<PAGE> 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
UNITED STATES
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 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 000-19480
PER-SE TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 58-1651222
(State or other (I.R.S. Employer
jurisdiction of
incorporation or Identification No.)
organization)
2840 MT. WILKINSON PARKWAY 30339
ATLANTA, GEORGIA (Zip code)
(Address of principal
executive offices)
</TABLE>
(770) 444-5300
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 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 ___ No [ ]
Indicate the number of shares of stock outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
SHARES OUTSTANDING
TITLE OF CLASS AT AUGUST 7, 2000
-------------- ------------------
<S> <C>
Common Stock $0.01 par value................................ 29,879,411 shares
Non-voting Common Stock $0.01 par value..................... 0 shares
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
PER-SE TECHNOLOGIES, INC.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I: FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets as of June 30, 2000 and
December 31, 1999....................................... 2
Consolidated Statements of Operations for the three and
six months ended June 30, 2000 and 1999................. 3
Consolidated Statements of Cash Flows for the six months
ended June 30, 2000 and 1999............................ 4
Notes to Consolidated Financial Statements.............. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 10
PART II: OTHER INFORMATION
Item 1. Legal Proceedings....................................... 16
Item 4. Submission of Matters to a Vote of Security Holders..... 16
Item 6. Exhibits and Reports on Form 8-K........................ 18
Index to Exhibits................................................ 20
</TABLE>
------------------------------------
THIS FORM 10-Q AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY THE
COMPANY OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933
AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. 15 U.S.C.A. SECTIONS 77Z-2 AND 78U-5 (SUPP.
1996). THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR
CURRENT EXPECTATIONS OF THE COMPANY AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL
AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. PROSPECTIVE INVESTORS ARE
CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE
PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS.
IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE IN FORWARD-LOOKING STATEMENTS ARE SET FORTH IN
THE SAFE HARBOR COMPLIANCE STATEMENT FOR FORWARD-LOOKING STATEMENTS INCLUDED AS
EXHIBIT 99.1 TO THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED MARCH 27, 2000,
WHICH IS INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES NO OBLIGATION
TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS,
THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS
OVER TIME.
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT PAR VALUE DATA)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
--------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 65,284 $ 74,354
Restricted cash........................................... 6,557 7,519
--------- ---------
Total cash............................................. 71,841 81,873
Accounts receivable, billed............................... 52,777 46,097
Accounts receivable, unbilled............................. 2,904 42,813
Other..................................................... 5,915 7,394
--------- ---------
Total current assets................................... 133,437 178,177
Property and equipment, net................................. 33,382 34,103
Intangible assets........................................... 48,094 46,446
Other....................................................... 5,677 6,291
--------- ---------
$ 220,590 $ 265,017
========= =========
CURRENT LIABILITIES:
Accounts payable.......................................... $ 10,488 $ 10,005
Accrued compensation...................................... 16,830 21,842
Accrued expenses.......................................... 20,357 26,449
Accrued litigation settlements............................ 2,862 4,043
Current portion of long-term debt......................... 2,175 2,138
--------- ---------
52,712 64,477
Deferred revenue.......................................... 21,305 20,396
--------- ---------
Total current liabilities.............................. 74,017 84,873
Long-term debt.............................................. 175,000 175,000
Other obligations........................................... 3,217 3,704
--------- ---------
Total liabilities...................................... 252,234 263,577
--------- ---------
Stockholders' Equity:
Preferred stock, no par value, 20,000 authorized; none
issued................................................. -- --
Common stock, voting, $0.01 par value, 200,000 authorized;
29,868 and 29,575 issued and outstanding in 2000 and
1999, respectively..................................... 299 296
Common stock, non voting, $0.01 par value, 600 authorized;
none issued............................................ -- --
Paid-in capital........................................... 774,270 771,864
Warrants.................................................. 1,495 1,495
Accumulated deficit....................................... (807,708) (772,215)
--------- ---------
Total stockholders' (deficit) equity................... (31,644) 1,440
--------- ---------
$ 220,590 $ 265,017
========= =========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 4
PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- --------------------
2000 1999 2000 1999
------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue........................................ $78,879 $ 82,357 $157,708 $163,730
------- -------- -------- --------
Salaries and wages............................. 47,082 53,769 99,340 106,923
Other operating expenses....................... 22,717 27,541 47,195 57,898
Depreciation................................... 4,483 5,654 8,447 12,440
Amortization................................... 2,388 2,248 4,807 4,515
Interest expense, net.......................... 3,659 3,879 7,312 7,783
Legal settlements.............................. -- 29,250 -- 29,250
------- -------- -------- --------
Total expenses............................ 80,329 122,341 167,101 218,809
------- -------- -------- --------
Loss before income taxes....................... (1,450) (39,984) (9,393) (55,079)
Income tax expense (benefit)................... 371 -- (743) (525)
------- -------- -------- --------
Loss from continuing operations................ (1,821) (39,984) (8,650) (54,554)
------- -------- -------- --------
Discontinued operations, net of tax:
Income from discontinued operations.......... -- 357 -- 661
Gain on sale of subsidiaries................. 9,241 4,017 10,895 4,487
------- -------- -------- --------
9,241 4,374 10,895 5,148
------- -------- -------- --------
Income (loss) before cumulative effect of
accounting change............................ 7,420 (35,610) 2,245 (49,406)
Cumulative effect of accounting change, net of
tax.......................................... -- -- (37,684) --
------- -------- -------- --------
Net income (loss)......................... $ 7,420 $(35,610) $(35,439) $(49,406)
======= ======== ======== ========
Basic net (loss) income per common share:
Loss from continuing operations.............. $ (0.06) $ (1.44) $ (0.29) $ (2.02)
Income from discontinued operations, net of
tax....................................... 0.31 0.16 0.36 0.19
Cumulative effect of accounting change, net
of tax.................................... -- -- (1.26) --
------- -------- -------- --------
Net income (loss)......................... $ 0.25 $ (1.28) $ (1.19) $ (1.83)
======= ======== ======== ========
