9%
Cost of Sales
and Services 9,666,253 82.0% 8,617,912 83.4% 1,048,341 12.2%
----------- ------------- ----------
Center Contribution 2,110,187 18.0% 1,717,096 16.6% 393,091 22.9%
General &
Administrative 1,152,218 9.8% 1,104,360 10.7% 47,858 4.3%
Depreciation and
Amortization 264,558 2.2% 225,002 2.2% 39,556 17.6%
Provision for
uncollectible
accounts 133,873 1.1% 179,378 1.7% (45,505) (25.4%)
Interest, Net 13,908 -% 110,931 1.1% (97,023) (87.5%)
--------- -------- -----------
Income from continuing
operations before
non-recurring items and
taxes $ 545,630 4.6% $ 97,425 0.9% $ 448,205 460.1%
========= ======== ===========
</TABLE>
<PAGE>
Net Revenues
Net revenues increased 14% to $11.8 million from $10.3 million in the prior
year. Growth came primarily from volumes, which grew to 179,208 days of care in
2000 from 149,509 in 1999. Average revenue per day of care decreased 5% due to
mix changes offsetting price increases of about 2%. Increased volumes were
derived primarily from increased occupancy in the adult day care centers, which
grew to 78% of capacity in 2000 from 75% of capacity in 1999. Average capacity
increased 8.5% from the same quarter last year. As of June 30, 2000 total system
capacity was 1,621 guests per day.
The Company has been notified by the Medicaid programs of certain states in
which it operates, that those programs have increased reimbursement rates paid
for adult day care services. In the aggregate the Medicaid rates received by the
Company for services provided on or after July 1, 2000, will be approximately
6.7% higher than the rates received for similar services in the quarter ended
June 30, 2000. During that quarter, the Company's Medicaid program revenues in
the affected states were approximately $4 million.
Cost of Sales and Services
Cost of sales and services as a percent of revenues declined to 82% in 2000 from
83% in 1999 primarily as a result of increased volumes of business and increased
occupancy rates for in-facility care.
General and Administrative
General and Administrative costs increased $47,858 due primarily to normal
annual salary increases. G&A as a percent of revenues dropped to 9.8% in 2000
from 10.7% in 1999.
Depreciation and Amortization
Depreciation and amortization increased by 17% or $39,556 due to capital
expenditures.
Provision for Uncollectible Accounts
Management establishes an allowance for uncollectible accounts based on its
estimate of probable collection losses. The decrease in provision for
uncollectible accounts resulted from improved collection results in 2000.
Interest, Net
The decrease in interest, net is primarily a result of lower average outstanding
debt levels associated with the Company's improved operating results and
proceeds from the sale of the product operations.
Income Taxes
As of June 30, 2000, the Company has net deferred tax assets of approximately
$3.5 million. The net deferred tax asset is composed of $3.4 million of
long-term deferred tax assets and $117,000 of current deferred tax assets.
The Company has provided a valuation allowance against certain net deferred tax
assets based upon management's estimation of realizability of those assets
through future taxable income. This valuation was based in large part on the
Company's history of generating operating income or losses, individual tax
locales and expectations for the future. The Company's ability to generate the
expected amounts of taxable income from future operations is dependent upon
general economic conditions, competitive pressures on revenues and margins and
legislation and regulation at all levels of government. Management has
considered the above factors in reaching its conclusions that it is more likely
than not that future taxable income will be sufficient to fully utilize the net
deferred tax assets. However, there can be no assurances that the Company will
meet its expectations of future taxable income.
For the quarter ended June 30, 2000, the effective income tax rate was
approximately 47% of income before income taxes, as compared to an effective
income tax rate of approximately 42% of income before taxes for 1999. The change
in the effective tax rate results from changes in the Company's business and the
state and local tax jurisdictions in which taxable income was generated.
Discontinued Operations
Results of operations for the quarter ended June 30, 1999 include net income of
$56,000 from operations which have subsequently been sold or are subject to
disposition. Please refer to the Company's report on Form 10K for the year ended
March 31, 2000 for a more detailed description.
