UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 2000
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 52,323,382 shares of common stock, $.001 par value, outstanding at
May 9, 2000.
<PAGE>
APRIA HEALTHCARE GROUP INC.
FORM 10-Q
For the period ended March 31, 2000
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
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
(dollars in thousands) 2000 1999
- ---------------------------------------------------------------------------------------------------
(unaudited)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents ............................................. $ 29,065 $ 20,493
Accounts receivable, less allowance for doubtful accounts of $49,409
and $44,652 at March 31, 2000 and December 31, 1999, respectively.... 151,837 149,767
Inventories ........................................................... 22,221 18,505
Deferred income taxes ................................................. 42,990 42,595
Prepaid expenses and other current assets ............................. 7,973 7,665
--------- ---------
TOTAL CURRENT ASSETS .......................................... 254,086 239,025
PATIENT SERVICE EQUIPMENT, less accumulated depreciation of $287,189
and $277,915 at March 31, 2000 and December 31, 1999, respectively .... 126,675 126,486
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET ............................... 38,752 41,503
DEFERRED INCOME TAXES ................................................... 87,090 95,974
INTANGIBLE ASSETS, NET .................................................. 127,697 125,641
OTHER ASSETS ............................................................ 420 422
--------- ---------
$ 634,720 $ 629,051
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ...................................................... $ 47,675 $ 47,202
Accrued payroll and related taxes and benefits ........................ 27,970 26,478
Accrued insurance ..................................................... 9,601 10,866
Other accrued liabilities ............................................. 48,984 51,307
Current portion of long-term debt ..................................... 26,056 23,528
--------- ---------
TOTAL CURRENT LIABILITIES ..................................... 160,286 159,381
LONG-TERM DEBT .......................................................... 384,671 394,201
COMMITMENTS AND CONTINGENCIES ........................................... - -
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value: 10,000,000 shares authorized;
none issued ......................................................... - -
Common stock, $.001 par value: 150,000,000 shares authorized;
52,245,202 and 52,054,974 shares issued and outstanding at
March 31, 2000 and December 31, 1999, respectively .................. 52 52
Additional paid-in capital ............................................ 330,407 328,894
Accumulated deficit ................................................... (240,696) (253,477)
--------- ---------
89,763 75,469
--------- ---------
$ 634,720 $ 629,051
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
Three Months Ended
March 31,
---------------------
(dollars in thousands, except per share data) 2000 1999
- -------------------------------------------------------------------------------------
<S> <C> <C>
Net revenues .............................................. $250,722 $228,294
Costs and expenses:
Cost of net revenues:
Product and supply costs ............................ 49,255 45,325
Patient service equipment depreciation .............. 18,853 17,746
Nursing services .................................... 453 551
Other ............................................... 2,940 2,447
-------- --------
71,501 66,069
Selling, distribution and administrative ............... 133,525 124,449
Provision for doubtful accounts ........................ 10,619 8,629
Amortization of intangible assets ...................... 2,440 1,873
-------- --------
218,085 201,020
-------- --------
OPERATING INCOME ................................ 32,637 27,274
Interest expense, net ..................................... 10,601 11,312
-------- --------
INCOME BEFORE TAXES ............................. 22,036 15,962
Income tax expense ........................................ 9,255 400
-------- --------
NET INCOME ...................................... $ 12,781 $ 15,562
======== ========
Basic income per common share ............................. $ 0.24 $ 0.30
======== ========
Diluted income per common share ........................... $ 0.24 $ 0.30
======== ========
</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,
---------------------
(dollars in thousands) 2000 1999
- -----------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income ...................................................................... $ 12,781 $ 15,562
Items included in net income not requiring (providing) cash:
Provision for doubtful accounts .............................................. 10,619 8,629
Depreciation and amortization ................................................ 25,760 24,467
Amortization of deferred debt costs........................................... 689 1,050
Deferred income taxes and other .............................................. 8,418 1,568
Changes in operating assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable .............................................. (12,997) (12,064)
Increase in inventories ...................................................... (3,697) (2,884)
Increase in prepaids and other assets ........................................ (306) (264)
Increase in accounts payable ................................................. 473 3,216
(Decrease) increase in accrued expenses and other liabilities ................ (1,576) 5,958
Net purchases of patient service equipment, net of effects of acquisitions ...... (18,920) (14,826)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES ............................... 21,244 30,412
INVESTING ACTIVITIES
Purchases of property, equipment and improvements,
