<PAGE> 1
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 quarterly period ended: September 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission file number: 0-21428
OCCUPATIONAL HEALTH + REHABILITATION INC
(Exact name of registrant as specified in its charter)
Delaware 13-3464527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 Derby Street, Suite 36
Hingham, Massachusetts 02043
(Address of principal executive offices)
(Zip code)
(617) 741-5175
(Registrant's telephone number, including area code)
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
filing requirements for the past 90 days. Yes X No ___.
The number of shares outstanding of the registrant's Common Stock as of
October 31, 1996 was 1,471,477.
<PAGE> 2
OCCUPATIONAL HEALTH + REHABILITATION INC
Quarterly Report on Form 1O-Q
For the Quarter Ended September 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets.......................... 3
Consolidated Statements of Operations................ 5
Consolidated Statements of Cash Flows................ 7
Notes to Consolidated Financial Statements........... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation............. 11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................... 16
Signatures............................................................... 17
</TABLE>
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<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,759,935 $ 368,959
Accounts receivable, net 892,201 236,875
Prepaid expenses 325,254 103,406
Other accounts receivable 11,020 0
Due from related party 530,026 680,445
Other assets 124,052 166,056
------------ ----------
Total current assets 3,642,488 1,555,741
Property and equipment, net 1,059,364 1,058,311
Intangible assets, net 2,529,882 1,565,179
Deposits 66,595 40,864
Other assets 387,168 29,167
------------ ---------
Total assets $ 7,685,497 $4,249,262
============ ==========
LIABILITIES, REDEEMABLE STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 1,034,782 $1,001,768
Current portion of obligations under capital leases 92,562 99,490
Current maturities of long-term debt 489,086 91,667
Current portion of obligations under noncompetition
agreements 312,908 325,000
Due to related party 638,847 377,862
------------ ----------
Total current liabilities 2,568,185 1,895,787
Long-term debt, less current maturities 1,165,071 744,779
Other long-term liabilities 25,168 0
Obligations under capital leases 80,406 122,621
Obligations under noncompetition agreements 0 293,153
------------ ----------
Total liabilities 3,838,830 3,056,340
Minority interest 23,513 201,106
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
Redeemable stock:
Redeemable convertible preferred stock, Series 1, $.01 par value -
1,600,000 shares authorized, issued and outstanding in 1995;
no shares issued and outstanding in 1996 0 2,700,000
Redeemable convertible preferred stock, Series 2,
$.01 par value - 3,000,000 shares authorized,
2,537,843 issued and outstanding in 1995; no
shares issued and outstanding in 1996 0 4,479,221
------------ -----------
Total redeemable stock 0 7,179,221
Stockholders' equity (deficit)
Common stock, $.01 par value - 8,000,000 shares
authorized, issued and outstanding 671,855 shares 0 6,719
in 1995
Common stock, $.001 par value - 10,000,000 shares
authorized, issued and outstanding 1,471,477
shares in 1996 1,471 0
Additional paid-in capital 9,843,029 11,022
Accumulated deficit (6,021,346) (6,205,146)
------------- ------------
Total stockholders' equity (deficit) 3,823,154 (6,187,405)
------------- ------------
Total liabilities, redeemable stock and stockholders' equity
(deficit) $ 7,685,497 $ 4,249,262
============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
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<PAGE> 5
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended September 30,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
Net patient service revenue $ 2,279,875 $ 1,764,911
Management fee income 48,185 86,502
Other income 29,532 15,303
----------- -----------
Total revenue 2,357,592 1,866,716
Operating and administrative expenses (2,800,695) (2,195,632)
Depreciation and amortization (117,197) (106,483)
Interest expense (76,229) (68,258)
Interest income 44,573 10,620
Minority interest in net loss of subsidiary 63,525 131,336
----------- -----------
Net loss before income taxes (528,431) (361,701)
Income taxes 0 0
----------- -----------
Net loss $ (528,431) $ (361,701)
=========== ===========
Net loss per share $ (0.36) $ (0.53)
=========== ===========
Weighted average common shares and common share