Weighted average shares outstanding............ 29,868 27,775 29,812 27,046
======= ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.................................................... $(35,439) $(49,406)
Adjustments to reconcile net loss to net cash used for
operating activities:
Income from discontinued operations....................... -- (661)
Depreciation and amortization............................. 13,254 16,955
Gain on sale of subsidiaries.............................. (10,895) (4,814)
Cumulative effect of accounting change.................... 37,684 --
Non-cash legal settlement costs........................... -- 25,738
Changes in assets and liabilities, excluding effects of
acquisitions and divestitures:
Restricted cash........................................ 321 341
Accounts receivable, billed............................ (6,608) 3,587
Accounts receivable, unbilled.......................... 2,225 3,467
Accounts payable....................................... 483 (29)
Accrued compensation................................... (5,028) (2,620)
Accrued expenses....................................... (5,817) (671)
Accrued litigation settlements......................... (1,181) (7,219)
Deferred revenue....................................... 909 1,827
Other, net............................................. 1,866 1,015
-------- --------
Net cash used for continuing operations................ (8,226) (12,490)
Net cash used for discontinued operations.............. -- (4,617)
-------- --------
Net cash used for operating activities............... (8,226) (17,107)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment......................... (7,650) (4,541)
Software development costs.................................. (3,510) (3,609)
Proceeds from sale of subsidiaries, net..................... 10,895 12,934
Proceeds from sale of property and equipment................ 55 2,738
Acquisitions, net of cash acquired.......................... (970) --
-------- --------
Net cash (used for) provided by investing
activities.......................................... (1,180) 7,522
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock...................... 292 503
Proceeds from the exercise of stock options................. 82 181
Proceeds from borrowings.................................... -- --
Payments of debt............................................ (33) (66)
Deferred financing costs.................................... (5) (205)
-------- --------
Net cash provided by financing activities............ 336 413
-------- --------
CASH AND CASH EQUIVALENTS
Net change.................................................. (9,070) (9,172)
Balance at beginning of period.............................. 74,354 54,409
-------- --------
Balance at end of period.................................... $ 65,284 $ 45,237
======== ========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 6
PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Per-Se Technologies, Inc. (the "Company") are presented in accordance with the
requirements of Form 10-Q and Rule 10-01 of Regulation S-X. For further
information, the reader of this Form 10-Q may wish to refer to the audited
consolidated financial statements of the Company for the fiscal year ended
December 31, 1999 included in the Company's Annual Report on Form 10-K filed
March 27, 2000.
The unaudited condensed financial information has been prepared in
accordance with the Company's customary accounting policies and practices. In
the opinion of management, all adjustments, consisting of normal recurring
adjustments considered necessary for a fair presentation of results for the
interim period, have been included.
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, liabilities, revenues
and expenses. Actual results could differ from those estimates.
Basic net income (loss) per common share is based on the weighted average
number of shares of common stock outstanding during the period. Diluted net
income (loss) per common share is not presented as it is antidilutive. Stock
options and warrants are the only securities issued that would have been
included in the pro forma diluted earnings per share calculation.
As more thoroughly discussed in Note 2, the Medaphis Services Corporation
("Hospital Services") and Impact Innovations Group ("Impact") segments have been
presented as discontinued operations for all periods presented.
NOTE 2 -- DISCONTINUED OPERATIONS
On November 30, 1998, the Company completed the sale of Hospital Services
to NCO Group, Inc. ("NCO") for initial consideration of $107.5 million. During
the first quarter of 1999, the Company received additional consideration of $0.8
million based on the Hospital Services final closing balance sheet and payment
on certain Hospital Services accounts receivable retained by the Company. The
additional consideration resulted in the recognition of an additional gain of
$0.5 million, net of tax of $0.3 million.
In addition, the Company received a purchase price adjustment of $10.0
million cash from NCO on May 5, 2000 based on Hospital Services' achievement of
various operational targets in 1999. The purchase price adjustment resulted in
the recognition of an additional gain of approximately $9.2 million.
In 1999, the Company completed the sale of both divisions of Impact. The
Company sold the commercial division of Impact to Complete Business Solutions,
Inc. ("CBSI") effective April 15, 1999 for $14.4 million, net of the final
closing balance sheet adjustment of $0.6 million which was paid on July 16,
1999. The government division of Impact was sold on December 17, 1999 to J3
Technology Services Corp. for $46.5 million, including a purchase price
adjustment of $1.5 million received on March 30, 2000 based on the division's
tangible net worth at closing. The purchase price adjustment resulted in the
recognition of an additional gain of $1.5 million.
Pursuant to APB No. 30, Reporting the Results of Operations -- Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions, the consolidated financial
statements of the Company have been presented to reflect both Hospital Services
and Impact as discontinued operations for all periods presented.
The net operating results of these segments have been reported in the
Consolidated Statements of Operations as "Income from discontinued operations"
and the net cash flows have been reported in the Consolidated Statements of Cash
Flows as "Net cash used for discontinued operations."
5
<PAGE> 7
Summarized financial information for the discontinued operations is as
follows:
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
JUNE 30, 1999
-------------
IMPACT
--------------
(IN THOUSANDS)
<S> <C>
Revenue..................................................... $12,555
=======
Income from discontinued operations before income taxes..... 357
Income tax expense.......................................... --
-------
Income from discontinued operations, net of tax............. $ 357
=======
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, 1999
-------------
IMPACT
--------------
(IN THOUSANDS)
<S> <C>
Revenue..................................................... $33,177
=======
Income from discontinued operations before income taxes..... 661
Income tax expense.......................................... --
-------
Income from discontinued operations, net of tax............. $ 661
=======
</TABLE>
NOTE 3 -- RECENT ACQUISITION
On February 9, 2000, the Company acquired the outstanding capital stock of
Knowledgeable Healthcare Solutions, Inc. ("KHS") for consideration of $3.1
million, consisting of $1.1 million cash and $2.0 million of the Company's
Common Stock. In addition, the purchase agreement provides for a purchase price
adjustment of up to $6.0 million, payable in cash and the Company's Common
Stock, should KHS meet certain operational targets over the next three years.
