<PAGE>
U.S. 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 June 30, 1997
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: 0-24260
--------
AMEDISYS, INC.
--------------
(Exact Name of Registrant as Specified in Charter)
Delaware 11-3131700
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
3029 S. Sherwood Forest Blvd., Ste. 300 Baton Rouge, LA 70816
---------------------------------------------------------------
(Address of principal executive offices including zip code)
(504) 292-2031
(Registrant's telephone number, including area code)
Indicate by check mark whether the issuer (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 [ ]
Number of shares of Common Stock outstanding as of June 30, 1997: 2,734,549
shares
1
<PAGE>
PART I.
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet as of June 30, 1997 and December 31, 1996............. 3
Consolidated Statements of Income for the Three and Six Months
ended June 30, 1997 and 1996..................................................... 4
Consolidated Statements of Cash Flows for the Six Months
ended June 30, 1997 and 1996..................................................... 5
Notes to Consolidated Financial Statements....................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............................................. 7
General.......................................................................... 7
Industry Overview................................................................ 8
Company Overview of Business Segments............................................ 9
Health Care Provider Services.................................................... 9
Outpatient Surgery........................................................ 9
Home Health Care.......................................................... 9
Supplemental Staffing..................................................... 9
Management Services.............................................................. 9
Home Health Care Management Services...................................... 9
Physician Practice Management Services.................................... 10
FutureCare................................................................ 10
Results of Operations............................................................ 10
Liquidity and Capital Resources........................................... 12
Inflation................................................................. 13
Seasonality............................................................... 13
</TABLE>
PART II.
OTHER INFORMATION
-----------------
<TABLE>
<CAPTION>
<S> <C> <C>
ITEM 1. LEGAL PROCEEDINGS.............................................................. 13
ITEM 2. CHANGES IN SECURITIES.......................................................... 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES................................................ 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................ 13
ITEM 5. OTHER INFORMATION.............................................................. 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................................. 13
</TABLE>
2
<PAGE>
Amedisys, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
as of June 30, 1997 and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Current Assets:
Cash $2,461,664 $1,104,165
Accounts Receivable, Net of Allowance for Doubtful
Accounts of $925,878 in June 1997 and $732,166 in Dec 1996 8,820,099 8,270,982
Prepaid Expenses 452,958 264,125
Other Current Assets 519,177 515,993
----------- -----------
Total Current Assets 12,253,897 10,155,265
Notes Receivable:
Related Parties 195,464 190,208
Property, Plant and Equipment, Net 4,827,365 4,609,718
Other Assets, Net 2,204,522 1,903,596
----------- -----------
Total Assets $19,481,247 $16,858,787
=========== ===========
LIABILITIES
Current Liabilities:
Notes Payable $5,051,008 $4,378,688
Current Portion of Long-Term Debt 779,266 779,266
Accounts Payable 813,000 1,416,259
Accrued Expenses:
Payroll and Payroll Taxes 1,030,958 1,033,250
Income Taxes 359,604 0
Insurance 946,333 642,607
Other 869,222 882,627
----------- -----------
Total Current Liabilities 9,849,389 9,132,697
Notes Payable to Related Parties 46,241 943,592
Long-Term Debt 3,516,743 2,279,448
----------- -----------
Total Liabilities 13,412,373 12,355,737
----------- -----------
Minority Interest 215,687 188,269
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock 2,735 2,576
Additional paid-in capital 2,804,980 1,915,514
