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 period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-14316
APRIA HEALTHCARE GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0488566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3560 HYLAND AVENUE, COSTA MESA, CA 92626
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 427-2000
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 X No
--- ---
There were 51,870,190 shares of common stock, $.001 par value, outstanding at
May 10, 1999.
<PAGE>
APRIA HEALTHCARE GROUP INC.
FORM 10-Q
For the period ended March 31, 1999
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1999 1998
---- ----
(unaudited)
(dollars in thousands)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents .......................... $ 90,172 $ 75,475
Accounts receivable, less allowance for doubtful
accounts of $35,695 and $35,564 at March 31, 1999
and December 31, 1998, respectively .............. 135,463 132,028
Inventories ........................................ 18,394 16,617
Prepaid expenses and other current assets .......... 5,247 4,917
--------- ---------
TOTAL CURRENT ASSETS ....................... 249,276 229,037
PATIENT SERVICE EQUIPMENT, less accumulated
depreciation of $258,254 and $249,921 at March 31,
1999 and December 31, 1998, respectively ........... 127,477 130,652
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET ............ 48,810 51,996
INTANGIBLE ASSETS, NET ............................... 86,853 84,365
OTHER ASSETS ......................................... 966 548
--------- ---------
$ 513,382 $ 496,598
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable ................................... $ 54,604 $ 51,252
Accrued payroll and related taxes and benefits ..... 23,655 25,455
Accrued insurance .................................. 13,472 13,092
Other accrued liabilities .......................... 57,382 49,870
Current portion of long-term debt .................. 71,578 74,439
--------- ---------
TOTAL CURRENT LIABILITIES .................. 220,691 214,108
LONG-TERM DEBT ....................................... 408,605 414,147
COMMITMENTS AND CONTINGENCIES ........................ - -
STOCKHOLDERS' DEFICIT
Preferred stock, $.001 par value: 10,000,000
shares authorized; none issued .................. - -
Common stock, $.001 par value: 150,000,000
shares authorized; 51,799,035 and 51,785,263
shares issued and outstanding at March 31, 1999
and December 31, 1998, respectively .............. 52 52
Additional paid-in capital ......................... 326,084 325,903
Retained deficit ................................... (442,050) (457,612)
--------- ---------
(115,914) (131,657)
$ 513,382 $ 496,598
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
Three Months Ended
March 31,
-----------------------
1999 1998
---- ----
(dollars in thousands,
except per share data)
<S> <C> <C>
Net revenues ...................................... $ 228,294 $ 250,538
Costs and expenses:
Cost of net revenues:
Product and supply costs .................... 45,325 61,143
Patient service equipment depreciation ...... 17,746 20,055
Nursing services ............................ 551 736
Other ....................................... 2,447 3,924
--------- ---------
66,069 85,858
Selling, distribution and administrative ....... 124,449 141,946
Provision for doubtful accounts ................ 8,629 13,795
Amortization of intangible assets .............. 1,873 3,564
--------- ---------
201,020 245,163
--------- ---------
OPERATING INCOME ........................ 27,274 5,375
Interest expense, net ............................. 11,312 11,482
--------- ---------
INCOME (LOSS) BEFORE TAXES .............. 15,962 (6,107)
Income taxes ...................................... 400 500
--------- ---------
NET INCOME (LOSS) ....................... $ 15,562 $ (6,607)
========= =========
Basic income (loss) per common share .............. $ 0.30 $ (0.13)
========= =========
Diluted income (loss) per common share ............ $ 0.30 $ (0.13)
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Three Months Ended
March 31,
----------------------
1999 1998
---- ----
(dollars in thousands)
OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) .................................... $ 15,562 $ (6,607)
Items included in net income (loss) not
requiring (providing) cash:
Provision for doubtful accounts .................. 8,629 13,795
Provision for excess/obsolete equipment .......... 1,605 2,637
Depreciation ..................................... 22,594 27,435
Amortization of intangible assets ................ 1,873 3,564
Amortization of deferred debt costs .............. 1,050 380
Gain on disposition of assets .................... (69) (52)
Changes in operating assets and liabilities,
net of effects of acquisitions:
(Increase) decrease in accounts receivable ....... (12,064) 13,564
Increase in inventories .......................... (2,884) (480)
(Increase) decrease in prepaids
and other assets ............................... (232) 3,665
Increase (decrease) in accounts payable .......... 3,352 (2,024)
Increase (decrease) in accruals and
other liabilities .............................. 5,822 (11,747)
Net purchases of patient service equipment,
net of effects of acquisitions ..................... (14,826) (8,638)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES .. 30,412 35,492
INVESTING ACTIVITIES
Purchases of property, equipment and
improvements, net of effects of acquisitions ... (1,687) (3,445)
Proceeds from disposition of assets ............... 110 68
Acquisitions and payments of
contingent consideration ....................... (4,835) (745)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES ...... (6,412) (4,122)
FINANCING ACTIVITIES
Payments under term loan .......................... (6,938) -
Payments of other long-term debt .................. (1,835) (2,705)
Capitalized debt costs, net ....................... (680) (1,018)
Issuances of common stock ......................... 150 1,499
-------- --------
NET CASH USED IN FINANCING ACTIVITIES ...... (9,303) (2,224)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS ............ 14,697 29,146
Cash and cash equivalents at beginning of period ..... 75,475 16,317
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ........... $ 90,172 $ 45,463
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
APRIA HEALTHCARE GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of Apria
Healthcare Group Inc. ("Apria" or "the company") and its subsidiaries. All
significant intercompany transactions and accounts have been eliminated.
