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 March 31, 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 March 31, 1997:
2,584,549 shares
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PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet as of March 31, 1997 and
December 31, 1996..................................................3
Consolidated Statements of Income for the Three Months
ended March 31, 1997 and 1996......................................4
Consolidated Statements of Cash Flows for the Three Months
ended March 31, 1997 and 1996......................................5
Notes to Consolidated Financial Statements.........................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................................6
General............................................................7
Industry Overview..................................................8
Company Overview of Business Segments..............................8
Health Care Provider Services
Outpatient Surgery........................................8
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
PART II.
OTHER INFORMATION
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
2
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Amedisys, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
as of March 31, 1997 and December 31, 1996
(Unaudited)
March 31, December 31,
ASSETS 1997 1996
Current Assets:
Cash ......................................... $ 1,317,246 $ 1,104,165
Accounts Receivable, Net of Allowance
for Doubtful Accounts of $690,379
in March 1997 and $732,166 in Dec 1996 ..... 8,943,255 8,270,982
Prepaid Expenses ............................. 388,382 264,125
Other Current Assets ......................... 537,544 515,993
----------- -----------
Total Current Assets ..................... 11,186,427 10,155,265
Notes Receivable:
Related Parties .............................. 215,425 190,208
Other
Property, Plant and Equipment, Net ............. 4,747,613 4,609,718
Other Assets, Net .............................. 1,965,873 1,903,596
----------- -----------
Total Assets ............................. $18,115,338 $16,858,787
=========== ===========
LIABILITIES
Current Liabilities:
Notes Payable ................................ $ 5,053,228 $ 4,378,688
Current Portion of Long-Term Debt ............ 779,266 779,266
Accounts Payable ............................. 1,097,104 1,416,259
Accrued Expenses:
Payroll and Payroll Taxes .................. 980,703 1,033,250
Income Taxes ............................... 148,269 0
Insurance .................................. 827,490 642,607
Other ...................................... 861,813 882,627
----------- -----------
Total Current Liabilities .............. 9,747,873 9,132,697
Notes Payable to Related Parties ............... 929,252 943,592
Long-Term Debt ................................. 2,585,541 2,279,448
----------- -----------
Total Liabilities ...................... 13,262,666 12,355,737
----------- -----------
Minority Interest .............................. 176,562 188,269
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock ................................. 2,585 2,576
Additional paid-in capital ................... 1,976,101 1,915,514
Stock Subscriptions Receivable ............... -73 -266
Retained Earnings ............................ 2,697,497 2,396,957
----------- -----------
Total Stockholders' Equity ............... 4,676,109 4,314,781
----------- -----------
Total Liabilities and Stockholders'
Equity ............................... $18,115,338 $16,858,787
=========== ===========
See accompanying notes to financial statements.
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Amedisys, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
for the three months ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
March 97 March 96
<S> <C> <C> <C> <C>
Income:
Service revenue ............................................ $13,384,717 100.0% $10,116,199 100.0%
Cost of service revenue .................................... 7,879,172 58.9% 5,617,100 55.5%
----------- -----------
Gross margin ............................................. 5,505,545 41.1% 4,499,099 44.5%
----------- -----------
General and administrative expenses:
Salaries and benefits ...................................... 2,734,469 20.4% 2,045,637 20.2%
Other ...................................................... 2,156,361 16.1% 2,093,189 20.7%
----------- -----------
Total general and administrative expenses ................ 4,890,83 36.5% 4,138,826 40.9%
----------- -----------
Operating income ......................................... 614,716 4.6% 360,273 3.6%
----------- -----------
Other income and expense:
Interest income ............................................ 2,361 0.0% 21,983 0.2%
Interest expense ........................................... -184,275 -1.4% -114,663 -1.1%
Miscellaneous .............................................. 17,862 0.1% 49,381 0.5%
----------- -----------
Total other income and expenses .......................... -164,052 -1.2% -43,299 -0.4%
----------- -----------
Income before income taxes and minority interest ............. 450,664 3.4% 316,974 3.1%
Provision (Benefit) for estimated income taxes ............... 161,831 1.2% 107,700 1.1%
----------- -----------
Income before minority interest .............................. 288,833 2.2% 209,274 2.1%
Minority interest in consolidated subsidiary ................. 11,707 0.1% -15,105 -0.1%
----------- -----------
Net income ................................................. $ 300,540 2.2% $ 194,169 1.9%
=========== ===========
Earnings per common share .................................... $ 0.12 $ 0.08
=========== ===========
</TABLE>
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Amedisys, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three months ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
March 97 March 96
<S> <C> <C>
Cash Flows from operating activities:
Net Income ............................................................ $ 300,540 $194,170
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization ..................................... 308,629 178,258
Provision for bad debts ........................................... 183,565 146,852
Minority interest in affiliated company ........................... -11,707 15,105
(Gain) on disposal of property and equipment ...................... 0 -3,556