Treasury Stock (25,000) 0
Stock Subscriptions Receivable 0 (266)
Retained Earnings 3,070,472 2,396,957
----------- -----------
Total Stockholders' Equity 5,853,187 4,314,781
----------- -----------
Total Liabilities and Stockholders' Equity $19,481,247 $16,858,787
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Amedisys, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
for the three and six months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------------------ -----------------------------------------
June 97 June 96 June 97 June 96
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income:
Service revenue $13,879,721 100.0% $11,769,253 100.0% $27,264,438 100.0% $21,885,452 100.0%
Cost of service revenue 8,093,814 58.3% 6,709,723 57.0% 15,972,986 58.6% 12,326,823 56.3%
----------- ----- ----------- ----- ----------- ----- ----------- -----
Gross margin 5,785,906 41.7% 5,059,530 43.0% 11,291,451 41.4% 9,558,629 43.7%
----------- ----- ----------- ----- ----------- ----- ----------- -----
General and administrative expenses:
Salaries and benefits 2,762,979 19.9% 2,583,100 21.9% 5,497,448 20.2% 4,628,737 21.1%
Other 2,276,327 16.4% 1,997,704 17.0% 4,432,688 16.3% 4,090,893 18.7%
----------- ----- ----------- ----- ----------- ----- ----------- -----
Total general and administrative
expenses 5,039,306 36.3% 4,580,804 38.9% 9,930,136 36.4% 8,719,630 39.8%
----------- ----- ----------- ----- ----------- ----- ----------- -----
Operating income 746,600 5.4% 478,727 4.1% 1,361,315 5.0% 839,000 3.8%
----------- ----- ----------- ----- ----------- ----- ----------- -----
Other income and expense:
Interest income 15,158 0.1% 10,356 0.1% 17,520 0.1% 32,339 0.1%
Interest expense (209,046) (1.5%) (127,185) (1.1%) (393,321) (1.4%) (241,848) (1.1%)
Miscellaneous 58,005 0.4% 34,501 0.3% 75,867 0.3% 83,882 0.4%
----------- ----- ----------- ----- ----------- ----- ----------- -----
Total other income and expenses (135,883) (1.0%) (82,329) (0.7%) (299,934) (1.1%) (125,628) (0.6%)
----------- ----- ----------- ----- ----------- ----- ----------- -----
Income before income taxes and
minority interest 610,717 4.4% 396,398 3.4% 1,061,381 3.9% 713,372 3.3%
Provision for estimated income taxes 216,790 1.6% 134,250 1.1% 378,621 1.4% 241,950 1.1%
----------- ----- ----------- ----- ----------- ----- ----------- -----
Income before minority interest 393,927 2.8% 262,148 2.2% 682,760 2.5% 471,422 2.2%
Minority interest in consolidated
subsidiary (20,952) (0.2%) (9,961) (0.1%) (9,245) 0.0% (25,066) (0.1%)
----------- ----- ----------- ----- ----------- ----- ----------- -----
Net income $372,975 2.7% $252,187 2.1% $673,515 2.5% $446,356 2.0%
=========== ===== =========== ===== =========== ===== =========== =====
Earnings per common share $0.14 $0.10 $0.26 $0.17
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
Amedisys, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
June 97 June 96
--------- ---------
<S> <C> <C>
Cash Flows from operating activities:
Net Income $673,515 $446,356
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 581,224 369,947
Provision for bad debts 424,627 347,973
Minority interest in affiliated company 9,245 25,066
(Gain) on disposal of property and equipment (12,756) (3,711)
Loss on sale of marketable securities 2,994 0
Changes in assets and liabilities:
(Increase) in accounts receivable (973,744) (2,986,802)
(Increase) in prepaid expenses (188,831) (54,132)
(Increase) in other current assets (3,183) (208,883)
(Increase) in other assets (390,760) (138,787)
Increase (decrease) in accounts payable (603,259) 347,327
Increase in accrued expenses 723,418 140,434
---------- -----------
Net cash provided by (used in) operating activities 242,490 (1,715,211)
---------- -----------
Cash flow from investing activities:
Purchase of furniture, fixtures & equipment (753,447) (946,036)
Proceeds from sale of furniture, fixtures & equipment 56,147 156,388
(Increase) in notes receivable from related parties (5,256) (2,384)
---------- -----------
Net cash (used in) investing activities (702,556) (792,032)
---------- -----------
Cash flow from financing activities:
Purchase of Treasury Stock (25,000) 0
Net increase (decrease) in borrowings on line of credit 672,319 1,634,501
Payments on notes payable (376,996) (421,821)
Proceeds from note payables 1,703,933 874,143
(Decrease) in note payable to related parties (987,924) (65,081)
Proceeds from common stock 830,967 7,199