KHS has developed a managed care software product that is used by the Company to
provide business management services to numerous independent physician
associations and sold as turnkey software to healthcare payers and providers.
The KHS acquisition was recorded using the purchase method of accounting
and, accordingly, the purchase price has been allocated to the assets acquired
and the liabilities assumed based on their estimated fair market value at the
date of acquisition. Approximately $2.9 million of the purchase price has been
allocated to intangible assets and will be amortized using the straight-line
method over five years. The operating results of KHS, which were not material to
the Company's operations, are included in the Company's Consolidated Statements
of Operations from the date of acquisition.
NOTE 4 -- CUMULATIVE EFFECT OF ACCOUNTING CHANGE
On December 3, 1999, the Securities and Exchange Commission (the
"Commission") issued Staff Accounting Bulletin Number 101, Revenue Recognition
in Financial Statements ("SAB 101"). SAB 101 summarizes certain of the
Commission's views in applying generally accepted accounting principles to
revenue recognition in financial statements. SAB 101 provides interpretative
guidance on the unbilled accounts receivable and related revenue recognition
within the Company's industry. The Commission's guidance encouraged the
accounting change to be reflected by the Company's quarter ended March 31, 2000.
Therefore, consistent with the Commission's guidance and changing industry
practice, the Company began recognizing revenue in its Physician Services
segment on an "as billed" basis January 1, 2000. The Company does not expect
this change to significantly impact annual recognized revenue amounts. There is
no effect on cash flow resulting from this change.
The change in accounting method resulted in the elimination of $37.7
million of unbilled accounts receivable. The one-time, cumulative non-cash
charge in the Company's statement of operations for the six months ended June
30, 2000 reflects the $22.7 million elimination of the unbilled accounts
receivable on a net
6
<PAGE> 8
of tax basis and a corresponding $15.0 million increase in the Company's
deferred tax valuation allowance. See Note 8 for further discussion of income
taxes.
NOTE 5 -- LEGAL MATTERS
The Company is subject to claims, litigation and official billing inquiries
in the ordinary course of its business. Within the Company's industry, federal
and state civil and criminal laws govern medical billing and collection
activities. These laws provide for various fines, penalties, multiple damages,
assessments and sanctions for violations, including possible exclusion from
federal and state healthcare programs.
On May 10, 1999, a motion by plaintiffs to reopen a putative class action
complaint filed by Ernest Hecht and Stephen D. Strandberger was granted by the
courts. During 1998, this case against the Company had been dismissed with
prejudice and without leave to amend. In May 2000, the appellate court upheld
the dismissal of the case against the Company without prejudice and without
leave to amend. The period for further appeals has expired without any further
appeal having been filed by the plaintiffs. This matter is effectively dismissed
without any adverse effect against the Company.
On January 8, 1997, the Commission notified the Company that it was
conducting a formal, non-public investigation into, among other things, former
officers and Company transactions including the restatements of the Company's
consolidated financial statements for the three months and year ended December
31, 1995 and its unaudited balance sheets as of March 31, 1996 and June 30,
1996. The Company has cooperated with the Commission during its investigation.
While the Company is unable to estimate the final outcome, the Company is
confident that resolution of the investigation is likely within a few months
with no material adverse effect on the Company.
In December 1995, the Company acquired Medical Management Sciences, Inc.
("MMS") (now a part of the Company's Physician Services segment). At
acquisition, a lawsuit was pending against MMS for the alleged breach of two
related billing and asset purchase contracts entered into by MMS in 1994. In
November 1996, a jury in that lawsuit returned a verdict that produced a net
award to MMS of approximately $900,000. The trial court reversed the net award
to MMS and awarded the plaintiffs approximately $1.2 million in 1998, which was
reduced to approximately $950,000 by an appeals court in May 2000. In July 2000,
MMS was granted a stay of the judgment against it pending a petition by MMS to
the U.S. Supreme Court.
The Company believes that it has meritorious defenses to the claims and
other issues asserted in existing legal matters. There can be no assurance that
existing or future claims, government investigations and legal matters will not
have an adverse effect on the Company. Since the Company is often unable to
estimate a range of awards or losses, if any, on pending legal matters, amounts
have not been reflected in the financial statements unless estimable and
probable.
NOTE 6 -- RESTRUCTURING AND OTHER CHARGES
The description of the type and amount of restructuring costs recorded and
applied against each reserve in the six months ended June 30, 2000 is as
follows:
<TABLE>
<CAPTION>
RESERVE RESERVE
BALANCE COSTS APPLIED BALANCE
DECEMBER 31, AGAINST JUNE 30,
1999 RESERVE 2000
------------ -------------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Lease termination costs............................. $3,528 $(376) $3,152
Severance........................................... 273 -- 273
------ ----- ------
$3,801 $(376) $3,425
====== ===== ======
</TABLE>
7
<PAGE> 9
NOTE 7 -- LONG TERM DEBT
Under the indenture governing the 9 1/2% $175 million of Senior Notes due
2005 (the "Notes"), the balance of the net sale proceeds, as defined, from the
sale of Hospital Services, the commercial division of Impact, the government
division of Impact or from the sale of any other asset having a fair value in
excess of $1.0 million, must be invested in the Company's business within 360
days of receipt of proceeds related to the sale. To the extent that such net
proceeds are not invested within 360 days, such amount constitutes "excess
proceeds." If the aggregate amount of excess proceeds is greater than $10.0
million, the Company is required to offer to repurchase the Notes at par with
such excess proceeds. As of August 14, 2000, aggregate excess proceeds did not
exceed $10.0 million.