equivalents outstanding 1,469,432 681,033
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
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<PAGE> 6
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
Net patient service revenue $ 6,288,885 $ 4,087,748
Management fee income 128,837 124,977
Other income 29,798 32,445
----------- -----------
Total revenue 6,447,520 4,245,170
Operating and administrative expenses (7,363,765) (5,253,208)
Depreciation and amortization (317,321) (250,438)
Interest expense (205,496) (100,186)
Interest income 56,531 33,353
Minority interest in net loss of subsidiary 193,879 202,392
----------- -----------
Net loss before income taxes (1,188,652) (1,122,917)
Income taxes 0 0
----------- -----------
Net loss $(1,188,652) $(1,122,917)
=========== ===========
Net loss per share $ (1.17) $ (1.74)
=========== ===========
Weighted average common shares and common share
equivalents outstanding 1,014,848 646,322
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
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<PAGE> 7
OCCUPATIONAL HEALTH + REHABILITATION INC
Consolidated Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(1,188,652) $(1,122,917)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 317,321 250,438
Amortization of discount 19,755 42,777
Minority interest in loss of subsidiary (193,879) (202,392)
Changes in operating assets and liabilities:
Accounts receivable (631,104) 37,797
Prepaid expenses and other current assets 19,067 (139,725)
Due from related party, net 411,404 0
Deposits and other noncurrent assets 16,268 0
Accounts payable and accrued expenses (546,164) 326,261
Other long-term liabilities 25,168 0
----------- -----------
Net cash used in operating activities (1,750,816) (807,761)
INVESTING ACTIVITIES:
Property and equipment additions (22,809) (148,308)
Additions to goodwill (311,024) 0
Cash received (paid) for acquisitions 3,677,414 (4,000)
----------- -----------
Net cash provided by (used in) investing activities 3,343,581 (152,308)
FINANCING ACTIVITIES:
Proceeds from sale of stock, net 8,385 599,999
Proceeds from line of credit and loans payable 500,000 0
Payments of long-term debt and other long-term obligations (627,884) (214,619)
Payments of capital lease obligations (82,290) (95,217)
----------- -----------
Net cash (used in) provided by financing activities (201,789) 290,163
-----------
Net increase (decrease) in cash and cash equivalents 1,390,976 (669,906)
Cash and cash equivalents at beginning of period 368,959 1,211,285
----------- -----------
Cash and cash equivalents at end of period $ 1,759,935 $ 541,379
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
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<PAGE> 8
OCCUPATIONAL HEALTH + REHABILITATION INC
Notes to Consolidated Financial Statements
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited interim financial statements of Occupational
Health + Rehabilitation Inc (formerly Telor Ophthalmic Pharmaceuticals, Inc.)
(the "Company") have been prepared in accordance with the instructions to Form
10-Q and Rule 10.01 of Regulation S-X pertaining to interim financial
information and disclosures required by generally accepted accounting
principles. The interim financial statements presented herein reflect all
adjustments (consisting of normal recurring adjustments) which, in the opinion
of management, are considered necessary for a fair presentation of the Company's
financial condition as of September 30, 1996 and results of operations for the
three months and nine months ended September 30, 1996 and 1995. The results of
operations for the nine months ended September 30, 1996 are not necessarily
indicative of the results that may be expected for a full year.
2. Mergers and Acquisitions
Telor Ophthalmic Pharmaceuticals, Inc.: Effective June 6, 1996,
Occupational Health + Rehabilitation Inc ("OH+R") merged with (the "Merger")
Telor Ophthalmic Pharmaceuticals, Inc. ("Telor"), with the Company being the
surviving corporation. Telor had historically been involved in the development
of ophthalmic pharmaceuticals. In connection with the Merger, the Company
changed its name to Occupational Health + Rehabilitation Inc and assumed the
business of OH+R. In conjunction with the Merger, the Company issued 681,415
shares of its common stock in exchange for all outstanding shares of OH+R
capital stock. Outstanding options held by employees, directors and consultants
of OH+R to purchase 832,000 shares of OH+R common stock were converted into
options to purchase approximately 117,807 shares of the Company's common stock.
