<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
11100 Mead Road, Suite 300, Baton Rouge, LA 70816
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(Address of principal executive offices including zip code)
(225) 292-2031
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(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, 2000: 4,662,156
shares
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<TABLE>
<S> <C> <C>
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 2000 and December 31, 1999............................ 3
Consolidated Statements of Operations for the Three and Six Months Ended
June 30, 2000 and 1999........................................................................... 4
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2000 and 1999............ 5
Notes to Consolidated Financial Statements....................................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS............ 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS...................................... 14
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS................................................................................ 15
ITEM 2. CHANGES IN SECURITIES............................................................................ 15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................................................. 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................................. 15
ITEM 5. OTHER INFORMATION................................................................................ 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................................................. 16
</TABLE>
<PAGE> 3
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
as of June 30, 2000 and December 31, 1999
(Unaudited, Dollar Amounts in 000's)
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 4,781 $ 1,425
Accounts Receivable, Net of Allowance for Doubtful
Accounts of $2,946 in June 2000 and $2,199 in
December 1999 12,154 13,944
Prepaid Expenses 335 319
Inventory and Other Current Assets 712 487
Current Assets Held for Sale 1,008 1,182
------------ ------------
Total Current Assets 18,990 17,357
Property and Equipment, net 3,119 3,439
Other Assets, net 18,768 19,544
Long-term Assets Held for Sale 1,429 4,262
------------ ------------
Total Assets $ 42,306 $ 44,602
============ ============
CURRENT LIABILITIES:
Accounts Payable $ 4,281 $ 4,739
Accrued Expenses:
Payroll and Payroll Taxes 6,089 6,240
Insurance -- 660
Income Taxes 597 437
Other 4,649 3,552
Notes Payable 2,984 4,917
Long-term Debt Classified as Current -- 15,461
Notes Payable to Related Parties 10 10
Current Portion of Long-term Debt 3,319 2,325
Current Portion of Obligations under Capital Leases 476 402
Deferred Revenue 2,119 2,119
Current Liabilities Held for Sale 364 806
------------ ------------
Total Current Liabilities 24.888 41,668
Long-term Debt 17,108 2,206
Long-term Medicare Liabilities 4,817 2,518
Deferred Revenue 4,943 6,003
Obligations under Capital Leases 78 211
Other Long-term Liabilities 826 826
Long-term Liabilities Held for Sale 1,239 1,275
------------ ------------
Total Liabilities 53,899 54,707
------------ ------------
Minority Interest 231 81
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock 5 3
Preferred Stock (510,000 Shares) 1 1
Additional Paid-in Capital 13,189 12,203
Treasury Stock (4,667 Shares of Common Stock) (25) (25)
Retained Earnings (Deficit) (24,994) (22,368)
------------ ------------
Total Stockholders' Equity (Deficit) (11,824) (10,186)
------------ ------------
Total Liabilities and Stockholders' Equity $ 42,306 $ 44,602
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended June 30, 2000 and 1999
(Unaudited, Dollar Amounts in 000's)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
(Restated) (Restated)
<S> <C> <C> <C> <C>
Income:
Service revenue $ 23,271 $ 24,642 $ 46,688 $ 49,698
Cost of service revenue 10,852 11,537 22,214 24,102
------------- ------------- ------------- -------------
Gross margin 12,419 13,105 24,474 25,596
General and administrative expenses:
Salaries and benefits 7,962 7,841 15,826 15,641
Other 5,278 6,099 10,286 11,966
------------- ------------- ------------- -------------
Total general and administrative expenses 13,240 13,940 26,112 27,607
Operating (loss) (821) (835) (1,638) (2,011)
Other income and expense:
Interest income 61 23 87 41
Interest expense (646) (1,015) (1,268) (1,660)
Other income, net 34 383 84 565
------------- ------------- ------------- -------------
Total other income and expense (551) (609) (1,097) (1,054)
Net (loss) before discontinued operations (1,372) (1,444) (2,735) (3,065)
Discontinued operations:
(Loss) from discontinued operations,
net of income taxes (2,471) (11) (2,400) (888)
Gain on sale of discontinued operations,
net of income taxes 2,509 -- 2,509 --
------------- ------------- ------------- -------------
Total discontinued operations 38 (11) 109 (888)
Net (loss) $ (1,334) $ (1,455) $ (2,626) $ (3,953)
============= ============= ============= =============
Weighted average common shares outstanding 3,852 3,117 3,526 3,075
Basic (loss) per common share:
Net (loss) before discontinued operations $ (0.36) $ (0.46) $ (0.78) $ (1.00)
(Loss) from discontinued
operations, net of income taxes (0.64) (0.01) (0.67) (0.29)
Gain on sale of discontinued operations,
net of income taxes 0.65 -- 0.71 --
------------- ------------- ------------- -------------
Net (loss) $ (0.35) $ (0.47) $ (0.74) $ (1.29)
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
4
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AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended June 30, 2000 and 1999
(Unaudited, Dollar Amounts in 000's)
<TABLE>
<CAPTION>
For the six months ended
------------------------------
June 30, 2000 June 30, 1999
(Restated)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (2,626) $ (3,953)
Adjustments to reconcile net (loss) to net cash provided (used)
by operating activities:
Depreciation and Amortization 1,469 1,537
Provision for bad debts 1,398 919
Deferred revenue 1,771 --
(Gain) on disposal of Company assets -- (342)
(Gain) loss on sale of Company operations (2,665) 249
Impairment of goodwill (1,060) (1,059)
Minority interest -- 4
Changes in assets and liabilities:
Decrease in cash included in assets held for sale 85 185
(Increase) decrease in accounts receivable 466 (18,014)
(Increase) in inventory and other current assets (214) (597)
(Increase) decrease in other assets 189 (74)
Increase (decrease) in accounts payable (512) 1,914
Increase (decrease) in accrued expenses 1,322 (1,555)
------------- -------------
Net cash (used) by operating activities (377) (20,786)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, plant and equipment 107 24
Purchase of property, plant and equipment (38) (176)
Proceeds from sale of Company operations 3,200 457
Minority interest investment in subsidiary 150 --
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Net cash provided by investing activities 3,419 305
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit agreements (2,058) 17,145
Proceeds from issuance of notes payable 1,000 300
Payments on notes payable and capital leases (1,596) (513)
Increase in long-term Medicare liabilities 2,299 2,518
Deferred interest expense 669 615
Decrease in notes receivable - related parties -- 89
------------- -------------
Net cash provided by financing activities 314 20,154
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,356 (327)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,425 387
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,781 $ 60
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $ 673 $ 426
============= =============
Income taxes $ -- $ 151
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Amedisys, Inc., a Delaware corporation ("Amedisys" or "the Company"),
is a leading multi-state provider of home health care nursing services. The
Company operates 50 home care nursing offices, 2 ambulatory surgery centers, 3
home infusion therapy locations (see Subsequent Events footnote), and 1
corporate office in the southern and southeastern United States.
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting solely of
normal recurring adjustments) necessary to present fairly the Company's
financial position at June 30, 2000, the results of operations for the three and
six months ended June 30, 2000 and 1999, and cash flows for the six months ended
June 30, 2000 and 1999. The results of operations for the interim periods are
not necessarily indicative of results of operations for the entire year. These
interim consolidated financial statements should be read in conjunction with the
Company's annual financial statements and related notes in the Company's Form
10-K.
Certain amounts previously reported in the 1999 interim unaudited
financial statements have been reclassified as discontinued operations due to
the implementation of a formal plan by the Company in the third quarter of 1999
to sell all of its interests in its outpatient surgery and infusion therapy
divisions. In addition, the Company has reclassified program fees related to the
National Century Financial Enterprises, Inc. ("NCFE") line of credit from other
general and administrative expenses, as previously reported, to interest expense
to conform with the 1999 Form 10-K presentation.
