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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
DATE OF REPORT - MAY 15, 1996
(Date of earliest event reported)
MHM SERVICES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-12238 52-1223048
(State of incorporation) (Commission file number) (IRS employer
identification
number)
7601 LEWINSVILLE ROAD, SUITE 200, MCLEAN, VIRGINIA 22102
(Address of principal executive offices, zip code)
AREA CODE (703) 749-4600
(Telephone number)
MENTAL HEALTH MANAGEMENT, INC.
(Former name or former address, if changed since last report)
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ITEM 5. OTHER INFORMATION.
At a special meeting held on May 13, 1996, the holders of a majority of
the outstanding shares of the Registrant's common stock voted to approve the
sale of five of the Registrant's freestanding behavioral healthcare facilities.
Also at the special meeting, the holders of a majority of the
Registrant's outstanding shares of common stock voted to approve an amendment to
the Registrant's Certificate of Incorporation to change the Registrant's name to
MHM Services, Inc. The Registrant's name change became effective May 15, 1996,
upon the filing the amendment with the Secretary of State of the State of
Delaware. A copy of the Registrant's Restated Certificate of Incorporation, as
amended, is attached hereto as Exhibit 3.1 and incorporated herein by reference.
The Registrant issued a press release announcing the approval of the
sale and the name change on May 15, 1996, a copy of which is attached hereto as
EXHIBIT 99.1 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits.
3.1 Restated Certificate of Incorporation of the Registrant. 1
3.2 Certificate of Amendment to the Restated Certificate of
Incorporation of the Registrant.
99.1 Press Release issued by the Registrant on May 15, 1996.
- ----------------------
1 Incorporated by reference to the Registrant's Form 10-K report for the Fiscal
Year ended September 30, 1995.
2
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SIGNATURES
Pursuant to requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: May 30, 1996 MHM Services, Inc.
By: /s/Vicki S. Hammond
-------------------------------------------
Vicki S. Hammond, Senior Vice President -
Finance and Chief Financial Officer
3
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
MENTAL HEALTH MANAGEMENT, INC.
Mental Health Management, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
1. That Paragraph First of the Certificate of Incorporation of the
Corporation hereby is amended to read in full as follows:
"1. The name of this Corporation is: MHM Services, Inc."
2. That the foregoing amendment to the Certificate of Incorporation
has been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the said Mental Health Management, Inc. has caused
this Certificate to be executed by its duly authorized officer this 15 day of
May, 1996.
MENTAL HEALTH MANAGEMENT, INC.
By: /s/ Vicki S. Hammond
-------------------------
Name: Vicki S. Hammond
Title: Secretary
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EXHIBIT 99.1
CONTACT: Michael S. Pinkert
President and Chief Executive Officer
703-749-4610
MENTAL HEALTH MANAGEMENT ANNOUNCES SHAREHOLDER APPROVAL
FOR SALE OF HOSPITALS; NAME CHANGE; AND SECOND QUARTER RESULTS
MCLEAN, VA, - Shareholders of Mental Health Management, Inc. (AMEX: MHM),
voted on May 13, 1996 to approve the sale of five of the Company's freestanding
behavioral health facilities. Shareholder approval for this sale allows the
company to continue its transition to the on-site delivery of healthcare
services to residents of extended care facilities through the management of non-
physician professional practices. Shareholders also approved a change of the
Company's name to MHM Services, Inc. to reflect this transition. The Company
expects the name change to become effective within the next several days upon a
filing with the State of Delaware.
The agreement to sell the five facilities, located in California, Arizona,
New Mexico and Ohio, was executed in January 1996 and amended in April 1996.
The facilities will be sold for approximately $10 million in cash and assumed
liabilities.
Michael S. Pinkert, President and Chief Executive Officer of MHM, noted
that "The Company intends to use a significant portion of the proceeds from the
sale of its freestanding facilities to expand its practice management
activities. A closing on the sale has been scheduled for May 31, 1996 pending
satisfaction of certain conditions."