NOTE 8 -- INCOME TAXES
As of June 30, 2000, the Company reassessed the recoverability of its
deferred tax asset. Based on its analysis, the Company determined a full
valuation allowance of $251.8 million against the deferred tax asset was
required. The increase in the valuation allowance of $15.0 million is directly
related to the elimination of the Company's unbilled accounts receivable (see
Note 4) and, as such, was recorded against the cumulative effect of accounting
change. When it becomes more likely than not that the Company will generate
sufficient taxable income to realize the deferred tax asset, the Company will
adjust this valuation allowance accordingly.
The Company recognized a $1.2 million tax benefit in the quarter ended
March 31, 2000 related to a state income tax refund offset by $371,000 related
to state tax payments in the quarter ended June 30, 2000.
NOTE 9 -- SEGMENT REPORTING
The Company's reportable segments are strategic business units that offer
different services and products. The Company provides its services and products
through its three operating segments: Physician Services, Application Software
and e-Health Solutions.
Physician Services provides business management services to physicians and
healthcare organizations, including clinical data collection, data input,
medical coding, billing, contract management, cash collections and accounts
receivable management. These services are designed to assist healthcare
providers with the business management functions associated with the delivery of
healthcare services, allowing physicians and hospital staff to focus on
providing quality patient care. These services also assist physicians and
healthcare organizations in improving cash flows and reducing administrative
costs and burdens.
The Application Software segment provides financial and clinical software
including patient scheduling, staff management, clinical information systems and
patient financial management software. These applications enable healthcare
organizations to simultaneously optimize the quality of care delivered and the
profitability of business operations.
The e-Health Solutions segment offers Internet-enabled and private network
connectivity to both integrated healthcare delivery networks and physician
practices, including electronic claims processing, referral submissions,
eligibility verification and other electronic and paper transaction processing.
In addition, e-Health Solutions offers physician practice management software as
an application service provider to physician practices.
The Company evaluates each segment's performance based on operating profit
or loss. The Company accounts for intersegment sales as if the sales were to
third parties.
8
<PAGE> 10
Information concerning the operations in these reportable segments is as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------------
2000 1999 2000 1999
------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenue:
Physician Services................................... $57,769 $ 61,462 $116,591 $122,919
Application Software................................. 15,251 15,920 29,603 31,113
e-Health Solutions................................... 8,600 7,868 17,087 15,448
Eliminations......................................... (2,741) (2,893) (5,573) (5,750)
------- -------- -------- --------
$78,879 $ 82,357 $157,708 $163,730
======= ======== ======== ========
Operating profit (loss)(1):
Physician Services................................... $ 2,624 $ (1,667) $ 2,704 $ (4,506)
Application Software................................. 1,962 168 270 (2,500)
e-Health Solutions................................... 1,000 (439) 1,905 (446)
Corporate............................................ (3,377) (4,917) (6,960) (10,594)
------- -------- -------- --------
$ 2,209 $ (6,855) $ (2,081) $(18,046)
======= ======== ======== ========
Interest expense, net.................................. $ 3,659 $ 3,879 $ 7,312 $ 7,783
======= ======== ======== ========
Restructuring and other charges (including legal
settlements):
Physician Services................................... $ -- $ 1,750 $ -- $ 1,750
Corporate............................................ -- 27,500 -- 27,500
------- -------- -------- --------
$ -- $ 29,250 $ -- $ 29,250
======= ======== ======== ========
Loss before income taxes............................. $(1,450) $(39,984) $ (9,393) $(55,079)
======= ======== ======== ========
Depreciation and amortization:
Physician Services................................... $ 3,778 $ 4,561 $ 7,110 $ 9,114
Application Software................................. 1,763 1,723 3,526 3,435
e-Health Solutions................................... 631 620 1,240 1,236
Corporate............................................ 699 998 1,378 3,170
------- -------- -------- --------
$ 6,871 $ 7,902 $ 13,254 $ 16,955
======= ======== ======== ========
Capital expenditures:
Physician Services................................... $ 3,026 $ 1,899 $ 4,075 $ 3,141
Application Software................................. 717 250 878 496
e-Health Solutions................................... 1,020 198 1,661 432
Corporate............................................ 671 79 1,036 472
------- -------- -------- --------
$ 5,434 $ 2,426 $ 7,650 $ 4,541
======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
JUNE 30, DECEMBER 31,
2000 1999
-------- ------------
(IN THOUSANDS)
<S> <C> <C>
Identifiable Assets:
Physician Services........................................ $ 78,466 $116,423
Application Software...................................... 42,975 39,265
e-Health Solutions........................................ 19,575 18,904
Corporate................................................. 79,574 90,425
-------- --------
$220,590 $265,017
======== ========
</TABLE>
---------------
(1) Includes depreciation and amortization expense; excludes legal settlements,
restructuring and other charges and interest expense, net.
9
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Per-Se Technologies, Inc. (the "Company"), a corporation organized in 1985
under the laws of the State of Delaware, is a global leader in delivering
technology-enabled business management services, financial and clinical software
solutions and Internet-enabled connectivity and e-health solutions to healthcare
providers and payers. The Company delivers its services and products through its
three operating segments: Physician Services, Application Software and e-Health
Solutions.
The Physician Services segment provides business management services to
physicians and healthcare organizations, including clinical data collection,
data input, medical coding, billing, contract management, cash collections and
accounts receivable management. These services are designed to assist healthcare
providers with the business management functions associated with the delivery of
healthcare services, allowing physicians and hospital staff to focus on
providing quality patient care. These services also assist physicians and
healthcare organizations in improving cash flows and reducing administrative
costs and burdens.
The Application Software segment provides financial and clinical software
including patient scheduling, staff management, clinical information systems and
patient financial management software. These applications enable healthcare
organizations to simultaneously optimize the quality of care delivered and the
profitability of business operations.
The e-Health Solutions segment offers Internet-enabled and private network
connectivity to both integrated healthcare delivery networks and physician
practices, including electronic claims processing, referral submissions,
eligibility verification and other electronic and paper transaction processing.