Warrants to purchase 148,150 shares of OH+R common stock now entitle the holders
to acquire 20,975 shares of the Company common stock.
Effective June 7, 1996, the Company is listed on the Nasdaq SmallCap Market
under the symbol "OHRI."
The Merger was accounted for as a "reverse acquisition" whereby OH+R was
deemed to have acquired Telor for financial reporting purposes. Consistent with
the reverse acquisition accounting treatment, historical financial statements
for the Company for periods prior to the date of the Merger will be those of
OH+R. Under the purchase method of accounting, balances and results of
operations of Telor will be included in the Company's financial statements from
the date of the Merger forward.
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<PAGE> 9
OCCUPATIONAL HEALTH + REHABILITATION INC
Notes To Consolidated Financial Statements (continued)
(UNAUDITED)
2. Mergers and Acquisitions (continued)
Argosy Health, L.P.: On September 11, 1996, the Company purchased a 70%
undivided interest in the assets (excluding accounts receivable) of a business
division of Argosy Health, L.P., ("Argosy") which provides industrial on-site
occupational and physical therapy and related assessments, evaluations and
injury prevention programs for employees with work-related injuries and
illnesses in New Jersey, Pennsylvania, Delaware, Maryland, Northern Virginia and
the District of Columbia. In connection with the transaction, the Company and
Argosy formed a general partnership by the name of Argosy Health Northeast (the
"Partnership"). The Company contributed to the Partnership the assets purchased
from Argosy (excluding goodwill) and Argosy contributed the remaining 30%
undivided interest of the business division's assets (excluding goodwill). The
consideration for the sale and other matters related thereto are more fully
described in the Current Report on Form 8-K dated September 11, 1996 filed by
the Company on September 18, 1996 concerning this acquisition.
The following pro forma information presents a summary of consolidated
results of operations of the Company as if the Merger and the Argosy acquisition
had occurred at the beginning of each of the respective periods presented. The
pro forma financial information is not necessarily indicative of the results of
operations as they would have been had the transaction been effected on the
assumed dates, or of the future results of operations of the combined entities.
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
Total revenue $ 7,911,512 $ 5,736,979
================= ===========
Net loss $ (1,391,959) $(7,828,752)
================= ===========
Net loss per share $ (.95) $ (5.46)
================= ===========
</TABLE>
3. Net Loss per Share
Net loss per share of common stock is computed by dividing net loss by the
weighted average number of shares of common stock outstanding during each period
presented. The weighted average number of shares outstanding for the three and
nine months ended September 30, 1995 is based on the number of OH+R shares of
common stock exchanged for the Telor shares (see Note 2) and assumes the
retroactive conversion of OH+R's preferred stock. The effect of options and
warrants is not considered as it would be antidilutive.
- 9 -
<PAGE> 10
OCCUPATIONAL HEALTH + REHABILITATION INC
Notes To Consolidated Financial Statements (continued)
(UNAUDITED)
4. Subsequent Events
1996 Stock Plan: In October 1996, the Company's board of directors adopted
the 1996 Stock Plan ("1996 Plan"), which provides for the granting of up to
265,000 non-qualified stock options, "incentive stock options" ("ISOs") and
stock appreciation rights to employees, directors and consultants of the
Company. Non-qualified options granted may not be at a price less than 50% of
fair market value of the common stock, and ISOs granted may not be at a price of
less than 100% of fair market value of the common stock on the date of grant.
Granting of incentive stock options is subject to the approval of the 1996 Plan
by the Company's stockholders.