2. EARNINGS PER SHARE
Basic net income (loss) per share of common stock is calculated by
dividing net income (loss) applicable to common stock by the weighted-average
number of common shares outstanding during the period. Diluted net income (loss)
per share is not presented as stock options, stock warrants and convertible
securities outstanding (equivalent to 2,471,602 and 3,581,934 shares of common
stock at June 30, 2000 and 1999, respectively) during the periods presented were
not dilutive.
3. MEDICARE REIMBURSEMENT REDUCTIONS AND RELATED RESTRUCTURING
The Company derived approximately 91% of its revenues from continuing
operations from the Medicare system for the six months ended June 30, 2000. In
1997, Congress approved the Balanced Budget Act ("BBA"), which established an
Interim Payment System ("IPS") that provided for the lowering of reimbursement
limits for home health visits until the Prospective Payment System ("PPS") is
implemented on October 1, 2000. For cost reporting periods beginning on or after
October 1, 1997, Medicare reimbursed home health agencies' cost limits were
determined as the lesser of (i) their actual costs, (ii) per visit cost limits
based on 105% of national median costs of freestanding home health agencies, or
(iii) a per beneficiary limit determined for each specific agency based on
whether the agency was an "old" or "new" provider. An old provider was defined
as an agency which existed for a twelve month cost report period ending in
Federal FY 1994. The Company currently has agencies that qualify as "old"
providers and agencies that qualify as "new" providers under the guidelines. An
old provider per beneficiary limit is based on 75% of 98% of the 1994 agency
cost adjusted for inflation, plus 25% of 98% of a regional average as determined
by Health Care Financing Administration ("HCFA"). A new provider per beneficiary
limit was based on a national average, as determined by HCFA, adjusted for
regional labor costs. The schedule of per visit limits for cost reporting
periods ended on or after October 1, 1997 was published by HCFA in January, 1998
and the schedule of per-beneficiary limits for cost reporting periods beginning
on or after October 1, 1997 was published in March, 1998, by HCFA. The new IPS
cost limits apply to the Company for the cost reporting periods beginning
January 1, 1998 and will remain in effect until the implementation of PPS, on
October 1, 2000.
As a result of these reimbursement changes, a significant restructuring
effort by the Company was completed during 1998, resulting in office
reorganizations, consolidations, and closures as it transitioned to IPS. After
the acquisition of certain home health care agencies from Columbia/HCA
Healthcare Corporation ("Columbia/HCA") in November and December, 1998, a
similar restructuring effort was implemented during 1999 and 2000 in an overall
effort to reduce costs and improve efficiencies, while maintaining the same high
quality of patient care.
6
<PAGE> 7
In October 1999, HCFA issued proposed regulations for PPS. On June 28,
2000, HCFA issued the final rules for PPS which will be effective for all
Medicare-certified home health agencies on October 1, 2000. The final
regulations establish payments based on episodes of care. An episode is defined
as a length of care up to sixty days with multiple continuous episodes allowed
under the rule. The services covered by the episode payment include all
disciplines of care in addition to medical supplies within the scope of the home
health benefit. A standard episode payment has been established at $2,115 per
episode for fiscal year 2001, to be adjusted by a case mix adjuster consisting
of eighty (80) home health resource groups ("HHRG") and the applicable
geographic wage index. The standard episode payment may be subject to further
individual adjustments due to low utilization, intervening events and other
factors. Providers are allowed to make a request for anticipated payment at the
start of care equal to 60% of the expected payment for the initial episode and
50% for each subsequent episode. The remaining balance due to the provider will
be paid following the submission of the final claim at the end of the episode.
In contrast to the cost-based reimbursement system currently in place whereby
providers' reimbursement is limited, among other things, to their actual costs,
episode payments will be made to providers regardless of the cost to provide
care, except with certain outlier provisions. As a result, the Company expects
that home health agencies will have the opportunity to be profitable under this
system; however, there can be no assurance to what degree the Company will be
profitable or that Medicare reimbursement laws, rules and regulations will not
be interpreted or modified through future legislation in a manner adverse to the
Company's business and future plans.
4. DISCONTINUED OPERATIONS
In August 1999, the Company adopted a formal plan to sell all of its
interests in its outpatient surgery and infusion therapy divisions. The
Company's strategic plan is to become a focused home health nursing company.
Effective September 1, 1999, the Company, by an Asset Purchase
Agreement, sold certain assets, subject to the assumption of certain
liabilities, of its wholly-owned subsidiary, Amedisys Surgery Centers, LC
("ASC"), to United Surgical Partners International, Inc. ("USP"). The assets and
liabilities sold related to two free-standing outpatient surgery centers
operated by ASC, Amedisys Surgery Center of Pasadena and Amedisys Surgery Center
of South Houston (the "Surgery Centers"). The assets of the Surgery Centers were
acquired by two Texas Limited Partnerships organized by USP and its wholly-owned
subsidiaries. The Company and its affiliates had no material relationship with
USP prior to this transaction. In consideration for the assets of the Surgery
Centers, ASC received $11,000,000, determined using a multiple of earnings
before interest, taxes, depreciation, and amortization (EBITDA). The Company
recorded a pre-tax gain of $9,417,000 as a result of this transaction in the
quarter ended September 30, 1999. The Company filed a Current Report on Form 8-K
with the Securities and Exchange Commission ("SEC") on September 15, 1999 with
regard to this transaction.
Effective September 1, 1999, the Company sold 19.02 units of its 42
units (each unit represented a 1% interest) in East Houston Surgery Center, Ltd.
and EHSC Management Company, LLC to thirteen physician investors for $180,000
cash. The Company recorded a pre-tax loss of $77,000 relating to the sale in the
quarter ended September 30, 1999.
Effective December 1, 1999, ASC, by a Membership Interest Purchase
Agreement, sold all of its 67% membership interest in West Texas Ambulatory
Surgery Center, LLC to U.S. Orthopedics Texas, LLC. ASC also assigned all of its
rights under a certain management agreement to U.S. Orthopedics, Inc. At
closing, ASC received $783,333 representing the purchase price for the
membership interest and ASC's share of the assignment of the management
agreement. ASC has agreed to a five-year non-compete covenant. The Company
recorded a pre-tax gain of $324,000 as a result of this transaction in the
quarter ended December 31, 1999.
On April 28, 2000, the Company, Park Place Surgery Center, LLC ("Park
Place"), and the remaining Members of Park Place Surgery Center ("Physician
Members") entered into an agreement for the purchase and sale of the Company's
20% membership interest in Park Place, an outpatient surgery center in
Lafayette, Louisiana, to the Physician Members. The purchase price of $3,200,000
cash was paid to the Company at closing. The purchase price was determined based
on an independent valuation analysis using the discounted economic income
method. The Company received a final partnership distribution of $165,000 in
May, 2000. The Company and the Physician Members had no material relationship
prior to the transaction, except by virtue of their membership interest in Park
Place and that the Company and some Physician Members served on the Board of
Directors of Park Place. At the closing, the management agreement existing
between the Company and Park Place was also terminated. The Company recorded a
pre-tax gain of $2,665,000 as a result of this transaction in the quarter ended
June 30, 2000. The Company filed a Current Report on Form 8-K with the SEC on
May 11, 2000 with regard to this transaction.