The estimated loss on disposal of discontinued operations reflected in the
Company's financial statements for the year ended March 31, 2000 included
management's estimate of the results of operating the visiting nurse segment,
through the date of disposal, and the estimated financial results of such
disposal. The implementation of Medicare's Prospective Payment System for home
care (PPS) may have a material impact on the disposal value of the visiting
nurse operations. Proposed rules for a home care PPS reimbursement system were
released by HCFA on October 1, 1999. On June 28, 2000 HCFA published final
rules. The final rules vary significantly from the proposed rules. Among other
changes, the rate of reimbursement per episode was increased by approximately 4%
as compared to the proposed rules. This system will go into effect on October 1,
2000 replacing the current reimbursement system, which is cost-based. Unlike the
current cost-based system, which prohibits profitable operation for the visiting
nurse business, PPS will make it at least possible to make a profit. However,
there can be no assurance that the visiting nurse business will operate
profitably under PPS. Management is evaluating the impact of these newly
released rules and is currently unable to predict what impact, if any, PPS may
have on the disposal value of the visiting nurse operations. Additionally, there
can be no assurance that HCFA will not make further significant changes to the
published rules that may impact the disposal value of the visiting nurse
operations.
Revenue from visiting nurse operations was approximately $6.7 million for the
quarter ended June 30, 2000. Interest expense has been allocated to continuing
and discontinued operations on the basis of allocated debt balances.
Accordingly, interest expense of $47,000 has been allocated to discontinued
operations for the quarter ended June 30, 2000.
The accompanying balance sheet includes net current assets and liabilities of
discontinued operations, consisting primarily of accounts receivable, inventory,
accounts payable and accrued liabilities, and long term assets of discontinued
operations consisting primarily of property, plant and equipment, net of
accumulated depreciation and goodwill. Refer to Note 6 to the accompanying
financial statements for additional information.
Building Sale
In May 1999, the Company sold an office building resulting in a non-operating
loss of $91,701. The transaction generated net cash of $79,093 after repaying
mortgage debt of approximately $40,000.
<PAGE>
Liquidity and Capital Resources
Revolving Credit Facility
The Company has a $20 million revolving credit facility with Bank One Kentucky,
NA. The credit facility bears interest at prime plus a margin (ranging from 0%
to 1.0%, currently 0.50%) dependent upon total leverage and is secured by
substantially all assets and the stock of the Company's subsidiaries. Borrowings
are available equal to the greater of: a) a multiple of earnings before
interest, taxes, depreciation and amortization (as defined) or, b) an asset
based formula, primarily based on accounts receivable. Borrowings under the
facility may be used for working capital, capital expenditures, development and
growth of the business and other corporate purposes. The facility has an
expiration date of July 10, 2001.
As of June 30, 2000 approximately $3.2 million was outstanding on the line of
credit. The Company has retained certain assets and liabilities associated with
the discontinued operations, the liquidation of which, together with disposition
of the visiting nurse operations, are expected to reduce the Company's bank
borrowings to approximately $241,000. Accordingly, as of June 30, 2000,
approximately $2.9 million of debt has been classified with net assets from
discontinued operations in the accompanying balance sheet.
The Company believes that this facility will be sufficient to fund its operating
needs for at least the next twelve months.
Management will continue to evaluate additional capital including possible debt
and equity investments in the Company to support a more rapid development of the
business than would be possible with internal funds.
Cash Flows and Financial Conditions
Key elements to the Consolidated Statements of Cash Flows for the quarters ended
June 30, 2000 and 1999 were (in thousands):
Net Change in Cash and Cash Equivalents 2000 1999
--------------------------------------- ------ -----
Continuing Operations
Provided by (used in)
Operating activities $ (49) $ (144)
Investing activities (320) (132)
Financing activities (370) (1,136)
------------ ------------
$ (738) $ (1,414)
Discontinued operations $ - $ 619
------------ ------------
Net Change in Cash and Cash $ (738) $ (795)
============ ============
Equivalents
2000
Net cash used by operating activities resulted principally from current period
income, net of changes in accounts receivable, accounts payable and accrued
expenses. The increase in prepaid expenses resulted from the timing of insurance
payments. The increase in accounts receivable resulted from volume increases.