net of effects of acquisitions ............................................... (1,708) (1,687)
Proceeds from disposition of assets ............................................. 74 110
Acquisitions and payments of contingent consideration ........................... (4,860) (4,835)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES ................................... (6,494) (6,412)
FINANCING ACTIVITIES
Payments under term loan ........................................................ (5,000) (6,938)
Payments of other long-term debt ................................................ (2,691) (1,835)
Capitalized debt costs, net ..................................................... - (680)
Issuances of common stock ....................................................... 1,513 150
-------- --------
NET CASH USED IN FINANCING ACTIVITIES ................................... (6,178) (9,303)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS ......................................... 8,572 14,697
Cash and cash equivalents at beginning of period .................................. 20,493 75,475
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ........................................ $ 29,065 $ 90,172
======== ========
</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, 1999, included in the company's 1999 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 accounting principles generally accepted in the United States of
America 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. Apria's policy is to reserve 100% of all receivables aged over
360 days. This policy is in addition to reserves provided on receivables aged
less than 360 days and to amounts provided for specific payors. 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. During the first quarter
of 2000, cash paid for acquisitions and related contingent consideration was
$4,860,000. For the acquisitions that closed during the first quarter,
$3,847,000 was allocated to intangible assets. 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 for the fifth time in March 2000 to increase the limitation on capital
expenditures.
At March 31, 2000, total borrowings under the credit agreement were
$214,062,000, outstanding letters of credit totaled $1,000,000 and credit
available under the revolving facility was $29,000,000.
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, 2000, proceeds from the exercise of stock options amounted to $1,513,000.
NOTE G - INCOME TAXES
Income taxes for the first quarter of 2000 have been provided at the effective
tax rate expected to be applicable for the year.
At December 31, 1999 Apria's federal net operating loss carryforwards ("NOLs")
approximated $225,000,000, expiring in 2003 through 2013. Additionally, the
company has various state NOLs which began expiring 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 NOLs
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. The company excludes the $57,000,000
of potentially expiring NOLs from its deferred tax assets. In fiscal year 2000,
NOLs are being utilized to the extent of Apria's taxable income.
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 outcomes of which are 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
losses related to certain matters when such losses are considered probable and
capable of estimation. No provision for losses is made in respect of claims
which do not meet such requirements.
<PAGE>
NOTE I - PER SHARE AMOUNTS
The following table sets forth the computation of basic and diluted per share
amounts:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
(in thousands, except per share data) 2000 1999
- -----------------------------------------------------------------------------------------------------------
Numerator:
<S> <C> <C>
Net income ......................................................................... $12,781 $15,562
Numerator for basic per share amounts - income available to common stockholders .... $12,781 $15,562
Numerator for diluted per share amounts - income available to common stockholders... $12,781 $15,562
Denominator:
Denominator for basic per share amounts - weighted average shares .................. 52,191 51,796
Effect of dilutive securities:
Employee stock options ......................................................... 1,756 868
------- -------
Dilutive potential common shares ............................................... 1,756 868
------- -------
Denominator for diluted per share amounts - adjusted weighted average shares ....... 53,947 52,664
======= =======
Basic income per common share ........................................................ $ 0.24 $ 0.30
======= =======
Diluted income per common share ...................................................... $ 0.24 $ 0.30
======= =======
Employee stock options excluded from the computation of diluted per share
amounts:
Exercise price exceeds average market price of common stock ...................... 2,391 2,171
Average exercise price per share that exceeds average market price of common stock.... $ 18.67 $ 16.15
</TABLE>
<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, 1999, as filed with the Securities and Exchange Commission on March
27, 2000. 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 the
collectibility of Apria's accounts receivable, the ongoing federal
investigations regarding Apria's billing practices, the effectiveness of Apria's
operating systems and controls, healthcare reform and the effect of federal and
state healthcare regulations, pricing pressures from large payors and continued
reductions in Medicare reimbursement, Apria's ability to implement its
acquisition strategy and the upcoming maturity of Apria's long-term debt.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
NET REVENUES AND GROSS MARGIN. Net revenues were $250.7 million in the
first quarter of 2000, up 9.8% from the first quarter of 1999. The primary
reasons for the increase are new contracts with regional and national payors,
the acquisition of complementary businesses and price increases in certain
managed care agreements.