In addition, e-Health Solutions offers physician practice management software as
an application service provider to physician practices.
The Company markets its products and services primarily to integrated
healthcare delivery networks, hospitals, physician practices, long-term care
facilities, home health providers, healthcare payers and managed care
organizations.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30,
1999
Revenue. Revenue classified by the Company's different operating segments
is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
2000 1999
------- -------
(IN THOUSANDS)
<S> <C> <C>
Physician Services.......................................... $57,769 $61,462
Application Software........................................ 15,251 15,920
e-Health Solutions.......................................... 8,600 7,868
Eliminations................................................ (2,741) (2,893)
------- -------
$78,879 $82,357
======= =======
</TABLE>
Physician Services' revenue decreased 6.0% to $57.8 million in the second
quarter of 2000 from $61.5 million in the same period of 1999. The revenue
decline is primarily attributable to Company and client-initiated
discontinuances throughout 1999. Client discontinuances initiated by the Company
are a result of management's ongoing review and evaluation of marginally
profitable clients that yield returns unacceptable to management. However, the
rate of client-initiated discontinuances continues to trend down. The Company
continues to add new business and new clients to offset the impact of client
discontinuances.
Application Software's revenue decreased by 4.2% for the second quarter of
2000 as compared to the second quarter of 1999. The decline is primarily the
result of lower consulting services revenue in certain
10
<PAGE> 12
product lines. The company was able to generate incremental consulting fees for
Year 2000 related services in 1999 compared to 2000. Higher maintenance revenue
in 2000 partially offset the lower consulting revenue resulting in the slight
overall revenue decline.
e-Health Solutions' revenue increased 9.3% in the second quarter of 2000
compared to the same period in 1999. The increase is a result of higher volume
in external claims processing at both the statement processing center ("Laser
Center") and the electronic exchange center ("Per-Se Exchange").
Operating Profit (Loss). Operating profit (loss), which excludes legal
settlements, restructuring and other charges and interest expense, classified by
the Company's reportable segments is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
2000 1999
------- -------
(IN THOUSANDS)
<S> <C> <C>
Physician Services.......................................... $ 2,624 $(1,667)
Application Software........................................ 1,962 168
e-Health Solutions.......................................... 1,000 (439)
Corporate................................................... (3,377) (4,917)
------- -------
$ 2,209 $(6,855)
======= =======
</TABLE>
Physician Services experienced a significant increase in operating profit
for the quarter ended June 30, 2000 as compared to the operating loss for the
same period in 1999. The increase is attributable to management's efforts to
focus on profitable business, as well as workforce reductions, process
improvements and productivity enhancements initiated in the first half of the
year.
Application Software's operating profit rose from $0.2 million in the
second quarter of 1999 to $2.0 million in second quarter of 2000. The increase
is attributable management's focus on cost containment, specifically in the
areas of salaries and wages and marketing expenses, as well as other operational
improvements.
e-Health Solutions' operating results improved from a loss of $0.4 million
in the second quarter of 1999 to a profit of $1.0 million in second quarter of
2000. This is attributable to the revenue increases discussed above as well as
lower operating expenses and salaries and wages expenses.
The Company's overhead decreased 31.3% for the three months ended June 30,
2000 as compared to the to the same period in 1999. This decrease is related to
management's continued commitment to reduce Corporate overhead costs where
feasible.
Interest. Net interest expense was $3.7 million in the second quarter of
2000 as compared with $3.9 million in the second quarter of 1999. The decrease
is attributable to interest income of $1.0 million generated from the short-term
investment of cash offset by interest related to the deferred portion of a prior
period legal settlement.
Legal Settlements. In June 1999, the Company recorded legal settlement
charges of $21.5 million and $6.0 million related to litigation arising from the
Company's June 1996 acquisition of Health Data Sciences Corporation ("HDS") and
December 1995 acquisition of Medical Management Sciences, Inc. ("MMS"),
respectively. In addition, the Company paid $1.8 million in June 1999 to settle
contract claims against PST Emergency Medicine Services, Inc. (the "Emergency
Medicine" division), which arose in January 1998 from a 1996 contract dispute in
the ordinary course of business.
Income Taxes. The Company recognized a $371,000 tax expense in the quarter
ended June 30, 2000 related to state tax payments.
11
<PAGE> 13
Discontinued Operations. Summarized financial information for the
discontinued operations for the three-month period ended June 30, 1999 is as
follows (the 1999 results for Impact include the commercial division through
April 15, 1999 -- the effective date of the sale):
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
JUNE 30, 1999
--------------
IMPACT
--------------
(IN THOUSANDS)
<S> <C>
Revenue..................................................... $12,555
=======
Income from discontinued operations before income taxes..... 357
Income tax expense.......................................... --
-------
Income from discontinued operations, net of tax............. $ 357
=======
</TABLE>
On November 30, 1998, the Company completed the sale of Hospital Services
to NCO Group, Inc. ("NCO") for initial consideration of $107.5 million. During
the first quarter of 1999, the Company received additional consideration of $0.8
million based on the Hospital Services final closing balance sheet and payment
on certain Hospital Services accounts receivable retained by the Company. The
additional consideration resulted in the recognition of an additional gain of
$0.5 million, net of tax of $0.3 million. In addition, the Company received a
purchase price adjustment of $10.0 million cash from NCO on May 5, 2000 based on
Hospital Services' achievement of various operational targets in 1999. The
purchase price adjustment resulted in the recognition of an additional gain of
approximately $9.2 million.
