U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _________ to _________
Commission file number 0-16964
CANCER TREATMENT HOLDINGS, INC.
---------------------------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 87-0410907
- --------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
4491 South State Road Seven, Suite 200, Fort Lauderdale, Florida, 33314
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(954) 321-9555
- --------------------------------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes x No___.
The number of shares outstanding of each of the issuer's classes of
common equity, as of April 17, 1998 was: 3,336,476
Transitional Small Business Disclosure Format
(Check One): Yes______ No X
1
<PAGE>
CANCER TREATMENT HOLDINGS, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets
as of February 28, 1998 and May 31, 1997 2
Consolidated Statements of Operations
for the Nine Months Ended
February 28, 1998 and 1997 3
Consolidated Statements of Cash Flows
for the Nine Months Ended
February 28, 1998 and 1997 4
Notes to Consolidated Financial Statements 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 8
PART II -OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
February 28, May 31,
1998 1997
----------- -------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 453,633 $ 1,324,745
Accounts receivable, net of allowance for doubtful accounts
of approximately $886,000 at February 28, 1998 and $101,000
at May 31, 1997 3,224,823 3,076,429
Current portion of long-term notes receivable, net of a discount of
approximately $22,000 at February 28, 1998 and $28,000
at May 31, 1997 362,186 641,217
Income taxes receivable -- 227,369
Other current assets 292,116 296,602
------------- ---------------
Total current assets 4,332,758 5,566,362
Long-term notes receivable, net of current portion and a
discount of approximately $18,000 at February 28, 1998 and
$33,000 at May 31, 1997 698,622 948,378
Property and equipment, net 495,740 968,331
Investments in and advances to partnerships and ventures 875,940 1,072,944
Intangible assets, net -- 844,868
Other assets 165,665 133,148
------------- ---------------
Total assets $ 6,568,725 $9,534,031
============= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 196,474 $ 207,309
Accounts payable and accrued expenses 785,732 387,251
Accrued payroll and related benefits 612,800 452,562
------------- ---------------
Total current liabilities 1,595,006 1,047,122
Long-term debt, net of current portion 1,923,368 2,124,611
Deferred income taxes 107,400 107,400
------------- ---------------
Total liabilities 3,625,774 3,279,133
------------- ---------------
Commitments and contingencies
Stockholders' equity:
Common stock; $.003 par value, 50,000,000
shares authorized, 3,495,760 shares issued 10,487 10,487
Capital in excess of par value 5,163,105 5,163,105
(Accumulated deficit) retained earnings (1,950,560) 1,361,387
------------- ---------------
3,223,032 6,534,979
Treasury stock: 159,284 shares, at cost (280,081) (280,081)
------------- ---------------
Total stockholders' equity 2,942,951 6,254,898
------------- ---------------
Total liabilities and stockholders' equity $6,568,725 $9,534,031
============= ===============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 1998 AND 1997
(UNAUDITED)
February 28, February 28,
1998 1997
----------- -----------
<S> <C> <C>
Net patient service revenues $10,217,806 $11,705,111
Other revenues 1,102,884 1,069,096
------------- --------------
Total revenues 11,320,690 12,774,207
------------- --------------
Operating expenses:
Direct cost of patient services
(primarily payroll and contracted medical services) 5,306,846 6,399,363
General and administrative 6,867,926 5,777,158
Interest expense 229,404 233,271
Depreciation and amortization 1,070,690 316,641
------------- --------------
Total operating expenses 13,474,866 12,726,433
------------- --------------
Income (loss) from continuing operations before loss in
earnings of partnerships and income taxes (2,154,176) 47,774
Equity in loss of partnerships (415,179) (25,401)
------------- --------------
Income (loss) from continuing operations before income taxes (2,569,355) 22,373
Benefit for income taxes -- 50,000
------------- --------------
Income (loss) from continuing operations (2,569,355) 72,373
Discontinued operations:
Loss from operations of discontinued pharmacy and
private home health divisions (379,015) (196,069)
Loss on disposal of pharmacy and private home health
divisions including losses of $197,000 during phase-out
period (363,577) --
------------- --------------
Net loss $(3,311,947) $ (123,696)
============= ==============
Basic and diluted per share data:
Income (loss) per share from continuing operations $ (.77) $ .02
Loss per share from discontinued operations (.22) (.06)
------------- --------------
Net loss $ (.99) $ (.04)
============= ==============
Weighted average number of shares outstanding 3,336,476 3,336,476
============= ==============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 1998 AND 1997
(UNAUDITED)
February 28, February 28,
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,311,947) $ (123,696)
Adjustments to reconcile net loss to cash
used in operating activities:
Accretion of discount on notes receivable (21,444) (72,172)
Depreciation and amortization 1,368,717 359,218
Provision for uncollectible advances to unconsolidated partnerships 200,000 --
Equity in loss of unconsolidated partnerships 415,179 25,401
Change in operating assets and liabilities:
Accounts receivable (148,394) (1,869,053)
Income tax receivable 227,369 --
Other current and non-current assets (17,232) (20,941)
Accounts payable, accrued payroll and related benefits 558,719 330,339
Income taxes payable -- (254,000)
--------------- ---------------
Net cash used in operating activities (729,033) (1,624,904)
--------------- ---------------
Cash flows from investing activities:
Collections of notes receivable 540,231 325,000
Investments in and advances to Partnerships and ventures (423,674) (279,222)
Acquisitions of property and equipment (46,558) (31,658)
--------------- ---------------
Net cash provided by investing activities 69,999 14,120
--------------- ---------------
Cash flows from financing activities:
Repayments of long-term debt, including revolving
credit agreements (6,743,538) (9,131,887)
Borrowings for long-term debt, including revolving
credit agreements 6,531,460 10,643,271
--------------- ---------------
Net cash provided by (used in) financing activities (212,078) 1,511,384
--------------- ---------------
Net decrease in cash and cash equivalents (871,112) (99,400)
Cash and cash equivalents at beginning of year 1,324,745 865,265
--------------- ---------------
Cash and cash equivalents at end of period $ 453,633 $ 765,865
=============== ===============
Supplemental disclosures:
Interest paid $ 229,966 $ 235,293
=============== ===============
Income taxes paid $ 0 $ 259,469
=============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
1. Preparation of Financial Statements
-----------------------------------
The accompanying unaudited consolidated financial statements for
Cancer Treatment Holdings, Inc. and its subsidiaries (the
"Company") have been prepared in accordance with the instructions
of SEC Form 10-QSB and therefore do not include all information
and footnotes necessary for a fair presentation of financial
position, results of operations, and cash flows in conformity with
generally accepted accounting principles. The financial statements
should be read in conjunction with the financial statements and
notes thereto included in the Company's latest SEC Form 10- KSB
for the year ended May 31, 1997. In the opinion of management, the
unaudited consolidated financial statements contain all
adjustments which are of a normal, recurring nature for a fair
statement of the results of operations for such interim periods
presented. The results of operations for the nine months ended
February 28, 1998, are not necessarily indicative of the results
which may be expected for the entire fiscal year. The May 31,
1997, consolidated balance sheet was derived from audited
financial statements but does not include all disclosures required
by generally accepted accounting principles.
2. Restructuring of Certain Agreements
-----------------------------------
During the second quarter, the Company restructured certain
Management, Consulting and Billing and Collection agreements
related to two centers it sold in fiscal 1995 and an interest in
one center it sold in fiscal 1996. As a result of the
restructuring, the Company will receive $172,800 annually in
consulting fees through September 30, 2006. In addition, certain
agreements related to the sale of the Company's interest in a
radiation center in Yonkers, New York ("Yonkers Center") were also
restructured. As a result, during the second quarter, the Company
received $300,000 as reimbursement for expenses incurred in the
development of the Yonkers Center. The Company also renegotiated
the payment terms of the non-competition and consulting
agreements, whereby the payments are no longer contingent upon the
percentage of fees collected by the Yonkers Center. As a result,
the Company will receive $250,000 annually in fees over the next
three years and $100,000 annually in fees over the subsequent two
years.