7
<PAGE> 8
In May 2000, the Company decided, after a thorough evaluation of
historical financial results and available divestiture opportunities, to close
one infusion therapy location. In connection with this closure, the Company
recorded a goodwill impairment of $1,252,000 which has been included in the
amount shown as income (loss) from discontinued operations in the accompanying
consolidated statements of operations. Concurrently, the Company re-evaluated
the goodwill recorded for the remaining infusion therapy locations, resulting in
an additional goodwill impairment of $519,000 (see Subsequent Events footnote).
Summarized financial information for the discontinued operations is as
follows (in 000's):
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30 ended June 30
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Outpatient Surgery Division:
Service Revenue $ 734 $ 2,420 $ 1,581 $ 4,157
Income from Discontinued
Operations before Provision for
Income Taxes $ 2,735 $ 687 $ 3,130 $ 739
Income from Discontinued
Operations Net of Income Taxes $ 2,579 $ 687 $ 2,974 $ 739
Infusion Therapy Division:
Service Revenue $ 1,977 $ 1,696 $ 4,006 $ 3,907
(Loss) from Discontinued Operations
before Provision for Income Taxes $ (2,542) $ (601) $ (2,864) $ (1,114)
(Loss) from Discontinued Operations
Net of Income Taxes $ (2,542) $ (601) $ (2,864) $ (1,114)
Staffing Division:
Service Revenue $ -- $ -- $ -- $ --
(Loss) from Discontinued Operations
before Provision for Income Taxes $ -- $ (4) $ -- $ (229)
(Loss) from Discontinued Operations
Net of Income Taxes $ -- $ (4) $ -- $ (229)
Management Services Division:
Service Revenue $ -- $ -- $ -- $ --
Income (Loss) from Discontinued
Operations before Provision for Income
Taxes $ -- $ 4 $ -- $ (1)
Income (Loss) from Discontinued
Operations Net of Income Taxes $ -- $ 4 $ -- $ (1)
DME Division:
Service Revenue $ -- $ -- $ -- $ --
(Loss) from Discontinued Operations
before Provision for Income Taxes $ -- $ (96) $ -- $ (283)
(Loss) from Discontinued Operations
Net of Income Taxes $ -- $ (96) $ -- $ (283)
Total Discontinued Operations:
Service Revenue $ 2,711 $ 4,116 $ 5,588 $ 8,064
Income (Loss) from Discontinued
Operations before Provision for
Income Taxes $ 194 $ (11) $ 265 $ (888)
Income (Loss) from Discontinued
Operations Net of Income Taxes $ 38 $ (11) $ 109 $ (888)
</TABLE>
8
<PAGE> 9
Included in the accompanying Consolidated Balance Sheets as of June 30,
2000 and December 31, 1999 are the following assets and liabilities relating to
the discontinued operations (in 000's):
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-------- ------------
<S> <C> <C>
Cash $ 136 $ 221
Accounts Receivable 482 555
Prepaid Expenses 34 41
Inventory and Other Current Assets 356 365
-------- ------------
Current Assets Held for Sale $ 1,008 $ 1,182
======== ============
Property $ 1,156 $ 1,711
Other Assets 7 1,813
Investments 266 738
-------- ------------
Long-term Assets Held for Sale $ 1,429 $ 4,262
======== ============
Accounts Payable $ 84 $ 138
Accrued Payroll 50 44
Accrued Insurance 10 --
Accrued Other 27 38
Notes Payable 163 288
Current Portion of Long-term Debt 16 209
Current Portion of Obligations under
Capital Leases 14 89
-------- ------------
Current Liabilities Held for Sale $ 364 $ 806
======== ============
Long-term Debt $ 1,216 $ 1,252
Obligations under Capital Leases 23 23
-------- ------------
Long-term Liabilities Held for Sale $ 1,239 $ 1,275
======== ============
</TABLE>
5. NOTES PAYABLE
Notes payable consists primarily of an asset-based line of credit with
availability, depending on collateral, of up to $25 million with NCFE and
borrowings under a revolving bank line of credit of $750,000. The $25 million
asset-based line of credit, which expires December 31, 2001, is collateralized
by eligible accounts receivable of the home health care nursing division and as
of June 30, 2000, had an outstanding balance of $2,984,000 with no amounts
available under this line of credit. Eligible receivables are defined as
receivables, exclusive of workers' compensation and self-pay, that are aged less
than 181 days. The effective interest rate on this line of credit was 16.77% for
the six months ended June 30, 2000.
9
<PAGE> 10
The revolving bank line of credit of $750,000 bears interest at 10.5%.
At June 30, 2000, $162,776 was outstanding on the line of credit and no amounts
were available. This line of credit has scheduled monthly principal payments of
$25,000 plus accrued interest, with the balance due October 5, 2000. The line of
credit is collateralized by eligible receivables in outpatient surgery and
physician notes receivable. Eligible receivables are defined principally as
accounts that are aged less than 90 days. Due to the anticipated divestiture of
the outpatient surgery division, this line of credit is included in Current
Liabilities Held for Sale in the Consolidated Balance Sheets.
6. LONG-TERM DEBT CLASSIFIED AS CURRENT
Long-term debt classified as current of $15,461,000 at December 31,
1999 consisted of a note payable to Columbia/HCA as a result of the
acquisition of home health agencies consummated in November 1998. Effective
September 30, 1999, the Company and Columbia/HCA executed an agreement to modify
the terms of this note. Quarterly principal and accrued interest payments are
due beginning April 30, 2001, with the balance of the note due, subject to
certain prepayment provisions in the agreement, on July 31, 2004. Under the loan
modification agreement, the Company may be required to pre-pay certain amounts
depending upon the Company's excess cash flows as defined in the agreement.
These amounts, if due, are payable 45 days after the end of each fiscal year
ending after October 1, 1999 and prior to July 30, 2004. The agreement also
restricts, amongst other things, the Company's ability, subject to certain
exceptions, to incur additional indebtedness, to acquire other businesses, or to
sell or transfer any of Company's property unless the net cash proceeds is
applied to repay the outstanding principal and accrued interest on the note. In
addition, the note contains a material adverse effect clause which provides
Columbia/HCA the ability to require immediate payment of outstanding principal
and accrued interest should the Company experience a material adverse change. A
material adverse change includes, but is not limited to, a material and adverse
change in the Company's financial condition, business operations, or the value
of the secured collateral.
Due to the significant operating losses incurred during both 1999 and
1998, the various prepayment provisions within the note agreement itself, and
the subjectivity of the material adverse effect clause, the Company reflected
the amount due Columbia as a current liability in the Consolidated Balance
Sheets as of December 31, 1999 and March 31, 2000.
In the accompanying Consolidated Balance Sheet as of June 30, 2000,
this note payable is reflected as Long-term Debt in accordance with the
repayment terms of the note agreement. This note has been reclassified due to
the overall stabilization of operating losses during the first two quarters of
2000, the receipt of waivers from Columbia/HCA from application of the net
proceeds from the divestitures completed to date as payment towards the balance
on the note, and discussions with representatives of Columbia/HCA at which time
Columbia verbally indicated that they had no intention of invoking the material
adverse effect clause through December 31, 2000.
7. LONG-TERM DEBT
Long-term debt consists primarily of a $14 million note plus accrued
interest of $2.1 million payable to Columbia/HCA, a $1.7 million note payable to
NPX, Inc., an affiliate of NCFE, a $1.2 million note payable to Merrill Lynch, a
$1 million note payable to CareSouth Home Health Services, Inc. ("CareSouth"),
$1 million in notes payable to individuals, and various other notes.