In 1999, the Company completed the sale of both divisions of Impact. The
Company sold the commercial division of Impact to Complete Business Solutions,
Inc. ("CBSI") effective April 15, 1999 for $14.4 million, net of the final
closing balance sheet adjustment of $0.6 million which was paid on July 16,
1999. The government division of Impact was sold on December 17, 1999 to J3
Technology Services Corp. for $46.5 million, including a purchase price
adjustment of $1.5 million received in March 2000 based on the division's
tangible net worth at closing. The purchase price adjustment resulted in the
recognition of an additional gain of $1.5 million.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999
Revenue. Revenue classified by the Company's different operating segments
is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------
2000 1999
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Physician Services.......................................... $116,591 $122,919
Application Software........................................ 29,603 31,113
e-Health Solutions.......................................... 17,087 15,448
Eliminations................................................ (5,573) (5,750)
-------- --------
$157,708 $163,730
======== ========
</TABLE>
Physician Services' revenue decreased 5.1% to $116.6 million in the six
months ended June 30, 2000 from $122.9 million in the same period of 1999. The
decline in revenue is primarily attributable to Company and client-initiated
discontinuances throughout 1999. Client discontinuances initiated by the Company
are a result of management's ongoing review and evaluation of marginally
profitable clients that yield returns unacceptable to management. However, the
rate of client-initiated discontinuances continues to trend down. The Company
continues to add new business and new clients to offset the impact of client
discontinuances.
Application Software's revenue declined by 4.9% from $31.1 million for the
six months ended June 30, 1999 to $29.6 million for the same period in 2000. The
decline is attributable to higher maintenance revenue offsetting lower software
revenue in certain product lines.
12
<PAGE> 14
e-Health Solutions' revenue increased by 10.6% from $15.4 million for the
six months ended June 30, 1999 to $17.1 million for the same period in 2000. The
increase is a result of increased volume of external claims processing at both
the Laser Center and Per-Se Exchange.
Operating Profit (Loss). Operating profit (loss), which excludes legal
settlements, restructuring and other charges and interest expense, classified by
the Company's reportable segments is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 1998
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
Physician Services.......................................... $ 2,704 $ (4,506)
Application Software........................................ 270 (2,500)
e-Health Solutions.......................................... 1,905 (446)
Corporate................................................... (6,960) (10,594)
------- --------
$(2,081) $(18,046)
======= ========
</TABLE>
Physician Services' $2.7 million operating profit for the six months ended
June 30, 2000 reflects significant improvement as compared to a $4.5 million
operating loss for the same period in 1999. The improvement is attributable to
management's efforts to focus on profitable business, as well as workforce
reductions, process improvements and productivity enhancements initiated in the
first half of the year. In addition, depreciation expense was approximately $2.1
million lower due to a large number of assets that became fully depreciated
during the first half of 1999.
Application Software had an operating profit of $0.3 million for the first
six months of 2000 as compared to a loss of $2.5 million for the same period in
1999. The increase is attributable management's focus on cost containment,
specifically in the areas of salaries and wages and marketing expenses, as well
as other operational improvements.
e-Health Solutions' operating profit improved to $1.9 million for the first
six months of 2000 from a loss of $0.4 million for the same period in 1999. This
is attributable to the revenue increases previously discussed as well as lower
operating expenses and salaries and wages expenses.
The decrease in the Company's overhead for the six months ended June 30,
2000 as compared to the same period in 1999 is related to management's efforts
to create more efficient processes and reduce Corporate overhead where feasible.
Interest. Net interest expense was $7.3 million for the six-month period
ended June 30, 2000 as compared to $7.8 million in the same period of 1999. The
decrease is attributable to interest income of $1.9 million generated from the
short-term investment of cash offset by interest related to the deferred portion
of a prior period legal settlement.
Legal Settlements. In June 1999, the Company recorded legal settlement
charges of $21.5 million and $6.0 million related to the Company's June 1996
acquisition of HDS and December 1995 acquisition of MMS, respectively. In
addition, the Company paid $1.8 million in June 1999 to settle contract claims
against the Emergency Medicine division, which arose in January 1998 in the
ordinary course of business.
Income Taxes. As of June 30, 2000, the Company reassessed the
recoverability of its deferred tax asset. Based on its analysis, the Company
determined a full valuation allowance of $251.8 million against the deferred tax
asset was required. The increase in the valuation allowance of $15.0 million is
directly related to the elimination of the Company's unbilled accounts
receivable (see Cumulative Effect of Accounting Change discussion below) and, as
such, was recorded against the cumulative effect of accounting change. When it
becomes more likely than not that the Company will generate sufficient taxable
income to realize the deferred tax asset, the Company will adjust this valuation
allowance accordingly.
The Company recognized a $1.2 million tax benefit in the quarter ended
March 31, 2000 related to a state income tax refund offset by $371,000 related
to state tax payments in the quarter ended June 30, 2000.
13
<PAGE> 15
Discontinued Operations. Summarized financial information for the
discontinued operations for the six-month period ended June 30, 1999 is as
follows (the 1999 results for Impact include the commercial division through
April 15, 1999 -- the effective date of the sale):
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
IMPACT
-------
<S> <C>
Revenue..................................................... $33,177
=======
Income from discontinued operations before income taxes..... 661
Income tax expense.......................................... --
-------
Income from discontinued operations, net of tax............. $ 661
=======
</TABLE>
Cumulative Effect of Accounting Change. On December 3, 1999, the
Securities and Exchange Commission (the "Commission") issued Staff Accounting
Bulletin Number 101, Revenue Recognition in Financial Statements ("SAB 101").
SAB 101 summarizes certain of the Commission's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
SAB 101 provides interpretative guidance on the unbilled accounts receivable and
related revenue recognition within the Company's industry. The Commission's
guidance encouraged the accounting change to be reflected by the Company's
quarter ended March 31, 2000. Therefore, consistent with the Commission's
guidance and changing industry practice, the Company began recognizing revenue
in its Physician Services segment on an "as billed" basis January 1, 2000. The
Company does not expect this change to significantly impact annual recognized
revenue amounts. There is no effect on cash flow resulting from this change.