Days sales outstanding declined to 50 from 53 at March 31, 2000. The decrease in
accounts payable and accrued liabilities resulted primarily from income tax
payments made during the quarter. Net cash used in investing activities resulted
principally from amounts invested in adult day health services expansion
activities, and improvements in information systems. Net cash used in financing
activities resulted primarily from lower borrowings under the Company's credit
facility.
1999
Net cash used by operating activities resulted principally from current period
income, net of changes in accounts receivable, accounts payable and accrued
expenses. The increase in prepaid expenses resulted from the timing of insurance
payments. The increase in accounts receivable resulted from volume increases.
Days sales outstanding declined to 54 from 62 at March 31, 1999. The decrease in
accounts payable and accrued liabilities resulted from a reduction in days
payables outstanding. Net cash used in investing activities resulted principally
from amounts invested in adult day health services expansion activities, and
improvements in information systems, plus the proceeds from the sale of a
building. Net cash used in financing activities resulted primarily from reduced
borrowings under the Company's credit facility. Discontinued operations provided
cash from operating results and a reduction in accounts receivable.
Health Care Reform
The health care industry has experienced, and is expected to continue to
experience, extensive and dynamic change. In addition to economic forces and
regulatory influences, continuing political debate is subjecting the health care
industry to significant reform. Health care reforms have been enacted as
discussed elsewhere in this document and proposals for additional changes are
continuously formulated by departments of the federal government, Congress, and
state legislatures.
Government officials can be expected to continue to review and assess
alternative health care delivery systems and payment methodologies. Changes in
the law or new interpretations of existing laws may have a dramatic effect on
the definition of permissible or impermissible activities, the relative cost of
doing business, and the methods and amounts of payments for medical care by both
governmental and other payors. Legislative changes to "balance the budget" and
slow the annual rate of growth of expenditures are expected to continue. Such
future changes may further impact reimbursement. There can be no assurance that
future legislation or regulatory changes will not have a material adverse effect
on the operations of the Company.
The Company cannot predict what additional government regulations may be enacted
in the future affecting its business or how existing or future laws and
regulations might be interpreted, or whether the Company will be able to comply
with such laws and regulations in its existing or future markets.
Refer to the sections on Reimbursement Changes and Cautionary Statements -
Forward Outlook and Risks in Part I, and the notes to the accompanying financial
statements and Management's Discussion and Analysis of Financial Condition and
Results of Operations all included in the Company's report on Form 10K for the
year ended March 31, 2000 for additional information.
Impact of Inflation
Management does not believe that inflation has had a material effect on income
during the past several years.
<PAGE>
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Derivative Instruments
The Company does not use derivative instruments.
Market Risk of Financial Instruments
The Company's primary market risk exposure with regard to financial instruments
is to changes in interest rates.
At June 30, 2000, a hypothetical 100 basis point increase in short-term interest
rates would result in a reduction of approximately $2,400 in annual pre-tax
earnings from continuing operations.
<PAGE>
Commission File No. 1-9848
Part II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 Calculation of Earnings Per Share (attached)
Exhibit 27 Financial Data (electronic filing only)
(b) Form 8-K - None
<PAGE>
ALMOST FAMILY, INC. AND SUBSIDIARIES
(FORMERLY CARETENDERS HEALTH CORP)
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11
Three Months Ended
June 30, 2000
BASIC 2000 1999
------------ ------------
Net income (loss) $ 290,714 $ 59,232
Weighted average outstanding shares during 3,141,186 3,120,436
the period
------------ ------------
Net income (loss) per share $ 0.09 $ 0.02
============ ============
DILUTED
Net income for diluted income per common share $ 290,714 $ 59,232
------------ ------------
Weighted average outstanding shares during
the period 3,141,186 3,120,436
Add-common equivalent shares representing
shares issuable upon exercise of dilutive
options and warrants 32,315 65,509
------------ ------------
3,173,501 3,185,945
------------ ------------
Net income (loss) per share $ 0.09 $ 0.02
============ ============
<PAGE>
2
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.
Date: August 8, 2000
ALMOST FAMILY, INC.
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