The table below sets forth a summary of net revenues by service line. The
largest increase is in the respiratory service line, which is largely due to a
sales focus on this higher-margin line and to the impact of acquisitions
consummated during 1999. The increase between periods in the infusion therapy
service line was due predominantly to volume increases.
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------------
2000 1999
-------------------- --------------------
(dollars in thousands) $ % $ %
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Respiratory therapy................ $163,263 65.1% $145,223 63.6%
Infusion therapy................... 46,751 18.6% 42,237 18.5%
HME/other.......................... 40,708 16.3% 40,834 17.9%
-------- ------ -------- ------
Total net revenues $250,722 100.0% $228,294 100.0%
======== ====== ======== ======
</TABLE>
The gross margin for the first quarter of 2000 was 71.5%, compared to 71.1%
for the same period last year. The majority of this improvement is due to the
increase in respiratory revenues as a percentage of total revenues.
Estimates and Revenue Adjustments. Substantially all of Apria's revenues
are reimbursed by third party payors, including Medicare, Medicaid and managed
care organizations. 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 the uncertainty of
reimbursement amounts for certain services 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 to obtain written confirmation of
authorization or other necessary documentation subsequent to service delivery,
and differences in contract prices due to complex contract terms or a biller's
lack of familiarity with a contract or payor.
SELLING, DISTRIBUTION AND ADMINISTRATIVE. Selling, distribution and
administrative expense, as a percentage of net revenue, was 53.3% in the first
quarter of 2000, versus 54.5% in the first quarter of 1999. This is primarily
due to management's ability to maintain the fixed and controllable expense
levels as revenues increase.
PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts was
4.2% of net revenues for the first three months of 2000, compared with 3.8% in
the same period in 1999. The increase in 2000 is largely attributable to an
increase in accounts receivable aged in excess of 180 days, at which time the
likelihood of collectibility decreases. Accounts greater than 180 days, as
percentages of total accounts receivable, were 25.8% and 20.1% at March 31, 2000
and March 31, 1999, respectively.
AMORTIZATION OF INTANGIBLE ASSETS. Amortization expense was $2.4 million in
the first quarter of 2000 and $1.9 million in the first quarter of 1999. The
increase is directly attributable to the $49.3 million in intangible assets that
were recorded in 1999 in conjunction with the acquisitions that were consummated
in that period.
INTEREST EXPENSE. Interest expense was $10.6 million in the first quarter
of 2000, down from $11.3 million for the same period last year. This is
primarily due to the reduction in long term debt levels between the two periods.
Partially offsetting the decrease in interest expense was an increase in
interest rates and a decrease in interest income due to lower cash balances.
INCOME TAXES. Income taxes were $9.3 million for the first three months of
2000 versus $400,000 for the same period last year. At December 31, 1999,
management concluded that it is more likely than not that Apria will realize its
net deferred tax assets. As a result, the company released the remaining
deferred tax valuation allowance during the fourth quarter of 1999. The increase
in income tax expense for the first quarter of 2000, as compared to the first
quarter of 1999, is primarily attributable to Apria's partial release of its
deferred tax valuation allowance in 1999.
At December 31, 1999 Apria's federal NOLs approximated $225 million,
expiring in the years 2003 through 2013. Additionally, Apria has various state
NOLs which began expiring 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 NOLs generated prior to 1992 are each
limited to approximately $5 million per year. Because of the annual limitation,
approximately $57 million of each of Apria's federal and state NOLs may expire
unused. Apria excludes the $57 million of potentially expiring NOLs from its
deferred tax assets. In 2000, NOLs are being utilized to the extent of the
company's taxable income.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING CASH FLOW. Operating cash flow was $21.2 million in the first
quarter of 2000, compared with $30.4 million in the first quarter of 1999. The
decrease is largely due to increased purchases of patient service equipment to
support growth in the respiratory therapy patient base. Also contributing to the
decrease in operating cash flow for the first quarter of 2000 was the payment of
the annual performance bonuses.