Series A Convertible Preferred Stock: On November 6, 1996, the Company sold
1,416,667 shares of Series A Convertible Preferred Stock ("Series A Preferred
Stock") in a private placement at a purchase price of $6.00 per share. Subject
to certain conditions, the Company may require the purchasers to purchase up to
an additional 250,000 shares of Series A Preferred Stock prior to May 1997. Each
share of Series A Preferred Stock is convertible, at the option of the holder,
into one share of Common Stock (subject to adjustment upon the occurrence of
certain specified events). The holders of the Series A Preferred Stock are
entitled to vote as a single class with the holders of the Common Stock and each
share of Series A Preferred Stock is entitled to the number of votes that is
equal to the number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such vote. The holders of Series A Preferred
Stock are entitled to certain registration rights with respect to the Common
Stock into which the Series A Preferred Stock is convertible. Dividends will be
payable on the shares of Series A Preferred Stock when and if declared by the
Board of Directors after three years from the date of issuance and will
thereafter accrue at an annual cumulative rate of $0.48 per share, subject to
certain adjustments. The Company intends to use the proceeds from the sale of
the Series A Preferred Stock for its expansion efforts, and for working
capital.
- 10 -
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Overview
The Company was organized in 1988 to develop ophthalmic pharmaceuticals. In
June 1996, Occupational Health + Rehabilitation Inc ("OH+R") merged with and
into (the "Merger") Telor Ophthalmic Pharmaceuticals, Inc. ("Telor"), with Telor
being the surviving corporation (the "Company"). In connection with the Merger,
the Company changed its name to Occupational Health + Rehabilitation Inc and
assumed the business of OH+R, which is to develop and operate a network of
outpatient centers throughout the Northeast. The transaction was accounted for
as a "reverse acquisition" whereby OH+R was deemed to have acquired Telor for
financial reporting purposes. Consistent with the reverse acquisition accounting
treatment, historical financial statements for the Company for periods prior to
the date of the Merger are those of OH+R.
The Company derives patient service revenue primarily from the prevention,
treatment and management of work-related injuries and illnesses and from other
occupational healthcare services, such as employment-related physical
examinations, drug and alcohol testing, physical and occupational therapy and
other related programs.
The Company's operations have been funded primarily through venture capital
investments. The Company's growth has resulted predominately from acquisitions
and development of businesses principally engaged in occupational healthcare.
The following table sets forth, for the periods indicated, the relative
percentages which certain items in the Company's consolidated statements of
operations bear to total revenue.
<TABLE>
<CAPTION>
Three Months Ended September 30,
1996 1995
---- ----
<S> <C> <C>
Total revenue .................................. 100.0% 100.0%
Operating and administrative expenses .......... (118.8) (117.6)
Depreciation and amortization .................. (5.0) (5.7)
Interest expense ............................... (3.2) (3.7)
Interest income ................................ 1.9 0.6
Minority interest in net loss of subsidiary .... 2.7 7.0
----- -----
Loss before income taxes ...................... (22.4) (19.4)
Income taxes .................................. 0.0 0.0
----- -----
Net loss ...................................... (22.4)% (19.4)%
===== =====
</TABLE>
- 11 -
<PAGE> 12
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1995
---- ----
<S> <C> <C>
Total revenue .................................. 100.0% 100.0%
Operating and administrative expenses .......... (114.2) (123.7)
Depreciation and amortization .................. (4.9) (5.9)
Interest expense ............................... (3.2) (2.4)
Interest income ................................ 0.9 0.8
Minority interest in net loss of subsidiary .... 3.0 4.8
----- -----
Loss before income taxes ....................... (18.4) (26.4)
Income taxes ................................... 0.0 0.0
----- -----
Net loss ....................................... (18.4)% (26.4)%
===== =====
</TABLE>
Results of Operations
Three Months Ended September 30, 1996 and 1995
Revenue
Total revenue increased 26.3% to approximately $2,358,000 in the three
months ended September 30, 1996 from approximately $1,867,000 in the same three
month period in 1995. Net patient service revenue increased 29.2% to
approximately $2,280,000 for the three months ended September 30, 1996 from
approximately $1,765,000 in the comparable period in 1995. The increases in net
patient service revenue resulted primarily from physician and physical therapy
practices acquired in 1995 and 1996 and from increased business in markets where
the Company operated centers during the entire months of both periods. Of the
approximately $515,000 increase in net patient service revenue from the three
month period September 30, 1995 compared to the same period in 1996,
approximately $299,000 (58%) was attributable to new centers acquired in 1995
and 1996. Approximately $216,000 (42%) was due to growth in markets where the
Company already operated.