Decrease in stock subscriptions 266 10,213
---------- -----------
Net cash provided by financing activities 1,817,565 2,039,154
---------- -----------
Net increase in cash and cash equivalents 1,357,499 (468,089)
Cash and cash equivalents at December 31, 1996 and 1995 1,104,165 870,004
---------- -----------
Cash and cash equivalents at June 30, 1997 and 1996 $2,461,664 $401,915
========== ===========
Supplemental disclosures of cash flow information:
Cash payments for:
Interest $360,455 $92,044
========== ===========
Income taxes $21,820 $122,000
========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
AMEDISYS, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. UNAUDITED FINANCIAL INFORMATION
The financial information as of June 30, 1997 and 1996, included herein is
unaudited; however, such information reflects, in the opinion of
management, all adjustments (consisting solely of normal recurring
adjustments) that are necessary to present fairly the results of operations
for such periods. Results of operations for the interim periods are not
necessarily indicative of results of operations which will be realized for
the year ending December 31, 1997.
2. CASH
Cash balance includes $1,000,000 held by an entity, 33% owned by the
Company, developing an HMO. The cash in the subsidiary is available to the
Company at any time.
3. INCOME TAXES
The subsidiaries in which the Company owns interests greater that 80% file
a consolidated federal income tax return. The primary care subsidiaries
file individual income tax returns.
4. PLACEMENT OF COMMON STOCK
As of April 17, 1997, AMEDISYS completed a placement of its common stock
with an institutional investor. According to the terms of the placement,
the Company issued 37,500 shares of Common Stock for gross proceeds of
$262,500. The Company issued 112,500 shares of Common Stock for gross
proceeds of $675,000. The total net proceeds from both of these offerings
was $830,967.
5. SUBSEQUENT EVENTS
On August 1, 1997, AMEDISYS, Inc. agreed to purchase all of the assets and
certain liabilities of Allgood Medical Services, Inc., a Louisiana
corporation doing business as Care Medical and Mobility Equipment Company
with its headquarters in Metairie, Louisiana. Care Medical and Mobility
Equipment Company is a durable medical equipment supplier. The purchase was
for $1,165,000 with $465,000 in cash, $600,000 in stock and a $100,000
note.
On July 1, 1997 AMEDISYS, Inc. advanced an additional $500,000, which
increases the total advances to $1,500,000, to FutureCare Health Plans to
meet minimum capital and surplus requirements of the Louisiana State
Department of Insurance to maintain its Health Maintenance Organization
license and certificate of authority.
On August 12, 1997, AMEDISYS signed an option to purchase a home health
care company located in Oklahoma in a stock for stock transaction. The
Company provides home health care with locations throughout the State of
Oklahoma. The close of the transaction is subject to due diligence by both
parties and the entering into a definitive agreement containing standard
conditions, representation, and warranties customary for these types of
transactions.
6
<PAGE>
AMEDISYS is currently in the process of completing two private placements
relating to the Company's 100% owned outpatient surgery centers located in
Houston and Pasadena, TX. These placements will offer qualified investors
the opportunity to acquire up to 30% of each outpatient surgery center. The
private placements are expected to be completed in August 1997 and
September 1997, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. This discussion should be read in
conjunction with the Consolidated Financial Statements appearing in Item 1.
GENERAL
AMEDISYS, INC. ("Company"), provides health care and management services. Health
care provider services include home health care, temporary medical staffing and
outpatient surgery. The Company has also developed a Management Services
Organization ("MSO") which offers a comprehensive scope of management services
to physician practices, Independent Practice Associations and home health care
agencies. The Company provides services through a network of subsidiaries, which
consist of the following:
AMEDISYS STAFFING SERVICES, INC. ("ASS") supplies highly trained
critical care registered nurses and licensed practical nurses to all
types of health care facilities. Independent contract nurses are
utilized to meet the staffing needs of client health care facilities.