Also during the second quarter, the Company sold an option to a
third party (the "Buyer") for $550,000. The option allows the
Buyer to acquire the Company's 50% interest in Ocean Radiation
Oncology Center, Inc. ("Ocean") for $3,500,000 or eight times
one-half of the prior year's net earnings, whichever is greater.
The option expires on May 31, 1999 and is evidenced by a
promissory note which bears interest at 13% and is payable in
monthly installments over three years.
3. Discontinued Operations
-----------------------
In February 1998, the Company's Board of Directors adopted a plan
to dispose of its pharmacy and private home health subsidiaries.
Accordingly, the operating results of these subsidiaries for all
periods presented are reflected as discontinued operations in the
Company's statement of operations. In addition, the Company has
recorded a loss on disposal of pharmacy and private home health
subsidiaries of approximately $364,000 which includes a writedown
of unamortized goodwill of $264,000 and a provision for operating
losses to be incurred during the phase-out period of $197,000.
On March 31, 1998, the Company entered into an agreement to sell
these subsidiaries. Under the terms of the agreement, the Company
will sell the stock in these subsidiaries in exchange for $100,000
in cash. The Company will retain the cash and accounts receivable
of these subsidiaries. The Company anticipates that the
transaction will close by April 30, 1998.
5
<PAGE>
Revenues from the discontinued operations were $661,000 and
$527,000 for the nine month period ended February 28, 1998 and
1997, respectively.
The components of net assets of discontinued operations included
in the consolidated balance sheets at February 28, 1998 and May
31, 1997 are as follows:
<TABLE>
<CAPTION>
February 28, 1998 May 31, 1997
----------------- ------------
<S> <C> <C>
Account receivable, net $ 337,738 $188,759
Prepaid and other current assets 31,217 31,870
Property and equipment, net 61,411 65,421
Other assets 4,691 --
Accounts payable and accrued expenses 99,808 27,289
</TABLE>
4. Contingencies
-------------
In conjunction with the current regulatory scrutiny of the home
health industry and, in particular the industry in South Florida,
the Company was randomly selected for an on-site review of its
Medicare policies, procedures and medical records related to its
Medicare certified home health agency in District 10, Broward
County, Florida. The review is being conducted by representatives
of the Health Care Finance Administration, the Office of Audit of
the Office of the Inspector General for the Department of Health
and Human Services and the Florida Agency for Health Care
Administration. The results of this review have not been
concluded. The Company believes the ultimate outcome of this
review will result in an assessment for amounts overpaid by the
Medicare system which could have a material adverse impact upon
the Company's financial condition and results of operations. Any
assessment is expected to be appealed by the Company.
On June 1, 1998, the Company's home health operations will be
subject to new reimbursement rates under a proposed "interim
payment system." Although the Company believes this new system
will decrease its Medicare reimbursement, it is not known at this
time by what amount.
As a general partner, the Company is jointly and severally liable
for liabilities concerning the actions of Ocean Radiation Oncology
Center, Inc. ("Ocean"), Palm Beach Radiotherapy Associates, Ltd.
("Palm Beach") and Logan Oncology Care Associates, Ltd. ("Logan")
and has guaranteed certain liabilities of these partnerships
amounting to $2,609,000 at February 28, 1998. Accordingly, the
Company could be held responsible for any and all liabilities
arising from the actions of such partnerships.
The Company is involved in several legal proceedings arising from
a dispute between the Company, as managing general partner of the
Palm Beach Partnership, and the other general partner of the Palm
Beach Partnership. The dispute relates to the decision of the
other general partner to conduct its radiation therapy business
through its own affiliates rather than through the Palm Beach
Partnership. In the opinion of management, the amount of ultimate
liability with respect to these actions will not materially affect
the financial position, results of operations or cash flows of the
Company.