Operating and Administrative Expenses
Operating and administrative expenses increased 27.6% to approximately
$2,801,000 in the three months ended September 30, 1996 from approximately
$2,196,000 in the same three month period in 1995. This increase was principally
due to the acquisition and development of additional practices and the
incurrence of certain expenses as a result of the Telor merger. As a percentage
of total revenues, operating and administrative expenses were 118.8% for the
three months ended September 30, 1996 and 117.6% for the same period in 1995.
The Company believes that as
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<PAGE> 13
additional acquisitions are completed, further leveraging of existing management
will occur, and, as a result, operating and other administrative costs will
decline as a percentage of total revenue.
Depreciation and Amortization
Depreciation and amortization expense increased 10% to approximately
$117,000 in the three months ended September 30, 1996 from approximately
$106,000 in the same three month period in 1995. This increase occurred
primarily as a result of the Company having additional growth through center
development and acquisitions. As a percentage of total revenues, depreciation
and amortization was 5.0% in the third quarter of 1996, and 5.7% in the same
quarter of 1995.
Interest Expense
Interest expense increased 11.7% to approximately $76,000 in the three
months ended September 30, 1996 from approximately $68,000 in the same three
month period in 1995. The increase from 1995 to 1996 was due to the incurrence
of certain debt as consideration for several acquisitions and for certain debt
acquired as a result of the Telor merger. Additionally, in June 1995, the
Company sold certain medical receivables to provide operating cash and to pay
down certain term loans and notes payable. As a percentage of total revenues,
interest expense was 3.2% in the third quarter of 1996, and 3.7% in the same
quarter of 1995.
Interest Income
Interest income is generated primarily from cash invested in highly liquid
funds with a maturity of three months or less. Interest income increased 319.7%
to approximately $45,000 in the quarter ended September 30, 1996 from $11,000 in
the same quarter in 1995. The increase was related to additional funds received
by the Company as a result of the merger with Telor.
Minority Interest
Minority interest represents the share of profit and losses of certain
investors in certain joint ventures with the Company. For the three months ended
September 30, 1996, the minority interest in net profits/losses of subsidiaries
decreased by 51.6% to approximately $64,000 from approximately $131,000 in the
same three-month period in 1995.
Nine Months Ended September 30, 1996 and 1995
Revenue
Total revenue increased 51.9% to approximately $6,448,000 in the nine
months ended September 30, 1996 from approximately $4,245,000 in the same nine
month period in 1995. Net patient service revenue increased 53.9% to
approximately $6,289,000 for the nine months ended September 30, 1996 from
approximately $4,088,000 in the comparable period in 1995. The increase in net
patient service revenue resulted primarily from physician and physical therapy
practices acquired in 1995 and 1996 and from increased business in markets where
the Company
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<PAGE> 14
operated centers during the entire months of both periods. Of the $2,201,000
increase in net patient service revenue from the nine months ended September 30,
1995 to the nine months ended September 30, 1996, approximately $1,123,000 (51%)
was attributed to centers acquired in 1995 and 1996. Approximately $1,078,000
(49%) was due to growth in markets where the Company already operated.
Operating and Administrative Expenses
Operating and administrative expenses increased 40.2% to approximately
$7,364,000 in the nine months ended September 30, 1996 from approximately
$5,253,000 in the same nine month period in 1995. This increase was principally
due to the acquisition and development of additional practices and the
incurrence of certain expenses as a result of the Telor merger. As a percentage
of total revenues, operating and administrative expenses decreased to 114.2% for
the period ended September 30, 1996 from 123.7% from the same period in 1995.
The Company believes that as additional acquisitions are completed, further
leveraging of existing management will occur, and, as a result, operating and
other administrative costs will further decline as a percentage of total
revenue.
Depreciation and Amortization
Depreciation and amortization expense increased 26.7% to approximately
$317,000 in the nine months ended September 30, 1996 from approximately $250,000
in the same nine month period in 1995. This increase occurred primarily as a
result of the Company having additional growth through center development and
acquisitions. As a percentage of total revenues, these expenses decreased to
4.9% in 1996 from 5.9% in the comparable period in 1995.