Loss on sale of marketable securities ............................. 1,497 0
Changes in assets and liabilities:
(Increase) in accounts receivable ............................... -855,838 -1,295,239
(Increase) decrease in prepaid expenses ......................... -124,257 95,780
(Increase) in other current assets .............................. -21,551 -67,301
(Increase) in other assets ...................................... -112,355 -121,093
Increase (decrease) in accounts payable ......................... -319,154 541,727
Increase (decrease) in accrued expenses ......................... 320,478 -295,654
---------- --------
Net cash (used in) operating activities .................... -330,153 -610,951
---------- --------
Cash flow from investing activities:
Purchase of furniture, fixtures & equipment ........................... -397,082 -712,429
Proceeds from sale of furniture, fixtures & equipment ................. 0 4,451
(Increase) in notes receivable from related parties ................... -25,217 0
---------- --------
Net cash (used in) investing activities ..................... -422,299 -707,978
---------- --------
Cash flow from financing activities:
Net increase in borrowings on line of credit .......................... 674,539 728,310
Payments on notes payable ............................................. -134,107 -177,992
Proceeds from note payables ........................................... 439,248 440,222
(Decrease) in note payable to related parties ......................... -14,339 -101,731
Decrease in stock subscriptions ....................................... 192 5,071
---------- --------
Net cash provided by financing activities ................... 965,533 893,880
---------- --------
Net increase (decrease) in cash and cash equivalents .................... 213,081 -425,049
Cash and cash equivalents at December 31, 1996 and 1995 ................. 1,104,165 870,004
---------- --------
Cash and cash equivalents at March 31, 1997 and 1996 .................... $1,317,246 $444,955
========== ========
Supplemental disclosures of cash flow information:
Cash payments for:
Interest .......................................................... $ 180,793 $127,965
========== ========
Income taxes ...................................................... $ 15,240 $275,000
========== ========
</TABLE>
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1. UNAUDITED FINANCIAL INFORMATION
The financial information as of March 31, 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. SUBSEQUENT EVENTS
As of April 17, 1997, AMEDISYS completed a placement of common stock
with Plymouth Partners, LP of Overhill Avenue, Rye, New York 10580.
According to the terms of the placement, the Company issued 37,500
shares of Common Stock to Plymouth Partners, LP, pursuant to a shelf
registration statement for gross proceeds of $262,500. The Company
issued 112,500 shares of Common Stock to Plymouth Partners, LP, pursuant
to a shelf registration statement for gross proceeds of $675,000. The
net proceeds from both of these offerings was $831,117.
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.
6
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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 is also developing 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. APS also operates a laboratory.
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 Company recently began construction on a fourth center, in the
Houston area, which will be majority owned by physicians with the Company as a
34% shareholder and providing management services. This center is anticipating
beginning operations in December, 1997.
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.
Physician services began in 1994 with the acquistion of an Internal Medicine
Group in Southeast Louisiana. The Company pursued the equity model of physician
practice management and acquired and managed several primary care practices. In
1995, AMEDISYS converted its model to an MSO system which is more profitable and
allows more flexibility for the physicians and the Company. The Company is also
developing and managing Independent Practice Associations and developing a
statewide Preferred Provider Organization in Louisiana which it will manage and
"rent" 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 new company would be majority owned by physician investors.
AMEDISYS, Inc. would retain 30% ownership and
7
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would be the managing organization. FutureCare, Inc. would allow physicians in
its network to accept multi-provider capitation arrangements with health plans
operating in the state of Louisiana since only licensed HMOs can accept risk
arrangements with commercial insurers. FutureCare, Inc. could qualify to operate
as a health plan for Medicare and Medicaid covered individuals who want a
managed care plan, especially in the small and/or rural markets, and to serve as
a provider network for other HMOs. From a physician perspective, this
arrangement allows physicians in small and rural communities to retain those
patients who want the benefits of a managed care plan. The FutureCare, Inc.
network linked with alternative site providers would comprise an integrated
delivery system in markets where alternative site provider services are
available. (See FutureCare below.)
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 and outpatient surgery 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 and corporate acquistions.
Since the Company has business segments which reduce the cost of health care and
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.
This year Congress is considering several bills which may change the cost
reimbursement nature of home health care in the Medicare system. A prospective
pay system which allows efficient home health care operators to retain a portion
of the profits is being considered in the current Congressional session. The
Company is positioned for any such legislative change. Such a change would also
drive growth in the Company's MSO since many home health care agencies would
need such services to adapt to such a significant change in the Medicare payment
system.
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 start-up and 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 segments' margins are
higher than the Company's home health care and medical staffing components.