The note payable to Columbia/HCA is as a result of the acquisition of
home health agencies consummated in November 1998. Effective September 30, 1999,
the Company and Columbia/HCA executed an agreement to modify the terms of this
note. Quarterly principal and accrued interest payments are due beginning April
30, 2001, with the balance of the note due, subject to certain prepayment
provisions in the agreement, on July 31, 2004. Under the loan modification
agreement, the Company may be required to pre-pay certain amounts depending upon
the Company's excess cash flows as defined in the agreement. These amounts, if
due, are payable 45 days after the end of each fiscal year ending after October
1, 1999 and prior to July 30, 2004. The agreement also restricts, amongst other
things, the Company's ability, subject to certain exceptions, to incur
additional indebtedness, to acquire other businesses, or to sell or transfer any
of Company's property unless the net cash proceeds is applied to repay the
outstanding principal and accrued interest on the note. Columbia/HCA has on
previous occasions consented to the sale of certain assets of the Company
without requiring the Company to apply the net cash proceeds from the sales
toward the balance of the note. However, there is no assurance that Columbia/HCA
will grant its consent to any future acquisitions or dispositions and waive the
requirement to apply the net cash proceeds of the sale to reduce the balance on
the note. Due to the significant operating losses incurred during both 1999 and
1998, the various prepayment provisions within the note agreement itself, and
the subjectivity of the material adverse effect clause, the Company reflected
the amount due Columbia as a current liability in the consolidated balance
sheets as of December 31, 1999 and March 31, 2000.
10
<PAGE> 11
The Company makes monthly principal and interest payments of $134,000
on the $1.7 million note to NPX, Inc., which is due December, 2001. The Company
makes monthly principal and interest payments of $25,000 on the $1 million note
to CareSouth which is due July, 2003. The notes payable to individuals of $1
million bear interest, payable monthly at 13%, with four equal monthly principal
payments beginning in April, 2001. In connection with the issuance of the notes
payable to the individuals, 20,000 warrants were also issued (exercise price of
$4.00 per share). These warrants have not been recorded in the financial
statements as the value has been deemed by management to be immaterial, if any.
The Company makes monthly principal and interest payments of $27,000 on
the $1.2 million note to Merrill Lynch, which is secured by equipment located at
one surgery center and is due in April, 2002. Due to the anticipated divestiture
of the outpatient surgery division, this note is included in Long-term
Liabilities Held for Sale in the Consolidated Balance Sheets.
8. AMOUNTS DUE TO AND DUE FROM MEDICARE
The Company records Medicare revenues at the lower of actual costs, the
per visit cost limit, or a per beneficiary cost limit on an individual provider
basis. Ultimate reimbursement under the Medicare program is determined upon
review of the annual cost reports. As of June 30, 2000, the Company estimates an
aggregate payable to Medicare of $11.8 million, resulting from interim cash
receipts in excess of expected reimbursement. In the accompanying Consolidated
Balance Sheets, the amounts due to Medicare within one year of $7 million is
netted against accounts receivable. The amount payable to Medicare in excess of
one year of $4.8 million is shown as Long-term Medicare Liabilities. The
Medicare program has committed to the automatic approval of a 36 month extended
repayment schedule for any Medicare-certified home health agency which submits
such a request and has a payment due to Medicare as a result of IPS, subject to
certain exceptions.
9. CAPITAL STOCK
In accordance with the terms of conversion of the Company's Series A
Preferred Stock as stated in the Series A Preferred Stock Conversion Agreement,
six preferred unrelated shareholders converted a total of 240,000 preferred
shares into 800,000 shares of Company Common Stock during the three months ended
June 30, 2000. The conversion rate for preferred shares is $3.33. There were no
preferred stock conversions during the first quarter of 2000. Subsequent to June
30, 2000, two additional unrelated preferred shareholders converted a total of
120,000 preferred shares into 400,000 shares of Company Common Stock.
10. SUBSEQUENT EVENTS
On August 9, 2000, the Company, through its wholly-owned subsidiaries,
Amedisys Alternate-Site Infusion Therapy Services, Inc. ("AASI") and PRN, Inc.
("PRN"), sold, by a Bill of Sale and Asset Purchase Agreement, certain assets,
subject to the assumption of certain liabilities, of AASI and PRN, to Park
Infusion Services, LP ("Buyer"). The transaction had an effective date of August
1, 2000. Neither the Company, its affiliates nor its directors and officers had
any material relationship with Buyer prior to this transaction. Subject to
certain post-closing adjustments, the Company, in consideration for the assets,
received, through AASI and PRN, $1,750,000, calculated using a multiple of
EBITDA, paid immediately to the Company at closing. Subject to certain
exceptions, the assets sold consisted primarily of all furniture, fixtures and
equipment; inventory and supplies on hand or in transit; service and provider
contracts; business contracts; intellectual and intangible assets; transferable
licenses, permits and approvals; capital and operating leases; telephone and
facsimile numbers; customer and supplier lists; books and records; goodwill;
deposits; prepaid expenses; claims and rights associated with all purchased
assets; and other privileges, rights, interest, properties and assets. Buyer
assumed only certain liabilities arising from and after the closing date
associated with certain leases and contracts and certain other liabilities
incurred after August 1, 2000 relating to the purchase of inventory, and wages
and salaries of employees. The Company intends to file a Current Report on Form
8-K with regard to this matter.
11
<PAGE> 12
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. is a leading multi-state provider of home health care
nursing services. The Company operates 50 home care nursing offices, 2
ambulatory surgery centers, 3 home infusion therapy locations (see Subsequent
Events footnote), and 1 corporate office in the southern and southeastern United
States. In August 1999, the Company adopted a formal plan to sell all of its
interests in its outpatient surgery and infusion therapy divisions (see
Subsequent Events footnote). The Company's strategic plan is to become a focused
home health nursing company.
RESULTS OF OPERATIONS
Revenues. Net revenues decreased $1,371,000 or 6% and $3,010,000 or 6%
for the three and six months ended June 30, 2000, respectively, as compared to
the same periods in 1999. This decrease was attributed to a decrease in visits
of 26,689 or 8.5% from 313,363 for the three months ended June 30, 1999 to
286,674 for the three months ended June 30, 2000 and a decrease in visits of
39,508 or 6% from 645,520 for the six months ended June 30, 1999 to 606,012 for
the six months ended June 30, 2000.
Cost of Revenues. Cost of revenues decreased 6% and 8% for the three
and six months ended June 30, 2000, respectively, as compared to the same
periods in 1999. This decrease is primarily attributed to a reduction in visit
volume as noted above. As a percentage of net revenues, cost of revenues
remained constant at 47% and 48% for the three and six months ended June 30,
2000, respectively, as compared to the same periods in 1999.
General and Administrative Expenses ("G&A"). General and administrative
expenses decreased by 5% for the three and six months ended June 30, 2000 as
compared to the same periods in 1999. This decrease is primarily attributed to
the restructuring efforts implemented during the latter part of 1999 following
the acquisition of certain Columbia/HCA home health care agencies in the latter
part of 1998.
Operating (Loss). The Company had an operating loss of $821,000 for the
three months ended June 30, 2000 as compared to a loss of $835,000 for the three
months ended June 30, 1999 and a loss of $1,638,000 for the six months ended
June 30, 2000 as compared to a loss of $2,011,000 for the six months ended June
30, 1999. The reduction in operating losses of $14,000 or 2% for the three month
period ended June 30, 2000 and $373,000 or 19% for six month period ended June
30, 2000 is mainly attributed to the restructuring efforts implemented during
the latter part of 1999 following the acquisition of certain Columbia/HCA home
health care agencies in the latter part of 1998.
Other Income and Expenses. Other income and expenses decreased $58,000
from $609,000 for the three month period ended June 30, 1999 to $551,000 for the
three month period ended June 30, 2000. Other income and expenses increased
$43,000 from $1,054,000 for the six month period ended June 30, 1999 to
$1,097,000 for the six month period ended June 30, 2000.