AMEDISYS NURSING SERVICES, INC. ("ANS") is an employee-based staffing
agency that provides a variety of relief personnel such as registered
and licensed practical nurses, and certified nurses' aides for staff
relief in all types of health care facilities.
AMEDISYS SPECIALIZED MEDICAL SERVICES, INC. ("ASM"), AMEDISYS HOME
HEALTH, INC. AND AMEDISYS HOME HEALTH, INC. OF TEXAS provide skilled
nursing care, home health aides, physical therapy, occupational
therapy, speech therapy and medical social workers to homebound
patients.
AMEDISYS SURGERY CENTERS, L. C. ("ASC") operates two outpatient
surgery centers in Houston, Texas, and one surgery center in Hammond,
Louisiana, which commenced operation in November, 1996.
AMEDISYS PHYSICIAN SERVICES, INC. ("APS") provides management of
physician practices and networks including Independent Practice
Associations.
AMEDISYS MANAGEMENT SERVICES ORGANIZATION D/B/A AMEDISYS RESOURCE
MANAGEMENT - Provides management of home health agencies.
The Company currently operates three outpatient surgery centers. The two
centers in Houston are wholly owned by AMEDISYS and the recently completed
center in Hammond, Louisiana is a joint venture with local physicians in which
the Company owns 56%. The Houston sites have recently been accredited by the
Accreditation Association for Ambulatory Health Care and accreditation for St.
Luke's in Hammond is pending. The Company recently began construction on a
fourth center, in the Houston area, which will be majority owned by physicians
with the Company as a 42% shareholder and providing management services. This
center is anticipating beginning operations in January, 1998.
7
<PAGE>
The Company operates 17 home health care sites in Louisiana, Texas and North
Carolina. All Medicare sites are accredited by the Joint Commission on
Accreditation of Health Care Organizations (JCAHO) which is the nationally
recognized quality standard in the home health care industry. As part of the
management program for home health care agencies the Company is leasing its
proprietary software system which meets Medicare financial reporting and
clinical data collection requirements. The system was introduced in July 1996
after three years of development and field testing.
Temporary medical staffing offices operate in eight states with a concentration
of sites in Louisiana and Texas. Private duty services were added in 1996 to
offices which had dual operations of home health care and staffing.
In 1995, AMEDISYS developed an MSO system. This system allows more flexibility
for physicians and the Company than the equity models used by competitors in the
industry. The Company is also developing and managing Independent Practice
Associations and developing a statewide Preferred Provider Organization in
Louisiana which it will manage and provide services to "MCOs".
In 1996, the Company was granted a license to operate a Health Maintenance
Organization ("HMO") in the state of Louisiana by the Louisiana State Department
of Insurance. The Company subsequently initiated on November 1, 1996 a
securities offering to residents and physicians in Louisiana to fund the new
company ("FutureCare Health Plans of La., Inc.") which would start and develop
the HMO, and a Company-sponsored Preferred Provider Organization ("PPO"),
FutureCare, Inc. The offering has since expired and the Company anticipates
selling the HMO license to a national managed care company.
INDUSTRY OVERVIEW
The Company believes that the health care industry is in a period of rapid
change being driven by employers and insurers who want to reduce the cost of
providing health care benefits to their employees and by federal and state
governments who want to decrease spending on Medicare and Medicaid programs.
Managed care is emerging as a possible solution. Managed Care Organizations
("MCOs") include Health Maintenance Organizations ("HMOs") and Preferred
Provider Organizations ("PPOs"). Large self insured employer groups are also
trying to reduce their health care costs by negotiating with provider groups for
capitated or discounted fees. The Company recognizes the industry trend
towards cost reduction and has positioned its services as cost effective
alternatives to hospitalization. Hospital services are the most costly in the
health care delivery system. Home health care, outpatient surgery centers, home
medical equipment, pharmaceuticals, and ambulatory infusion centers can provide
many of the services formerly found in the hospital setting at a lower cost.
