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 December 31, 1996
OR
|_| TRANSITIONAL REPORT PURSUANT TO SECTION 13 0R 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number 0-17292
ACCUHEALTH, INC.
(Exact name of registrant as specified in its charter)
New York 13-3176233
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1575 Bronx River Avenue
Bronx, New York 10460
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 518-9511
Indicate by check mark (X) whether the registrant 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___
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at February 11, 1997
Common stock, par value $.01 per share 1,479,594 Shares
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page No.
--------
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
December 31, 1996 and March 31, 1996 3
Condensed Consolidated Statements of Operations
for the three and nine months ended
December 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows
for the nine months ended December 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
SIGNATURES 13
2
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996
----------------- --------------
<S> <C> <C>
ASSETS:
Current Assets:
Cash $ 1,548 $ 2,694
Accounts receivable, net 5,067,099 4,459,693
Inventories 750,705 621,838
Prepaid expenses and other current assets 85,247 103,114
----------- -----------
Total Current Assets 5,904,599 5,187,339
Revenue producing equipment, net 564,966 670,352
Fixed assets, net 1,685,352 1,758,646
Other assets 24,388 34,620
----------- -----------
Total Assets $ 8,179,305 $ 7,650,957
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Notes payable - revolving credit facility $ 2,856,745 $ 2,413,392
Notes payable - trade 106,020 294,598
Accounts payable 2,051,195 1,512,836
Accrued expenses and other current liabilities 1,080,794 1,021,422
Reserve for contingencies -- 200,000
Capital lease facility 357,500 71,500
Current portion of other capital lease obligations 171,561 354,209
----------- -----------
Total Current Liabilities 6,623,815 5,867,957
Capital lease - facility, less current portion -- 375,375
Other capital lease obligations, less current portion 101,518 112,977
----------- -----------
Total Liabilities 6,725,333 6,356,309
----------- -----------
Stockholders' Equity:
Preferred stock, $.01 par value; authorized 3,650,000
shares; no shares issued and outstanding -- --
6% Redeemable cumulative convertible preferred stock
$.01 par value; $2,713,500 liquidation preference, authorized,
issued and outstanding 1,350,000 shares 13,500 13,500
Common stock, $.01 par value; authorized 15,000,000
shares; issued 1,787,598 and 1,630,233 shares, respectively 17,876 16,302
Additional paid-in capital 6,167,187 6,007,938
Deficit (4,120,271) (4,118,772)
----------- -----------
2,078,292 1,918,968
Less treasury stock (308,004 shares) at cost 624,320 624,320
----------- -----------
Total Stockholders' Equity 1,453,972 1,294,648
----------- -----------
Total Liabilities and Stockholders' Equity $ 8,179,305 $ 7,650,957
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
December 31, December 31,
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 4,221,491 $ 3,716,056 $ 12,304,599 $ 11,393,854
Cost of goods sold 2,458,407 1,953,813 7,165,648 6,204,292
------------ ------------ ------------ ------------
Gross profit 1,763,084 1,762,243 5,138,951 5,189,562
Selling, general and administrative
expenses 1,581,594 1,690,179 4,646,849 5,517,942
------------ ------------ ------------ ------------
Operating income (loss) 181,490 72,064 492,102 (328,380)
Interest expense 122,200 155,979 373,235 452,308
------------ ------------ ------------ ------------
Net income (loss) $ 59,290 $ (83,915) $ 118,867 $ (780,688)
============ ============ ============ ============
Net primary and fully diluted
income (loss) per share:
Primary $ .01 $ (.10) -- $ (.72)
Fully diluted $ .01 $ (.10) -- $ (.72)
============ ============ ============ ============
Weighted number of common shares
and equivalents outstanding
Primary 1,410,300 1,267,436 1,374,513 1,250,570
------------ ------------ ------------ ------------
Fully diluted 1,410,300 1,267,436 1,374,513 1,250,570
------------ ------------ ------------ ------------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
------------
1996 1995
---- ----
<S> <C> <C>
Operating activities
Net income (loss) $ 118,867 $(760,688)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Amortization of financing costs 41,492 109,647
Depreciation and amortization 304,754 307,604
Write off of Revenue Producing Equipment 15,800 --
Changes in operating assets and liabilities:
Accounts receivable (607,406) (780,826)
Inventories (128,867) (92,157)
Prepaid expenses and other assets 17,867 3,246
Other assets (31,250) (28,285)
Accounts payable and notes payable trade 640,684 574,170
