<PAGE>
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 first quarter ended March 31, 1999
--------------
Commission file number 80-19878
--------
OPTION CARE, INC.
-----------------
(Exact name of registrant as specified in its charter)
Delaware 36-3791193
- --------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
100 Corporate North
Suite 212
Bannockburn, Illinois 60015
- --------------------------------------- ----------
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: (847) 615-1690
--------------
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Issued and Outstanding as of April 30, 1999
---------------------------- -------------------------------------------
Common Stock - .01 par value 11,274,299
1
<PAGE>
INDEX
OPTION CARE, INC. & SUBSIDIARIES
PART I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. FINANCIAL STATEMENTS (Unaudited) PAGE NO.
<S> <C> <C>
Condensed Consolidated Balance Sheets - March 31, 1999
and December 31, 1998........................................ 3
Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 1999 and 1998................... 4
Condensed Consolidated Statement of Stockholders' Equity -
Three Months Ended March 31, 1999............................ 5
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1999 and 1998................... 6
Notes to Condensed Consolidated Financial Statements......... 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS................ 8
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK... 11
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS............................................ 12
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.................... 12
Item 3. DEFAULTS UPON SENIOR SECURITIES.............................. 12
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......... 12
Item 5. OTHER INFORMATION............................................ 12
Item 6(a). EXHIBITS .................................................... 12
Item 6(b). REPORTS ON FORM 8-K.......................................... 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OPTION CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
(UNAUDITED) (NOTE)
----------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents ................................................ $ -- $ 3,665
Accounts receivable, net ................................................. 22,615 23,544
Inventories, net ......................................................... 1,961 2,097
Other current assets ..................................................... 2,874 3,042
-------- --------
Total current assets .............................................. 27,450 32,348
Equipment and other fixed assets, net ...................................... 5,635 6,085
Goodwill, net .............................................................. 19,782 19,025
Other assets ............................................................... 1,389 1,434
-------- --------
Total assets ...................................................... $ 54,256 $ 58,892
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft ........................................................... $ 1,015 $ --
Trade accounts payable ................................................... 6,420 6,493
Other current liabilities ................................................ 7,549 6,059
-------- --------
Total current liabilities ......................................... 14,984 12,552
Long-term debt, excluding current portion .................................. 14,105 22,096
Other liabilities .......................................................... 315 450
Minority interest .......................................................... 56 55
-------- --------
Total liabilities ................................................. 29,640 35,153
Stockholders' equity:
Common stock, $.01 par value, 30,000,000 shares authorized, 11,274,299
and 11,165,719 shares issued and outstanding,
respectively ........................................................... 111 110
Common stock to be issued, 402,661 and 439,627
shares, respectively ................................................... 1,315 1,227
Additional paid-in capital ............................................... 43,478 43,273
Accumulated deficit ...................................................... (20,108) (20,871)
-------- --------
Total stockholders' equity ........................................ 24,796 23,739
-------- --------
Total liabilities and stockholders'
equity .......................................................... $ 54,256 $ 58,892
-------- --------
-------- --------
</TABLE>
Note : The balance sheet at December 31, 1998 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. See notes to condensed
consolidated financial statements.