In the opinion of management, all adjustments, consisting of normal recurring
accruals necessary for a fair presentation of the results of operations for the
interim periods presented, have been reflected herein. The unaudited results of
operations for interim periods are not necessarily indicative of the results to
be expected for the entire year. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
December 31, 1998, included in the company's 1998 Form 10-K.
NOTE B - RECLASSIFICATIONS AND USE OF ACCOUNTING ESTIMATES
Reclassifications: Certain amounts from prior periods have been reclassified to
conform to the current year presentation.
Use of Accounting Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates. Due to
the nature of the industry and the reimbursement environment in which the
company operates, certain estimates are required in recording net revenues.
Inherent in these estimates is the risk that they will have to be revised or
updated, and the changes recorded in subsequent periods, as additional
information becomes available to management.
NOTE C - REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK
Revenues are recognized on the date services and related products are provided
to patients and are recorded at amounts estimated to be received under
reimbursement arrangements with a large number of third-party payors, including
private insurers, managed care organizations, Medicare and Medicaid.
Apria establishes allowances for revenue adjustments which are normally
identified and recorded at the point of cash application or upon account review.
Revenue adjustments result from differences between estimated and actual
reimbursement amounts, failures to obtain authorizations acceptable to the payor
or other specified billing documentation, changes in coverage or payor and other
reasons unrelated to credit risk. The allowance for revenue adjustments is
deducted directly from gross accounts receivable. Management also establishes
allowances for those accounts from which payment is not expected to be received,
although services were provided and revenue was earned.
Management performs various analyses to estimate the revenue adjustment
allowance and the allowance for doubtful accounts. Specifically, management
considers historical realization data, accounts receivable aging trends,
operating statistics and relevant business conditions. Apria periodically
refines its procedures for estimating the allowances for revenue adjustments and
doubtful accounts based on experience with the estimation process and changes in
circumstances. Because of continuing changes in the healthcare industry and
third-party reimbursement, it is reasonably possible that management's estimates
of net collectible revenues could change in the near term, which could have a
favorable or unfavorable impact on operations and cash flows.
NOTE D - BUSINESS COMBINATIONS
Apria periodically makes acquisitions of complementary businesses in specific
geographic markets. The transactions are accounted for as purchases and the
results of operations of the acquired companies are included in the accompanying
statement of operations from the date of acquisition. Acquisitions that closed
during the three-month period ended March 31, 1999 resulted in cash payments of
approximately $4,835,000. Of that amount, $4,361,000 was allocated to intangible
assets and $243,000 to patient service equipment. Goodwill is being amortized
over 20 years and covenants not to compete are being amortized over the life
of the respective agreements.
NOTE E - LONG-TERM DEBT
Apria's credit agreement with Bank of America and a syndicate of banks was
amended and restated for the third time in April of 1999. The agreement was
amended to remove the requirement that the company issue $50,000,000 in senior
subordinated notes or senior subordinated convertible debentures by April 23,
1999. In connection with this amendment, Apria made a required $50,000,000
repayment of the term loan. The agreement was also amended to remove the
requirement that the company maintain minimum cash balances of $35,000,000
through the consummation of the debt or equity offering. In addition, the
agreement still allows Apria to complete $62,000,000 of acquisitions in 1999.
NOTE F - EQUITY
The change in stockholders' equity, other than from net income, resulted
primarily from the exercise of stock options. For the three months ended March
31, 1999, proceeds from the exercise of stock options amounted to $150,000.
NOTE G - INCOME TAXES
Current income tax expense includes federal and state tax amounts accrued and
paid on a basis other than or in addition to taxable income.
At December 31, 1998, Apria's federal net operating loss carryforward ("NOL")
approximated $380,000,000, expiring in varying amounts in the years 2003 through
2013. Additionally, the company has various state operating loss carryforwards
which began to expire in 1997. As a result of an ownership change in 1992 which
met specified criteria of Section 382 of the Internal Revenue Code, future use
of a portion of the federal and state operating loss carryforwards generated
prior to 1992 are each limited to approximately $5,000,000 per year. Because
of the annual limitation, approximately $57,000,000 of each of Apria's federal
and state NOLs may expire unused. In considering the positive and negative
factors at this time, management concluded that it is more likely than not that
Apria will be unable to utilize the NOLs except for future reversals of existing
taxable temporary differences.
NOTE H - COMMITMENTS AND CONTINGENCIES
Apria is engaged in the defense of certain claims and lawsuits arising out of
the ordinary course and conduct of its business, the outcome of which is not
determinable at this time. In the opinion of management, any liability that
might be incurred by the company upon the resolution of these claims and
lawsuits will not, in the aggregate, have a material adverse effect on Apria's
consolidated results of operations and financial position. Apria provides for
probable losses related to certain matters arising in each period and revises
estimates for certain matters arising in previous periods. Management is unable
to estimate the range of possible loss for all other claims and lawsuits.