5. Impairment of Assets
--------------------
The Company had recorded costs in excess of the estimated fair
value of net identifiable assets of acquired business ("goodwill")
and other intangible assets which consist of licenses and amounts
attributable to certain consulting agreements obtained in
connection with the sale of two centers. In addition, the Company
has recorded property and equipment including an office
condominium at cost which is being depreciated over its useful
life.
At each balance sheet date or whenever events or changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable based on estimated future cash flows expected
to result from the use of the assets and its eventual disposition,
the Company reviews certain long-lived assets, such as property
and equipment and certain identifiable intangible assets
(including goodwill) for impairment. As a result of the Company
entering into an agreement in principle for the sale of
substantially all the assets and liabilities of the Company
6
<PAGE>
(see Note 8), the Company recorded a charge to operations of
$739,000, included in depreciation and amortization expense in the
statement of operations for the nine month period ending February
28, 1998, representing the estimated impairment of property and
equipment and certain identifiable intangible assets described
above.
6. Earnings Per Share
------------------
The Company adopted the provisions of SFAS No. 128, "Earnings Per
Share" which requires the presentation of both basic and diluted
earnings per share. Basic earnings per share is calculated based
on the weighted-average number of common shares outstanding during
the year. Diluted earnings per share is based on the sum of the
weighted-average number of common shares outstanding plus common
stock equivalents arising out of stock options and warrants. The
Company's outstanding options were not assumed exercised for the
periods ended February 28, 1997 and 1996 because they were
antidilutive for such periods. The impact of the adoption of SFAS
No. 128 was not significant to the Company's financial statements.
7. Reclassifications
-----------------
Certain amounts have been reclassified in the financial statements
for the nine-month period ended February 28, 1997, to conform to
the presentation in the financial statements for the nine-month
period ended February 28, 1998.
8. Subsequent Event
----------------
On April 14, 1998, the Company announced that it agreed in
principle to sell substantially all of the assets of the Company
for $3 million in cash and the assumption of substantially all of
the liabilities of the Company. The agreement is subject to
certain conditions, including the approval of the transaction by
the Company's shareholders. The Company anticipates that, if
approved, the transaction will close prior to June 30, 1998.
7
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. Results Of Operations
---------------------
Comparison of the Nine Months Ended February 28, 1998, to the Nine
------------------------------------------------------------------
Months Ended February 28, 1997
------------------------------
Revenues for the nine-month period ended February 28, 1998, decreased
$1,453,000 or 11% over the nine-month period ended February 28, 1997,
from $12,774,000 in 1997 to $11,321,000 in 1998. This decrease was
principally attributable to the items discussed below.
Patient service revenues, as reported, are derived from the home
health operations of Med Tech Services of South Florida, Inc. and Med
Tech Services of Palm Beach, Inc. ("Med Tech"). The operations of
Leader Health Care Center, Inc. ("Leader") and Southern Cross Home
Health, Inc. ("Southern Cross") have been reflected as discontinued
operations in the statement of operations as a result of the
Company's decision to dispose of its pharmacy and private home health
operations as discussed in Note 3. Approximately 98% net patient
service revenues for 1998 and 1997, were derived from Med Tech for
services provided to home healthcare patients who are Medicare
beneficiaries. Med Tech participates in the Medicare program under
which services rendered to Medicare program beneficiaries are
reimbursed based on cost-reimbursement principles. Such revenues
decreased $1,503,000 from $11,490,000 in 1997 to $9,987,000 in 1998
primarily due to a decrease in visits.
During the quarter, the Company recorded an adjustment of $850,000
which reduced revenues as a result of a change in the estimated costs
which would not be reimbursed by Medicare to Med Tech. The Company
does not believe that any additional adjustments of this nature will
be required prior to the end of the Company's fiscal year.
Other revenues, which consist principally of billing, collection,
management and consulting revenues and interest income, increased
$34,000 from $1,069,000 in 1997 to $1,103,000 in 1998 as a result of
the restructuring of certain management, consulting, and billing and
collection agreements as discussed in Note 2.
The Company receives payment for its services from various sources.
