<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
COMMISSION FILE NUMBER 0-19600
CORE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2828817
(I.R.S. EMPLOYER IDENTIFICATION NO.)
(STATE OF OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
18881 VON KARMAN AVENUE, SUITE 1750, IRVINE, CALIFORNIA 92715
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 442-2100
Indicate by check "X" 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 X No
On August 9, 1996, there were 6,862,068 shares of the Registrant's Common
Stock outstanding.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CORE, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets.................................................. 3
Consolidated Condensed Statements of Operations........................................ 5
Consolidated Condensed Statements of Cash Flows........................................ 6
Notes to Consolidated Condensed Financial Statements................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................................... N/A
Item 2. Changes in Securities.................................................................. N/A
Item 3. Defaults Upon Senior Securities........................................................ N/A
Item 4. Submission of Matters to a Vote of Security Holders.................................... N/A
Item 5. Other Information...................................................................... N/A
Item 6. Exhibits and Reports on Form 8-K....................................................... 12
Signatures...................................................................................... 13
</TABLE>
2
<PAGE>
CORE, INC
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
(NOTE 1) (UNAUDITED)
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 1,005,807
Cash pledged as collateral.......................... 106,000 $ 45,500
Customer advances................................... 286,550 281,650
Investments available-for-sale...................... 1,531,610
Accounts receivable, net of allowance for doubtful
accounts of $170,337 in 1995 and $171,925 at June
30, 1996........................................... 2,987,356 5,313,215
Notes receivable from officers...................... 35,507 93,808
Notes receivable from affiliates (Note 2)........... 1,092,450
Prepaid expenses and other current assets........... 499,921 1,219,163
----------- -----------
Total current assets.................................. 6,452,751 8,045,786
Property and equipment, net........................... 3,155,234 4,802,043
Cash pledged as collateral............................ 192,000 192,000
Deposits and other assets............................. 178,402 256,991
Goodwill, net of accumulated amortization of $17,000
in 1995 and $52,200 at June 30, 1996................. 1,929,885 1,903,072
Intangibles, net...................................... 286,927 246,635
----------- -----------
Total assets.......................................... $12,195,199 $15,446,527
=========== ===========
</TABLE>
See accompanying notes
3
<PAGE>
CORE, INC
CONSOLIDATED CONDENSED BALANCE SHEETS--CONTINUED
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
------------ -----------
(NOTE 1) (UNAUDITED)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft.................................... $ 173,834
Advances under revolving line of credit........... 1,411,978
Accounts payable.................................. $ 846,156 2,011,484
Accrued expenses.................................. 1,525,623 1,418,301
Accrued payroll................................... 184,795 256,080
Accrued restructuring costs....................... 130,498 52,808
Deferred income taxes............................. 68,316 68,316
Current portion of notes payable.................. 155,994 27,995
Current portion of obligations to former share-
holders.......................................... 298,509 343,529
Current portion of capital lease payments......... 91,159 85,949
------------ -----------
Total current liabilities........................... 3,301,050 5,850,274
Long-term obligations to former shareholders, net of
current portion.................................... 745,106 261,671
Capital lease obligations, net of current portion... 71,969 52,282
Deferred rent, net of current portion............... 279,317 269,382
Deferred income taxes............................... 149,500 149,500
Stockholders' equity:
Preferred stock, no par value, authorized 500,000
shares: no shares outstanding
Common stock, $0.10 par value per share; authorized
10,000,000 shares: issued and outstanding 4,794,403
at December 31, 1995 and 4,861,796 at June 30,
1996............................................... 479,440 486,188
Additional paid-in capital.......................... 18,052,547 18,255,169
Deferred compensation............................... (51,120) (51,120)
Cumulative unrealized gain on investments available-
for-sale........................................... 30,975
Accumulated deficit................................. (10,863,585) (9,826,819)
------------ -----------
Total stockholders' equity.......................... 7,648,257 8,863,418
------------ -----------
Total liabilities and stockholders' equity.......... $ 12,195,199 $15,446,527
============ ===========
</TABLE>
See accompanying notes
4
<PAGE>