The Company's management services are focused on the physician and home health
care industries to help independent providers become cost effective and
competitive during an era of consolidation, changes in government regulations,
and corporate acquistions.
Since the Company has business segments which reduce the cost of health care and
promote relationships with physician groups, an opportunity to form integrated
networks and/or service group agreements is present in some markets. These
strategic alliances, networks or service groups are attractive to MCOs since
they provide economies of scale, large provider panels and "one stop shop"
convenience for the patients. The Company operates such agreements according to
its understanding of the requirements and restrictions of the Stark legislation.
Congress has included changes in regulations governing the reimbursement system
for home health care in its current Medicare budget. The changes include a
provision for prospective pay for home health care which will take effect
October 1, 1999. A prospective pay system could enable efficient home health
care operators to retain their profits. The Company is positioned for this
change since it has reduced costs in its home health care delivery system and
has developed and implemented a software system which can make the transition
from cost reimbursement to prospective pay. Prior to the initiation of
prospective pay, Medicare authorities have indicated that they may institute a
fee reduction in reimbursement rates for home health care. Congress has also
enacted legislation to curtail the growth in Medicare home health care
reimbursement limits which could potentially reduce these limits.
8
<PAGE>
COMPANY OVERVIEW OF BUSINESS SEGMENTS
HEALTH CARE PROVIDER SERVICES:
OUTPATIENT SURGERY
The Company currently operates two centers in the Houston, Texas area and one
in Hammond, Louisiana which is a joint venture with local physicians. The
outpatient center in Hammond is a model which can be replicated in various
markets from a physical plant, clinical and business perspective. The Company
began construction on a fourth center in May, 1997 in the Houston area.
The outpatient surgery strategy of the Company fits the health care delivery
system model and offers an additional platform for the the Company's physician
practice management services. In addition, this business segment's margins are
higher than the Company's home health care and medical staffing components. The
Company believes that the industry will grow because technological advances
enable more procedures to be performed in this setting at a significantly lower
cost than in a hospital surgical suite. Physicians who participate in the
centers can also have ownership and share in the profits generated from facility
fees.
HOME HEALTH CARE
Home health care has been one of the fastest growing segments of the Company's
business mix. The home health care industry is continuing to grow. Growth
is driven by payors who want to reduce hospital stays by utilizing a cost
effective alternative and by patients who prefer to be treated at home. The
Company has 17 home health care offices.
AMEDISYS was initially positioned as a specialty home health care service of
highly qualified and specialized nurses who could provide quality care for
acutely ill patients at home. The Company continues to provide these services
and has expanded to traditional home health care services as well. The Company
has also positioned itself to handle changes in the home health care business by
establishing systems that are necessary to succeed in the new health care
environment. One of those key developments is its proprietary software system
which meets the multifaceted reporting requirements of Medicare and another is
achieving JCAHO accreditation with commendation.
SUPPLEMENTAL STAFFING
The Company has 12 supplemental staffing offices and has successfully competed
in the industry for 14 years. The Company built its reputation on providing
highly qualified specialty nurses but has since expanded to providing practical
and vocational nurses, therapists and certified nurse aides. A clerical
staffing program is being introduced into three test markets this year. The
Company has also expanded client facilities and currently staffs hospitals,
nursing homes, assisted living centers, physician offices and other home health
care agencies. The Company distinguishes itself from its competitors in the
following ways: (1) the ability to recruit and staff specialty nurses in all of
its markets; (2) 24-hour access to staffing coordinators using computerized
scheduling and information systems; (3) rigorous orientation and screening
procedures; and (4) a proprietary software scheduling program which generates a
faster scheduling response time than traditional methods.