8
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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 is one of the fastest growing segments of the Company's
business mix. The company has 17 home health care offices. Home health care
visits for the company increased 40% from 1995 to 1996. 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.
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 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 13 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
development, 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 agency with
JCAHO accreditation preparation. AMEDISYS home health 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.
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, and (3) the knowledge of the regulatory
environment and trends among the private and governmental payors to shift to
managed care.
The consolidation of the home health care delivery system and the emergence of
managed care in the Medicare system should continue to drive growth in this
industry.
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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 allow 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. According to the Medical Group Management
Association ("MGMA"), 55% of all group practices derived revenue from at risk
HMO/PPO contracts in 1994--up from 53% in 1993. Group practices derived 15% of
total medical revenue from at-risk managed care contracts in 1994, up slightly
from 14% in 1993. AMEDISYS believes this trend will accelerate in the next five
years as MCOs gain market share.
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. Upon completion of an offering to
capitalize FutureCare, it would merge with Health Plans and the Company's
ownership would be reduced to 19% of Health Plans. The Company owns
approximately 33% of Health Plans and has provided $1 million to Health Plans in
order 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, which may be reimbursed upon completion of a
securities offering of FutureCare stock, although the completion of such an
offering is not assured.
FutureCare and Health Plans plan to enter into a management agreement with the
Company whereby the Company will become the exclusive manager and administrator
of non-medical services relating to the operation of the PPO and HMO network.
The future of this project will be determined at the close of the securities
offering on June 30, 1997. Since the inception of the project, federal
legislation has been proposed which may allow physicians to directly contract
with employer groups without being licensed as an HMO. The response of the
physicians to the securities offering and the outcome of federal legislation
will determine if the HMO will become operational. The PPO is currently being
established and will be managed by AMEDISYS. If the proposed federal regulation
is passed, the PPO could possibly directly contract with various employer
groups. In the event the legislation does not pass, the Company could proceed
with the HMO if market conditions in Louisiana are favorable at that time or the
Company could sell its HMO license.
RESULTS OF OPERATIONS
The Company continues to show strong growth in revenue for the three months
ended March 31,1997 compared to the same period last year. The Company derives
revenues from provider and management services in health care. Provider services
include home health care, supplemental medical staffing and outpatient surgery.
Management services include physician practice and home care management. The
Company's proprietary software system provides the foundation for the Company's
home care management program.
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The Company's revenue increased by 32% to $13,384,717 for the first three months
ended March 31,1997 compared to $10,116,199 in the first three months ended
March 31,1996. This increase in revenue reflects growth in each business
segment. The largest increase, as a percentage of the previous year, was from
home health care management which started operations in 1996. Its revenue grew
significantly as more aggressive marketing strategies were implemented and the
software system was introduced in January 1997.
Outpatient surgery revenues increased 108% over the same period last year due to
the opening of the St. Luke's SurgiCenter in Hammond, Louisiana in November,
1996. Supplemental medical staffing increased its revenue by 58% from the same
period in 1996. Its growth is attributable to increasing the scope of services
including private duty, as well as, increased demand for specialty nursing
services in hospitals whose staffs were downsized during consolidation and
restructuring activities. Home health care revenue showed growth of 4% although
patient visits increased 20%. Home health care revenue is based on cost
reimbursement rates. The Company costs have been controlled in order to make it
more competitive for private and managed care patients.
Gross margins decreased by 3% to 41% of revenue or $5,505,546 in the period
ended March 31,1997 from 44% of revenue or $ 4,499,099 for the same period in
1996. The decrease is attributable to the following factors: (1) a physician
services cost plus contract which is below the normal gross margins of the
Company (2) reduced general and administrative cost in home health care which is
cost reimbursed, and (3) St. Lukes SurgiCenter was staffed to meet Medicare
survey requirements.
General and administrative expenses decreased by 5% to 36% of revenue or
$4,890,830 for the period ended March 31,1997 from 41% of revenue or $4,138,826
for the same period in 1996. The reductions in general and administrative
expenses were primarily in the supplemental staffing and home health care
divisions due to internal controls and cost reductions. These expenses were
approximately 7% lower as a percentage of revenue for staffing services and
approximately 3% lower as a percentage of revenue in the home health care
division for the periods ended March 31, 1997 and 1996. Outpatient surgery
increased general and administrative expenses by 3% of revenue, an increase of
$500,032. The increase was due to the opening of the St. Lukes facility in
Hammond. St. Lukes' salaries were in place prior to a full patient volume to
meet Medicare survey standards and to start-up the center with proper quality
standards.