Reserve for contingencies (200,000) --
Accrued expenses and other current liabilities 59,372 283,396
--------- ---------
Cash provided by (used in) operating activities 231,313 (403,893)
--------- ---------
Investing activities
Notes receivable -- 54,165
Purchase of revenue producing equipment -- --
Purchase of fixed assets (23,740) (31,978)
--------- ---------
Cash (used in) provided by investing activities (23,740) 22,187
--------- ---------
Financing activities
Proceeds from sale of redeemable convertible preferred shares -- 62,500
Proceeds from note payable - revolving credit facility 443,353 785,076
Principal payments on note payable -trade (271,957) (147,406)
Principal payments on capital lease - facility (89,375) (53,625)
Payments on other capital lease obligations (290,740) (216,666)
Due to prior officers -- (189,222)
--------- ---------
Cash (used in) provided by financing activities (208,719) 240,657
--------- ---------
Net decrease in cash (1,146) (141,049)
Cash at beginning of period 2,694 147,307
--------- ---------
Cash at end of period $ 1,548 $ 6,258
========= =========
Supplemental disclosure of cash flow information:
Interest paid $ 331,743 $ 387,700
========= =========
Noncash investing and financing activities:
Additions to capital leases $ 96,633 $ 123,505
========= =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
December 31, 1996
Note 1 - Basis of Presentation
The condensed consolidated financial statements include the accounts of
Accuhealth, Inc. and its subsidiaries, all of which are wholly-owned (the
"Company"). Significant intercompany accounts and transactions have been
eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and principally with the instructions to Form 10-Q and
Article 10 of Regulation S-X. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the periods reported have been included. Operating results for
the nine-month period ended December 31, 1996 may not be indicative of the
results for the full fiscal year.
These financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Form 10-KSB for the
fiscal year ended March 31, 1996 filed with the Securities and Exchange
Commission.
The balance sheet at March 31, 1996 has been derived from the audited financial
statements at that date.
Management has formulated certain planned actions to mitigate the effects of the
Company's working capital deficiency and generate sufficient cash to meet its
operating needs through at least December 31, 1997. The plan included, among
other matters, increasing the borrowing capacity under the revolving credit
facility, obtaining more favorable terms and financing from vendors, reducing
corporate expenses and increasing services to managed care providers. The
Company expects to extend its current financing agreement with more favorable
terms, obtained more favorable terms with vendors and has reduced corporate
expenses. However, no assurances can be made that management will be successful
in achieving its plans or that the Company will continue or improve in
profitability. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Accounts Receivable
Accounts receivable are principally due from third party payers, primarily
governmental agencies (Medicare and Medicaid), managed care organizations and
private insurance companies.
Inventories
Inventories consist of over-the-counter and prescription drugs, infusion
products and supplies, and home health care equipment and supplies and are
priced at the lower of cost or market using the first-in, first-out ("FIFO")
method.
Earnings Per Share
For the three months and nine months ended December 31, 1996 and 1995, primary
loss per share has been calculated by dividing the net loss applicable to common
stock by the weighted average of common stock and common stock equivalents
outstanding during the period. Net income (loss) applicable to
6
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
December 31, 1996
common stock is derived by reducing net income (loss) by redeemable preferred
stock dividends. Dividends attributable to the redeemable preferred stock were
$40,500, and $40,323, respectively, for the three months ended December 31, 1996
and 1995 and $ 121,500, and $117,704, respectively, for the nine months ended
December 31, 1996 and 1995. Net income (loss) applicable to common stockholders
for the three months ended December 31, 1996 and 1995, respectively, were
$59,290 and $(83,915 ) and $118,867 and $(780,688 ) for the nine months ended
December 31, 1996 and 1995, respectively. On a fully diluted basis, both the net
loss and shares outstanding, if applicable, are adjusted to assume the
conversion of convertible preferred stock from the date of issue and for the
incremental option shares for fully diluted purposes (See Note 4). For the
periods ended December 31, 1996 and 1995, their effect was anti-dilutive and
therefore not included in the calculation.