ACCOUNTS RECEIVABLE. Accounts receivable, before allowance for doubtful
accounts, increased to $201.2 million at March 31, 2000 from $194.4 million at
December 31, 1999. The increase is largely attributable to the continuing trend
of quarter-over-quarter revenue increases.
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 a day to 55 days at March 31, 2000 from 56
days at December 31, 1999. Accounts aged in excess of 180 days as a percentage
of total accounts receivable increased to 25.8% at March 31, 2000 compared to
24.1% at December 31, 1999.
Collection of its accounts receivable remains one of Apria's primary
focuses. Two factors impacting the collectibility of accounts receivable are (1)
continued high turnover among accounts receivable personnel in many of Apria's
locations and (2) the inability to collect contractually-due receivables from
certain large managed care payors on a timely basis, or at all.
Allowance Evaluation. Accounts receivable are reduced by an allowance for
estimated revenue adjustments and further netted by an allowance for doubtful
accounts to reflect accounts receivable in the financial statements at net
realizable value. Bad debt and revenue adjustment allowances are aggregated and
analyzed on a combined basis. Management uses actual write-off classifications
in conjunction with historical experience and account reviews to determine the
appropriate categorization of revenue adjustments and bad debts, both reserved
and expensed. Apria's methodology for estimating allowances for uncollectible
accounts and providing for the related revenue adjustments and bad debt expense
involves an extensive, balanced evaluation of operating statistics, historical
realization data and accounts receivable aging trends. Also considered are
relevant business conditions such as system conversions, facility
consolidations, business combinations, Medicare carrier conditions and the
extent of contracted business. Finally, specific reviews of certain large and/or
problematic payors are performed. Management periodically refines the analysis
and allowance estimation process to consider any changes in related policies and
procedures and adjusts the combined allowance to reflect its best estimate of
the allowance required at each reporting date.
Unbilled Receivables. Included in accounts receivable are earned but
unbilled receivables of $23.5 million and $23.0 million at March 31, 2000 and
December 31, 1999, 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 was amended for the fifth time in
March 2000. This latest amendment increases the amount of capital expenditures
permitted by the credit agreement.
At March 31, 2000, total borrowings under the credit agreement were $214.1
million (none of which were advanced from the revolving credit facility),
outstanding letters of credit totaled $1.0 million and credit available under
the revolving facility was $29.0 million
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. During the first quarter of 2000, cash paid for acquisitions and
related contingent consideration was $4.9 million. For acquisitions that closed
during the first quarter, approximately $3.8 million was allocated to intangible
assets. Goodwill is being amortized over 20 years and covenants not to compete
are being amortized over the life of the respective agreements.
OTHER. Apria's management believes that cash provided by operations
together with cash invested in its money market account and amounts available
under its existing credit facility will be sufficient to finance its current
operations for at least the next year.
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, 2000 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.
PART II - OTHER INFORMATION
ITEM 1. NOT APPLICABLE
ITEM 2. CHANGES IN SECURITIES
On February 7, 2000, the Rights Agreement dated as of February 8,
1995, between Apria and Norwest Bank Minnesota, National
Association, as successor Rights Agent, expired. As a result, all
outstanding Rights issued under that Agreement that were
evidenced by shares of the company's common stock have becaome
void and may no longer be exercised under any circumstances.
ITEMS 3-5. NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit
Number Reference
------- ---------
10.1 Fifth Amendment to Amended and Restated Credit
Agreement dated March 24, 2000, among Registrant
and certain of its subsidiaries, Bank of America
National Association and other financial
institutions party to the Credit Agreement.
10.2 Executive Severance Agreement dated March 28, 2000,
between Registrant and George J. Suda.
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 15, 2000 /s/ JOHN C. MANEY
---------------------------
John C. Maney
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 10.1
FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") dated as of March 24, 2000 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"), and BANK OF AMERICA, NATIONAL ASSOCIATION (as
successor to Bank of America National Trust and Savings Association and
NationsBank of Texas, N.A.), as the Syndication, Administrative and Collateral
Agent (the "Administrative and Collateral Agent"). Capitalized terms used but
not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.