The Company's net income increased to $300,540 or $.12 per share from $194,169
or $.08 per share in the periods ended March 31,1997 and 1996, respectively. The
increased net income is attributable to increased revenues in all of the
Company's business segments, internal controls on costs and internal goals which
are linked with a budgetary process. An incentive system was also implemented to
reward managers and their staffs who reach their goals. The Company also
benefited from the investment made in the previous year in upgrading outpatient
surgery centers and the restructuring of the home health care and staffing
operations and the development of management services for physicians, physician
networks and home health care agencies. The Company's software system was three
years in development and this year the Company is realizing revenues from
leasing the system in connection with its management services to home health
care providers.
OUTPATIENT SURGERY (DOLLARS IN THOUSANDS)
================================================================================
THREE MONTHS ENDED
MARCH, 1997 MARCH, 1996
Revenue .......................... $1,610 100.0% $775 100.0%
Cost of Revenue .................. 570 35.4% 223 28.8%
------ ----
Gross Margin ..................... 1,040 64.6% 552 71.2%
General & Administrative ........ 923 57.3% 423 54.5%
------ ----
Operating Income ................. $ 117 7.3% $129 16.7%
====== ====
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<TABLE>
<CAPTION>
NURSING SERVICES (DOLLARS IN THOUSANDS)
====================================================================================================================
HOME HEALTH CARE MEDICAL STAFFING
====================================================================================================================
THREE MONTHS ENDED
MARCH 1997 MARCH 1996 MARCH 1997 MARCH 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $ 6,248 100.0% $6,017 100.0% $ 4,296 100.0% $2,716 100.0%
Cost of Revenue 3,633 58.2% 3,312 55.1% 2,868 66.7% 1,816 66.9%
------ ----- ------ -----
Gross Margin 2,615 41.8% 2,704 44.9% 1,427 33.2% 900 33.1%
Gen. & Admin. 1,978 31.7% 2,067 34.4% 543 12.6% 550 20.3%
------ ----- ------ -----
Operating Income $ 637 10.2% $ 637 10.6% $ 884 20.6% $ 350 12.8%
======= ====== ======= ======
====================================================================================================================
MANAGEMENT SERVICES (DOLLARS IN THOUSANDS)
PHYSICIAN SERVICES HOME CARE MANAGEMENT
====================================================================================================================
THREE MONTHS ENDED
MARCH 1997 MARCH 1996 MARCH 1997 MARCH 1996
Revenue $ 848 100.0% $ 516 100.0% $ 382 100.0% $ 91 100.0%
Cost of Revenue 730 86.0% 265 51.4% 78 20.4% 0 .0%
----- ----- ------ -----
Gross Margin 118 14.0% 251 48.6% 304 79.7% 91 100.0%
Gen. & Admin. 160 18.9% 172 33.2% 136 35.6% 13 14.4%
----- ----- ----- -----
Operating Income $ (42) -4.9% $ 79 15.4% $ 168 44.1% $ 78 85.4%
====== ======= ====== =====
====================================================================================================================
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997 the Company had a revolving bank line of credit of $5,500,000
bearing interest at the lender's prime rate. As of March 31, 1997, $446,772 was
available under the line of credit. The line of credit is collateralized by 80%
of eligible receivables in staffing and outpatient surgery and 75% in home
health care. 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.
Net cash used in operating activities decreased from $610,951 in the three
months ended March 31,1996 to $330,153 in the three months ended March 31, 1997.
This change is primarily attributable to increased net income and a decrease in
accounts receivables. Net cash used in investing activities decreased from
$707,978 in the three months ended March 31, 1996 to $422,299 in the three
months ended March 31, 1997. This decrease is attributable to reduced purchases
of furniture, fixtures and equipment. Net cash provided by financing activities
increased from $893,880 to $965,533 for the three months ended March 31, 1996
and 1997, respectively. The change is primarily due to a decrease in notes
payable.
12
<PAGE>
At March 31,1997, the Company had working capital of $1,438,554 and
stockholder's equity of $4,676,109. The Company's ratio of total liabilities to
equity at March 31,1997 was 2.84 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. AMEDISYS completed a placement
with Plymouth Partners, LP to subsequently issue 150,000 shares of Common Stock
for $937,500. 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 services is 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.
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reimbursement for home health care services to patients covered by the
Medicare program is based on cost reimbursement rates. Final
reimbursement is determined after submission of annual cost reports and
audits thereof by the fiscal intermediaries. At this time, the fiscal
intermediary is auditing two of the Company's providers. Management
believes that the ultimate resolution of such matters will not have a
significant effect on the Company's financial position or results of
operations.
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 May 9, 1997, Irv Gregory resigned his position as President of the
Company's Outpatient Surgery Division and as a member of the Board of
Directors of the Company. Mr. Gregory resigned to pursue other
interests.
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
May 15, 1997
14
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,317,246
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<RECEIVABLES> 8,943,255
<ALLOWANCES> 690,379
<INVENTORY> 537,544
<CURRENT-ASSETS> 11,186,427
<PP&E> 4,747,613
<DEPRECIATION> 2,302,460
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