<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
________________________________________________________________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 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 September 30, 1997: 2,850,067
shares
<PAGE>
PART I.
FINANCIAL INFORMATION
---------------------
<TABLE>
<CAPTION>
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ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet as of September 30, 1997 and December 31, 1996 ...................... 3
Consolidated Statements of Income for the Three and Nine Months
ended September 30, 1997 and 1996................................................................ 4
Consolidated Statements of Cash Flows for the Nine Months ended September 30, 1997 and 1996...... 5
Notes to Consolidated Financial Statements....................................................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............................................................. 8
General.......................................................................................... 8
Health Care Provider Services.................................................................... 8
Home Health Care............................................................................... 8
Supplemental Staffing.......................................................................... 8
Outpatient Surgery............................................................................. 8
Alternate-Site Infusion Therapy Services....................................................... 8
Management Services.............................................................................. 9
Home Health Care Management Services........................................................... 9
Physician Practice Management Services......................................................... 9
Industry Overview................................................................................ 9
Results of Operations............................................................................ 9
Liquidity and Capital Resources................................................................ 11
Seasonality.................................................................................... 12
</TABLE>
PART II.
OTHER INFORMATION
-----------------
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<CAPTION>
<S> <C> <C>
ITEM 1. LEGAL PROCEEDINGS................................................................................ 12
ITEM 2. CHANGES IN SECURITIES............................................................................ 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................................................. 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................................. 12
ITEM 5. OTHER INFORMATION................................................................................ 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................................................. 12
</TABLE>
2
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AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1997 DECEMBER 31, 1996
<S> <C> <C>
CURRENT ASSETS:
CASH $ 2,656,644 $ 1,104,165
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR DOUBTFUL
ACCOUNTS OF $1,169,270 IN SEPTEMBER 1997 AND
$732,166 IN DECEMBER 1996 9,125,109 8,270,982
PREPAID EXPENSES 490,168 264,125
OTHER CURRENT ASSETS 736,782 515.003
----------- -----------
TOTAL CURRENT ASSETS 13,008,703 10,155,265
NOTES RECEIVABLE:
RELATED PARTIES 244,758 190,208
PROPERTY, PLANT AND EQUIPMENT, NET 4,670,628 4,609,718
OTHER ASSETS, NET 3,096,758 1,903,596
----------- -----------
TOTAL ASSETS $21,020,845 $16,858,787
=========== ===========
LIABILITIES SEPTEMBER 30, 1997 DECEMBER 31, 1996
CURRENT LIABILITIES:
NOTES PAYABLE $ 5,292,049 $ 4,378,688
CURRENT PORTION OF LONG-TERM DEBT 779,266 779,266
ACCOUNTS PAYABLE 1,086,471 1,416,259
ACCRUED EXPENSES:
PAYROLL AND PAYROLL TAXES 1,698,305 1,033,250
INCOME TAXES 510,328 0
INSURANCE 964,181 642,607
OTHER 463,240 882,627
----------- -----------
TOTAL CURRENT LIABILITIES 10,793,839 9,132,697