Income Taxes
The Company files consolidated Federal, combined New York State and combined New
York City income tax returns. The Company's method of accounting for income
taxes is the liability method required by FASB Statement No. 109 "Accounting for
Income Taxes."
Major Customer
The Company's revenues from one customer accounted for 29.9% and 21.0% of the
Company's net sales for the three months ended December 31, 1996 and 1995,
respectively, and 26.4% and 14.9% for the nine months ended December 31, 1996
and 1995, respectively. At December 31, 1996, this customer represented
approximately 18.8% of the Company's gross receivables.
Note 2 - Notes Payable and Capital Lease Obligations
Notes payable - trade
The Company's trade notes outstanding which arose in connection with the
purchase of pharmaceutical inventories are as follows:
(A) In December 1995, the Company issued an unsecured note payable to a trade
creditor in the principal amount of $348,616. The note, with interest at
12% per annum, was paid in full during the quarter ended December 31, 1996.
(B) During the three months ended June 30, 1996, the Company converted a
portion of its accounts payable into a note payable to a trade creditor in
the principal amount aggregating $46,949. The outstanding balance at
December 31, 1996 was $28,004. This note is payable in monthly installments
of approximately $4,200 beginning August 24, 1996 which includes interest
at 10.9% per annum. During the quarter ended December 31, 1996, the Company
converted a portion of its accounts payable into a note payable to this
same trade creditor in the principal amount aggregating $102,325. The
outstanding balance at December 31, 1996 was $78,016. This note is payable
in monthly installments of approximately $9,200 beginning October 15, 1996
which includes interest at 13.5% per annum. At December 31, 1996, the
Company has classified the principal balance as a current note
payable-trade.
7
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
December 31, 1996
Notes payable - revolving credit facility
In April 1994, the Company entered into a Loan and Security Agreement (the
"Agreement") with Rosenthal and Rosenthal ("Rosenthal") to borrow, under certain
conditions and terms, up to $2,500,000 at an interest rate of prime (8-1/4% at
December 31, 1996) plus 4-7/8%. Borrowings under the Agreement are
collateralized by certain assets of the Company, including accounts receivables,
inventories, equipment and fixtures. The Company's ability to use this revolving
credit facility is dependent upon the level of its eligible receivables, as
defined in the Agreement. In addition, the Company granted Rosenthal warrants to
purchase 70,000 shares of the Company's common stock at $2.00 per share.
Effective February 1, 1996, the Company and Rosenthal amended the Loan and
Security Agreement (the "Amendment"). The Amendment extends the Agreement
through April 28, 1997 and allows the Company to borrow, under certain
conditions and terms up to $3,500,000 (based on eligible accounts receivable, as
defined) at an interest rate of prime plus 3-7/8%. The revolving credit facility
can be terminated by Rosenthal absent a default, at any time upon one
hundred-twenty days notice. The Company granted Rosenthal an extension of their
current warrants to purchase 70,000 shares of the Company's common stock, at
$2.00 per share until October 31, 1997. In addition, the Company granted
Rosenthal warrants to purchase an additional 30,000 shares of common stock at
$2.50 per share expiring on April 28, 1998. The Company is required to pay a
facility fee of $35,000 per annum.
The revolving credit facility bears interest at variable market rates and as
such the carrying value approximates its fair value.
Capital lease facility
The Company leases its principal office and warehouse facility (the "Facility")
and certain equipment, furniture and fixtures, rental equipment and leasehold
improvements under capital lease agreements which extend through April 1999.