CORE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------- -----------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1996 1995 1996
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Revenues...................... $4,881,294 $6,559,345 $9,609,946 $13,142,904
Cost of services.............. 3,056,185 3,847,994 6,173,122 7,786,976
---------- ---------- ---------- -----------
Gross profit.................. 1,825,109 2,711,351 3,436,824 5,355,928
Operating expenses:
General and administrative.. 1,109,349 1,495,449 2,299,565 2,899,103
Sales and marketing......... 305,164 430,981 687,195 898,323
Restructuring costs......... 557,515
Merger costs and expenses... 8,154 436,104
Depreciation and amortiza-
tion....................... 209,521 289,656 442,083 567,567
---------- ---------- ---------- -----------
Total operating expenses...... 1,632,188 2,216,086 4,422,462 4,364,993
Income (loss) from opera-
tions........................ 192,921 495,265 (985,638) 990,935
Other income (expense):
Interest income............. 64,268 29,392 141,752 74,759
Interest expense............ (6,037) (26,961) (57,376) (45,412)
Realized gain (loss) on sale
of investments available-
for-sale................... 1,386 (1,663) 16,003
Other income................ 2,760 5,520 481
---------- ---------- ---------- -----------
60,991 3,817 88,233 45,831
---------- ---------- ---------- -----------
Net income (loss)............. $ 253,912 $ 499,082 $ (897,405) $ 1,036,766
========== ========== ========== ===========
Net income (loss) per common
share........................ $ 0.05 $ 0.09 $ (0.19) $ 0.18
========== ========== ========== ===========
Weighted average number of
common shares outstanding.... 4,740,000 5,741,000 4,740,000 5,741,000
========== ========== ========== ===========
</TABLE>
See accompanying notes
5
<PAGE>
CORE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------
1995 1996
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)................................ $ (897,405) $ 1,036,766
Adjustments to reconcile net income (loss) to net
cash used in operating activities
Depreciation and amortization.................. 479,458 611,857
Provision for doubtful accounts................ 15,000
Realized gain on sale of investments available-
for-sale...................................... (16,003)
Decrease in obligations to former sharehold-
ers........................................... (198,100)
Changes in operating assets and liabilities
Increase in accounts receivable.............. (284,493) (2,325,859)
(Increase) decrease in prepaid expenses and
other current assets........................ 116,124 (327,179)
(Increase) decrease in customer advances..... (4,900) 4,900
Increase (decrease) in cash overdraft........ (301,367) 173,834
Increase (decrease) in accounts payable and
accrued expenses............................ (158,793) 1,041,666
------------ -------------
NET CASH USED IN OPERATING ACTIVITIES............ (1,036,376) 1,882
INVESTING ACTIVITIES
Additions to property and equipment............ (513,436) (2,183,174)
Additions to goodwill.......................... (8,387)
Deferred acquisition costs..................... (392,063)
Decrease (increase) in cash pledged as collat-
eral.......................................... (135,116) 60,500
Purchases of investments available-for-sale.... (3,988,041)
Sales of investments available-for-sale........ 7,879,679 1,516,638
Increase to notes receivable from officers..... (21,675) (58,301)
Advances to affiliates......................... (1,092,450)
(Increase) decrease in deposits and other as-
sets.......................................... (570) 20,640
------------ -------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVI-
TIES............................................ 3,220,841 (2,136,597)
FINANCING ACTIVITIES
Net borrowings (repayments) under bank revolv-
ing line of credit............................ (1,200,000) 1,411,978
Payments on officer's notes.................... (200,000)
Payments on obligations to former sharehold-
ers........................................... (240,315)
Payments on notes payable...................... (150,904) (127,999)
Payments on capital lease obligations.......... (43,814) (24,897)
Deferred offering costs........................ (99,229)
Issuance of common stock upon exercise of stock
options and warrants.......................... 494 209,370
------------ -------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVI-
TIES............................................ (1,594,224) 1,128,908
------------ -------------
Net increase (decrease) in cash and cash equiva-
lents........................................... 590,241 (1,005,807)
Cash and cash equivalents at beginning of peri-
od.............................................. -- 1,005,807
============ =============
CASH AND CASH EQUIVALENTS AT END OF PERIOD....... $ 590,241 --
============ =============
Interest paid.................................... $ 73,941 $ 72,392
============ =============
</TABLE>
See accompanying notes
6
<PAGE>
CORE, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1996
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission, but do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. The balance sheet at December 31, 1995 has been
derived from the audited financial statements of CORE, INC. (the "Company") at
that date.