Interest Expense
Interest expense increased 105.1% to approximately $205,000 in the nine
months ended September 30, 1996 from approximately $100,000 in the same nine
month period in 1995. The increase from 1995 to 1996 was due to the incurrence
of certain debt as consideration for several acquisitions and for certain debt
acquired as a result of the Telor merger. Additionally, in June 1995, the
Company sold certain medical receivables to provide operating cash and to pay
down certain term loans and notes payable. As a percentage of total revenues,
interest expense was 3.2% for the nine month period ended September 30, 1996 and
2.4% for the comparable period of 1995.
Interest Income
Interest income is generated primarily from cash invested in highly liquid
funds with a maturity of three months or less. Interest income increased 69.5%
to approximately $57,000 in the nine months ended September 30, 1996 from
$33,000 in the same period of 1995. The increase was related to additional funds
received by the Company as a result of the merger with Telor.
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<PAGE> 15
Minority Interest
Minority interest represents the share of profit and losses of certain
investors in certain joint ventures with the Company. For the nine months ended
September 30, 1996, the minority interest in net profits/losses of subsidiaries
decreased by 4.2% to approximately $194,000 from approximately $202,000 the same
nine-month period in 1995.
Liquidity and Capital Resources
Net cash used in operating activities by the Company during the nine months
ended September 30, 1996 was approximately $1,751,000 as compared to
approximately $808,000 for the comparable period in 1995. The principal use of
cash was to fund the Company's operating losses for centers in early stages of
development, to provide working capital to centers acquired in 1996 and to fund
certain expenses related to the Telor merger. These operating losses were offset
by non-cash expenses, such as depreciation and amortization, and by fluctuations
in working capital during those periods. Working capital fluctuations have been
primarily from increases in accounts receivable and other current assets offset
by increases in accounts payable and accrued expenses.
The Company's investing activities for the nine months ended September 30,
1996 included approximately $4.5 million of cash received in connection with the
Merger. The Company's also invested $823,000 for the purchase of a 90% interest
in an ambulatory care facility located in Lewiston, Maine and a 70% interest in
an on-site rehabilitation business located in Horsham, Pennsylvania. In the
previous year, the Company also invested approximately $200,000 for the purchase
of a physician practice in Bangor, Maine and the purchase of a physical therapy
practice located in Vermont. The Company incurred approximately $23,000 for the
purchase of equipment during the nine months ended September 30, 1996 as
compared to approximately $148,000 for the comparable period in 1995.
For the nine months ended September 30, 1996, the Company used
approximately $202,000 of cash for financing purposes as compared with the
generation of approximately $290,000 for the same period in 1995. During 1996,
advances of $300,000 under a bank line of credit and $200,000 in other
short-term loans were offset by payments of existing loans payable, noncompete
agreements and capital lease obligations aggregating approximately $710,000. For
the nine months ended September 30, 1995, the Company generated approximately
$600,000 from the sale of preferred stock and received $196,000 through a
partnership contribution. The net uses for the same period in 1995 were
primarily the pay down of certain bank loans and capital lease obligations
totaling approximately $310,000.
The Company expects that its principal use of funds in the near future will
be in connection with acquisitions, working capital requirements, debt
repayments and purchases of property and equipment. The Company expects that the
cash received as the result of the Merger, proceeds received upon the sale of
1,416,667 shares of its Series A Preferred Stock, cash generated from the
operations, available lines of credit and sales of certain accounts receivable
will be adequate to
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<PAGE> 16
satisfy the Company's cash requirements through 1996. The Company considers
raising additional capital on an on-going basis as market factors and its needs
suggest.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
2.01(a) Asset Purchase Agreement by and between Argosy Health,
L.P. and Occupational Health + Rehabilitation Inc
dated as of September 11, 1996 (Filed as Exhibit 2.01
to Form 8-K dated September 11, 1996, File No. 0-21428
and incorporated by reference herein).
11.01 Statement re Computation of Per Share Earnings.*
27.01 Financial Data Schedule.*
-------------
*Filed herewith.
b. Reports on Form 8-K.