Discontinued Operations. Income from discontinued operations, net of
income taxes, is $38,000 for the three months ended June 30, 2000 as compared to
a loss of $11,000 for the three months ended June 30, 1999 and $109,000 for the
six months ended June 30, 2000 as compared to a loss of $888,000 for the six
months ended June 30, 1999.
Net Income/(Loss). The Company recorded a net (loss) of ($1,334,000)
for the three months ended June 30, 2000 as compared to a (loss) of ($1,455,000)
for the three months ended June 30, 1999 and a (loss) of ($2,626,000) for the
six months ended June 30, 2000 compared with a (loss) of ($3,953,000) for six
months ended June 30, 1999.
12
<PAGE> 13
FINANCIAL CONDITION
The Company's principal capital requirements are for additional working
capital to fund current cash requirements of the Company. The Company recorded
operating losses thus far in 2000 and for the years ended December 31, 1999 and
1998 and has had negative cash flow from operations since then. The negative
cash flow from operations is largely attributable to the changes in Medicare
reimbursement which were effective January 1, 1998 for the Company. The Company
has undertaken significant restructuring efforts to reduce operating costs, but
expects to record a loss from operations through September, 2000 until the
implementation of PPS. The operating losses and negative cash flow from
operations have impacted the availability of the Company's current financing
sources and have decreased the Company's overall liquidity position. The Company
expects the negative cash flow from operations to continue on a short-term basis
and has implemented a plan to divest all non-home health care nursing assets to
generate cash to fund remaining obligations until the implementation of PPS (see
below for certain restrictions on disposition of assets under the Columbia/HCA
note agreement).
Notes payable consists primarily of an asset-based line of credit with
availability, depending on collateral, of up to $25 million with NCFE and
borrowings under a revolving bank line of credit of $750,000. The $25 million
asset-based line of credit, which expires December 31, 2001, is collateralized
by eligible accounts receivable of the home health care nursing division and as
of June 30, 2000, had an outstanding balance of $2,984,000 with no amounts
available under this line of credit. Eligible receivables are defined as
receivables, exclusive of workers' compensation and self-pay, that are aged less
than 181 days. The effective interest rate on this line of credit was 16.77% for
the six months ended June 30, 2000.
The revolving bank line of credit of $750,000 bears interest at 10.5%.
At June 30, 2000, $162,776 was outstanding on the line of credit and no amounts
were available. This line of credit has scheduled monthly principal payments of
$25,000 plus accrued interest, with the balance due October 5, 2000. The line of
credit is collateralized by eligible receivables in outpatient surgery and
physician notes receivable. Eligible receivables are defined principally as
accounts that are aged less than 90 days. Due to the anticipated divestiture of
the outpatient surgery division, this line of credit is included in Current
Liabilities Held for Sale in the Consolidated Balance Sheets.
Long-term debt consists primarily of a $14 million note plus accrued
interest of $2.1 million payable to Columbia/HCA, a $1.7 million note payable to
NPX, Inc., an affiliate of NCFE, a $1.2 million note payable to Merrill Lynch, a
$1 million note payable to CareSouth, $1 million in notes payable to
individuals, and various other notes.
The note payable with Columbia/HCA is as a result of the acquisition of
home health agencies consummated in November 1998. Effective September 30, 1999,
the Company and Columbia/HCA executed an agreement to modify the terms of this
note. Quarterly principal and accrued interest payments are due beginning April
30, 2001, with the balance of the note due, subject to certain prepayment
provisions in the agreement, on July 31, 2004. Under the loan modification
agreement, the Company may be required to pre-pay certain amounts depending upon
the Company's excess cash flows as defined in the agreement. These amounts, if
due, are payable 45 days after the end of each fiscal year ending after October
1, 1999 and prior to July 30, 2004. The agreement also restricts, amongst other
things, the Company's ability, subject to certain exceptions, to incur
additional indebtedness, to acquire other businesses, or to sell or transfer any
of Company's property unless the net cash proceeds is applied to repay the
outstanding principal and accrued interest on the note. Columbia/HCA has on
previous occasions consented to the sale of certain assets of the Company
without requiring the Company to apply the net cash proceeds from the sales
toward the balance of the note. However, there is no assurance that Columbia/HCA
will grant its consent to any future acquisitions or dispositions and waive the
requirement to apply the net cash proceeds of the sale to reduce the balance on
the note.
Due to the significant operating losses incurred during both 1999 and
1998, the various prepayment provisions within the note agreement itself, and
the subjectivity of the material adverse effect clause, the Company reflected
the amount due Columbia as a current liability in the Consolidated Balance
Sheets as of December 31, 1999 and March 31, 2000.
In the accompanying Consolidated Balance Sheet as of June 30, 2000,
this note payable is reflected as Long-term Debt in accordance with the
repayment terms of the note agreement. This note has been reclassified due to
the overall stabilization of operating losses during the first two quarters of
2000, the receipt of waivers from Columbia/HCA from application of the net
proceeds from the divestitures completed to date as payment towards the balance
on the note, and discussions with representatives of Columbia/HCA at which time
Columbia verbally indicated that they had no intention of invoking the material
adverse effect clause through December 31, 2000.
The Company makes monthly principal and interest payments of $134,000
on the $1.7 million note to NPX, Inc., which is due December, 2001. The Company
makes monthly principal and interest payments of $25,000 on the $1 million note
to CareSouth which is due July, 2003. The notes payable to individuals of $1
million bear interest, payable monthly at 13%, with four equal monthly principal
payments beginning in April, 2001. In connection with the issuance of the notes
payable to the individuals, 20,000 warrants were also issued (exercise price of
$4.00 per share). These warrants have not been recorded in the financial
statements as the value has been deemed by management to be immaterial, if any.
The Company makes monthly principal and interest payments of $27,000 on
the $1.2 million note to Merrill Lynch, which is secured by equipment located at
one surgery center and is due in April, 2002. Due to the anticipated divestiture
of the outpatient surgery division, this note is included in Long-term
Liabilities Held for Sale in the Consolidated Balance Sheets.
13
<PAGE> 14
The Company records Medicare revenues at the lower of actual costs, the
per visit cost limit, or a per beneficiary cost limit on an individual provider
basis. Ultimate reimbursement under the Medicare program is determined upon
review of the annual cost reports. As of June 30, 2000, the Company estimates an
aggregate payable to Medicare of $11.8 million, resulting from interim cash
receipts in excess of expected reimbursement. In the accompanying Consolidated
Balance Sheets, the amounts due to Medicare within one year of $7 million is
netted against accounts receivable. The amount payable to Medicare in excess of
one year of $4.8 million is shown as Long-term Medicare Liabilities. The
Medicare program has committed to the automatic approval of a 36 month extended
repayment schedule for any Medicare-certified home health agency which submits
such a request and has a payment due to Medicare as a result of IPS, subject to
certain exceptions.
The Company's operating activities used $377,000 in cash during the six
month period ended June 30, 2000, whereas such activities used $20,786,000 in
cash during the same period in 1999. Cash used by operating activities for 2000
is attributed to an increase in accrued expenses of $1,322,000, a decrease in
accounts receivable of $466,000, the write off of goodwill of $1,771,000,
depreciation and amortization expense of $1,469,000 and provision for bad debts
of $1,398,000 offset by a net loss of $2,626,000, a gain on the sale of Company
operations of $2,665,000, a decrease in accounts payable of $512,000 and a
change in deferred revenue of $1,060,000
The Company's investing activities provided $3,419,000 for the six
month period ended June 30, 2000, whereas investing activities provided $305,000
for the six month period ended June 30, 1999. Cash provided by investing
activities in 2000 is attributed to proceeds from the sale of Company operations
of $3,200,000, proceeds from the sale of property, plant and equipment of
$107,000 and an increase in minority interest in subsidiary of $150,000 offset
by purchases of property, plant and equipment of $38,000.