RECITALS
I. The Borrowers, the Banks 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
and Consent, dated as of January 15, 1999, as amended by the Second Amendment to
Amended and Restated Credit Agreement, dated as of February 23, 1999, as amended
by the Third Amendment to Amended and Restated Credit Agreement, dated as of
April 22, 1999, and as amended by the Fourth Amendment to Amended and Restated
Credit Agreement, dated as of October 22, 1999 (the "Credit Agreement"),
pursuant to which the Banks extended certain credit to the Borrowers.
II. The Borrowers have requested that the Banks amend the Credit Agreement
to modify the covenant regarding Capital Expenditures
set forth therein.
III. 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 10.8 of the Credit Agreement. Section 10.8 of the
Credit Agreement is amended in its entirety as follows:
Capital Expenditures. Apria will not, for any period of four
consecutive fiscal quarters, make or permit its Subsidiaries to make
any Capital Expenditures in an amount such that the fraction
(expressed as a percentage), the numerator of which is the amount of
such Capital Expenditures for such period plus any investments
permitted under Section 10.6(viii) during such period, but excluding
expenditures made in connection with Permitted Transactions made in
compliance with Section 9.13 during such period, and the denominator
of which is the amount of consolidated net revenues for Apria and its
Subsidiaries for such period, would be greater than 12.5%.
2. 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.
3. Conditions Precedent. This Amendment shall become effective upon
satisfaction of the following conditions:
(i) the receipt by the Administrative and Collateral Agent of the
consent of the Required Banks;
(ii) 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;
(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; and
(iv) 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.
4. 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.
5. 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.
6. Expenses. The Borrowers shall reimburse the Administrative and
Collateral Agent on demand for all reasonable costs, expenses and charges
(including, without limitation, reasonable fees and charges of legal counsel and
other consultants for the Administrative and Collateral Agent) incurred by the
Administrative and Collateral Agent in connection with the preparation,
performance or enforcement of this Amendment.
7. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of its parties and their respective successors and permitted
assigns.
8. 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.
9. 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.
10. 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.
11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
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:
Title:
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative and Collateral Agent
By:
----------------------------------------------
Name: Christine Cordi
Title: Vice President
EXHIBIT 10.2
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (this "Agreement") is made as of this
28th day of March, 2000, between Apria Healthcare Group Inc., a Delaware
corporation (the "Company"), and George J. Suda (the "Executive").
RECITALS
A. It is the desire of the Company to retain the services of the Executive
and to recognize the Executive's contribution to the Company.
B. The Company and the Executive wish to set forth certain terms and
conditions of Executive's employment.
C. The Company wishes to provide to the Executive certain benefits in the
event that his employment is terminated by the Company without cause or in the
event that he terminates employment for Good Reason (as defined below), in order
to encourage the Executive's performance and continued commitment to the
Company.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. Positions and Duties. The Executive shall serve as the Company's
Executive Vice President, Information Services, or in such other position and
shall undertake such duties and have such authority as the Company, through its
Chief Executive Office or Chief Financial Officer shall assign to the Executive
from time to time in the Company's sole and absolute discretion. The Company has
the right to change the nature, amount or level of authority and responsibility
assigned to the Executive at any time, with or without cause. The Company may
also change the title or titles assigned to the Executive at any time, with or
without cause. The Executive agrees to devote substantially all of his working
time and efforts to the business and affairs of the Company. The Executive
further agrees that he shall not undertake any outside activities which create a
conflict of interest with his duties to the Company, or which, in the judgment
of the Board of Directors of the Company, interfere with the performance of the
Executive's duties to the Company.
2. Compensation and Benefits.
(a) Salary. The Executive's salary shall be such salary as the Company
assigns to him from time to time in accordance with its regular practices and
policies. The parties to this Agreement recognize that the Company may, in its
sole discretion, increase such salary at any time.
(b) Bonuses. The Executive's eligibility to receive any bonus shall be
determined in accordance with the Company's Incentive Compensation Plan or other
bonus plans as they shall be in effect from time to time. The parties to this
Agreement recognize that such bonus plans may be amended and/or terminated by
the Company at any time.