<PAGE>
NOTE I - PER SHARE AMOUNTS
<TABLE>
The following table sets forth the computation of basic and diluted per share
amounts:
<CAPTION>
Three Months Ended
March 31,
------------------------
1999 1998
---- ----
(in thousands,
except per share data)
NUMERATOR:
<S> <C> <C>
Net income (loss) ................................. $ 15,562 $(6,607)
Numerator for basic per share amounts - income
(loss) available to common stockholders .......... $ 15,562 $(6,607)
Numerator for diluted per share amounts - income
(loss) available to common stockholders .......... $ 5,562 $(6,607)
DENOMINATOR:
Denominator for basic per share amounts - weighted
average shares .................................... 51,796 51,674
Effect of dilutive securities:
Employee stock options .......................... 868 -
-------- -------
Dilutive potential common shares ................ 868 -
-------- -------
Denominator for diluted per share amounts - adjusted
weighted average shares .......................... 52,664 51,674
======== ========
Basic income (loss) per common share ................ $ 0.30 $ (0.13)
======== =======
Diluted income (loss) per common share .............. $ 0.30 $ (0.13)
======== =======
Employee stock options excluded from the
computation of diluted per share amounts:
Exercise price exceeds average market
price of common stock ......................... 2,171 2,154
Other ........................................... - 155
-------- -------
2,171 2,309
======== =======
Average exercise price per share that exceeds
average market price of common stock .............. $ 16.15 $ 19.15
======== =======
</TABLE>
Due to the net loss reported for the three months ended March 31, 1998, the
impact of employee stock options is antidilutive. There is no difference between
basic and diluted per share amounts.
<PAGE>
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: APRIA'S BUSINESS IS SUBJECT TO
A NUMBER OF RISKS, SOME OF WHICH ARE BEYOND THE COMPANY'S CONTROL. THE COMPANY
HAS DESCRIBED CERTAIN OF THOSE RISKS IN ITS FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL
5, 1999. THIS REPORT MAY BE USED FOR PURPOSES OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AS A READILY AVAILABLE DOCUMENT CONTAINING
MEANINGFUL CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN ANY FORWARD-LOOKING
STATEMENTS THE COMPANY MAY MAKE FROM TIME TO TIME. THESE RISKS INCLUDE WHETHER
APRIA WILL BE ABLE TO RESOLVE ISSUES PERTAINING TO MANAGEMENT STABILITY AND
RECRUITING, THE COLLECTIBILITY OF ITS ACCOUNTS RECEIVABLE, THE COST OF AND THE
COMPANY'S ABILITY TO IMPLEMENT ITS REORGANIZATION PLAN, APRIA'S ABILITY TO
SERVICE ITS DEBT, HEALTHCARE REFORM AND THE EFFECT OF FEDERAL AND STATE
HEALTHCARE REGULATIONS, THE ONGOING U.S. ATTORNEYS' INVESTIGATIONS REGARDING
APRIA'S BILLING PRACTICES, PRICING PRESSURES FROM LARGE PAYORS AND CHANGES IN
GOVERNMENTAL REIMBURSEMENT LEVELS, THE EFFECTIVENESS OF APRIA'S INFORMATION
SYSTEMS AND CONTROLS, INCLUDING ITS ABILITY TO RESOLVE ANY REMAINING YEAR 2000
COMPLIANCE ISSUES, THE HIGHLY COMPETITIVE MARKET, RECENT LOSSES, AND APRIA'S
HIGH LEVERAGE AND RESTRICTIONS ON ITS BORROWING CAPACITY.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
NET REVENUES: Apria had net revenues of $228.3 million for the first
quarter of 1999, down from $250.5 million for the first quarter of 1998. The
primary reason for the decline is the recent exit from the infusion therapy
service line in certain geographic markets where profit margins were
consistently below acceptable levels. The variance between the first quarter of
1999 and the first quarter of 1998 attributable to this partial exit from the
infusion business is approximately $12.7 million. Also impacting 1999 revenues
was a 5% reduction of the Medicare reimbursement rates for home oxygen therapy,
as mandated by the provisions of the Balanced Budget Act of 1997. The
reimbursement rate reduction, which decreased first quarter revenues by
approximately $2.5 million, became effective January 1, 1999 and is in addition
to a 25% rate reduction effected in January 1998. Additionally, starting in late
1997 and continuing into 1998, Apria performed a comprehensive review of its
managed care contracts and renegotiated or terminated those not meeting
profitability standards. The termination of such contracts accounts for
approximately $4 million of the revenue decrease between the first quarter of
1999 and the first quarter of 1998. An unfavorable consequence of the infusion
therapy exit and the termination of the low-margin managed care contracts was
the loss of related business that Apria would have preferred to retain.
The table below sets forth a summary of net revenues by service line.
Respiratory therapy shows a slight increase despite the Medicare reimbursement
reduction. The quarter-to-quarter decrease in infusion therapy revenues is
largely explained by the exit of this business in selected areas as described
above. The infusion line was also impacted by the termination of low-margin
contracts. The decrease in the HME/other line was primarily attributable to the
contract review process and, to a lesser extent, decreases in the medical supply
and nursing lines which Apria began exiting in late 1997.
Three Months Ended March 31,
---------------------------------------------
1999 1998
------------------ ------------------
$ % $ %
-------- ------ -------- ------
(dollars in thousands)
Respiratory therapy.......... $145,223 63.6% $142,810 57.0%
Infusion therapy............. 42,237 18.5% 57,752 23.0%
HME/other.................... 40,834 17.9% 49,976 20.0%
-------- ------ -------- ------
Total net revenues......... $228,294 100.0% $250,538 100.0%
======== ====== ======== ======
Due to the nature of the industry and the reimbursement environment in
which Apria operates, certain estimates are required in recording net revenues.