The change in accounting method resulted in the elimination of $37.7
million of unbilled accounts receivable. The one-time, cumulative non-cash
charge in the Company's statement of operations for the six months ended June
30, 2000 reflects the $22.7 million elimination of the unbilled accounts
receivable on a net of tax basis and a corresponding $15.0 million increase in
the Company's deferred tax valuation allowance.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $59.4 million at June 30, 2000,
including $65.3 million of unrestricted cash and cash equivalents. The $33.9
million decrease in working capital from December 31, 1999 is primarily the
result of the timing of payments on accruals, the payment of semi-annual
interest payments required under the $175 million of 9 1/2% Senior Notes due
2005 (the "Notes") and investment in the Company's operations offset by cash
flow generated by operations.
The Company completed its divestiture of non-core operations in December
1999. The Company sold Hospital Services on November 30, 1998 for $103.2 million
net proceeds. In February 1999, the Company received additional proceeds of $0.5
million based on Hospital Services' tangible net worth at closing. In addition,
the Company received a purchase price adjustment of $10.0 million cash from NCO
in May 2000 based on Hospital Services' achievement of various operational
targets in 1999.
The Company sold the commercial division of Impact effective April 15, 1999
for $14.4 million, net of the final closing balance sheet adjustment of $0.6
million that was paid on July 16, 1999. The Company sold the government division
of Impact on December 17, 1999 for approximately $46.5 million, including a
purchase price adjustment of $1.5 million received in March 2000 based on the
division's tangible net worth at closing.
Under the Indenture governing the Notes, the balance of the net proceeds,
as defined, from the sale of Hospital Services, the two divisions of Impact or
the sale of any other asset having a fair value in excess of $1.0 million, must
be invested in the Company's business within 360 days of receipt of proceeds
related to the sale. To the extent that such net proceeds are not invested
within 360 days, such amount constitutes "excess proceeds." If the aggregate of
excess proceeds is greater than $10.0 million, the Company is required to offer
to repurchase the Notes at par with such excess proceeds.
14
<PAGE> 16
As of June 30, 2000, uninvested net proceeds related to the sale of
non-core operations and other assets totaled approximately $69.1 million. The
net proceeds are the result of various asset sales and, as such, under the
Indenture, must be invested in the Company's business by varying points in time
during 2000. In addition, the Company will have to invest a minimum of
approximately $45.2 million by December 11, 2000 to preclude the Company's
obligation to make an offer to repurchase the Notes at par in the first quarter
of 2001. As of August 14, 2000, aggregate excess proceeds did not exceed $10.0
million.
The Company believes that its current cash flow is sufficient to permit the
Company to meet its operating expenses, service its debt requirements as they
become due in the next twelve months and for the long term and to invest in the
business.
15
<PAGE> 17
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to claims, litigation and official billing inquiries
in the ordinary course of its business. Within the Company's industry, federal
and state civil and criminal laws govern medical billing and collection
activities. These laws provide for various fines, penalties, multiple damages,
assessments and sanctions for violations, including possible exclusion from
federal and state healthcare programs.
On May 10, 1999, a motion by plaintiffs to reopen a putative class action
complaint filed by Ernest Hecht and Stephen D. Strandberger was granted by the
courts. During 1998, this case against the Company had been dismissed with
prejudice and without leave to amend. In May 2000, the appellate court upheld
the dismissal of the case against the Company without prejudice and without
leave to amend. The period for further appeals has expired without any further
appeal having been filed by the plaintiffs. This matter is effectively dismissed
without any adverse effect against the Company.
On January 8, 1997, the Commission notified the Company that it was
conducting a formal, non-public investigation into, among other things, former
officers and Company transactions including the restatements of the Company's
consolidated financial statements for the three months and year ended December
31, 1995 and its unaudited balance sheets as of March 31, 1996 and June 30,
1996. The Company has cooperated with the Commission during its investigation.
While the Company is unable to estimate the final outcome, the Company is
confident that resolution of the investigation is likely within a few months
with no material adverse effect on the Company.
In December 1995, the Company acquired Medical Management Sciences, Inc.
("MMS") (now a part of the Company's Physician Services segment). At
acquisition, a lawsuit was pending against MMS for the alleged breach of two
related billing and asset purchase contracts entered into by MMS in 1994. In
November 1996, a jury in that lawsuit returned a verdict that produced a net
award to MMS of approximately $900,000. The trial court reversed the net award
to MMS and awarded the plaintiffs approximately $1.2 million in 1998, which was
reduced to approximately $950,000 by an appeals court in May 2000. In July 2000,
MMS was granted a stay of the judgment against it pending a petition by MMS to
the U.S. Supreme Court.
The Company believes that it has meritorious defenses to the claims and
other issues asserted in existing legal matters. There can be no assurance that
existing or future claims, government investigations and legal matters will not
have an adverse effect on the Company. Since the Company is often unable to
estimate a range of awards or losses, if any, on pending legal matters, amounts
have not been reflected in the financial statements unless estimable and
probable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on May 4, 2000. The
following directors were elected at such meeting:
<TABLE>
<CAPTION>
NOMINEE BOARD TERM VOTES FOR VOTES AGAINST VOTES WITHHELD
------- ------------ ---------- ------------- --------------
<S> <C> <C> <C> <C>
Roderick M. Hills.................... Through 2000 24,600,842 -- 2,252,239
David R. Holbrooke, M.D.............. Through 2000 24,590,596 -- 2,262,485
David E. McDowell.................... Through 2000 24,600,684 -- 2,252,397
Kevin E. Moley....................... Through 2000 24,590,659 -- 2,262,422
John C. Pope......................... Through 2000 24,590,638 -- 2,262,443
Allen W. Ritchie..................... Through 2000 24,590,729 -- 2,262,352
C. Christopher Trower................ Through 2000 24,590,533 -- 2,262,548
</TABLE>
A proposal to increase the number of shares of the Company's Common Stock
reserved for issuance under the Company's Second Amended and Restated Stock
Option Plan from 2,652,152 shares to 5,652,152 shares, which is an increase of
3,000,000 shares, also was voted upon at the Annual Meeting of Stockholders, and
was approved by the stockholders. Votes cast were 11,891,852 for, 3,090,176
against and 26,316 abstained.