MANAGEMENT SERVICES:
HOME HEALTH CARE MANAGEMENT SERVICES
AMEDISYS offers management services to home health care agencies. The scope of
services provided by the Resource Management division include financial systems,
general agency management, business development, management information system
support, and development of quality improvement programs. Services also include
a complete program which assists a home health care agency with JCAHO
accreditation preparation. AMEDISYS home health care software system,
Analytical Medical Systems (AMS), is a comprehensive medical software system
designed to monitor Medicare cost reimbursement, decrease collection turnaround
time, and provide accurate utilization reports. Agencies can contract with the
Company for the software system and/or a more comprehensive management package.
9
<PAGE>
AMEDISYS Resource Management distinguishes itself from other management
companies by (1) the availability of the software system, (2) the experience and
reputation of the professional staff, (3) the knowledge of the regulatory
environment and trends among the private and governmental payors to shift to
managed care and (4) the ability to offer continuing education credits to nurses
attending Company sponsored health care courses.
PHYSICIAN PRACTICE MANAGEMENT SERVICES
Physician Practice Management services physician group practices and Independent
Physician Associations. In the AMEDISYS system, the physician can remain
independent but have access to information and business systems which enable the
practice to remain competitive. The physician can choose to use the Company's
management services or to join an Independent Practice Association developed and
/or managed by the Company. Leverage in negotiating contracts with managed care
organizations is a key reason physicians belong to Independent Practice
Associations. Negotiating strength is particularly attractive in capitated
(prepaid) managed care contracts.
On May 1,1996, the Company signed an agreement with the Louisiana Health Care
Authority, the Louisiana state agency which controls the public hospital system
in Louisiana, to manage physician services at a state hospital in Lake Charles,
Louisiana. Under the agreement the Company coordinates the services of the
inpatient staff with community physicians working in outpatient clinics. The
arrangement is a unique public-private partnership which opens access to a full
range of medical services in the community.
FUTURECARE
In February, 1996, the Company formed FutureCare, Inc. ("FutureCare"), a Nevada
corporation, to organize and operate a preferred provider network (PPO) of
independent health care providers, and to merge with and capitalize FutureCare
Health Plans of Louisiana, Inc. ("Health Plans") which is licensed as a health
maintenance organization (HMO) in the state of Louisiana.
The company currently owns 51% of FutureCare. The Company owns approximately
33% of Health Plans and has provided $1.5 million to Health Plans to enable it
to meet the capital requirements for licensing as a HMO in the state of
Louisiana. The Company also loaned Health Plans approximately $400,000 for
development costs.
The securities offering for FutureCare did not close and investor funds were
refunded. Changes in federal legislation which allowed physician networks to
directly contract with employers without an HMO license impacted the offering
which was directed at physician investors. However, the Company has plans to
sell the HMO license.
RESULTS OF OPERATIONS
The Company continued to show strong growth in revenue and earnings for the
second consecutive quarter in 1997. The Company derives revenues from its
provider and management services in health care. Provider services include home
health care and supplemental medical staffing which are reported as "Staffing
and Patient Care Services" and outpatient surgery. Management services include
physician practice and home care management.
The Company's revenues increased by 18% and 25% for the three and six months
ended June 30,1997, respectively, compared to the same periods last year. The
largest increase in revenue was from the outpatient surgery division which had
increases of 70% and 85% in the three months and six months ended June 30,1997,
respectively, compared to the same periods in 1996. Management services also
showed significant growth in revenue of 43% and 66% for the three and six months
ended June 30,1997, respectively, compared to those same periods in 1996.
Staffing and patient care services reported growth in revenue of 9% and 15% for
the reporting periods.
Outpatient surgery revenue growth was due to the opening of St. Luke's
SurgiCenter in Hammond, Louisiana in November, 1996. Home health care
management services, which is part of the Company's management services
organization ("MSO"), increased revenue growth due to more aggressive marketing
strategies and the introduction of the home health care software system.
10
<PAGE>
Supplemental medical staffing, which is reported in staffing and patient care
services, showed significant revenue growth for the three months and six months
ended June 30, 1997 compared to these periods last year. Its growth is
attributable to increasing the scope of services including private duty, as well
as an increased demand for specialty nursing services in hospitals whose staffs
were downsized during consolidation and restructuring activities.