The following summarizes the Company's revenues by payor sources:
<TABLE>
<CAPTION>
1998 1997
Amount % Amount %
------- ---- ------- -----
<S> <C> <C> <C> <C>
Medicare, on a cost reimbursement basis $ 9,987,000 97.8 $11,490,000 98.2
Commercial Insurance 22,000 .2 52,000 .4
Other 209.000 2.0 163,000 1.4
-------------- ----- ------------- ----
Net patient service revenue 10,218,000 100 11,705,000 100
-------------- ===== ------------- ====
Billing, collection, management and consulting fees 774,000 804,000
Other miscellaneous revenues 329,000 265,000
-------------- -------------
$11,321,000 $12,774,000
============== =============
</TABLE>
Changes in the current mix of payors, specifically those which would
result in a decrease in the percentage of revenues from Medicare or
third-party payors, may adversely effect the Company's future results
of operations.
Operating expenses for the nine-month period ended February 28, 1998,
increased $749,000 or 5.9% over the nine-month period ended February
28, 1997, from $12,726,000 in 1997 to $13,475,000 in 1998. This
increase was primarily attributable to the following:
Direct cost of patient services includes primarily payroll costs and
contracted medical services. The majority of these costs relate to
the Company's home health operations. The total number of visits
performed by the Company decreased from 129,395 for the nine-month
period ended February 28,
8
<PAGE>
1997 to 105,106 for the nine-month period ended February 28, 1998,
and costs decreased by $1,092,000 from $6,399,000 in 1997 to
$5,307,000 in 1998. On a per visit basis, these costs increased
slightly from 49.46 per visit in 1997 to 50.49 in 1998. The Company
believes the average direct cost per visit will decrease if the
Company increases the number of patients it services. During the
third quarter, the Company took steps to reduce its costs as a result
of the slower than anticipated growth in the business.
General and administrative expenses, which include the general and
administrative expenses of all of the Company's subsidiaries,
increased $1,091,000 or 18.9% from $5,777,000 in 1997 to $6,868,000
in 1998. The majority of these costs are attributable to the
Company's home health operation. On a per visit basis, these costs
increased from $44.65 per visit in 1997 to $59.74 in 1998. During the
latter part of fiscal 1997 and continuing through the second quarter
the Company, in anticipation of future growth which has not yet
occurred, significantly increased its base of administrative clinical
employees, to a level to support significantly more visits than the
Company performed during the current period. The Company believes the
average cost per visit for general and administrative expenses will
decrease if the Company increases the number of patients it services.
During the third quarter, the Company took steps to reduce its costs
as a result of the slower than anticipated growth in the business.
Also included in general and administrative expenses is a $200,000
provision for uncollectible advances to unconsolidated partnerships.
Depreciation and amortization expenses increased from $317,000 in
1997 to $1,071,000 in 1998 as a result of the Company recording a
charge for the estimated impairment of property and equipment as
discussed in Note 5.
The equity in losses of partnerships represents the losses incurred
at two of the Company's 50% owned radiation centers. In August of
1997, the Ocean facility in Lakewood, New Jersey began its
operations. For the nine months ended February 28, 1998, the
Company's share of the losses for this partnership were approximately
$270,000 which included approximately $102,000 in start-up costs
amortized over a one-year period and which will be fully amortized by
May 31, 1998. The Company's equity in the loss of the Palm Beach
Partnership was approximately $134,000 for the nine months ended
February 28, 1998. The loss is the result of lower patient volume and
increased legal fees due to litigation involving the Company and the
other partner.
2. Liquidity and Capital Resources
-------------------------------
As of February 28, 1998, the Company had working capital of
$2,738,000, including cash of $454,000, as compared with working capital of
$4,519,000 at May 31, 1997. The decrease was primarily attributable to a
decrease in cash of $871,000 primarily related to the cash investment required
by the Lakewood and Palm Beach partnerships and the unreimbursed Medicare costs,
and increases in accounts payable and accrued expenses of $559,000 related to
the timing differences of payroll periods, increases in reserves for worker's
compensation costs and the estimated losses during the phase-out period for the
discontinued operations.