NOTES PAYABLE TO RELATED PARTIES 46,241 943,592
LONG-TERM DEBT 3,299,025 2,279,448
----------- -----------
TOTAL LIABILITIES 14,139,105 12,355,737
----------- -----------
MINORITY INTEREST 204,063 188,269
----------- -----------
STOCKHOLDERS' EQUITY
COMMON STOCK 2,850 2,576
ADDITIONAL PAID-IN CAPITAL 3,404,864 1,915,514
TREASURY STOCK (25,000) 0
STOCK SUBSCRIPTIONS RECEIVABLE 0 (266)
RETAINED EARNINGS 3,294,962 2,396,957
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 6,677,677 4,314,781
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $21,020,845 $16,858,787
----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------
SEPTEMBER 97 SEPTEMBER 96
INCOME:
<S> <C> <C> <C> <C>
SERVICE REVENUE $14,118,203 100.0% $11,762,546 100.0%
COST OF SERVICE REVENUE 7,616,320 53.9% 6,841,997 58.2%
----------- -----------
GROSS MARGIN 6,501,883 46.1% 4,920,549 41.8%
----------- -----------
GENERAL AND ADMINISTRATIVE EXPENSES:
SALARIES AND BENEFITS 3,295,901 23.3% 2,619,508 22.3%
OTHER 2,628,851 18.6% 2,095,433 17.8%
----------- -----------
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 5,924,752 42.0% 4,714,941 40.1%
----------- -----------
OPERATING INCOME 577,131 4.1% 205,608 1.7%
----------- -----------
OTHER INCOME AND EXPENSE:
INTEREST INCOME 9,855 0.1% 4,687 0.0%
INTEREST EXPENSE (226,497) (1.6%) (157,506) (1.3%)
MISCELLANEOUS 2,035 0.0% 19,307 0.2%
----------- -----------
TOTAL OTHER INCOME AND EXPENSES (214,606) (1.5%) (133,512) (1.1%)
----------- -----------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 362,525 2.6% 72,096 0.6%
PROVISION FOR ESTIMATED INCOME TAXES 149,659 1.1% 25,500 0.2%
----------- -----------
INCOME BEFORE MINORITY INTEREST 212,866 1.5% 46,596 0.4%
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 11,624 0.1% 9,321 0.1%
=========== ===========
NET INCOME $ 224,490 1.6% $ 55,917 0.5%
=========== ===========
EARNINGS PER COMMON SHARE $ 0.08 $ 0.02
NINE MONTHS ENDED
SEPTEMBER 97 SEPTEMBER 96
INCOME:
SERVICE REVENUE $41,382,641 100.0% $33,647,998 100.0%
COST OF SERVICE REVENUE 23,589,306 57.0% 19,168,820 57.0%
----------- -----------
GROSS MARGIN 17,793,335 43.0% 14,479,178 43.0%
----------- -----------
GENERAL AND ADMINISTRATIVE EXPENSES:
SALARIES AND BENEFITS 8,793,349 21.2% 7,567,966 22.5%
OTHER 7,061,539 17.1% 5,866,605 17.4%
----------- -----------
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES 15,854,888 38.3% 13,434,571 39.9%
----------- -----------
OPERATING INCOME 1,938,447 4.7% 1,044,607 3.1%
----------- -----------
OTHER INCOME AND EXPENSE:
INTEREST INCOME 27,374 0.1% 37,026 0.1%
INTEREST EXPENSE (619,818) (1.5%) (399,354) (1.2%)
MISCELLANEOUS 77,902 0.2% 103,189 0.3%
----------- -----------
TOTAL OTHER INCOME AND EXPENSES (514,541) (1.2%) (259,139) (0.8%)
----------- -----------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 1,423,906 3.4% 785,468 2.3%
PROVISION FOR ESTIMATED INCOME TAXES 528,280 1.3% 267,450 0.8%
----------- -----------
INCOME BEFORE MINORITY INTEREST 895,626 2.2% 518,018 1.5%
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 2,379 0.0% (15,745) (0.0%)
----------- -----------
NET INCOME $ 898,005 2.2% $ 502,273 1.5%
=========== ===========
EARNINGS PER COMMON SHARE $ 0.33 $ 0.19
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
<TABLE>
<CAPTION>
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
SEPTEMBER 97 SEPTEMBER 96
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 898,005 $ 502,273
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 866,310 566,628
PROVISION FOR BAD DEBTS 695,115 593,780
MINORITY INTEREST IN AFFILIATED COMPANY (2,379) 15,745
(GAIN) ON DISPOSAL OF PROPERTY AND EQUIPMENT (24,385) (3,711)
LOSS ON SALE OF MARKETABLE SECURITIES 2,994 0
CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) IN ACCOUNTS RECEIVABLE (1,311,925) (1,884,271)
(INCREASE) DECREASE IN PREPAID EXPENSES (226,041) 69,743
(INCREASE) IN OTHER CURRENT ASSETS (79,879) (240,623)
(INCREASE) IN OTHER ASSETS (480,839) (627,910)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE (395,098) 955,119
INCREASE IN ACCRUED EXPENSES 1,153,355 732,419