Financing activities provided cash during the six month period ended
June 30, 2000 of $314,000, whereas such activities provided $20,154,000 during
the same period in 1999. Cash provided by financing activities in 2000 is
attributable to net borrowings on line of credit agreements of $2,058,000 and
payments on notes payable and capital leases of $1,596,000 offset by an increase
in long-term Medicare liabilities of $2,299,000, proceeds from issuance of notes
payable of $1,000,000 and deferred interest expense of $669,000.
At June 30, 2000, the Company had negative working capital of
$5,898,000 and a stockholders' equity deficit of $11,824,000. The Company's
strategy to offset ongoing negative cash flows from continuing operations
includes divesting its non-core assets, including two ambulatory surgery
centers and three infusion therapy sites (see Discontinued Operations
footnote). The Company is currently in various stages of divesting these assets
and anticipates, based on estimates of current market values for these assets
and the purchase price of transactions completed (see Subsequent Events
footnote), to generate in excess of $4.9 million cash (subject to the release
of certain restrictions on indebtedness and dispositions of assets imposed
under the note agreement executed between the Company and Columbia/HCA). For
the divestitures completed in 1999 and thus far in 2000, Columbia/HCA allowed
sales to occur without requiring the net cash proceeds from the sales to be
applied towards the note payable, however, there can be no assurances that it
will do so in the future (see Long-term Debt footnote). If all applicable
waivers and consents under the Columbia/HCA note agreement are obtained, the
cash generated from the sales will be used to offset the operating cash
deficits which are anticipated through September 31, 2000. The Company believes
that the implementation of PPS on October 1, 2000 will allow the Company to
generate positive cash flow from operations beginning in the fourth quarter of
2000.
The Company does not believe that inflation has had a material effect
on its results of operations for the three and six month periods ended June 30,
2000.
FORWARD LOOKING STATEMENTS
When included in the Quarterly Report on Form 10-Q or in documents
incorporated herein by reference, the words "expects", "intends", "anticipates",
"believes", "estimates", and analogous expressions are intended to identify
forward-looking statements. Such statements inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include, among others,
general economic and business conditions, current cash flows and operating
deficits, debt service needs, adverse changes in federal and state laws relating
to the health care industry, competition, regulatory initiatives and compliance
with governmental regulations, customer preferences and various other matters,
many of which are beyond the Company's control. These forward-looking statements
speak only as of the date of the Quarterly Report on Form 10-Q. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or any changes in the Company's expectations with regard thereto or any
changes in events, conditions or circumstances on which any statement is based.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company does not engage in derivative financial instruments, other
financial instruments, or derivative commodity instruments for speculative or
trading/non-trading purposes.
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<PAGE> 15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material developments have occurred on the legal proceedings last
reported in the Company's Annual Report on Form 10-K for the year ended December
31, 1999.
ITEM 2. CHANGES IN SECURITIES
In accordance with the terms of conversion of the Company's Series A
Preferred Stock as stated in the Series A Preferred Stock Conversion Agreement,
six preferred unrelated shareholders converted a total of 240,000 preferred
shares into 800,000 shares of Company Common Stock during the three months ended
June 30, 2000. The conversion rate for preferred shares is $3.33. There were no
preferred stock conversions during the first quarter of 2000. Subsequent to June
30, 2000, two additional unrelated preferred shareholders converted a total of
120,000 preferred shares into 400,000 shares of Company Common Stock.
On June 5, 2000, the Board of Directors of the Company approved a
shareholder rights plan and declared a distribution of one right ("Right") for
each share of common stock, par value $0.001 per share, including securities
convertible into, exchangeable into or exercisable for common stock
(collectively the "Common Stock") of the Company. The Rights were granted on
June 15, 2000 to the shareholders of record as of the close of business on that
date. One Right will also be issued for each share of Common Stock issued by the
Company thereafter, but prior to the Separation Date (as defined in the
Shareholder Rights Agreement dated as of June 15, 2000 between the Company and
American Stock Transfer & Trust Company as Rights Agent (the "Rights
Agreement")) and in certain circumstances, for each share of Common Stock issued
after the Separation Date. Subject to the terms of the Rights Agreement, each
Right will entitle the registered holder, after the Separation Date and prior to
the Expiration Date (as defined in the Rights Agreement), to purchase from the
Company, for $15.00 (the "Exercise Price"), that number of shares of Common
Stock having an aggregate Market Price (hereinafter defined), on the first date
of the Company"s public announcement that a person has become an Acquiring
Person (subject to certain exceptions, an Acquiring Person is a person who
together with affiliates and associates acquires beneficial ownership of 15% or
more of the outstanding shares of Common Stock), equal to twice the Exercise
Price. Subject to certain adjustments and subject to the more detailed
description set forth in the Rights Agreement, the "Market Price" per share of
Common Stock on any date shall mean the average of the daily closing prices of
such Common Stock on each of the 10 consecutive business days through and
including the business day immediately preceding such date. The Exercise Price
and Rights are subject to adjustments from time to time as set forth in the
Rights Agreement. The Company filed a Current Report on Form 8-K with the SEC on
June 16, 2000 with regard to this matter.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual shareholders meeting of the Company was held on June 22,
2000 with the following three items voted on:
Item 1. Election of five directors to serve until the next annual
meeting of the shareholders of the Company. The nominated individuals were
William F. Borne, CEO of Amedisys, Inc.; Ronald A. LaBorde, President and CEO of
Piccadilly Cafeterias, Inc.; Jake L. Netterville, managing director of
Postlethwaite and Netterville, a public accounting firm; David R. Pitts,
President and CEO of Pitts Management Associates, Inc.; and Peter F. Ricchiuti,
Assistant Dean and Director of Research at Tulane University's A.B. Freeman
School of Business. These individuals were approved with the following votes:
<TABLE>
<CAPTION>
Director Votes in Favor Votes Against Votes Abstained
<S> <C> <C> <C>
Mr. Borne 5,328,855 33,034 --
Mr. LaBorde 5,328,855 33,034 --
Mr. Netterville 5,328,855 33,034 --
Mr. Pitts 5,328,855 33,034 --
Mr. Ricchiuti 5,328,855 33,034 --
</TABLE>
15
<PAGE> 16
Item 2. Reappointment of the Company's independent public accounting
firm of Arthur Andersen LLP. The reappointment of the independent public
accounting firm was approved by the shareholders, receiving 5,334,044 votes in
favor, 27,674 votes against and 171 votes abstained.
Item 3. To consider and act upon a proposal to transact such other
business as may properly come before the meeting or any adjournment thereof.
This item was approved by the shareholders, receiving 5,184,168 votes in favor,
169,929 votes against and 7,792 abstained.
ITEM 5. OTHER INFORMATION
The independent auditors' report dated March 15, 2000, included as an
exhibit to the Company's Annual Report on Form 10-K for the year ended December
31, 1999, expressed a qualified opinion with an explanatory paragraph due to the
substantial doubt about the Company's ability to continue as a going concern as
a result of significant recurring losses from operations and a deficit in
stockholders' equity of $10,186,000 at December 31, 1999. In addition,
management's projections indicated that continuing operations would generate
negative cash flow and certain assets sales would have to take place in order to
sustain operations through December 31, 2000. Subsequent to March 15, 2000, the
Company completed the sale of several non-core assets (see Discontinued
Operations and Subsequent Events footnotes) along with other events. As a result
of these transactions, the auditors' opinion on the 1999 financial statements is
no longer qualified. The company intends to amend the Annual Report on Form 10-K
for the year ended December 31, 1999 as a result of this change.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Identification of Exhibit
------- -------------------------
<S> <C>
2.1(1) - Acquisition Agreement dated December 20, 1993 between the
Company and M & N Capital Corp.