Inherent in these estimates is the risk that they will have to be revised or
updated, and the changes recorded in subsequent periods, as additional
information becomes available to management. Specifically, the complexity of
many third-party billing arrangements and uncertainty of reimbursement amounts
for certain services and/or from certain payors result in adjustments to billed
amounts. Such adjustments are fairly common and are typically identified and
recorded at the point of cash application, claim denial or upon account review.
Examples of revenue adjustments include subsequent changes to estimated revenue
amounts or denials for services not covered due to changes in the patient's
coverage; failure subsequent to service delivery to obtain written confirmation
of authorization or other necessary documentation; and differences in contract
prices due to complex contract terms or a biller's lack of familiarity with a
contract or payor.
GROSS PROFIT: The gross margin for the first quarter in 1999 was 71.1%
versus 65.7% in the same quarter last year. The improvement is largely
attributable to the exit from low-profit service lines and contracts and better
pricing negotiated for inventory, patient service equipment and related goods.
Gross margins in the first quarter of 1999 for respiratory therapy,
infusion therapy and home medical equipment/other were 78%, 59% and 58%,
respectively.
SELLING, DISTRIBUTION AND ADMINISTRATIVE: Selling, distribution and
administrative expenses were $124.4 million or 54.5% of net revenues for the
first quarter of 1999, compared to $141.9 million or 56.7% for the same period
last year. The primary component of the decrease is a reduction in labor
expenses. During the first quarter of 1998, Apria was in the process of reducing
its workforce in response to the 25% Medicare reimbursement reductions and
therefore the financial results did not yet reflect the full savings of that
labor reduction effort. Since then, Apria has continued to reduce staffing
levels, particularly in the functional area of reimbursement, an area that
experienced significant staffing increases during the period of billing and
collection difficulties arising from the 1995 Abbey/Homedco merger. During the
second half of 1998, Apria also effected significant labor reductions at its
corporate headquarters and reduced staff in conjunction with the exit of
selected infusion therapy businesses. From the end of the first quarter in 1998
to the end of the first quarter in 1999, Apria's full-time equivalent employees
decreased by 971.
The impairment of computer hardware and software recognized in the third
quarter of 1998 has resulted in a decrease in depreciation expense. Also,
certain costs associated with the selected infusion therapy exit have been
eliminated. Finally, the successful implementation of spending controls at the
field locations and corporate headquarters has contributed to the decrease in
selling, distribution and administrative expenses.
PROVISION FOR DOUBTFUL ACCOUNTS: The provision for doubtful accounts, as a
percentage of net revenues, was 3.8% in the first quarter of 1999, as compared
to 5.5% in the first quarter of 1998. The improvement in the provision rate is
largely due to an improvement in the aging of accounts receivable and a
shortening in collection periods. Accounts in excess of 180 days were 30.5% of
total accounts receivable at March 31, 1998; this compares to 20.1% at March 31,
1999. Days sales outstanding (calculated as of each period-end by dividing
accounts receivable, less allowance for doubtful accounts, by the 90-day rolling
average of net revenues) decreased to 53 days at March 31, 1999, from 83 days at
March 31, 1998.
During the second half of 1998, management reviewed the historic
performance and collectibility of Apria's accounts receivable portfolio.
Management considered the continued high-level of bad debt write-offs and
reviewed its existing policies and procedures for estimating the collectibility
of its accounts receivable. In response, management decided to change the
collection policy and is formally shifting the focus of the collection function
to the more current balances and is assigning the older accounts to outside
collection agencies. Management believes this concentration on more current
balances will limit the amount of receivables that age beyond 180 days.
Consequently, the accounts that do age beyond 180 days are likely to be more
difficult to collect. Accordingly, with this change in collection policy,
management increased the allowance percentage applied to balances over 180 days
outstanding.
AMORTIZATION OF INTANGIBLE ASSETS: Amortization of intangible assets was
$1.9 million in the three months ended March 31, 1999 versus $3.6 million for
the same period in 1998. The decrease is due to the impairment of intangible
assets of $76.2 million that was recorded in the third quarter of 1998 and, to a
lesser extent, the expiration of certain non-compete covenants.
INTEREST EXPENSE: Interest expense was $11.3 million in the first quarter
of 1999 and $11.5 million in the first quarter of 1998. Although there was a 12%
reduction in the average long-term debt balance between the two periods, Apria
is now incurring interest on its bank loans at higher rates as a result of its
November 1998 amended and restated credit agreement.