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,095,233 679,192
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
PURCHASE OF FURNITURE, FIXTURES & EQUIPMENT (957,974) (1,452,648)
PROCEEDS FROM SALE OF FURNITURE, FIXTURES & EQUIPMENT 193,913 156,388
PURCHASE OF CARE MEDICAL AND MOBILITY (465,000) 0
(INCREASE) DECREASE IN NOTES RECEIVABLE FROM RELATED PARTIES (54,550) 3,868
----------- -----------
NET CASH (USED IN) INVESTING ACTIVITIES (1,283,611) (1,292,392)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
PURCHASE OF TREASURY STOCK (25,000) 0
NET INCREASE IN BORROWINGS ON LINE OF CREDIT 913,360 1,476,843
PAYMENTS ON NOTES PAYABLE (733,176) (653,059)
PROCEEDS FROM NOTE PAYABLES 1,742,363 1,358,819
(DECREASE) IN NOTE PAYABLE TO RELATED PARTIES (987,924) (75,401)
PROCEEDS FROM COMMON STOCK 830,967 7,199
DECREASE IN STOCK SUBSCRIPTIONS 266 12,248
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,740,856 2,126,649
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,552,479 1,513,449
CASH AND CASH EQUIVALENTS AT DECEMBER 31, 1996 AND 1995 1,104,165 870,004
----------- -----------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30, 1997 AND 1996 $ 2,656,644 $ 2,383,453
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 97 SEPTEMBER 96
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAYMENTS FOR:
INTEREST $ 551,067 $ 373,272
=========== ===========
INCOME TAXES $ 21,820 $ 504,713
=========== ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITY:
ACQUISITION OF CARE MEDICAL AND MOBILITY
VALUE OF STOCK ISSUED IN EXCHANGE 600,000
VALUE OF NOTE PAYABLE ISSUED IN EXCHANGE 100,000
WORKING CAPITAL ACQUIRED NET OF CASH AND CASH EQUIVALENTS (312,917)
-----------
NON CASH PORTION OF ACQUISITION 387,083
CASH PAYMENT FOR ACQUISITION OF CARE MEDICAL AND MOBILITY 465,000
-----------
GOODWILL RECORDED IN EXCHANGE $ 852,083
===========
</TABLE>
6
<PAGE>
AMEDISYS, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Unaudited Financial Information
The financial information as of September 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
On July 1, 1997 AMEDISYS, Inc. advanced to FutureCare Health Plans, an
additional $500,000, which increases the total advances to $1,500,000,
which is included in cash balances, 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. FutureCare was discontinued and the Company's
capital and surplus requirements will be returned upon approval of the
Louisiana State Department of Insurance.
3. Income Taxes
The subsidiaries in which the Company owns interests greater than 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. Acquisitions
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 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.
7
<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.
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
The Company's divisions provide a synergistic menu of integrated services which
provide for disease state management with a continuum of care. Patients, health
care providers and managed care benefit from a wide range of services provided
by one Company. The Company's services include:
HEALTH CARE PROVIDER SERVICES:
HOME NURSING SERVICES: This division provides a broad spectrum of home
nursing services provided by care givers ranging from highly trained
critical care registered nurses to licensed practical nurses and
certified home health aides. The Company operates 17 home health care
offices, all of which are accredited by the Joint Commission on
Accreditation of Health Care Organizations (JCAHO), the nationally
recognized standard for quality in the home health care industry.
Growth in this sector continues to be driven by payors seeking cost-
effective alternatives to lengthy hospital stays.
SUPPLEMENTAL STAFFING: Medical personnel including registered nurses,
licensed practical nurses, certified nurses' aides, and therapists
provide staff relief in a variety of markets including hospitals,
nursing homes, assisted living centers, physician offices and home
health care companies, as well as private duty care. In operation since
the early 1980's, this division provides service in 12 locations.