The Facility was obtained under a ten-year lease (the "Lease Agreement") with
the New York City Industrial Development Agency (the "Agency") as lessor. The
Agency issued to National Westminster Bank, U.S.A. (now "Fleet") $1,072,500
principal amount of its Industrial Development Bonds (the "Bonds") pursuant to
an Indenture of Mortgage and Agreement dated April 1, 1989 (the "Indenture"),
which created a lien on the Facility. The Company also paid $227,500 in order
for the Agency to purchase the warehouse. This amount and other acquisition
costs are capitalized as land and building under capital lease.
At the end of the term of the lease, the Company may purchase the Facility for
one dollar so long as all terms and conditions of the lease have been met. The
Lease Agreement and Guaranty Agreement require the Company and its subsidiaries
to comply with certain covenants, including but not limited to, maximum debt to
worth ratio, maximum allowable losses and debt service coverage ratio. The
Company's non-compliance with such covenants was waived by Fleet through April
1, 1997 with a principal payment of $71,500 in July, 1996. Since the Company has
not requested nor received from Fleet a waiver of non-compliance with such
covenants occurring after April 1, 1997, the entire balance
8
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
December 31, 1996
outstanding has been classified as current on the accompanying condensed
consolidated balance sheet at December 31, 1996.
In lieu of rent, the Company pays principal on the Bonds in quarterly
installments of $17,875, plus interest at the rate of prime (8 1/4% at December
31, 1996) plus 1%. On April 28, 1994, in conjunction with the Rosenthal
financing, the Company made an additional principal payment of $143,000. A final
balloon payment of $232,375 plus interest thereon is due on April 1, 1999. Each
of the Company's wholly-owned subsidiaries has guaranteed the Company's
obligations under the lease. The Lease Agreement and Guaranty Agreement also
restrict the payment of cash dividends in any one year to an aggregate amount
not to exceed 25% of the Company's net income for the immediately preceding
year.
Other capital leases
The Company leases durable medical equipment under capital lease agreements
which extend through March 31, 2000.
Note 3 - Contingencies
The City of New York conducted an audit relating to General Corporation and
Commercial Rent taxes for the years 1990 through 1992. The Company has settled
with the City of New York during the quarter ended September 30, 1996 for
approximately $100,000 and reclassified the liability to accrued expenses and
other current liabilities from the reserve for contingencies. As of September
30, 1996, as a result of the settlement with the City of New York, the remaining
balance of the reserve for contingencies has been reclassified to accrued
expenses and other current liabilities.
An agency of New York State is conducting a review of Medicaid reimbursement
with respect to two categories of products for the years 1990 through 1993. The
Company has not been advised as to whether any claim will be made.
In June 1995, a former employee commenced an action against the Company alleging
that the Company breached plaintiff's employment agreement. The Company intends
to deny the principal allegations in the Complaint and to defend this action
vigorously. Management and counsel are still assessing the legal implications at
this time but currently management believes that this action will not have any
material adverse financial impact on the Company. The minimum probable liability
as estimated by management of approximately $15,000 is included in accrued
expenses and other current liabilities at December 31, 1996.
Management believes that the above matters will be settled without any material
adverse financial impact to the Company.
Note 4 - 6% Redeemable Cumulative Convertible Preferred Stock
On December 14, 1994 and January 30, 1995, the Company completed the sale at
$2.00 per share of 1,325,000 shares of redeemable convertible preferred stock
("Preferred Stock") with a 6% per annum
9
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
December 31, 1996
cumulative dividend. During the quarter ended December 31, 1995, the Company
sold at $2.50 per share 25,000 additional shares of Preferred Stock to certain
officers and directors of the Company. The Preferred Stock is convertible at any
time at the option of the holder, subject to anti-dilution adjustments, into
1,350,000 shares of common stock. The Company has reserved 1,350,000 shares of
common stock for such conversion. At any time on or after December 31, 1995,
subject to certain conditions, such as the registration of the underlying common
stock under the Securities Act of 1933, compliance with the terms of the
Preferred Stock and any other agreement with the holders of the Preferred Stock
and the payment of all dividends that are accrued and unpaid on the Preferred
Stock as of the Redemption Date, the Company may redeem all or any portion of
the Preferred Stock then outstanding. For each share that is called for
redemption, the Company shall pay $3.00 per share from December 31, 1995 through
December 31, 1997 and $4.00 per share on or after January 1, 1998. The holders
of the Preferred Stock are entitled to voting rights equivalent to that of the
common stock. The Preferred Stock is senior to the common stock in the event of
a liquidation of the Company. The liquidation preference is $2.00 per share plus
accrued and unpaid dividends.