16
<PAGE> 18
A proposal to increase the number of shares of the Company's Common Stock
reserved for issuance under the Company's Non-Employee Director Stock Option
Plan from 33,333 shares to 283,333 shares, which is an increase of 250,000
shares, also was voted upon at the Annual Meeting of Stockholders, and was
approved by the stockholders. Votes cast were 13,723,773 for, 1,252,404 against
and 32,168 abstained.
17
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT
-------------- --------
<C> <S> <C>
2.1 -- Stock Purchase Agreement dated as of October 15, 1998,
between Registrant and NCO Group, Inc. (incorporated by
reference to Exhibit 2.1 to Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998).
2.2 -- Stock Purchase Agreement dated as of April 20, 1999, among
Complete Business Solutions, Inc., E-Business Solutions.com,
Inc., Impact Innovations Holdings, Inc. and Registrant
(incorporated by reference to Exhibit 2.1 to Current Report
on Form 8-K filed on May 5, 1999).
2.3 -- Stock Purchase Agreement dated as of November 4, 1999, among
J3 Technology Services Corp., Impact Innovations Holdings,
Inc., Impact Innovations Government Group, Inc. and
Registrant (incorporated by reference to Exhibit 2.3 to
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
3.1 -- Restated Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.1 to Annual Report
on Form 10-K for the year ended December 31, 1999).
3.2 -- Restated By-laws of Registrant (incorporated by reference to
Exhibit 3.2 to Annual Report on Form 10-K for the year ended
December 31, 1999).
4.1 -- Indenture dated as of February 20, 1998, among Registrant,
as Issuer, the Subsidiary Guarantors named in the Indenture
and State Street Bank and Trust Company, as Trustee
(including form of note) (incorporated by reference to
Exhibit 10.3 to Current Report on Form 8-K filed on March 3,
1998).
4.2 -- Warrant Agreement dated as of July 8, 1998, between
Registrant and SunTrust Bank, Atlanta, as Warrant Agent
(including form of warrant certificate) (incorporated by
reference to Exhibit 4.2 to Registration Statement on Form
8-A filed on July 21, 1998).
4.3 -- Rights Agreement dated as of February 11, 1999, between
Registrant and American Stock Transfer & Trust Company
(including form of rights certificates) (incorporated by
reference to Exhibit 4 to Current Report on Form 8-K filed
on February 12, 1999).
4.4 -- First Amendment to Rights Agreement dated as of February 11,
1999, between Registrant and American Stock Transfer & Trust
Company, entered into as of May 4, 2000 (incorporated by
reference to Exhibit 4.4 to Quarterly Report of Form 10-Q
for the quarter ended March 31, 2000).
27 -- Financial Data Schedule (for SEC use only)
99.1 -- Safe Harbor Compliance Statement for Forward-Looking
Statements. (incorporated by reference to Exhibit 99.1 to
Annual Report on Form 10-K for the year ended December 31,
1999).
</TABLE>
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter ended
June 30, 2000.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Per-Se Technologies, Inc.
(Registrant)
By: /s/ WAYNE A. TANNER
--------------------------------------
Wayne A. Tanner
Executive Vice President and
Chief Financial Officer
By: /s/ MARY C. BLACKADAR
--------------------------------------
Mary C. Blackadar
Vice President and Controller
(Chief Accounting Officer)
Date: August 14, 2000
19
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DOCUMENT
-------------- --------
<C> <S> <C>
2.1 -- Stock Purchase Agreement dated as of October 15, 1998,
between Registrant and NCO Group, Inc. (incorporated by
reference to Exhibit 2.1 to Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998).
2.2 -- Stock Purchase Agreement dated as of April 20, 1999, among
Complete Business Solutions, Inc., E-Business Solutions.com,
Inc., Impact Innovations Holdings, Inc. and Registrant
(incorporated by reference to Exhibit 2.1 to Current Report
on Form 8-K filed on May 5, 1999).
2.3 -- Stock Purchase Agreement dated as of November 4, 1999, among
J3 Technology Services Corp., Impact Innovations Holdings,
Inc., Impact Innovations Government Group, Inc. and
Registrant (incorporated by reference to Exhibit 2.3 to
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
3.1 -- Restated Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.1 to Annual Report
on Form 10-K for the year ended December 31, 1999).
3.2 -- Restated By-laws of Registrant (incorporated by reference to
Exhibit 3.2 to Annual Report on Form 10-K for the year ended
December 31, 1999).
4.1 -- Indenture dated as of February 20, 1998, among Registrant,
as Issuer, the Subsidiary Guarantors named in the Indenture
and State Street Bank and Trust Company, as Trustee
(including form of note) (incorporated by reference to
Exhibit 10.3 to Current Report on Form 8-K filed on March 3,
1998).
4.2 -- Warrant Agreement dated as of July 8, 1998, between
Registrant and SunTrust Bank, Atlanta, as Warrant Agent
(including form of warrant certificate) (incorporated by
reference to Exhibit 4.2 to Registration Statement on Form
8-A filed on July 21, 1998).
4.3 -- Rights Agreement dated as of February 11, 1999, between
Registrant and American Stock Transfer & Trust Company
(including form of rights certificates) (incorporated by
reference to Exhibit 4 to Current Report on Form 8-K filed
on February 12, 1999).
4.4 -- First Amendment to Rights Agreement dated as of February 11,
1999, between Registrant and American Stock Transfer & Trust
Company, entered into as of May 4, 2000 (incorporated by
reference to Exhibit 4.4 to Quarterly Report of Form 10-Q
for the quarter ended March 31, 2000).
27 -- Financial Data Schedule (for SEC use only)
99.1 -- Safe Harbor Compliance Statement for Forward-Looking
Statements (incorporated by reference to Exhibit 99.1 to
Annual Report on Form 10-K for the year ended December 31,
1999).
</TABLE>
20