Earlier this year, a clerical staffing program was introduced in three
markets as an adjunct service for the Company's clients. The Company
differentiates itself from its competitors through the use of a
proprietary software system which generates a faster and more accurate
scheduling response than traditional methods used throughout the
industry.
OUTPATIENT SURGERY CENTERS: The Company currently operates three
outpatient surgery centers. Its two centers in Houston, TX are wholly
owned by AMEDISYS and the Hammond, LA center is a joint venture with
local physicians in which the Company owns a 56% share. All three
centers have been accredited. Construction has begun on a fourth center
located in Houston, TX with commencement of operations expected in
March, 1998. The Company will own 42% of the center and in addition,
will provide management services. Growth in the outpatient surgery
center market is being fueled by advances in technology which allow a
greater number of procedures to be performed in an outpatient setting
at a significantly lower cost.
ALTERNATE-SITE INFUSION THERAPY SERVICES: In the third quarter of 1997,
the Company established a team of highly talented, proven experts in
infusion therapy and plans to initiate services in the fourth quarter
of 1997. These services will include a wide range of infusion therapies
as well as durable medical equipment and respiratory therapy. Services
will be provided through clinical partnerships with physicians in their
offices, in infusion suites and to patients in their home and
alternate-sites. A key component in the successful delivery of
infusion therapy services is the support of a high quality nursing
team. This division will utilize the Company's successful and well
respected nursing division to support this facet of its operations.
8
<PAGE>
MANAGEMENT SERVICES:
-------------------
HEALTH CARE MANAGEMENT SERVICES: Through AMEDISYS Resource Management, the
Company provides home health care companies with a comprehensive menu of
management services. These include financial systems, general agency
management, new business development, management information systems and
support, and the development and implementation of quality improvement
programs, including preparation for the JCAHO accreditation process. Either
separately or as a complement to its management services, the Company offers
a proprietary software system designed to address the issues of Medicare cost
reimbursement, clinical outcomes data, patient utilization, scheduling and
multiple payor options.
PHYSICIAN PRACTICE MANAGEMENT SERVICES: This division provides business
management services, allowing physician group practices and independent
physician associations (IPO's) to remain a step ahead of their competition
through its innovative information and business systems. In addition, the
Company provides its clients with access to managed care contracts and group
purchasing discounts. Its years of experience in the health care arena
provide the Company with a basis of information and experience which
differentiates it from its competitors.
INDUSTRY OVERVIEW
- - -----------------
The Company believes the health care industry is being challenged to be creative
in a way that is foreign to its history. There is a challenge for hospitals to
reduce waste and over spending and to change from a cost plus system to a price
sensitive, market driven business. Employers and insurers are seeking
alternative solutions to reduce the cost of providing health care benefits, and
federal and state governments are confronted with the need to decrease spending
in Medicare and Medicaid programs. AMEDISYS is in step with the industry trend
toward cost reduction and has positioned itself as the cost-effective
alternative.
With its broad menu of synergistic services, the Company is positioned to work
in partnership with managed care organizations, payors and physicians to create
a continuum of care that will not only benefit its referral sources, but
patients as well. It is developing integrated networks and strategic alliances
that will provide its customers with access to the highest quality care at
reasonable prices. These agreements are structured according to the Company's
understanding of the requirements and restrictions of health care laws and
regulations including the Stark legislation.
Congress recently included changes in regulations governing the reimbursement
system for home nursing care in its Medicare budget. The changes include a
provision for prospective pay which will take effect October 1, 1999. A
prospective payment 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 will provide a smooth transition from cost
reimbursement to prospective pay. Prior to the initiation of prospective pay,
Medicare authorities have indicated they expect to 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.