The Preferred Stock was subject to mandatory redemption requirements of up to
$4.00 per share plus accrued dividends. As of June 16, 1995, the holders of
Preferred Stock agreed to modify their stockholder agreements to negate the
mandatory redemption requirements. This modification eliminates the need for
recognition of accretion effective June 16, 1995, and results in the Preferred
Stock being classified as equity rather than debt.
The Company is obligated to pay annual dividends of $.12 per share on its
1,350,000 outstanding shares of Preferred Stock. Such dividends accrue daily,
are payable each June 1 and December 1 and, at the election of the Company, may
be paid in shares of Common Stock valued in accordance with the terms of such
stock. Dividends on the Company's Preferred Stock are payable in preference and
priority to any payment of any dividends on the common stock.
The December 1, 1996 dividend is being paid out in 104,509 shares of common
stock. Accrued and unpaid dividends from December 2, 1996 to December 31, 1996
of $13,500 are included in accrued expenses and other current liabilities at
December 31, 1996.
10
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
This Management's Discussion and Analysis should be read in conjunction with the
condensed consolidated financial statements of the Company and related notes
included elsewhere in this Form 10-Q.
Results of Operations
Three Months Ended December 31, 1996 and 1995
Net sales increased approximately $505,000 or 14% from the comparable 1995
quarter to $4.2 million for the three months ended December 31, 1996. The
increase was principally the result of increases of approximately $484,000 and
$140,000 in the Company's institutional pharmacy business and oral medication
revenues, respectively.
Gross profit for each of the three months ended December 31, 1996 and 1995 was
approximately $1.76 million representing approximately 41.8% of net sales for
the three months ended December 31, 1996 as compared to 47.4% for the comparable
period during the prior year. Gross profit, as a percentage of net sales,
decreased primarily due to an increase in lower margin institutional pharmacy
business.
Selling, general and administrative expenses ("SG &A") were approximately $1.58
and $1.69 million or approximately 37.5% and 45.4% of net sales for the three
months ended December 31, 1996 and 1995, respectively. The decrease was
principally the result of reductions of approximately $90,000 and $44,000 for
marketing costs and professional fees, respectively.
Nine Months Ended December 31, 1996 and 1995
Net sales for the nine months ended December 31, 1996 increased approximately
$911,000 or 8.0% from the comparable 1995 period to $12.3 million. The increase
was the result of an increase of approximately $1,552,000 and $86,000 in the
Company's institutional pharmacy business and oral medications revenues,
respectively, partially offset by a decrease in the Company's infusion services
revenues of approximately $683,000.
Gross profit for the nine months ended December 31, 1996 and 1995 was
approximately $5.14 and $5.19 million, respectively, representing approximately
41.8% of net sales for the nine months ended December 31, 1996 as compared to
45.5% for the nine months ended December 31, 1995. The percentage decrease was
primarily due to an increase in lower margin institutional pharmacy business.
Selling, general and administrative expenses ("SG &A") were approximately $4.65
and $5.52 million or approximately 37.8% and 48.4% of net sales for the nine
months ended December 31, 1996 and 1995, respectively. The decrease was
principally the result of reductions of approximately $217,000, $211,000,
$155,000, $90,000 and $65,000 for professional fees, marketing costs, certain
clinical and administrative salaries, recruiting costs and insurance,
respectively.