During the nine months ended February 28, 1998, cash decreased
$871,000. Cash used in operating activities amounted to $729,000 in 1998
compared to $1,625,000 in 1997. The use of cash in operating activities was
primarily attributable to the net loss, including equity in losses of
partnerships of $415,000, as discussed above, and an increase in accounts
receivable of $148,000 offset by increases in accounts payable, accrued payroll
and related benefits of $559,000 as discussed above. The Company's current ratio
(current assets over current liabilities) was 2.72 as of February 28, 1998 and
5.32 as of May 31,1997.
Cash provided by investing activities was $70,000 in 1998, compared
to $14,000 in 1997 and was primarily the result of collections under notes
receivable of $540,000 offset by net investments in and advances to partnerships
of $424,000. The increase in the investment in and advances to partnerships is
primarily the result of expenses incurred in the start up of two radiation
centers (Ocean and Logan) and cash advances to the Palm Beach Partnership, as
discussed above.
Cash used in financing activities was $212,000 in 1997, and was the
result of payments against the Company's revolving credit agreements offset by
borrowings.
9
<PAGE>
The Company guarantees certain financing agreements of Palm Beach,
Ocean and Logan. As a general partner, the Company is jointly and severally
liable for liabilities concerning the actions of Palm Beach, Ocean and Logan.
As of February 28, 1998, the Company has guaranteed the following
amounts:
<TABLE>
<CAPTION>
Partnership Amount Description
----------------------------------------------------------------------------
<S> <C> <C>
Palm Beach $ 62,000 (1) Equipment leased and leasehold
improvements; (2) Term loan
Logan 1,175,000 Equipment leased
Ocean 1,372,000 Equipment leased and leasehold
---------- improvements
$2,609,000
==========
</TABLE>
Except for those items discussed above, and in the Company's latest
Form 10-KSB for the year ended May 31, 1997, there are no existing material
sources of liquidity available to the Company or material commitments for
capital expenditures. There are no material trends, favorable or unfavorable, in
the Company's capital resources. Management is unaware, except for those items
discussed above and the review being conducted on the home health agency as
discussed in Note 4, of any trends, demands, commitments, events or
uncertainties that will result in or that are reasonably likely to result in the
Company's liquidity increasing or decreasing in any material way.
3. Forward-looking Statements and Associated Risk
----------------------------------------------
This Form 10-QSB, specifically the Management's Discussion and
Analysis, contains "Forward- looking Statements" within the meaning of the
federal securities laws. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for "Forward-looking Statements." In order to comply with
the terms of the safe harbor, the Company notes that a variety of factors could
cause the Company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in the Company's
"Forward-looking Statements." Among other things, the following factors that
could cause actual results to differ materially include, but are not limited to,
general economic conditions; competitive factors; changes in federal or state
legislation governing the Company's operations, including the Medicare and
Medicaid reimbursement climate; and an adverse determination in connection with
the review being conducted concerning the Company's home health operations in
Broward County.
10
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the nine months ended
February 28, 1998.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CANCER TREATMENT HOLDINGS, INC.
April 20, 1998 by: /s/ Louis W. Boisvert, III
---------------------------------
Louis W. Boisvert, III
Vice President of Finance and
Chief Financial Officer
(Principal Accounting Officer and Duly Authorized
Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the financial statements of Cancer Treatment Holdings, Inc.
for the nine months ended February 28, 1998, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> FEB-28-1998
<CASH> 454
<SECURITIES> 0
<RECEIVABLES> 4,495
<ALLOWANCES> 908
<INVENTORY> 0
<CURRENT-ASSETS> 4,333
<PP&E> 1,778
<DEPRECIATION> 982
<TOTAL-ASSETS> 6,569
<CURRENT-LIABILITIES> 1,595
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 2,933
<TOTAL-LIABILITY-AND-EQUITY> 6,569
<SALES> 10,213
<TOTAL-REVENUES> 11,321
<CGS> 0
<TOTAL-COSTS> 13,475
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 229
<INCOME-PRETAX> (3,312)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,569)
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