2.2(3) - Plan of Merger dated August 3, 1994 between M & N Capital Corp.
and the Company
2.3(4) - Certificate of Merger dated August 3, 1994 between M & N Capital
Corp. and the Company
2.4(7) - Acquisition Agreement dated August 1,1997 between the Company
and Allgood Medical Services, Inc.
2.5(7) - Exchange Agreement dated January 1, 1998 between the Company and
Alliance Home Health, Inc. and University Capital Corp. dated
December 10, 1997
2.6(7) - Stock Purchase Agreement by and among Amedisys, Alternate-Site
Infusion Therapy Services, Inc., PRN, Inc. d/b/a Home IV
Therapy, Joseph W. Stephens, and Terry I. Stevens dated February
23, 1998
2.7(7) - Agreement to Purchase by and between Amedisys, Alternate-Site
Infusion Therapy Services, Inc. and Precision Health Systems,
LLC dated February 27, 1998
2.8(7) - Promissory note in the amount of $250,000 to Precision Health
Solutions, LLC in connection with the purchase of the company
2.9(7) - Stock Purchase Agreement by and among Amedisys Alternate-Site
Infusion Therapy Services, Inc., Infusion Care Solutions, Inc.
and Daniel D. Brown dated February 27,1998
2.10(7) - Promissory note in the amount of $125,000 to Daniel D. Brown in
connection with the purchase of Infusion Care Solutions, Inc.
2.11(8) - Stock Purchase Agreement by and among Amedisys Specialized
Medical Services, Inc., Quality Home Health Care, Inc., Frances
Unger, and James Unger dated May 1, 1998
2.12(8) - Asset Purchase Agreement by and among Amedisys Specialized
Medical Services, Inc., and Precision Home Health Care, Inc.
dated May 1, 1998
2.13(8) - Promissory note in the amount of $800,000 to Precision Home
Health Care, Inc. in connection with the purchase of the company
2.14(8) - Promissory note in the amount of $400,000 to Precision Home
Health Care, Inc. in connection with the purchase of the company
2.15(9) - Asset Purchase Agreement among Nursefinders, Inc., Amedisys
Staffing Services, Inc., Amedisys Nursing Services, Inc., and
Amedisys Home Health, Inc. and Amedisys, Inc.
2.16(10) - Asset Purchase Agreement by and between CPII Acquisition Corp.
and Amedisys, Inc.
2.17(10) - Asset Purchase Agreement by and between Columbia/HCA Healthcare
Corporation and Amedisys, Inc.
2.18(13) - Asset Purchase Agreement among Amedisys Surgery Centers, LC and
Permian Surgical Care Center, Inc. d/b/a Tanglewood Surgery
Center
2.19(15) - Asset Purchase Agreement among Amedisys, Inc., Amedisys Surgery
Centers, LC and United Surgical Partners International, Inc.
2.20(15) - Promissory Note from United Surgical Partners International,
Inc.
2.21(17) - Membership Interest Purchase Agreement by and among U.S.
Orthopedics, Texas, LLC, Amedisys Surgery Centers, LC,
Ambulatory Systems Development of Texas, Inc., Ambulatory
Systems Development Corporation, and U.S. Orthopedics, Inc.
2.22(18) - Agreement for Purchase and Sale of LLC Membership Interest among
Amedisys, Inc., Park Place Surgery Center, LLC, and the Members
of Park Place Surgery Center, LLC
</TABLE>
16
<PAGE> 17
<TABLE>
<S> <C>
3.1(4) - Certificate of Incorporation
3.2(4) - Bylaws
4.1(4) - Certificate of Designation for the Series A Preferred Stock
4.2(7) - Common Stock Specimen
4.3(7) - Preferred Stock Specimen
4.4(7) - Form of Placement Agent's Warrant Agreement
4.5(14) - Series A Preferred Stock Conversion Agreement Specimen
4.6(14) - Certificate of Amendment of Certificate of Designation Specimen
4.7(19) - Shareholder Rights Agreement
5.1(7) - Opinion Regarding Legality
10.1(4) - Master Note with Union Planter's Bank of Louisiana
10.2(4) - Merrill Lynch Term Working Capital Management Account
10.3(5) - Promissory Note with Deposit Guaranty National Bank
10.4(7) - Amended and Restated Stock Option Plan
10.5(7) - Registration Rights Agreement
10.6(11) - Master Corporate Guaranty of Service Agreements between
CareSouth Home Health Services, Inc. and Amedisys, Inc. dated
November 2, 1998
10.7(16) - Loan Modification Agreement by and between Amedisys, Inc. and
Columbia/HCA Healthcare Corporation
18.1(12) - Letter regarding Change in Accounting Principles
21.1(7) - List of Subsidiaries
23.1(7) - Consent of Counsel (contained in Exhibit 5.1)
23.2(7) - Consents of Arthur Andersen LLP and Hannis T. Bourgeois & Co.,
LLP, Independent Public Accountants
27.1(20) - Financial Data Schedule
</TABLE>
(1) Previously filed as an exhibit to the Current Report on Form 8-K dated
December 20, 1993.
(2) Previously filed as an exhibit to the Current Report on Form 8-K dated
February 14, 1994.
(3) Previously filed as an exhibit to the Current Report on Form 8-K dated
August 11, 1994.
(4) Previously filed as an exhibit to the Annual Report on Form 10-KSB for
the year ended December 31, 1994.
(5) Previously filed as an exhibit to the Current Report on Form 8-K dated
June 30, 1995.
(6) Previously filed as an exhibit to the Registration Statement on Form
S-1 (333-8329) dated July 18, 1996.
(7) Previously filed as an exhibit to the Registration Statement on Form
S-3 dated March 11, 1998.
(8) Previously filed as an exhibit to the Quarterly Report on Form 10-Q
dated August 14, 1998.
(9) Previously filed as an exhibit to the Current Report on Form 8-K dated
October 5, 1998.
(10) Previously filed as an exhibit to the Current Report on Form 8-K dated
November 10, 1998.
(11) Previously filed as an exhibit to the Quarterly Report on Form 10-Q
dated December 30, 1998.
(12) Previously filed as an exhibit to the Annual Report on Form 10-K for
the year ended December 31, 1997.
(13) Previously filed as an exhibit to the Annual Report on Form 10-K for
the year ended December 31, 1998.
(14) Previously filed as an exhibit to the Quarterly Report on Form 10-Q/A
for the period ended June 30, 1999.
(15) Previously filed as an exhibit to the Current Report on Form 8-K dated
September 15, 1999.
(16) Previously filed as an exhibit to the Quarterly Report on Form 10-Q for
the period ended September 30, 1999.
(17) Previously filed as an exhibit to the Annual Report on Form 10-K for
the year ended December 31, 1999.
(18) Previously filed as an exhibit to the Current Report on Form 8-K dated
May 11, 2000.
(19) Previously filed as an exhibit to the Current Report on Form 8-K dated
June 16, 2000 and the Registration Statement on Form 8-A dated June 16,
2000.
(20) Filed herewith.
(b) Report on Form 8-K
The Company filed a Current Report on Form 8-K with the SEC on May 11,
2000 in connection with the sale of its interest in Park Place to the Physician
Members effective April 28, 2000. Pro forma financial information, required
pursuant to Article 11 of Regulation S-X, was included in the filing. The pro
forma financial information was comprised of a pro forma consolidated balance
sheet as of December 31, 1999, a pro forma consolidated statement of operations
for the year ended December 31, 1999, and explanatory notes.