Gross margins decreased by 1% and 2% from the same periods in 1996. The
decrease is attributable to a physician services cost plus contract and reduced
general and administrative expenses in home health care which are cost
reimbursed.
General and administrative expenses decreased by 3% for the three and six months
ended June 30,1997 compared to the same periods in 1996. The reductions in
general and administrative expenses were primarily in the supplemental staffing
division due to internal controls and cost reductions.
The Company's net income increased for the second consecutive quarter in 1997.
The Company's net income increased to $372,975 or $.14 per share from $252,187
or $.10 per share for the three months ended June 30,1997 and 1996,
respectively. Net income for the six months period ended June 30,1997 was
$673,515 or $.26 per share compared to $446,356 or $.17 per share in the same
period in 1996. The increased net income is primarily attributable to increased
revenues in the Company's staffing and patient care and home care management
divisions, as well as, internal controls on costs and internal goals which are
linked with a budgetary process.
<TABLE>
<CAPTION>
===================================================================================================================================
STAFFING AND PATIENT CARE SERVICES (DOLLARS IN THOUSANDS)
===================================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE, 1997 JUNE, 1996 JUNE, 1997 JUNE 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $10,500 100.0% $9,629 100.0% $21,045 100.0% $18,362 100.0%
Cost of Revenue 6,506 62.0% 5,783 60.1% 13,009 61.8% 10,912 58.3%
------- ------ ------- -------
Gross Margin 3,994 38.0% 3,846 39.9% 8,036 38.2% 7,450 41.7%
Gen. & Admin. 2,653 25.3% 2,901 30.1% 5,174 24.6% 5,518 30.1%
------- ------ ------- -------
Operating Income $ 1,341 12.8% $ 945 9.8% $ 2,862 13.6% $ 1,932 11.6%
======= ====== ======= =======
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
MANAGEMENT SERVICES (DOLLARS IN THOUSANDS)
===================================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE, 1997 JUNE, 1996 JUNE, 1997 JUNE 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $1,376 100.0% $ 963 100.0% $ 2,606 100.0% $ 1,570 100.0%
Cost of Revenue 845 61.4% 615 63.9% 1,653 63.4% 880 56.1%
------ ------ ------ ------
Gross Margin 531 38.6% 348 36.1% 953 36.6% 690 43.9%
Gen. & Admin. 289 21.0% 210 21.8% 585 22.5% 394 25.1%
------ ------ ------ ------
Operating Income $ 242 17.6% $ 138 14.3% $ 368 14.1% $ 296 18.8%
====== ====== ====== ======
===================================================================================================================================
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
OUTPATIENT SURGERY (DOLLARS IN THOUSANDS)
===================================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE, 1997 JUNE, 1996 JUNE, 1997 JUNE 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $2,003 100.0% $1,178 100.0% $ 3,613 100.0% $ 1,953 100.0%
Cost of Revenue 742 37.0% 312 26.5% 1,312 36.3% 535 27.4%
------ ------ ------ ------
Gross Margin 1,261 63.0% 866 73.5% 2,301 63.7% 1,418 72.6%
Gen. & Admin. 923 46.1% 406 34.5% 1,846 51.1% 829 42.5%
------ ------ ------ ------
Operating Income $ 338 16.9% $ 460 39.0% $ 455 12.6% $ 589 30.1%
====== ====== ====== ======
===================================================================================================================================
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997 the Company had revolving bank lines of credit of $5,500,000
and $750,000 bearing interest at the lender's prime rate and prime rate plus
1%, respectively. As of June 30, 1997, $1,198,992 was available under the
combined lines of credit. The lines of credit are collateralized by 80% of
eligible receivables in staffing and outpatient surgery, 75% of eligible
receivables in home health care, and 80% of physician notes receivable.
Eligible receivables are defined principally as accounts that are aged less
than 90 days for staffing and outpatient surgery and 120 days for home health
care.