INCOME TAXES: Income taxes were $400,000 for the first quarter in 1999 and
$500,000 for the same period last year. The recorded amounts for both periods
include federal and state taxes payable on a basis other than or in addition to
taxable income. At December 31, 1998, Apria's federal net operating loss
carryforward ("NOL") approximated $380,000,000, expiring in varying amounts in
the years 2003 through 2013. Additionally, the company has various state
operating loss carryforwards which began to expire in 1997. As a result of an
ownership change in 1992 which met specified criteria of Section 382 of the
Internal Revenue Code, future use of a portion of the federal and state
operating loss carryforwards generated prior to 1992 are each limited to
approximately $5,000,000 per year. Because of the annual limitation,
approximately $57,000,000 of each of Apria's federal and state NOLs may expire
unused. In considering the positive and negative factors at this time,
management concluded that it is more likely than not that Apria will be unable
to utilize the NOLs except for future reversals of existing taxable temporary
differences.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
OPERATING CASH FLOW: Cash provided by operating activities was $30.4
million for the three-month period ended March 31, 1999, compared to $35.5
million for the same period in 1998. The higher net income in the 1999 period
was offset by an increase in accounts receivable, as compared to a decrease last
year, and an increase in patient service equipment purchases. The decrease in
accounts receivable in the first quarter last year was due, in part, to the fact
that revenues were being recorded at a lower level due to the 25% Medicare
reimbursement rate reduction, but cash was still being collected on the higher
pre-reduction-based revenues. The equipment purchases increased during the first
quarter of 1999, primarily to support a recently-signed national contract and to
support a new equipment utilization model currently being implemented.
ACCOUNTS RECEIVABLE: Accounts receivable, before allowance for doubtful
accounts, increased to $171.2 million at March 31, 1999 from $167.6 million at
December 31, 1998. The slight increase can be attributed to a slowdown in cash
collections from fourth-quarter levels. Days sales outstanding (DSO - calculated
as of each period-end by dividing accounts receivable, less allowance for
doubtful accounts, by the 90-day rolling average of net revenues) at March 31,
1999 remained unchanged from December 31, 1998 at 53 days.
During the last three fiscal years, results of operations have been
adversely affected by high levels of accounts receivable write-offs. Initially
caused by the disruptive effects of system conversions and branch
consolidations, the high level of accounts receivable write-offs were largely
due to billing problems such as untimely billing, improper and/or untimely
preparation of, and deficiencies in, reimbursement documentation, problems with
the billing systems and the high concentration of managed care payors from whom
it has been difficult to collect.
Also during the last three years, management has instituted a number of
measures in response to these problems. During 1998, management reorganized its
field operations to create a separate "revenue management" organization which
encompasses the functions of order-taking, patient qualification, documentation
coordination, timely filing and prompt follow-up. The revenue management
organization reports directly to corporate headquarters and specifically to a
newly created Executive Vice President position. The new organization structure
was intended to facilitate improved communications and accountability. In
conjunction with the reorganization, processes and procedures were reviewed to
identify additional opportunities for improvement. As a result, additional
personnel were placed in quality assurance positions to help ensure that
products and services were more accurately and timely billed and
responsibilities were consolidated to allow specifically qualified personnel to
support, direct and train the revenue management staff. Task forces were formed
to visit the billing centers to ensure compliance with policies and standard
procedures. Software enhancements to simplify the order-intake process were
introduced and the billing and accounts receivable modules are currently being
rewritten to address the system-caused difficulties. Although management has
been proactive in addressing the issues leading to the high level of accounts
receivable write-offs recognized in recent periods, there can be no assurance
that the collectibility of Apria's recorded accounts receivable will continue to
improve in the near future.
Included in accounts receivable are earned but unbilled receivables of
$27.2 million and $25.3 million at March 31, 1999 and December 31, 1998,
respectively. Delays in billings can occur, from a few days to several weeks or
more, from the date of service due to delays in obtaining certain required
payor-specific documentation from internal and external sources. Such
documentation would include internal records of proof of service and written
authorizations from physicians and other referral sources. Earned but unbilled
receivables are aged from date of service and are considered in Apria's analysis
of historical performance and collectibility.
LONG-TERM DEBT: Apria's credit agreement with Bank of America and a
syndicate of banks was amended and restated for the third time in April of 1999.
The agreement was amended to remove the requirement that the company issue $50
million in senior subordinated notes or senior subordinated convertible
debentures by April 23, 1999. In connection with this amendment, the company
made a required $50 million repayment of the term loan. The agreement was also
amended to remove the requirement that the company maintain minimum cash
balances of $35 million through the consummation of the debt or equity offering.
In addition, the amendment still allows Apria to complete $62 million of
acquisitions in 1999.
At March 31, 1999, total borrowings under the credit agreement were $281.1
million, outstanding letters of credit totaled $10 million and credit available
under the revolving facility was $20 million (subject to a temporary borrowing
restriction under the indenture governing Apria's $200 million 9 1/2% senior
subordinated notes). Reflecting the $50 million debt repayment discussed above,
total borrowings under the credit agreement were $231.1 million at May 10, 1999.
PURCHASE COMMITMENTS: Apria had been a party to an agreement to purchase
medical supplies with minimum annual volume requirements. Because of the
company's strategic decision to exit the low-margin medical supply business,
management had been working with the vendor to restructure the agreement. The
negotiations have been completed and a new agreement, without any minimum volume
requirements, is now in effect.
BUSINESS COMBINATIONS: Apria periodically makes acquisitions of
complementary businesses in specific geographic markets. The transactions are
accounted for as purchases and the results of operations of the acquired
companies are included in the accompanying statement of operations from the date
of acquisition. Acquisitions that closed during the three-month period ended
March 31, 1999 resulted in cash payments of approximately $4.8 million. Of that
amount, $4.4 million was allocated to intangible assets and $243,000 to patient
service equipment. Goodwill is being amortized over 20 years and covenants not
to compete are being amortized over the life of the respective agreements.