17
<PAGE> 18
The Company filed a Current Report on Form 8-K with the SEC on June 16,
2000 in connection with a shareholder rights plan approved by the Board of
Directors on June 5, 2000 and effective on June 15, 2000.
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/ John M. Joffrion
---------------------------------------
John M. Joffrion
Senior Vice President of Finance
Principal Accounting and Financial Officer
DATE: August 21, 2000
18
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. IDENTIFICATION OF EXHIBIT
------- -------------------------
<S> <C>
2.1(1) - Acquisition Agreement dated December 20, 1993 between the
Company and M & N Capital Corp.
2.2(3) - Plan of Merger dated August 3, 1994 between M & N Capital Corp.
and the Company
2.3(4) - Certificate of Merger dated August 3, 1994 between M & N Capital
Corp. and the Company
2.4(7) - Acquisition Agreement dated August 1,1997 between the Company
and Allgood Medical Services, Inc.
2.5(7) - Exchange Agreement dated January 1, 1998 between the Company and
Alliance Home Health, Inc. and University Capital Corp. dated
December 10, 1997
2.6(7) - Stock Purchase Agreement by and among Amedisys, Alternate-Site
Infusion Therapy Services, Inc., PRN, Inc. d/b/a Home IV
Therapy, Joseph W. Stephens, and Terry I. Stevens dated February
23, 1998
2.7(7) - Agreement to Purchase by and between Amedisys, Alternate-Site
Infusion Therapy Services, Inc. and Precision Health Systems,
LLC dated February 27, 1998
2.8(7) - Promissory note in the amount of $250,000 to Precision Health
Solutions, LLC in connection with the purchase of the company
2.9(7) - Stock Purchase Agreement by and among Amedisys Alternate-Site
Infusion Therapy Services, Inc., Infusion Care Solutions, Inc.
and Daniel D. Brown dated February 27,1998
2.10(7) - Promissory note in the amount of $125,000 to Daniel D. Brown in
connection with the purchase of Infusion Care Solutions, Inc.
2.11(8) - Stock Purchase Agreement by and among Amedisys Specialized
Medical Services, Inc., Quality Home Health Care, Inc., Frances
Unger, and James Unger dated May 1, 1998
2.12(8) - Asset Purchase Agreement by and among Amedisys Specialized
Medical Services, Inc., and Precision Home Health Care, Inc.
dated May 1, 1998
2.13(8) - Promissory note in the amount of $800,000 to Precision Home
Health Care, Inc. in connection with the purchase of the company
2.14(8) - Promissory note in the amount of $400,000 to Precision Home
Health Care, Inc. in connection with the purchase of the company
2.15(9) - Asset Purchase Agreement among Nursefinders, Inc., Amedisys
Staffing Services, Inc., Amedisys Nursing Services, Inc., and
Amedisys Home Health, Inc. and Amedisys, Inc.
2.16(10) - Asset Purchase Agreement by and between CPII Acquisition Corp.
and Amedisys, Inc.
2.17(10) - Asset Purchase Agreement by and between Columbia/HCA Healthcare
Corporation and Amedisys, Inc.
2.18(13) - Asset Purchase Agreement among Amedisys Surgery Centers, LC and
Permian Surgical Care Center, Inc. d/b/a Tanglewood Surgery
Center
2.19(15) - Asset Purchase Agreement among Amedisys, Inc., Amedisys Surgery
Centers, LC and United Surgical Partners International, Inc.
2.20(15) - Promissory Note from United Surgical Partners International,
Inc.
2.21(17) - Membership Interest Purchase Agreement by and among U.S.
Orthopedics, Texas, LLC, Amedisys Surgery Centers, LC,
Ambulatory Systems Development of Texas, Inc., Ambulatory
Systems Development Corporation, and U.S. Orthopedics, Inc.
2.22(18) - Agreement for Purchase and Sale of LLC Membership Interest among
Amedisys, Inc., Park Place Surgery Center, LLC, and the Members
of Park Place Surgery Center, LLC
</TABLE>
16
<PAGE> 20
<TABLE>
<S> <C>
3.1(4) - Certificate of Incorporation
3.2(4) - Bylaws
4.1(4) - Certificate of Designation for the Series A Preferred Stock
4.2(7) - Common Stock Specimen
4.3(7) - Preferred Stock Specimen
4.4(7) - Form of Placement Agent's Warrant Agreement
4.5(14) - Series A Preferred Stock Conversion Agreement Specimen
4.6(14) - Certificate of Amendment of Certificate of Designation Specimen
4.7(19) - Shareholder Rights Agreement
5.1(7) - Opinion Regarding Legality
10.1(4) - Master Note with Union Planter's Bank of Louisiana
10.2(4) - Merrill Lynch Term Working Capital Management Account
10.3(5) - Promissory Note with Deposit Guaranty National Bank
10.4(7) - Amended and Restated Stock Option Plan
10.5(7) - Registration Rights Agreement
10.6(11) - Master Corporate Guaranty of Service Agreements between
CareSouth Home Health Services, Inc. and Amedisys, Inc. dated
November 2, 1998
10.7(16) - Loan Modification Agreement by and between Amedisys, Inc. and
Columbia/HCA Healthcare Corporation
18.1(12) - Letter regarding Change in Accounting Principles
21.1(7) - List of Subsidiaries
23.1(7) - Consent of Counsel (contained in Exhibit 5.1)
23.2(7) - Consents of Arthur Andersen LLP and Hannis T. Bourgeois & Co.,
LLP, Independent Public Accountants
27.1(20) - Financial Data Schedule
</TABLE>
(1) Previously filed as an exhibit to the Current Report on Form 8-K dated
December 20, 1993.
(2) Previously filed as an exhibit to the Current Report on Form 8-K dated
February 14, 1994.
(3) Previously filed as an exhibit to the Current Report on Form 8-K dated
August 11, 1994.
(4) Previously filed as an exhibit to the Annual Report on Form 10-KSB for
the year ended December 31, 1994.
(5) Previously filed as an exhibit to the Current Report on Form 8-K dated
June 30, 1995.
(6) Previously filed as an exhibit to the Registration Statement on Form
S-1 (333-8329) dated July 18, 1996.
(7) Previously filed as an exhibit to the Registration Statement on Form
S-3 dated March 11, 1998.
(8) Previously filed as an exhibit to the Quarterly Report on Form 10-Q
dated August 14, 1998.
(9) Previously filed as an exhibit to the Current Report on Form 8-K dated
October 5, 1998.
(10) Previously filed as an exhibit to the Current Report on Form 8-K dated
November 10, 1998.
(11) Previously filed as an exhibit to the Quarterly Report on Form 10-Q
dated December 30, 1998.
(12) Previously filed as an exhibit to the Annual Report on Form 10-K for
the year ended December 31, 1997.
(13) Previously filed as an exhibit to the Annual Report on Form 10-K for
the year ended December 31, 1998.
(14) Previously filed as an exhibit to the Quarterly Report on Form 10-Q/A
for the period ended June 30, 1999.
(15) Previously filed as an exhibit to the Current Report on Form 8-K dated
September 15, 1999.
(16) Previously filed as an exhibit to the Quarterly Report on Form 10-Q for
the period ended September 30, 1999.
(17) Previously filed as an exhibit to the Annual Report on Form 10-K for
the year ended December 31, 1999.
(18) Previously filed as an exhibit to the Current Report on Form 8-K dated
May 11, 2000.
(19) Previously filed as an exhibit to the Current Report on Form 8-K dated
June 16, 2000 and the Registration Statement on Form 8-A dated June 16,
2000.
(20) Filed herewith.