In the opinion of management, all adjustments, (consisting of only normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the six-month period ended June 30, 1996 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the consolidated
financial statements for the year ended December 31, 1995 contained in the
Company's annual report filed on Form 10-K (File #0-19600) with the Securities
and Exchange Commission on April 1, 1996.
NOTE 2--SUBSEQUENT EVENT
On May 10, 1996, the Company entered into an Asset Purchase Agreement (the
"AmHealth Agreement") to acquire substantially all of the assets (excluding
accounts receivable) and operations of AmHealth, Inc. ("AmHealth"). On July
24, 1996, the Company terminated the AmHealth Agreement. As a result of this
termination, the Company expects to incur a charge to earnings during the
three months ending September 30, 1996, which is preliminarily estimated to be
between $500,000 and $1,000,000 in connection with transaction costs incurred
in relation to the AmHealth Agreement. In addition, the Company intends to
write-off, during the three months ending September 30, 1996, a $1,000,000
loan it made to AmHealth during the quarter ended March 31, 1996 because there
is currently substantial doubt about AmHealth's ability to repay the loan.
7
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
CORE, INC. ("CORE" or "the Company") is a national provider of managed
disability and health care benefits management services. The Company was
incorporated in 1984 under the name Peer Review Analysis, Inc. ("PRA") to
provide physician-intensive utilization management services to commercial
insurance companies and self-insured employers. PRA became a publicly-held
entity in December 1991 with the completion of an initial public offering. In
March 1995 PRA completed the CMI/PRA Merger with Core Management, Inc.
("CMI"). CMI provides managed disability services, including benefits analysis
and consulting services and health care benefits utilization review and case
management services. CMI's utilization review and case management services
with respect to mental health and substance abuse cases were acquired in an
acquisition in March 1993. The CMI/PRA Merger has been accounted for as
pooling of interests, and consequently the financial statements of the Company
have been retroactively restated to include the financial position and results
of operations of CMI for all periods presented. In July 1995, the Company
changed its name to CORE, INC., and in October 1995 the Company acquired Cost
Review Services, Inc. ("CRS") a provider of bill audit and case management
services in the workers' compensation market.
The Company provides managed disability services (which consist of the
Company's WorkAbility(R) program as well as its bill audit and analytic
consulting services), specialty physician and behavioral health review
services and health care benefits utilization review and case management
services. These services are provided principally to self-insured employers,
third-party administrators and insurance carriers, and the Company is
typically compensated for these services either on a per review (i.e., per
case), hourly or to a lesser extent per enrollee basis. In a limited number of
cases, the Company's compensation varies with cost savings realized by the
client as a result of the Company's services. Also included in managed
disability services revenue is a limited amount (5% of revenue for the six
months ended June 30, 1996) of licensing revenue attributable to license
grants by the Company of the medical protocol portion of the WorkAbility
software program. A significant portion of the Company's revenues have
historically been derived from a limited number of key clients.
CURRENT DEVELOPMENTS
On May 10, 1996, CORE entered into an Asset Purchase Agreement (the
"AmHealth Agreement") to acquire substantially all of the assets and
operations of AmHealth, Inc. (excluding its accounts receivable). AmHealth is
a management services organization that manages occupation health clinics and
on-site industrial medical facilities in California. In connection with the
proposed acquisition, in the first quarter of 1996 the Company made a $1.0
million loan (the "AmHealth Loan") to AmHealth.