3
<PAGE>
OPTION CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
---- ----
<S> <C> <C>
Revenue .............................................. $ 28,904 $ 26,618
Cost of revenue ...................................... 17,493 15,347
-------- --------
Gross profit ................................. 11,411 11,271
Selling, general and
Administrative expenses ......................... 8,792 8,415
Provision for doubtful accounts ...................... 651 488
Amortization of goodwill ............................. 131 144
-------- --------
Total operating expenses ..................... 9,574 9,047
-------- --------
Operating income ..................................... 1,837 2,224
Interest expense ..................................... (329) (616)
Other expense, net ................................... (193) (23)
-------- --------
Income before income taxes ........................... 1,315 1,585
Income tax expense ................................... 552 720
-------- --------
Net income ........................................... $ 763 $ 865
-------- --------
-------- --------
Net income per common share :
Basic ........................................... $ 0.07 $ 0.08
-------- --------
-------- --------
Diluted ......................................... $ 0.07 $ 0.08
-------- --------
-------- --------
Shares used in computing net income per common share :
Basic ........................................... 11,395 10,967
-------- --------
-------- --------
Diluted ......................................... 11,691 11,029
-------- --------
-------- --------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
OPTION CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON
STOCK ADDITIONAL
COMMON TO BE PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK ISSUED CAPITAL DEFICIT EQUITY
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998............... $110 $1,227 $43,273 $(20,871) $23,739
------ ------ ---------- ----------- -------------
Net income............................... 763 763
Common Stock to be issued, net........... 88 88
Issuance of Common Stock................. 1 205 206
------ ------ ---------- ----------- -------------
Balance, March 31, 1999 (Unaudited)...... $111 $1,315 $43,478 $(20,108) $24,796
------ ------ ---------- ----------- -------------
------ ------ ---------- ----------- -------------
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
OPTION CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
3 Months Ended March 31,
------------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income....................................................................... $763 $865
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................................................. 651 663
Provision for doubtful accounts................................................ 651 488
Change in current assets and current liabilities............................... 2,122 741
------- -------
Net cash provided by operating activities........................................... 4,187 2,757
------- -------
Cash flows from investing activities:
Other assets, net................................................................ (318) 214
Purchases of equipment and other, net............................................ (52) (844)
Payments for acquisitions........................................................ (757) (874)
------- -------
Net cash used in investing activities............................................... (1,127) (1,504)
------- -------
Cash flows from financing activities:
Cash overdraft................................................................... 1,015 1,187
Retirement of previous facility.................................................. (21,800) ----
Net borrowings(payments) on revolving credit agreement 13,824 (2,400)
Payments on capital leases....................................................... (50) (93)
Payments of other long-term debt................................................. (9) (5)
Proceeds from issuance of stock.................................................. 295 58
------- -------
Net cash used by financing activities............................................... (6,725) (1,253)
------- -------
Net decrease in cash and cash equivalents........................................... (3,665) ----
Cash and cash equivalents, beginning of period...................................... 3,665 ----
------- -------
Cash and cash equivalents, end of period............................................ $ ---- $ ----
------- -------
------- -------
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
OPTION CARE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 16 of Regulation S-X. Accordingly, they
do not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1998.
2. RECLASSIFICATIONS
Certain prior year amounts in the condensed consolidated financial
statements have been reclassified to conform to the current year presentation.
3. LONG-TERM DEBT
On February 5, 1999, the Company entered into a $25 million Loan and
Security Agreement ("Agreement") with a bank that replace the Company's former
existing facility. The Agreement provides for borrowings up to $25 million
and requires the Company to meet certain financial covenants including, but
not limited to: fixed charge coverage ratio; debt ratio; and limitation on
annual capital expenditures. The Agreement allowed the Company, among other
things, to meet working capital needs and to retire in its entirety the
Company's former facility. Under the Agreement, the Company is subject to an
early termination fee if the loan is terminated prior to its natural
expiration of February 2002. The Company paid a facility fee of $0.2 million
at the time of signing of the Agreement. The Agreement provides for an annual
commitment fee paid by the Company of 0.25% on the average daily unused
amount of the facility. The Agreement prohibits the Company from declaring
any cash dividends on its common stock. The Company may elect interest rates
ranging from various LIBOR periods plus a 2.125% margin, to the bank's
reference rate. The average interest rate for outstanding borrowings under
the line was 7.2% at March 31, 1999.
Borrowing availability under the facility is related to a percentage
of the Company's net outstanding account receivable balances, less certain
ineligible amounts, as defined in the Agreement. The facility is secured by
all of the issued and outstanding Common Stock of the Company. In addition to
the Company's assets, the John N. Kapoor Trust, dated September 20, 1989,
(the "Trust"), has pledged an irrevocable letter of credit totaling $5 million
in favor of the lending bank to support borrowings, if any, that exceed the
allowable collateral base as defined in the Agreement. Overall borrowings
allowable under the Agreement are limited to the lessor of $25 million or,
the total allowable collateral base plus amounts available that are supported
by the letters of credit. The Company has entered into an agreement with the
Trust which provides the monthly payment of a monitoring fee as well as all
expenses related to the set up and maintenance of the letter of credit.
In the case of a draw on the letter of credit pledged, the Company may
7
<PAGE>
elect, at its option, to issue to the Trust a Convertible Note (the "Note")
for the amount of such draw. The Trust has the option, at any time up to and
including January 31, 2000 or until the Note has been paid in full, to
convert all or a portion of the unpaid amount of such Note into Common Stock
of the Company, at a price equal to the average closing price per share of
the Common Stock during the five days preceding the receipt of the Note.