(c) Expenses. During the term of the Executive's employment, the Executive
shall be entitled to receive reimbursement for all reasonable and customary
expenses incurred by the Executive in performing services for the Company in
accordance with the Company's reimbursement policies as they may be in effect
from time to time. The parties to this Agreement recognize that such policies
may be amended and/or terminated by the Company at any time.
(d) Other Benefits. The Executive shall be entitled to participate in all
employee benefit plans, programs and arrangements of the Company (including,
without limitation, stock option plans or agreements and insurance, retirement
and vacation plans, programs and arrangements), in accordance with the terms of
such plans, programs or arrangements as they shall be in effect from time to
time during the period of the Executive's employment. The parties to this
Agreement recognize that the Company may terminate or modify such plans,
programs or arrangements at any time.
3. Grounds for Termination. The Executive's employment may be terminated on
any of the following grounds:
(a) Without Cause. The Executive or the Company may terminate the
Executive's employment at any time, without cause, by giving the other party to
this Agreement at least 30 days advance written notice of such termination.
(b) Death. The Executive's employment hereunder shall terminate upon his
death.
(c) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been unable to perform the
essential functions of his position, even with reasonable accommodation that
does not impose an undue hardship on the Company, on a full-time basis for the
entire period of six (6) consecutive months, and within thirty (30) days after
written notice of termination is given (which may occur before or after the end
of such six-month period), shall not have returned to the performance of his
duties hereunder on a full-time basis (a "disability"), the Company may
terminate the Executive's employment hereunder.
(d) Cause. The Company may terminate the Executive's employment hereunder
for cause. For purposes of this Agreement, "cause" shall mean that the Company,
acting in good faith based upon the information then known to the Company,
determines that the Executive has engaged in or committed: willful misconduct;
theft, fraud or other illegal conduct; refusal or willingness to substantially
perform his duties (other than such failure resulting from the Executive's
disability) after written demand for substantial performance is delivered by the
Company that specifically identifies the manner in which the Company believes
the Executive has not substantially performed his duties; insubordination; any
willful act that is likely to and which does in fact have the effect of injuring
the reputation or business of the Company; violation of any fiduciary duty;
violation of the executive's duty of loyalty to the Company; or a breach of any
term of this Agreement. For purposes of this Section 3(d), no act, or failure to
act, on the Executive's part shall be considered willful unless done or omitted
to be done, by him not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for cause
without delivery to the Executive of a notice of termination signed by the
Company's Chairman or Chief Executive Officer stating that, in the good faith
opinion of the officer signing such notice, the Executive has engaged in or
committed conduct of the nature described above in the second sentence of this
Section 3(d), and specifying the particulars thereof in detail.
4. Payments upon Termination.
(a) Without Cause or with Good Reason. In the event that the Executive's
employment is terminated by the Company for any reason other than death,
disability or cause as defined in Section 3(b), (c) and (d) of this Agreement,
or in the event that the Executive terminates his employment hereunder with Good
Reason, the Executive shall be entitled to receive severance pay in an aggregate
amount equal to 200% of his Annual Compensation, which shall be payable in one
lump sum, less any amounts required to be withheld by applicable law, in
exchange for a valid release of all claims the Executive may have against the
Company in a form acceptable to the Company. The Company will also pay to the
Executive any earned but unused vacation time at the rate of pay in effect on
the date of the notice of termination.
(b) Annual Compensation. For purposes of this Section 4, the term "Annual
Compensation" means an amount equal to the Executive's annual base salary at the
rate in effect on the date on which the Executive received or gave written
notice of his termination, plus the sum of (i) an amount equal to the average of
the Executive's two most recent annual bonuses, if any, received under the
Company's Incentive Compensation Plan prior to the notice of termination, (ii)
the Executive's annual car allowance, if any, and (iii) an amount determined by
the Company from time to time in its sole discretion to be equal to the average
annual cost for Company employees of obtaining medical, dental and vision
insurance under COBRA, which amount is hereby initially determined to be $5,000.