On July 24, 1996, the Company terminated the AmHealth Agreement. As a result
of such termination, the Company expects to incur an estimated one-time charge
to earnings of between $0.5 million and $1.0 million during the three months
ending September 30, 1996 in connection with the write-off of transaction
costs related to the proposed AmHealth acquisition. In addition, because there
is substantial doubt about AmHealth's ability to repay the AmHealth Loan, the
Company intends to write-off the AmHealth Loan during the three months ending
September 30, 1996 which will result in an additional non-recurring charge to
earnings of $1.0 million.
On April 8, 1996, CORE announced that it had been selected (subject to
negotiation of a definitive service agreement) by Bell Atlantic Corporation to
provide managed disability services, including utilization of CORE's
WorkAbility program, for approximately 57,000 employees. The Company and Bell
Atlantic are currently negotiating the agreement. On August 1, 1996, CORE
began providing such services to Bell Atlantic.
On April 30, 1996, the Company announced its negotiations with respect to
the Company's providing long-term administrative and managerial service to
Continental FirstCare, a MSO which is affiliated with an independent physician
association (IPA) of approximately 75 occupational health facilities in
California. These services are expected to commence during the summer of 1996.
8
<PAGE>
On August 9, 1996, the Company completed a public offering of 2,000,000
shares of Common Stock through a group of underwriters managed by Smith Barney
Inc. and Cowen & Company. The public offering price was $8.00 per share. CORE
intends to use the net proceeds from this offering for investments in its
operating capacity and for working capital and general corporate purposes.
RESULTS OF OPERATIONS
The following table sets forth certain statement of operations data for the
periods indicated expressed as a percentage of revenues:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------- ----------------
1995 1996 1995 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenue..................................... 100.0% 100.0% 100.0% 100.0%
Cost of services............................ 62.7 58.7 64.3 59.3
Gross profit................................ 37.3 41.3 35.7 40.7
General and administrative.................. 22.7 22.8 23.9 22.1
Sales and marketing......................... 6.3 6.6 7.2 6.8
</TABLE>
The following table sets forth the contribution to total revenues of each of
the Company's principal service lines for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
----------------------------- ------------------------------
1995 1996 1995 1996
-------------- -------------- -------------- ---------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Specialty physician and
behavioral health
review................. $2,072 42.4% $2,219 33.8% $4,331 45.1% $ 4,544 34.6%
Utilization review and
case management........ 1,574 32.2 1,769 27.0 3,142 32.7 3,679 28.0
Managed disability
(including
WorkAbility(R),
analytic and bill
audit)................. 1,235 25.4 2,571 39.2 2,137 22.2 4,920 37.4
------ ----- ------ ----- ------ ----- ------- -----
$4,881 100.0% $6,559 100.0% $9,610 100.0% $13,143 100.0%
====== ===== ====== ===== ====== ===== ======= =====
</TABLE>
Revenues. Revenues for the three months ended June 30, 1996 increased by
$1,678,000 (34%) from $4,881,000 in 1995 to $6,559,000 in 1996. For the six
months ended June 30, 1996 revenues increased by $3,533,000 (37%) from
$9,610,000 in 1995 to $13,143,000 in 1996. The increase in revenues can be
attributed to the number of referrals processed in each of the Company's
principal service lines which increased over the prior year comparative
period. Approximately $1,336,000 (80%) for the three months ended June 30,
1996 and $2,783,000 (79%) for the six months ended June 30, 1996 of the
Company's increase in revenues came from growth in WorkAbility, analytic and
bill audit services. During 1995, CORE added Hughes Electronic Corporation as
a key WorkAbility client and increased its services to smaller corporate
clients under the Company's distribution relationship with CIGNA Insurance.
Additionally, with the acquisition of CRS in October 1995, CORE expanded its
ability to service the workers' compensation market with bill audit services.