4. NET INCOME PER COMMON SHARE
The reconciliation of net income per weighted average common share for
the quarters ended March 31, 1999 and 1998 is as follows (in thousands,
except per share amounts):
<TABLE>
<CAPTION>
For the Quarter Ended March 31, 1999
----------------------------------------------------------------
Income Shares Per Share
----------------- ----------------- -------------------
<S> <C> <C> <C>
Basis EPS
Net income $763 11,395 $0.07
Effect of dilutive securities ---- 296 ----
----------------- ----------------- -------------------
Diluted EPS $763 11,691 $0.07
----------------- ----------------- -------------------
----------------- ----------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
For the Quarter Ended March 31, 1998
----------------------------------------------------------------
Income Shares Per Share
----------------- ----------------- -------------------
<S> <C> <C> <C>
Basis EPS
Net income $865 10,967 $0.08
Effect of dilutive securities ---- 62 ----
----------------- ----------------- -------------------
Diluted EPS $865 11,029 $0.08
----------------- ----------------- -------------------
----------------- ----------------- -------------------
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 1998.
Any forward looking statements in the following discussion relating to
financial results, performance, acquisitions, business development
activities, competition or future regulation, involve risks and uncertainties
that could significantly affect anticipated results in the future. These
risks and uncertainties include, but are not limited to, uncertainties
relating to acquisitions and divestitures, availability of capital to fund
operations and acquisitions, sales and renewals of franchisees, government
and regulatory policies, general economic conditions and change in the
competitive environment in which the Company operates.
8
<PAGE>
DISCUSSION OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999
Revenue for the three months ended March 31, 1999 was $28.9 million,
an increase of $2.3 million or 8.6% from the $26.6 million reported for the
three months ended March 31, 1998. Revenue from patient care services
increased $3.4 million, offset by a $0.9 million decline in product and
network management revenue and a $0.2 million decline in royalty fee revenue.
The increase in patient care services is primarily attributable to a 14.7%
increase in same store sales. The decline in product and network management
revenue is largely the result of management's earlier decision to transition
to direct billing of franchisees by selected manufacturers. Revenue for
patient care services through the company-owned locations for the quarter
ended March 31, 1999, represented 90.7% of total revenues, while royalty fees
represented 6.9% and product and network management represented 2.4% of total
revenue.
Gross profit as a percentage of revenue (gross margin) for the three
months ended March 31, 1999 was 39.5% compared to 42.3% for the three months
ended March 31, 1998. The decline in gross margin is due primarily to the
revenue mix as more revenue was generated in the first quarter of 1999 from
lower margin revenue sources than in the first quarter of 1998. During the
three months ended March 31, 1999, the Company changed its methodology for
determining gross margin. The Company determined that the change in
methodology was more appropriate and provided a better indication of the
actual gross margin provided for by the revenue. Amounts from 1998 were
reclassified to conform to the 1999 presentation.
Total operating expenses for the three months ended March 31, 1999
were $9.6 million, an increase of $0.5 million or 6% from operating expenses
of $9.1 million for the three months ended March 31, 1998. Total operating
expenses as a percentage of revenue decreased to 33.1% for first quarter 1999
compared to 34.0% for the comparable period in the prior year. This decline
is primarily due to better productivity of selling, general and administrative
expenses which, as a percentage of revenue, declined to 30.4% in the first
quarter of 1999 from 31.6% in 1998. The provision for doubtful accounts for
the first quarter of 1999 remained relatively consistent with the first
quarter of 1998 at approximately 2% of revenue.
Interest expense decreased to $0.3 million for the three months ended
March 31, 1999 from $0.6 million for the corresponding period in the prior
year as the amount of debt outstanding was reduced by 46.4% from $26.8 million
at March 31, 1998 to $14.3 million at March 31, 1999.
The effective income tax rate for the first quarter of 1999 was
42.0%, resulting in net income of $0.8 million, or $0.07 per share (basic and
diluted). For the first quarter of 1998 the effective tax rate was 45.4% and
net income was $0.9 million or $0.08 per share (basic and diluted). As a
percentage of revenue, net income for first quarter 1999 was 2.6% compared to
3.2% for first quarter 1998
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow from operations increased $1.4 million or 51.9% for
the first quarter of 1999 compared to the first quarter of 1998, due to
increased cash collections of the Company's outstanding account receivable
balances. Net cash flows used by investing activities decreased by $0.4
million for the first quarter of 1999 compared to the first quarter of 1998,
mainly due to reductions in purchases of equipment. Net cash flow used by
financing activities increased by $5.5 million in the first quarter of 1999
compared to the same period in 1998, due to the retirement in its entirety of
the Company's former credit facility and reduced borrowings under the
Company's new facility as excess cash and the Company's operating cash flow
reduced the amount needed under the new facility.