RESULTS OF OPERATIONS
- - ---------------------
The Company continued to show strong growth in revenue and earnings for the
third quarter in 1997. The Company's revenues increased by 20% and 23% for the
three and nine months ended September 30, 1997, respectively, compared to the
same periods last year. The largest increase in revenue was from the Management
Services division which had increases of 74% and 86% in the three months and
nine months ended September 30, 1997, respectively, compared to the same period
in 1996. Outpatient surgery also showed significant growth in revenue of 38%
and 66% for the three and nine months ended September 30, 1997, respectively,
compared to those periods in 1996. Staffing and Patient Care services reported
growth in revenue of 14% and 13% for the reporting periods.
9
<PAGE>
Outpatient surgery revenue growth was due to the opening of St. Luke's
SurgiCenter in Hammond, LA in November, 1996. Home health care management
service, which is part of the Company's management service organization ("MSO"),
increased revenue primarily due to a significant contract signed in July, 1997.
The Company also continued to experience revenue growth from the sale of its
home health care software system.
Supplemental medical staffing, which is reported in staffing and patient care
services, showed revenue growth for the three and nine months ended September
30, 1997, of 35% and 44%, respectively, over the same periods in 1996. Its
growth is attributable to increasing the scope of services including private
duty, as well as an increased demand for specialty nursing service in hospitals.
Gross margins increased by 4% and 0%, as a percentage of revenue, for the three
and nine months ended September 30, 1997 over the same periods in 1996,
respectively. This increase during the 3 month period was due to increased
revenue and restructuring of medical management contracts with medical
facilities in the Management Services division from a direct cost plus
arrangement to a straight management fee. Gross margins decreased in the
Outpatient Surgery division in both periods due to reduced net revenue per case,
as well as, reduced case load. Additionally, revenues in Staffing and Patient
Care Services increased in both periods.
General and administrative expenses increased 26% and 18% for the three and nine
months ended September 30, 1997 compared to the same periods in 1996. The
increases were due primarily to the additional outpatient surgery center and
increased costs in the Management Services division.
The Company's net income increased for the third consecutive quarter for the
three and nine months ended September 30, 1997 compared to the same period in
1996. The Company's net income increased to $224,490 or $0.08 per share from
$55,917 or $0.02 per share for the three months ended September 30, 1997 and
1996, respectively. Net income for the nine months period ended September 30,
1997 was $898,005 or $0.33 per share compared to $502,273 or $0.19 per share in
the same period in 1996. The increased net income is attributable to
substantial growth in revenue in the Management Services and Staffing and
Patient Care Services division, as well as, cost controls instituted in the
Staffing and Patient Services division.
<TABLE>
<CAPTION>
===================================================================================================================================
STAFFING AND PATIENT CARE SERVICES (DOLLARS IN THOUSANDS)
===================================================================================================================================
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------------------------- ------------------------------------------------
SEPTEMBER, 1997 SEPTEMBER, 1996 SEPTEMBER, 1997 SEPTEMBER ,1996
------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $11,122 100.0% $9,781 100.0% $32,166 100.0% $28,353 100.0%
Cost of Revenue 6,784 61.0% 5,932 60.6% 19,792 61.5% 16,844 59.4%
------- ------ ------- -------
Gross Margin 4,338 39.0% 3,849 39.4% 12,374 38.5% 11,509 40.6%
Gen. & Admin. 3,047 27.4% 4,008 41.0% 8,221 25.6% 11,625 41.0%
------- ------ ------- -------
Operating Income $ 1,291 11.6% $ (159) (1.6)% $ 4,153 12.9% $ (116) (0.4)%
======= ====== ======= =======
====================================================================================================================================
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
MANAGEMENT SERVICES (DOLLARS IN THOUSANDS)
====================================================================================================================================
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------------------------- -----------------------------------------------
SEPTEMBER, 1997 SEPTEMBER, 1996 SEPTEMBER, 1997 SEPTEMBER, 1996