YEAR 2000 COMPLIANCE: As the year 2000 approaches, an issue impacting all
companies has emerged regarding how existing application software programs and
operating systems can accommodate this date value. In brief, many existing
application programs in the marketplace were designed to accommodate a two-digit
date position which represents the year (e.g., "95" is stored on the system and
represents the year 1995). Consequently, the year 1999 could be the maximum date
value that systems would be able to accurately process.
Internal operating systems. Beginning in late 1997, Apria conducted a
comprehensive review of its operating and field information systems, including
an assessment of the nature and potential extent of the impact of the year 2000
issue. As a result, Apria began the modification process of its software in
order for its computer systems to function properly in the year 2000 and
thereafter. Apria utilized internal resources to reprogram and test the software
for the necessary year 2000 modifications. Apria's systems also underwent two
external assessments of the year 2000 issue and received a "low" risk rating.
The modification and testing were completed on schedule and management now
considers its operating and field information systems year 2000-compliant. To
further ensure a smooth transition into the year 2000, management will, among
other measures, suspend software updates between November 1999 and January 2000
and form a special team to address any related problems that may arise.
Apria has not developed a formal contingency plan in the event that the
modifications to its internal operating systems prove to be inadequate. Such
inadequacies could result in system failure or miscalculations. This would cause
disruptions to normal business processes including, among other things, the
temporary inability to process transactions and generate billings. If such a
disruption continued for an extended period, it could have a material adverse
effect on the results of operations, cash flow and financial condition of Apria.
Apria is currently in the process of assessing and addressing any potential
issues with its ancillary software packages that perform less-critical functions
and any other electronic mechanisms that could have date-sensitive
microprocessors.
External risks. Apria depends on electronic interfaces with many of its
business partners to conduct many of its day-to-day functions. Such functions
include payments to and from suppliers and payors, transfer of funds between
Apria's banks, and electronic billing and supply ordering. Apria has been in
contact with its more critical business partners to obtain assurance of their
year 2000-readiness and is currently in the process of scheduling live tests
with the regional Medicare carriers responsible for processing approximately
one-fourth of Apria's reimbursements. As a contingency, in the event of failure
on the part of an external agent, the exchange of data and payments can continue
via paper documents and more traditional methods. Further, Apria has revised
contracts with certain of its managed care payors to include remedies should the
payors fail to reimburse the company on a timely basis due to their own year
2000 problems.
Another area of potential risk is with certain patient service equipment
items that have microprocessors with date functionality that could malfunction
in the year 2000. Although Apria has found that the majority of such
microprocessors include duration time clocks and not date time clocks,
management has initiated formal communications with its suppliers to obtain
assurance that the equipment they supply is year 2000-compliant. To date, Apria
has received year 2000-compliance certification letters from substantially all
of its primary vendors and approximately 59% of the entire set of vendors from
which it requested such assurance.
If Apria is unable to resolve all its year 2000 issues with external
agents, it may have a material adverse effect on the company's business, results
of operations or financial condition.
Costs. Apria does not believe the costs of its year 2000 remediation
efforts are material. To date, such costs have been expensed as incurred.
Management's expectations about year 2000-related costs yet to be incurred are
subject to various uncertainties that could cause the actual costs to differ
materially from those expectations. Such uncertainties include the adequacy of
the modifications made to Apria's operating and field information systems, the
success of the company in identifying and resolving any problems with its
ancillary systems or electronic mechanisms and the year 2000-readiness of
Apria's business partners.
OTHER: Apria's management believes that cash provided by operations
together with cash invested in its money market account will be sufficient to
finance its current operations for at least the next year or until the borrowing
restriction described above is eliminated.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Apria currently utilizes no material derivative financial instruments that
expose the company to significant market risk. However, Apria is subject to
interest rate changes on its variable rate term loan under the company's bank
credit agreement that may affect the fair value of that debt and cash flow and
earnings. Based on the term debt outstanding at March 31, 1999 and the current
market perception, a 50 basis point increase in the applicable interest rates
would decrease Apria's annual cash flow and earnings by approximately $1.1
million. Conversely, a 50 basis point decrease in the applicable interest rates
would increase annual cash flow and earnings by $1.1 million.
<PAGE>
PART II - OTHER INFORMATION
ITEMS 1-5. NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit
Number Reference
------ ---------
10.1 Third Amendment to Amended and Restated Credit Agreement
dated April 22, 1999, among Registrant and certain of
its subsidiaries, Bank of America National Trust and
Savings Association and other financial institutions
party to the Credit Agreement.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for
which this report is filed.
<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.
APRIA HEALTHCARE GROUP INC.
---------------------------
Registrant
May 14, 1999 /s/ JOHN C. MANEY
-----------------------------------
John C. Maney
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 10.1
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") dated as of April 22, 1999 is made among APRIA HEALTHCARE GROUP
INC., a corporation organized and existing under the laws of the State of
Delaware ("Apria") and the Subsidiaries of Apria identified on the signature
pages of this Amendment and any Subsidiary of Apria that, subject to Section
9.13 of the Credit Agreement, shall have executed a Joinder Agreement (Apria and
such Subsidiaries are referred to individually as a "Borrower" and,
collectively, as the "Borrowers"), each of the financial institutions listed on
Schedule I to the Credit Agreement or that, pursuant to Section 13.4 of the
Credit Agreement, shall become a "Bank" thereunder (individually, a "Bank" and,
collectively, the "Banks"), NATIONSBANK OF TEXAS, N.A., as the Syndication
Agent, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as the
Administrative and Collateral Agent.