(c) Good Reason. For purposes of this Section 4 the term "Good Reason"
means:
(i) any reduction in the Executive's annual base salary, except for a
general one-time "across-the-board" salary reduction not exceeding ten percent
(10%) which is imposed simultaneously on all officers of the Company; or
(ii) the Company requires the Executive to be based at an office
location which will result in an increase of more than thirty (30) miles in the
Executive's one-way commute; or
(iii) there shall occur a "change of control" of the Company and, at
any time concurrent with or during the six-month period following such change of
control, the Executive shall have sent to the Chief Executive Officer of the
Company or the party acting in such capacity a written notice terminating his
employment on a date specified in said notice. For purposes of this Agreement,
the term "change of control" shall mean the occurrence of one of the following:
(1) any "person," as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"1934 Act") is, becomes or enters a contract to become, the
"beneficial owner," as such term is used in Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of
securities representing twenty-five percent (25%) or more of the
voting common stock of the Company;
(2) all or substantially all of the business of the Company is
disposed of, or a contract is entered into to dispose of all of
the business of the Company pursuant to a merger, consolidation
or other transaction in which (a) the Company is not the
surviving company or (b) the stockholders of the Company prior to
the transaction do not continue to own at least sixty percent
(60%) of the surviving corporation;
(3) the Company is materially or completely liquidated; or
(4) any person (other than the Company) purchases any common
stock of the Company in a tender or exchange offer with the
intent, expressed or implied, of purchasing or otherwise
acquiring control of the Company.
Notwithstanding clause (1) above, a "change of control" shall not be deemed
to have occurred solely because a person shall be, become or enter into a
contract to become the beneficial owner of 25% or more, but less than 40%, of
the voting common stock of the Company, if and for so long as such person is
bound by, and in compliance with, a contract with the Company providing that
such person may not nominate, vote for, or select more than a minority of the
directors of the Company. The exception provided by the preceding sentence shall
cease to apply with respect to any person upon expiration, waiver, or
non-compliance with any such contract, by which such person was bound.
(d) Release of all Claims. The Executive understands and agrees that the
Company's obligation to pay the Executive severance pay under this Agreement is
subject to the Executive's execution of a valid written waiver and release of
all claims which the Executive may have against the Company and/or its
successors in a form acceptable to the Company in its sole and absolute
discretion.
(e) Death, Disability or Cause. In the event that the Executive's
employment is terminated due to death, disability or cause, the Company shall
not be obligated to pay the Executive any amount other than earned unused
vacation, reimbursement for business expenses incurred prior to his termination
and in compliance with the Company's reimbursement policies, and any unpaid
salary for days worked prior to the termination.
5. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as he would be entitled to hereunder if he terminated his employment for
good Reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the date of
termination. As used in this Agreement, "Company" shall mean the Company as
herein before defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section
5 or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrator, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.
6. Notices. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
-------------------
George J. Suda
1236 Puerto Natales Drive
Placentia, CA 92871
If to the Company:
-----------------
Apria Healthcare Group Inc.
3560 Hyland Avenue
Costa Mesa, CA 92626
Attn: Chief Executive Officer
With a copy to the attention of the Company's
Senior Vice President and General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
7. Antisolicitation. The Executive promises and agrees that, during the
period of his employment by the Company and for a period of one year thereafter,
he will not influence or attempt to influence customers of the Company or any of
its present or future subsidiaries or affiliates, either directly or indirectly,
to divert their business to any individual, partnership, firm, corporation or
other entity then in competition with the business of the Company, or any
subsidiary or affiliate of the Company.
8. Soliciting Employees. The Executive promises and agrees that for a
period of one year following termination of his employment, he will not,
directly or indirectly solicit any of the Company employees who earned annually
$50,000 or more as a Company employee during the last six months of his or her
own employment to work for any other business, individual, partnership, firm,
corporation, or other entity.