The Company's operating activities provided $242,490 during the first six months
of 1997, whereas such activities used $1,715,211 in cash during the first six
months of 1996. This change is primarily attributable to a decrease in the rate
of growth of accounts receivables. Net cash used in investing activities
decreased from $792,032 in the six months ended June 30, 1996 to $702,556 in the
six months ended June 30, 1997. This decrease is attributable to reduced
purchases of furniture, fixtures and equipment. Net cash provided by financing
activities decreased from $2,039,154 to $1,817,565 for the six months ended
June 30, 1996 and 1997, respectively. The change is primarily due to a decrease
in the Company's borrowings on its lines of credit offset by proceeds from a
private stock placement.
At June 30, 1997, the Company had working capital of $2,404,508 and
stockholder's equity of $5,853,187. The Company's ratio of total liabilities to
equity at June 30,1997 was 2.3 to 1.0. The Company's sources of external and
internal financing are limited. The Company may need to obtain additional
financing, either through public or private securities offerings or borrowing,
in order to meet future capital requirements. In April 1997, AMEDISYS issued a
total of 150,000 shares of Common Stock for net proceeds of $830,967. To date,
the Company has no other source of external financing.
INFLATION
The Company does not believe that inflation has had a material effect on its
results of operations. The Company expects that any increase in costs
attributable to inflation in the future would be offset by an increase in fees
charged for services.
SEASONALITY
The demand for the Company's home health care and management services are not
typically influenced by seasonal factors. However, demand for supplemental
staffing services is affected by variations in the hospital census at various
times of the year. Outpatient surgery services also have seasonal factors.
12
<PAGE>
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
On August 6,1997, shareholders approved the following Board of
Directors for AMEDISYS, INC.: Mr. William F. Borne, Chairperson; Dr.
S.F. Hartley, a leading podiatrist in Houston; Ronald A. LaBorde; the
President and CEO of Piccadilly Cafeterias; Jake L. Netterville, the
managing director of Postlethwaite & Netterville, a public accounting
firm; David R. Pitts, President and CEO of Pitts Management
Associates, Inc; Peter F. Ricchiuti, Assistant Dean and Director of
Research at Tulane University's A.B. Freeman School of Business;
William M. Hession, Jr. President of Key Medical Supply; Dr. Karl A.
LeBlanc, a general surgeon in private practice; and Dr. Alan J.
Ostrowe, an anesthesiologist and specialist in pain management.
On August 6, 1997 shareholders approved the reappointment of the
Company's auditing firms which are Arthur Andersen & Company and
Hannis T. Bourgeois & Co., and they further approved that 500,000
options be added to the Company's Statutory Employee Stock Option
Plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
13
<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.
AMEDISYS, INC.
By:/s/ MITCHEL G. MOREL
---------------------
Mitchel G. Morel, Chief Financial Officer
Principal Financial and Accounting Officer
August 14, 1997
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,461,664
<SECURITIES> 0
<RECEIVABLES> 8,820,099
<ALLOWANCES> 925,878
<INVENTORY> 519,177
<CURRENT-ASSETS> 12,253,897
<PP&E> 4,827,365
<DEPRECIATION> 2,403,363
<TOTAL-ASSETS> 19,481,247
<CURRENT-LIABILITIES> 9,849,389
<BONDS> 0
0
0
<COMMON> 2,735
<OTHER-SE> 5,850,452
<TOTAL-LIABILITY-AND-EQUITY> 19,481,247
<SALES> 27,264,438
<TOTAL-REVENUES> 27,264,438
<CGS> 15,972,986
<TOTAL-COSTS> 9,930,136
<OTHER-EXPENSES> 299,934
<LOSS-PROVISION> 424,627
<INTEREST-EXPENSE> 393,321
<INCOME-PRETAX> 1,061,381
<INCOME-TAX> 378,621
<INCOME-CONTINUING> 673,515
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 673,515
<EPS-PRIMARY> .26
<EPS-DILUTED> 0
</TABLE>