RECITALS
I. The Borrowers, the Banks, the Syndication Agent and the Administrative
and Collateral Agent are parties to the Amended and Restated Credit Agreement
dated as of November 13, 1998, as amended by the First Amendment to Amended and
Restated Credit Agreement, dated as of January 15, 1999, as amended by the
Second Amendment to Amended and Restated Credit Agreement, dated as of February
23, 1999 (the "Credit Agreement"), pursuant to which the Banks extended certain
credit to the Borrowers.
II. Pursuant to certain sections of the Credit Agreement, Apria is required
to issue certain Senior Subordinated Debentures on or prior to April 23, 1999.
III. The Borrowers have requested that they be relieved of their obligation
to issue such Senior Subordinated Debentures.
IV. The Banks are willing to accommodate the request of the Borrowers on
the terms and conditions specified in this Amendment.
AGREEMENT
In consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Amendment agree as follows:
1. Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of the
Credit Agreement is hereby amended as follows:
a. the definition of "Additional Permitted Subordinated Indebtedness" is
amended and restated in its entirety as follows:
"Additional Permitted Subordinated Indebtedness" shall mean up to
$150,000,000 of other Indebtedness having a maturity of not less than
five years and no scheduled amortization and containing other terms,
including subordination provisions, acceptable to the Administration
and Collateral Agent.
b. the definition of "Change of Control" is amended by deleting the phrase
"or as defined in the Senior Subordinated Debentures" in clause (z) of such
definition.
c. the definition of "Initial Acquisition Cap" is hereby deleted in its
entirety.
d. the definition of "Senior Subordinated Debentures" is deleted in its
entirety.
e. the definition of "Trigger Date" is deleted in its entirety.
2. Amendment to Section 5.2(a)(B). Section 5.2(a)(B) of the Credit
Agreement is hereby amended by deleting the phrase "other than the Senior
Subordinated Debentures" at the end of such provision.
3. Amendment to Section 5.2(a)(C). Section 5.2(a)(C) of the Credit
Agreement is hereby amended by deleting "or Senior Subordinated Debentures" in
each place that it appears.
4. Amendment to Section 5.2(a)(E). Section 5.2(a)(E) of the Credit
Agreement is hereby deleted in its entirety.
5. Amendment to Section 6.12. Section 6.12 of the Credit Agreement is
hereby amended by deleting the last sentence thereof.
6. Amendment to Section 9.1(i). Section 9.1(i) of the Credit Agreement is
hereby amended in its entirety to read as follows:
"(i) Monthly Financial Statements. Within 20 days after the close of
each fiscal month in each fiscal year of Apria, (i) the consolidated
balance sheet of Apria and its Subsidiaries as at the end of such monthly
period and the related consolidated statements of income, retained earnings
and cash flow, (ii) pro forma statements of cash flow, including sources
and uses of cash, for Apria and its Subsidiaries for the next succeeding
three month period, in form and substance reasonably satisfactory to the
Administrative and Collateral Agent and the Required Banks, (iii)
statements showing Apria and its Subsidiaries' Excess Cash Flow and (iv) an
accounts receivable aging report with aging detail and bad debt exposure
analysis. Within thirty (30) days after the close of each monthly
accounting period in each fiscal year of Apria, a business overview
narrative, including without limitation, the number of oxygen starts placed
during the period. Notwithstanding anything to the contrary contained in
the foregoing, commencing with financial statements for the fiscal month of
July of 1999 and continuing thereafter, for any month during which the
Borrowers' EBITDA for the immediately preceding fiscal quarter, as
calculated pursuant to Section 10.10, was in excess of $40,000,000 (A) the
Borrowers will not be required to produce the information required pursuant
to this paragraph (i) clauses (i) through (iii), and (B) the Borrowers'
obligation pursuant to this paragraph (i) to produce (x) the accounts
receivable aging report required by clause (iv) and (y) the business
overview narrative, shall be a quarterly reporting obligation under Section
9.1(a)."
7. Amendment to Section 9.13(a). Section 9.13(a) of the Credit Agreement is
hereby amended as follows:
a. by amending and restating paragraph (i) in its entirety to read
"Reserved"; and
b. restating paragraph (ii) to read as follows:
"withrespect to all Permitted Transactions (other than Subsidiary
Reorganizations) after April 22, 1999, the sum (without duplication)
of (I) cash paid by Apria in connection with such Permitted
Transactions, (II) the Fair Market Value of Apria Common Stock issued
in connection with such Permitted Transactions and (III) the amount
(determined by using the face amount of the debt or the amount payable
at maturity, whichever is greater) of all Permitted Debt incurred,
assumed or acquired in all such Permitted Transactions, shall not
exceed the sum of $56,900,000 in the aggregate (the "Acquisition
Cap"); provided, that (x) for the fiscal year 1999, the Acquisition
Cap shall be reduced on a dollar for dollar basis by the amount of any
Unusual Cash Expenses incurred by the Borrowers and paid in fiscal
year 1999;".
8. Amendment to Section 9.15. Section 9.15 of the Credit Agreement is
hereby amended and restated in its entirety to read "Reserved.".
9. Amendment to Section 9.16. Section 9.16 of the Credit Agreement is
hereby amended by deleting the phrase "the minimum balance of which prior to the
Trigger Date shall not be less than $35,000,000," in clause (i) of such section.