On September 18, 1996, the Company filed a Current Report on Form 8-K
dated September 11, 1996, reporting in Item 5 thereof the acquisition by the
Company of certain assets of Argosy Health, L.P. pursuant to an Asset Purchase
Agreement between the Company and Argosy Health, L.P. dated September 11, 1996.
On October 1, 1996, the Company filed a Current Report on Form 8-K
dated September 24, 1996 reporting in Item 4 thereof the dismissal of Arthur
Anderson LLP as the Company's independent public accountants and the appointment
of Ernst & Young LLP as the Company's independent public accountants for the
fiscal year ending December 31, 1996.
- 16 -
<PAGE> 17
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.
OCCUPATIONAL HEALTH + REHABILITATION INC
Date: November 13, 1996
By /s/John C. Garbarino
_________________________________
John C. Garbarino
President, Chief Executive
Officer and Treasurer
(principal executive officer
and principal financial officer)
By /s/Kathryn G. Converse
_________________________________
Kathryn G. Converse
Controller
- 17 -
<PAGE> 18
Exhibit Index
Exhibit No. Description
- ---------- -----------
2.01 Asset Purchase Agreement by and between Argosy
Health, L.P. and Occupational Health + Rehabilitation
Inc dated as of September 11, 1996 (Filed as Exhibit
2.01 to Form 8-K dated as of September 11, 1996,
File No. 0-21428 and incorporated by reference
herein).
11.01 Statement re Computation of Per Share Earnings.*
27.01 Financial Data Schedule.*
<PAGE> 1
OCCUPATIONAL HEALTH + REHABILITATION INC
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ --------------------------------
1996 1995 1996 1995
------------------------------ --------------------------------
PRIMARY
<S> <C> <C> <C> <C>
Weighted average OH+R common stock
outstanding during the period, as converted 97,529 95,132 96,187 93,008
Conversion of OH+R preferred stock
into common stock 585,901 585,901 585,901 553,314
Weighted average Telor common stock from
date of merger 786,002 0 332,760 0
------------------------------ --------------------------------
Total 1,469,432 681,033 1,014,848 646,322
============================== ================================
Net loss $ (528,431) $ (361,701) $ (1,188,652) $ (1,122,917)
============================== ================================
Loss per share $ (0.36) $ (0.53) $ (1.17) $ (1.74)
============================== ================================
FULLY DILUTED
Weighted average OH+R common stock
outstanding during the period, as converted 97,529 95,132 96,187 93,008
Conversion of OH+R preferred stock into
common stock 585,901 585,901 585,901 553,314
Weighted average Telor common stock from
date of merger 786,002 0 332,760 0
------------------------------ --------------------------------
Total 1,469,432 681,033 1,014,848 646,322
============================== ================================
Net loss $ (528,431) $ (361,701) $ (1,188,652) $ (1,122,917)
============================== =================================
Loss per share - fully diluted $ (0.36) $ (0.53) $ (1.17) $ (1.74)
============================== =================================
</TABLE>
Notes:
The weighted average number of shares outstanding for the three and nine months
ended 1995 are based on the number of OH+R shares of Common Stock exchanged for
common shares of the Company, and assume the retroactive conversion of OH+R's
Preferred Stock.
The effect of options and warrants is not considered as it would be
antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,759,935
<SECURITIES> 0
<RECEIVABLES> 892,201
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,642,488
<PP&E> 1,873,696
<DEPRECIATION> 814,332
<TOTAL-ASSETS> 7,685,497
<CURRENT-LIABILITIES> 2,568,185
<BONDS> 0
0
0
<COMMON> 1,471
<OTHER-SE> 9,843,029
<TOTAL-LIABILITY-AND-EQUITY> 7,685,497
<SALES> 6,288,885
<TOTAL-REVENUES> 6,447,520
<CGS> 7,363,765
<TOTAL-COSTS> 7,681,086
<OTHER-EXPENSES> (193,879)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 205,496
<INCOME-PRETAX> (1,188,652)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,188,652)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,188,652)
<EPS-PRIMARY> (1.17)
<EPS-DILUTED> (1.17)
</TABLE>