In the last year, MHM began its expansion in the field of practice
management. The Company purchased a network of mental health outpatient clinics
serving over 1,200 patients with 60 professionals in Boston, and a large
psychological practice group serving assisted living centers in California. For
the past two years, MHM has operated under a
99.1-1
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contract with the State of Georgia to provide mental health and mental
retardation rehabilitation services to Medicaid-eligible nursing facility
residents.
In addition, the Company reported its results for the quarter and six
months ended March 31, 1996. Net revenues for the second quarter of fiscal 1996
increased 11% to $11,321,000 from $10,390,000 in the comparable 1995 quarter.
The net loss for the second quarter of fiscal 1996 was $6,208,000 or $1.88 per
share on 3,310,000 weighted average shares outstanding. This compares with a
net loss of $149,000 or $.04 per share on comparable weighted average shares
outstanding for the same quarter of fiscal 1995. For the six months ended March
31, 1996, net revenues increased to $22,502,000 from $20,331,000 in the prior
year period. The net loss was $7,497,000 or $2.27 per share on 3,310,000
weighted average shares outstanding, as compared to a net loss of $365,000 or
$.11 per share on comparable weighted average shares outstanding. The net loss
in the current year includes an estimated loss on the sale of the freestanding
facilities of approximately $4.4 million. The prior year included significant
non-recurring pre-tax income of approximately $4.4 million related to the sale
of the Company's interest in a joint venture.
Commenting on the results, President and CEO Michael S. Pinkert said, "Our
results for the second quarter reflect the anticipated completion of the sale of
five of our freestanding facilities. The major portion of our losses were
attributable to one-time charges of approximately $4.4 million associated with
write-offs of goodwill related to the facilities, the loss on the sale of
certain property, plant and equipment, transaction expenses, severance costs and
other expenses. With the sale of our facilities nearly completed, we
99.1-2
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can now focus on building the Company into a national practice management leader
for non-physician professionals serving extended care facilities."
****
Mental Health Management, based in McLean, Virginia, provides a sub-acute
medical specialty and behavioral health services via practice management of non-
physician medical specialties. The Company serves over 800 extended care
facilities, nursing homes, assisted living centers, other adult community living
institutions and schools in 12 states and is a leader in the privatization of
programs of care to underserved populations and beneficiaries of public funds.
Services provided include behavioral healthcare, podiatry, optometry and
dentistry.
This release includes forward-looking statements based on management's
current plans and expectations. Such statements involve risks and uncertainties
which may cause actual future activities and results of operations to be
materially different from those suggested in this release, including risks
associated with industry consolidation and acquisitions, the need to manage
growth, the possible need to use the net cash proceeds from the sale of
freestanding facilities for the retirement of certain indebtedness, competition
and satisfaction of certain conditions to completion of the sale of the
freestanding facilities. For additional information, please refer to the
Company's filings with the Securities and Exchange Commission.
Table to Follow
###
99.1-3
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MENTAL HEALTH MANAGEMENT, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands except per share date)
Three Months Ended Six Months Ended
March 31, March 31, March 31, March 31,
1996 1995 1996 1995
Net Revenues $ 11,321 $10,380 $ 22,502 $20,331
Costs and Expenses 13,177 11,839 25,822 22,517
Equity in earnings of
joint venture -- (382) -- (835)
Gain on sale of
investment in joint
venture -- (3,529) -- (3,529)
Loss on sale of
facilities 4,352 -- 4,352 --
Income (loss) before
income taxes (6,208) 2,462 (7,672) 2,178
Income tax expense
(benefit) 2,611 (175) 2,543
Net Loss $ (6,208) $ (149) $ (7,497) $ (365)
Earnings (loss) per
share $ (1.88) $ (0.04) $ (2.27) $ (0.11)
Weighted Average
Shares Outstanding 3,310 3,310 3,310 3,310
99.1-4