10. Amendment to Section 10.5(i). Section 10.5(i) of the Credit Agreement
is hereby amended by deleting the reference to "Senior Subordinated Debentures".
11. Amendment to Section 10.11(i). Section 10.11(i) of the Credit Agreement
is hereby amended by deleting the proviso "; provided, however, that so long as
no Default or Event of Default shall have occurred and be continuing or would
result therefrom, Apria may refinance the Senior Subordinated Debentures in
their entirety pursuant to Section 10.5(i)"
12. Amendment to Section 11.11. Section 11.11 of the Credit Agreement is
hereby deleted in its entirety.
13. Representations. Each of the Borrowers represents and warrants to the
Banks that (a) it has the corporate or partnership power to execute, deliver and
perform the terms and provisions of this Amendment and has taken all necessary
corporate or partnership action to authorize the execution, delivery and
performance by it of this Amendment and (b) upon the effectiveness of this
Amendment, no Default or Event of Default shall have occurred and be continuing
under the Credit Agreement. Each of Apria and its Material Subsidiaries has duly
executed and delivered this Amendment and this Amendment constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
14. Conditions Precedent. The effectiveness of this Amendment is subject to
the following:
(i) the receipt by the Administrative and Collateral Agent of the consent
of the Required Banks;
(ii) the receipt by the Banks of a cash prepayment of the Loans by the
Borrower, in the amount of $50,000,000 to be applied to permanently repay the
Term Loans, in the inverse order of maturity.
(iii) the receipt by the Administrative and Collateral Agent of an opinion
of Borrower's counsel in a form and substance satisfactory to the Administrative
and Collateral Agent;
(iv) the receipt by the Administrative and Collateral Agent of this
Amendment, duly executed and delivered by each of the Borrowers and the
Administrative and Collateral Agent;
(v) the Borrowers shall have paid to the Administrative and Collateral
Agent for distribution to each Bank that approves this Amendment on or prior to
12:00 noon (Pacific Time) on April 21, 1999 an amendment fee equal to .125% of
such Bank's Commitment Amount as in effect subsequent to the prepayment set
forth in clause (ii) of this Section 9;
(vi) the Borrowers shall have paid all fees owed to the Administrative and
Collateral Agent in connection with this Amendment (including, but not limited
to, reasonable fees and expenses of counsel) to the Administrative and
Collateral Agent; and
(vii) an officer's certificate of Apria to the effect that no Default or
Event of Default has occurred or is continuing under the Credit Agreement and
that each of the representations and warranties contained in Section 8 of the
Credit Agreement are true and correct in all material respects as of the date of
this Amendment with references to the Agreement being references to the
Agreement as amended by this Amendment.
15.Reference to and Effect on the Credit Agreement, Notes and Guaranty.
a. Except as specifically amended by this Amendment, the Credit Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
b. This Amendment shall be construed as one with the Credit Agreement and
the Credit Agreement shall, where the context requires, be read and construed
throughout so as to incorporate this Amendment.
c. All documents executed in connection with the Credit Agreement,
including, but not limited to, the Notes and the Guaranty shall remain in full
force and effect and are hereby ratified and confirmed with respect to the
Credit Agreement, as amended hereby.
16. Entire Agreement. This Amendment, together with the Credit Agreement
and the other documents referred to in, or executed in connection with, the
Credit Agreement supersedes all prior agreements and understandings, written or
oral, among the parties with respect to the subject matter of this Amendment.
17. Expenses. The Borrowers shall reimburse the Agents on demand for all
reasonable costs, expenses and charges (including, without limitation,
reasonable fees and charges of legal counsel and other consultants for the
Agents) incurred by the Agents in connection with the preparation, performance
or enforcement of this Amendment.
18. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of its parties and their respective successors and permitted
assigns.
19. Severability. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Amendment and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
20. Captions. The captions and section headings appearing in this Amendment
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Amendment.
21. Counterparts. This Amendment may be executed in any number of
counterparts all of which when taken together shall constitute one and the same
instrument and any of the parties to this Amendment may execute this Amendment
by signing any such counterpart; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signatures are physically attached to the same document.
22. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
<PAGE>
IN WITNESS WHEREOF, the parties to this Amendment have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
APRIA HEALTHCARE GROUP INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIA NUMBER TWO, INC.
APRIA HEALTHCARE OF NEW YORK STATE, INC.
By:
----------------------------------------
Name: Robert S. Holcombe, Esq.
Title: Vice President, Secretary and General
Counsel
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Administrative and Collateral Agent
By:
---------------------------------------
Name: Christine Cordi
Title: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1999 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 90,172
<SECURITIES> 0
<RECEIVABLES> 171,158
<ALLOWANCES> 35,695
<INVENTORY> 18,394
<CURRENT-ASSETS> 249,276
<PP&E> 493,113
<DEPRECIATION> 316,826
<TOTAL-ASSETS> 513,382
<CURRENT-LIABILITIES> 220,691
<BONDS> 408,605
0
0
<COMMON> 52
<OTHER-SE> (115,966)
<TOTAL-LIABILITY-AND-EQUITY> 513,382
<SALES> 228,294
<TOTAL-REVENUES> 228,294
<CGS> 66,069
<TOTAL-COSTS> 66,069
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 8,629
<INTEREST-EXPENSE> 11,312
<INCOME-PRETAX> 15,962
<INCOME-TAX> 400
<INCOME-CONTINUING> 15,562
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,562
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