During the six months ended June 30, 1996 the Company's top five clients
represented 29% of revenues compared to 32% during the six months ended June
30, 1995. Chrysler Corporation accounted for approximately 10% of revenue for
the six months ended June 30, 1995. No single client represented more than 10%
of total revenues in the six months ended June 30, 1996.
9
<PAGE>
Cost of services. Cost of services for the Company include direct expenses
associated with the delivery of its review services, including salaries for
professional, clerical and license support staff, the cost of physician
reviewer consultants and telephone expense. Cost of services increased for the
three months ended June 30, 1996 by $792,000 (26%) from $3,056,000 in 1995 to
$3,848,000 in 1996. Cost of services for the six months ended June 30, 1996
increased $1,614,000 (26%) from $6,173,000 in 1995 to $7,787,000 in 1996. The
increase is primarily the result of additional costs associated with the
acquisition of CRS as well as increased payroll costs associated with
processing a higher volume of referrals and increased staffing levels required
to service new and growing WorkAbility clients.
During the six months ended June 30, 1996 CORE's cost of services increased
by only 26% to service a 37% increase in revenue. Accordingly, gross profit
performance improved from 36% for the six months ended June 30, 1995 to 41%
for the six months ended June 30, 1996. This improvement is due to the
contribution to profit margin received from the operations of CRS which were
purchased in October 1995 as well as improvement due to efficiencies obtained
as the result of the CMI/PRA Merger which included a consolidation of the
companies' benefit plans and greater economies of scale related to higher
revenues.
General and administrative expenses. General and administrative expenses for
the three months ended June 30, 1996 increased $386,000 (35%) from $1,109,000
in 1995 to $1,495,000 in 1996. General and administrative expenses for the six
months ended June 30, 1996 increased $600,000 (26%) from $2,299,000 in 1995 to
$2,899,000 in 1996. Expenses were increased due to higher costs associated
with additional staffing in the accounting and information services areas to
support the growth of the Company. Additionally, general and administrative
expenses have increased due to the purchase of CRS in October 1995.
General and administrative expenses decreased as a percentage of revenue
from 24% for the six months ended June 30, 1995 to 22% for the six months
ended June 30, 1996. This improvement is generally due to efficiencies
obtained as the result of the CMI/PRA Merger which included a consolidation of
the companies' benefit plans and greater economies of scale related to higher
revenues.
Sales and marketing expenses. Sales and marketing expenses include but are
not limited to salaries for sales and account management, sales commissions
and travel expense. Sales and marketing expenses also include costs designed
to increase revenues, such as participation in and attendance at industry
trade shows and conferences. Sales and marketing expenses for the three months
ended June 30, 1996 increased $126,000 (41%) from $305,000 in 1995 to $431,000
in 1996. Sales and marketing expenses for the six months ended June 30, 1996
increased $211,000 (31%) from $687,000 in 1995 to $898,000 in 1996. The
increase is primarily due to increased travel expenses and increased payroll
due to staffing increases to support the marketing department. The Company's
sales and marketing strategy focuses the efforts of an industry known senior
management team and a smaller sales and marketing staff on fewer but
significantly larger sales prospects.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 1996 the Company's cash and cash
equivalents decreased by $1,006,000. For this period operating activities
provided $2,000 primarily due to net income of $1,037,000 and an increase in
accounts payable of $1,042,000, as reduced by an increase of $2,326,000 in
accounts receivable. Due to the continued growth of the Company, there is a
broader client base than in prior years that has consequently led the Company
to experience a slower accounts receivable collection rate. Approximately 90%
of the increase in accounts payable is due to payables relating to the startup
of an office in Silver Spring, Maryland to service the Company's contract with
Bell Atlantic (see "Current Developments," above.) The Company's investing
activities used $2,080,000 primarily due to the $1,000,000 note receivable due
from AmHealth (see "Current Developments," above) and $2,183,000 for the
funding of equipment and furniture purchases and leasehold improvements, as
offset by the sale of investments available-for-sale of $1,517,000.