11
<PAGE>
Financial Condition
The Company's cash provided by operating activities during the nine months ended
December 31, 1996 was $231,313. As of December 31, 1996, the Company had a
working capital deficiency of $(719,216) as compared to $(680,618) at March 31,
1996. As described in Note 2 of the financial statements, the entire capital
lease obligation for the Company's capital lease facility of $357,500 has been
classified as a current liability at December 31, 1996. The Company's working
capital deficiency at December 31, 1996 would be $(415,341) if the capital lease
were not classified as a current liability on the December 1996 balance sheet.
The Company is current in the payment of principal and interest with respect to
such capital lease.
Management has formulated certain planned actions to mitigate the working
capital deficiency and generate sufficient cash to meet its operating needs
through at least December 31, 1997. The plans include seeking an acquisition,
increasing the borrowing capacity under the Company's existing revolving credit
facility and continuing to obtain better terms and financing from vendors and
reducing corporate expenses. The Company expects to extend its current financing
agreement with more favorable terms, obtained more favorable terms with vendors
and reduced corporate expenses. However, no assurances can be made that
management will be successful in achieving its plan or that the Company will
continue or improve in profitability.
On April 28, 1994, the Company obtained a $2.5 million maximum commitment
working capital facility from Rosenthal and Rosenthal ("Rosenthal") and used
funds borrowed under that facility to reduce its indebtedness to Fleet under the
capital lease-facility and to trade and other creditors. Interest on the greater
of $1,250,000 or the outstanding balance is payable monthly at the rate of 47/8%
over the prime rate. Effective February 1, 1996, the Company agreed to an
amendment of the Loan and Security Agreement, which allows the Company to
borrow, under certain conditions and terms up to $3,500,000 at an interest rate
of prime plus 37/8%. See, "Note 2 - Notes payable - revolving credit facility."
During the quarter ended September 30, 1996, the Company made a settlement of
approximately $100,000 with the City of New York as a result of an audit
relating to General Corporation and Commercial Rent taxes for the years 1990
through 1992. Payment terms have not been yet been agreed upon.
Accounts receivable is principally due from third party payers, primarily
governmental agencies (Medicare and Medicaid) and private insurance companies.
Disclosure Regarding Forward-Looking Statements
This document contains certain forward-looking statements, containing the words
"believes," "anticipates," "expects," and words of similar import, based upon
current expectations that involve a number of known and unknown business risks
and uncertainties. The factors that could cause results to differ materially
include the following: national and regional economic conditions, changes in the
reimbursement practices of third party payers, changes in laws affecting the
availability of health care services for the needy that reduce the funding
available for such services, risks related to the expansion of the Company's
business, whether through acquisitions or internal growth, losses of key
executives or other employees, and other risks and uncertainties described in
the Company's Annual Report on form 10-KSB filed with the SEC for the year ended
March 31, 1996.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ACCUHEALTH, INC.
Date: February 14, 1997 By: /s/Glenn C. Davis
-----------------------
Glenn C. Davis, as
President and Chief Executive Officer
Date: February 14, 1997 By: /s/Gary S. LaPorta
-----------------------
Gary S. LaPorta, as
Treasurer, Chief Financial Officer
and Chief Accounting Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,548
<SECURITIES> 0
<RECEIVABLES> 5,376,099
<ALLOWANCES> 309,580
<INVENTORY> 750,705
<CURRENT-ASSETS> 5,904,599
<PP&E> 4,619,311
<DEPRECIATION> 2,368,993
<TOTAL-ASSETS> 8,179,305
<CURRENT-LIABILITIES> 6,623,815
<BONDS> 0
0
13,500
<COMMON> 17,876
<OTHER-SE> 6,167,187
<TOTAL-LIABILITY-AND-EQUITY> 8,179,305
<SALES> 12,304,599
<TOTAL-REVENUES> 12,304,599
<CGS> 7,165,648
<TOTAL-COSTS> 7,165,648
<OTHER-EXPENSES> 4,646,849
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 373,235
<INCOME-PRETAX> 492,102
<INCOME-TAX> 0
<INCOME-CONTINUING> 118,867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 118,867
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