9. Confidential Information.
(a) The Executive, in the performance of his duties on behalf of the
Company, shall have access to, receive and be entrusted with confidential
information, including but not limited to systems technology, field operations,
reimbursement, development, marketing, organizational, financial, management,
administrative, clinical, customer, distribution and sales information, data,
specifications and processes presently owned or at any time in the future
developed, by the Company or its agents or consultants, or used presently or at
any time in the future in the course of its business that is not otherwise part
of the public domain (collectively, the "Confidential Material"). All such
Confidential Material is considered secret and will be available to the
Executive in confidence. Except in the performance of duties on behalf of the
Company, the Executive shall not, directly or indirectly for any reason
whatsoever, disclose or use any such Confidential Material, unless such
Confidential Material ceases (through no fault of the Executive's) to be
confidential because it has become part of the public domain. All records,
files, drawings, documents, notes, disks, diskettes, tapes, magnetic media,
photographs, equipment and other tangible items, wherever located, relating in
any way to the Confidential Material or otherwise to the Company's business,
which the Executive prepares, uses or encounters during the course of his
employment, shall be and remain the Company's sole and exclusive property and
shall be included in the Confidential Material. Upon termination of this
Agreement by any means, or whenever requested by the Company, the Executive
shall promptly deliver to the Company any and all of the Confidential Material,
not previously delivered to the Company, that may be or at any previous time has
been in the Executive's possession or under the Executive's control.
(b) The Executive hereby acknowledges that the sale or unauthorized use or
disclosure of any of the Company's Confidential Material by any means whatsoever
and at any time before, during or after the Executive's employment with the
Company shall constitute unfair competition. The Executive agrees he shall not
engage in unfair competition either during the time employed by the Company or
any time thereafter.
10. Parachute Limitation. Notwithstanding any other provision of this
Agreement, the Executive shall not have any right to receive any payment or
other benefit under this Agreement, any other agreement, or any benefit plan if
such right, payment or benefit, taking into account all other rights, payments
or benefits to or for the Executive under this Agreement, all other agreements,
and all benefit plans, would cause any right, payment or benefit to the
Executive under this Agreement to be considered a "parachute payment" within the
meaning of Section 280G(b)(2) of the Internal Revenue Code as then in effect (a
"Parachute Payment"). In the event that the receipt of any such right or any
other payment or benefit under this Agreement, any other agreement, or any
benefit plan would cause the Executive to be considered to have received a
Parachute Payment under this Agreement, then the Executive shall have the right,
in the Executive's sole discretion, to designate those rights, payments or
benefits under this Agreement, any other agreements, and/or any benefit plans,
that should be reduced or eliminated so as to avoid having the right, payment or
benefit to the Executive under this Agreement be deemed to be a Parachute
Payment.
11. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Chief Executive Officer or
the President of the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral, or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California without regard to is conflicts of law
principles.
12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement or Executive's employment by the Company shall be settled
exclusively by arbitration, conducted before a single neutral arbitrator in
accordance with the American Arbitration Association's National Rules for
Resolution of Employment Disputes as then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
the provisions of Sections 7, 8 or 9 of this Agreement and the Executive hereby
consents that such restraining order or injunction may be granted without the
necessity of the Company's posting any bond, and provided, further, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the date of employment termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement. The fees and
expenses of the arbitrator shall be borne by the Company.
15. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto; and any prior agreement of the parties
hereto in respect of the subject matter contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
APRIA HEALTHCARE GROUP INC.
By:
---------------------------------
Philip L. Carter
Chief Executive Officer
EXECUTIVE
--------------------------------
George J. Suda
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2000 (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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 29,065
<SECURITIES> 0
<RECEIVABLES> 201,246
<ALLOWANCES> 49,409
<INVENTORY> 22,221
<CURRENT-ASSETS> 254,086
<PP&E> 524,676
<DEPRECIATION> 359,249
<TOTAL-ASSETS> 634,720
<CURRENT-LIABILITIES> 160,286
<BONDS> 384,671
0
0
<COMMON> 52
<OTHER-SE> 89,711
<TOTAL-LIABILITY-AND-EQUITY> 634,720
<SALES> 250,722
<TOTAL-REVENUES> 250,722
<CGS> 71,501
<TOTAL-COSTS> 71,501
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 10,619
<INTEREST-EXPENSE> 10,601
<INCOME-PRETAX> 22,036
<INCOME-TAX> 9,255
<INCOME-CONTINUING> 12,781
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<EPS-BASIC> 0.24
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