Approximately 40% of the funding of equipment and furniture purchases and
leasehold improvements is due to the start up of the office in Sliver Spring,
Maryland. The Company's financing activities provided $1,129,000 for this
period primarily due to borrowings of $1,412,000 from the Company's line of
credit.
10
<PAGE>
At June 30, 1996 the Company had available $2,500,000 on its line of credit
under which $1,412,000 of principal was outstanding. The line of credit will
be further utilized to meet short-term demands for cash that fluctuate based
on the timing of collections on accounts receivable.
The Company plans to finance its operations and working capital requirements
with the proceeds of the August 1996 stock offering, earnings from operations,
investments on hand and other sources of available funds, including the
Company's available line of credit of $2,500,000. The Company presently
believes that these resources will be sufficient to meet its liquidity and
funding requirements through at least the year 1997.
11
<PAGE>
PART II.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. The following exhibits are included:
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
11.1* Statement re: Computation of Per Share Earnings for the three and
six months ended June 30, 1996.
27* Financial Data Schedule
</TABLE>
- --------
* Filed herewith
(b) Reports on Form 8-K.
The Company did not file any Reports on Form 8-K during the three months
ended June 30, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Core, Inc.
/s/ William E. Nixon
By: ---------------------------------
William E. Nixon
Chief Financial Officer, Treasurer
and
Executive Vice President (Duly
authorized
officer and Principal Financial
Officer)
Dated: August 14, 1996
13
<PAGE>
EXHIBIT 11.1
CORE, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------------- -----------------------
1995 1996 1995 1996
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding..... 4,740,000 4,840,000 4,740,000 4,840,000
Shares issuable on assumed ex-
ercise of dilutive options and
warrants--based on treasury
stock method using average
market price.................. 901,000 901,000
---------- ---------- ---------- -----------
Total........................ 4,740,000 5,741,000 4,740,000 5,741,000
========== ========== ========== ===========
Net income (loss).............. $ 253,912 $ 499,082 $ (897,405) $ 1,036,766
========== ========== ========== ===========
Net income (loss) per share.... $ 0.05 $ 0.09 $ (0.19) $ 0.18
========== ========== ========== ===========
Fully diluted:
Average shares outstanding..... 4,740,000 4,840,000 4,740,000 4,840,000
Shares issuable on assumed ex-
ercise of dilutive options and
warrants--based on treasury
stock method using average
market price.................. 901,000 901,000
---------- ---------- ---------- -----------
Total........................ 4,740,000 5,741,000 4,740,000 5,741,000
========== ========== ========== ===========
Net income (loss).............. $ 253,912 $ 499,082 $ (897,405) $ 1,036,766
========== ========== ========== ===========
Net income (loss) per share.... $ 0.04 $ 0.11 $ (0.19) $ 0.18
========== ========== ========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-30-1996 JUN-01-1996
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 5,485,140
<ALLOWANCES> 0 171,925
<INVENTORY> 0 0
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<PP&E> 0 9,086,644
<DEPRECIATION> 0 4,284,601
<TOTAL-ASSETS> 0 15,446,527
<CURRENT-LIABILITIES> 0 5,850,274
<BONDS> 0 0
0 0
0 0
<COMMON> 0 486,188
<OTHER-SE> 0 8,377,230
<TOTAL-LIABILITY-AND-EQUITY> 0 15,446,527
<SALES> 0 0
<TOTAL-REVENUES> 6,559,345 13,142,904
<CGS> 0 0
<TOTAL-COSTS> 3,847,994 7,786,976
<OTHER-EXPENSES> 2,216,086 4,364,933
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 26,961 45,412
<INCOME-PRETAX> 499,082 1,036,766
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 499,082 1,036,766
<DISCONTINUED> 0 0
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<CHANGES> 0 0
<NET-INCOME> 499,082 1,036,766
<EPS-PRIMARY> 0.09 0.18
<EPS-DILUTED> 0.09 0.18
</TABLE>