9
<PAGE>
As of March 31, 1999, the Company had no cash and cash equivalents,
compared to $3.7 million of cash and cash equivalents at December 31, 1998 as
the Company, upon replacing its former debt facility on February 5, 1999,
re-continued its policy of reducing its outstanding debt with its excess cash
flow.
Management believes that cash flow from operations, cash on hand and
amounts available under the new Agreement, will be sufficient to meet the
cash needs of the business for the immediate future. In the event that
additional capital is required, management cannot assure that such capital
can be obtained on terms acceptable to the Company.
On February 5, 1999, the Company entered into a $25 million Loan and
Security Agreement ("Agreement") with a bank that replaced a previous
facility. The Agreement provides for borrowings up to $25 million and
requires the Company to meet certain financial covenants including, but not
limited to: fixed charge coverage ratio; debt ratio; and limitation on annual
capital expenditures. The Agreement provides for, among other things, the
ability to meet working capital needs and to retire in its entirety the
Company's then existing facility. The Company is subject to an early
termination fee if the loan is terminated prior to its natural expiration of
February 2002. The Company paid a facility fee of $0.2 million at the time of
signing the Agreement. The Agreement provides for an annual commitment fee
paid by the Company of 0.25% on the average daily unused amount of the
facility. The Agreement prohibits the Company from declaring any cash
dividends on its common stock. The Company may elect interest rates ranging
from various LIBOR periods plus a 2.125% margin, to the bank's reference rate.
Availability under the facility is related to a percentage of the
Company's net outstanding account receivable balances, less certain ineligible
amounts, as defined in the Agreement. The facility is secured by all of the
issued and outstanding Common Stock of the Company. In addition to the
Company's assets, the John N. Kapoor Trust, dated September 20, 1989, (the
"Trust"), has pledged an irrevocable letter of credit totaling $5 million in
favor of the lending bank to support borrowings, if any, that exceed the
allowable collateral base as defined in the Agreement. Overall borrowings
allowable under the Agreement are limited to the lessor of $25 million or,
the total allowable collateral base plus amounts available that are supported
by the letters of credit. The Company has entered into an agreement with the
Trust which provides the monthly payment of a monitoring fee as well as all
expenses related to the set up and maintenance of the letter of credit.
In the case of a draw on the letter of credit pledged, the Company
may elect, at its option, to issue to the Trust a Convertible Note (the
"Note") for the amount of such draw. The Trust has the option, at any time up
to and including January 31, 2000 or until the Note has been paid in full, to
convert all or a portion of the unpaid amount of such Note into Common Stock
of the Company, at a price equal to the average closing price per share of
the Common Stock during the five days preceding the receipt of the Note.
There are currently various proposals under development to enact
healthcare reform on a national, state and local level. It is not possible at
this time to predict the cash flow impact, if any, which any such changes may
have on providers of home healthcare services and on Option Care locations.
YEAR 2000 ISSUE
10
<PAGE>
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Computer
equipment, software and devices with imbedded technology that are time
sensitive may treat years as occurring between 1900 and the end of 1999 and
may not self-convert to reflect the upcoming change in the century. If not
corrected, this problem could result in system failures or miscalculations
and erroneous results by, or at, Year 2000.
Currently, the Company is continuing its program to understand the
nature and extent of the work required to make its systems Year 2000
compliant. This program encompasses the Company's operating information and
facilities systems, and the readiness of customers, third-party payers,
vendors and other third parties with which the Company does business. The
program includes the following phases : awareness and inventory, detailed
assessment and resolution, testing, deployment and contingency plan
development for all areas.
To date, the Company has completed an internal review of its
computer equipment and software systems and other equipment with imbedded
technology, and is in the early stages of completion of the other phases of
its program, including the implementation of remediation measures for certain
identified systems, ordinary course replacement of equipment and software
with replacements which are Year 2000 complaint, and a comprehensive review
of customers, vendors and other third parties to determine the extent to
which interfaces with such entities are vulnerable to Year 2000 issues. The
Company's objective is to become Year 2000 compliant with its critical
systems prior to the end of the third quarter of 1999, with substantial time
for further testing, verification and conversion of less important activities
and systems.