-------------------- ------------------- ------------------ --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $1,255 100.0% $ 720 100.0% $3,862 100.0% $2,080 100.0%
Cost of Revenue 134 10.7% 549 76.3% 1,786 46.2% 1,429 68.7%
------ ----- ------ ------
Gross Margin 1,121 89.3% 171 23.8% 2,076 53.8% 651 31.3%
Gen. & Admin. 434 34.6% 279 38.8% 1,019 26.4% 689 33.1%
------ ----- ------ ------
Operating Income $ 687 54.7% $(108) (15.0)% $1,057 27.4% $ (38) (1.8)%
====== ===== ====== ======
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
OUTPATIENT SURGERY (DOLLARS IN THOUSANDS)
====================================================================================================================================
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------------------------- ------------------------------------------------
SEPTEMBER, 1997 SEPTEMBER, 1996 SEPTEMBER, 1997 SEPTEMBER, 1996
------------------- ------------------ -------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $1,741 100.0% $1,261 100.0% $5,355 100.0% $3,214 100.0%
Cost of 699 40.1% 361 28.6% 2,011 37.6% 896 27.9%
Revenue ------ ------ ------ ------
Gross Margin 1,042 59.9% 900 71.4% 3,344 62.4% 2,318 72.1%
Gen. & Admin. 981 56.3% 555 44.0% 2,827 52.8% 1,377 42.8%
------ ------ ------ ------
Operating $ 61 3.5% $ 345 27.4% $ 517 9.7% $ 941 29.3%
Income ====== ====== ====== ======
====================================================================================================================================
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997 the Company had revolving bank lines of credit of
$5,500,000 and $750,000, both bearing interest at prime rate plus 1%. As of
September 30, 1997, $1,022,415 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 $1,095,233 during the first nine
months of 1997, whereas such activities provided $679,192 in cash during the
first nine months of 1996. This change is due to a decrease in the rate of
growth of accounts receivables from improved collections of amounts due. Cash
from operating activities improved even with substantial reduction of accounts
payable and increase in prepaid expenses. Net cash used in investing activities
remained relatively constant with $1,283,611 and $1,292,392 used for the nine
months ending September 30, 1997 and 1996 respectively. Purchases of furniture,
fixtures and equipment decreased $494,674; however, $465,000 was used to
purchase a home medical equipment entity, Care Medical and Mobility. Net cash
provided by financing activities decreased to $1,740,856 from $2,126,649 for the
nine months ending September 30, 1997 and 1996, respectively. The change is due
to a decrease in the Company's borrowing on its lines of credit offset by
$830,967 in proceeds from a private stock placement.
11
<PAGE>
At September 30, 1997, the Company had working capital of $2,214,864 and
stockholder's equity of $6,677,677. The Company's ratio of total liabilities to
equity at September 30, 1997 was 2.12 to 1.0. The Company's sources of external
and internal financing are limited. The Company may need to obtain additional
financing 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
pursuant to a shelf registration on Form S-1, (file number 333-08329) filed
July 18, 1996, amended October 24, 1996 and declared effective October 28, 1996,
pursuant to a shelf registration on Form S-1, SEC file number 333-08329 and in
August, 1997 issued 115,518 shares of common stock in connection with the
acquisition of Care Medical and Mobility. To date, the Company has used no other
source of external financing.
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 experience seasonal
fluctuations.
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 September 1, 1997 AMEDISYS, Inc. appointed James P. Cefaratti to the
position of President and Chief Operating Officer. William F. Borne,
founder of AMEDISYS, Inc., formerly held the titles of Chairman, Chief
Executive Officer and President. He remains Chairman and Chief
Executive Officer. Mr. Cefaratti has extensive senior management
experience in the health care industry. He has served as president and
chief executive officer in numerous entrepreneurial organizations and
in senior management with major corporations including National Medical
Care, a subsidiary of W.R. Grace, and Foster Medical Corporation, a
subsidiary of Avon Products. He recently served as Chief Executive
Officer of Home Intensive Care.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
12
<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 hereunto duly authorized.
AMEDISYS, INC.
By: /s/ MITCHEL G. MOREL
----------------------------------------
Mitchel G. Morel, Chief Financial Officer
Principal Financial and Accounting Officer
DATE: June 17, 1998
13
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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