The total cost of the Year 2000 project to date has not been
material. Based on the program to date, the Company does not expect that
future costs of modifications will have a material adverse effect on the
Company's financial position or results of operations and that currently
anticipated costs to be incurred by the Company with respect to Year 2000
issues will be funded from operating cash flows. However, if all Year 2000
issues are not properly identified, or assessment, remediation and testing
are not effected timely with respect to Year 2000 problems that are
identified, there can be no assurance that the Year 2000 issue will not
materially adversely impact the Company's results of operations or adversely
affect the Company's relationships with customers, vendors, or others.
Additionally, there can be no assurance that the Year 2000 issues of other
entities will not have a material adverse impact on the Company's systems or
results of operations.
Because the Company expects that its internal systems will become
Year 2000 compliant in a timely manner, the Company believes that the most
likely worst case scenario would result from vendors or other third parties
failing to achieve Year 2000 compliance. Depending upon the number of third
parties, their identity and the nature of the noncompliance, the Year 2000
issue could have a material adverse effect on the Company's financial
position or results of operations. The Company has not yet developed full
contingency plans for any critical problems which may occur in any of the
assessment areas noted above, but anticipates that such plans will be
completed by September, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
Not Applicable.
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company was a party to a $35 million revolving credit facility,
which contained certain financial covenants. On February 5, 1999, the Company
entered into a $25 million Loan and Security Agreement ("Agreement") with a
bank that replaces the existing outstanding facility. The Agreement provides
for borrowings up to $25 million and requires the Company to meet certain
financial covenants including, but not limited to: fixed charge coverage
ratio; debt ratio; and limitation on annual capital expenditures. Under the
Agreement, the Company may not declare and pay dividends without the consent
of the lenders.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its 1999 Annual Meeting of Shareholders on May 4,
1999. At the Annual Meeting, the shareholders voted on and approved the
election of James G. Andress and Michael A. Rusnak as Directors to serve
until the Annual Meeting of 2002. In addition, the shareholders voted to
approve and ratify certain stock bonus awards made to certain officers of the
Company for fiscal 1998. The votes cast at the Annual Meeting on such matters
were as follows :
a. Election of Directors :
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
Mr. Andress 9,888,801 --- 62,353
Mr. Rusnak 9,888,771 --- 62,383
b. Approval of 1998 Stock Bonus Awards :
9,352,508 212,948 385,698
</TABLE>
The terms of Directors John N. Kapoor, Ph.D. and Roger W. Stone
expire at the Annual Meeting in 2000 and for Jerome F. Sheldon at the Annual
Meeting in 2001.
ITEM 5 OTHER INFORMATION
Not Applicable.
ITEM 6 (a) EXHIBITS
27 Financial Data Schedule
12
<PAGE>
ITEM 6 (b) REPORTS ON FORM 8-K OR FORM 8
The Company did not file any reports on Form 8-K during the three
months ended March 31, 1999.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OPTION CARE, INC.
/s/ Michael A. Siri
-------------------
By : Michael A. Siri
Vice President and Chief
Financial Officer (Principal
Accounting Officer and
Principal Financial Officer)
Date: May 17, 1999
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 22,615,000 31,453,000
<ALLOWANCES> 0 0
<INVENTORY> 1,961,000 2,180,000
<CURRENT-ASSETS> 27,450,000 38,492,000
<PP&E> 5,635,000 6,191,000
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 54,256,000 65,920,000
<CURRENT-LIABILITIES> 14,984,000 16,636,000
<BONDS> 0 0
0 0
0 0
<COMMON> 111,000 108,000
<OTHER-SE> 24,685,000 22,792,000
<TOTAL-LIABILITY-AND-EQUITY> 24,796,000 22,900,000
<SALES> 0 0
<TOTAL-REVENUES> 28,904,000 26,218,000
<CGS> 17,493,000 15,347,000
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 9,116,000 8,582,000
<LOSS-PROVISION> 651,000 488,000
<INTEREST-EXPENSE> 329,000 616,000
<INCOME-PRETAX> 1,315,000 1,585,000
<INCOME-TAX> 552,000 720,000
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 763,000 865,000
<EPS-PRIMARY> .07 .08
<EPS-DILUTED> .07 .08
</TABLE>
