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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
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Date: March 21, 1997
MHM SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-12238 52-1223048
(Commission File No.) (IRS Employer Identification No.)
8000 Towers Crescent Drive, Suite 810, Vienna, Virginia 22182
(Address of principal executive offices, Zip Code)
(703) 749-4600
(Registrant's telephone number, including area code)
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ITEM 5. Other Information.
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On March 21, 1997, MHM Services, Inc. (the "Registrant") issued a
Press Release announcing that its subsidiary, MHM Extended Care
Services, Inc., secured a $4.0 million line of credit to fund its
growing practice management business. Also, on March 27, 1997, the
Registrant issued a Press Release announcing the acquisition of
Apogee's long-term care operations.
ITEM 7. Financial Statements and Exhibits. Page
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(c) Exhibits
99.1 Press Release of Registrant dated 4
March 21, 1997
99.2 Press Release of Registrant dated 6
March 27, 1997
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SIGNATURES
Pursuant to the 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: April 2, 1997 MHM SERVICES, INC.
(REGISTRANT)
/s/ Carolyn Zimmerman
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(signature)
Vice President - Finance
and Chief Financial Officer
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EXHIBIT 99.1
[MHM LETTERHEAD]
CONTACT: Michael S. Pinkert
President and Chief Executive Officer
703/749-4610
FOR IMMEDIATE RELEASE
MHM SERVICES, INC. ANNOUNCES
ACQUISITION OF APOGEE'S LONG-TERM CARE OPERATIONS
Vienna, VA, March 27, 1997 -- MHM Services, Inc. (AMEX:MHM) announced that its
wholly-owned subsidiary, MHM Extended Care Services, Inc., has acquired the
long-term care operations of Apogee, Inc. (NASDAQ:APGG) in Pennsylvania and
Tennessee. These operations, with revenues of more than $7.0 million in
calendar year 1996, provide mental health services to approximately 270
long-term care facilities in these two states and are supported by
approximately 140 on-site licensed social workers, psychologists and other
mental health clinicians. The acquisition is expected to be accretive to fiscal
1997 earnings.
As consideration for the purchase, the company paid $100,000 in cash, issued a
three year promissory note in the principal amount of $125,000, and issued
200,000 shares of common stock of MHM Services, Inc. The note provides for
interest payments six months after the closing date for the first two quarters
and quarterly thereafter at an annual interest rate of 7% and annual principal
payments. The company also agreed to pay, as additional consideration, 20% of
"cash flow" (as such term is defined in the agreement) from the acquired
operations over a five year period. Such additional consideration is payable
annually.
MHM's President and CEO, Michael S. Pinkert said, "The purchase of these
long-term care operations expands our existing operations in Tennessee and
Pennsylvania, and brings the number of extended care facilities we serve to
approximately 925. This will give us dominant market positions in these states
which will provide us with additional opportunities to pursue public sector
managed care contracts. We further expect to expand on this base by introducing
our other specialty services, including podiatry, optometry and dentistry."
-more-
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Mr. Pinkert added, "These acquisitions are part of our growth strategy which
involves acquiring organizations that specialize in delivering a range of
on-site specialized healthcare services to long-term care facilities, prisons
and schools. These specialties include behavioral health, dentistry, podiatry
and optometry. We seek to add value by improving service delivery, enhancing
operating efficiencies, and combining administrative functions of these
non-physician practices."
MHM Extended Care Services, Inc., based in Vienna, Virginia, provides sub-acute
medical and behavioral health services via practice management of non-physician
medical specialties. The Company serves more than 925 extended care facilities,
nursing homes, assisted living centers, and other adult community living
institutions in 10 states and is a leader in the privatization of programs to
underserved populations and beneficiaries of public funds. Services provided
include behavioral healthcare, podiatry, optometry and dentistry. MHM also
provides a range of healthcare services for schools and dialysis centers.
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 the use of available
cash resources to fund continued operating losses, the amount and timing of
receipt of government reimbursement and the resolution of claim reviews, an
adverse decision in the Company's suit against MEDIQ, 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.
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EXHIBIT 99.2
[MHM LETTERHEAD]
CONTACT: Michael S. Pinkert
President and Chief Executive Officer
703/749-4610
FOR IMMEDIATE RELEASE
MHM SERVICES, INC. SUBSIDIARY SECURES $4.0 MILLION
LINE OF CREDIT TO FUND
GROWING PRACTICE MANAGEMENT BUSINESS
Vienna, VA, March 21, 1997 -- A subsidiary of MHM Services, Inc. (AMEX:MHM) has
entered into a new $4,000,000 revolving credit facility with an affiliate of
Bethesda, Maryland-based commercial lender Healthcare Financial Partners
(NASDAQ:HCFP). The MHM subsidiary -- MHM Extended Care Services, Inc. -intends
to use the facility for working capital purposes and to fund continued
expansion of its growing business of delivering on-site specialized healthcare
services to institutions such as nursing homes, schools and prisons.
The facility, which bears interest at prime plus 2.25%, is secured by accounts
receivable and expires in March 1999. The amount of credit available fluctuates
based on the amount of qualified accounts receivable.
MHM's President and CEO, Michael S. Pinkert, said, "This financing will help
our extended care services operations take advantage of the opportunities we
see in the burgeoning field of non-physician practice management. We anticipate
using the funds for both internal growth and acquisitions. Our growth strategy
involves acquiring organizations that specialize in delivering a range of
on-site specialized healthcare services to long-term care facilities, prisons
and schools. These specialties include behavioral health, dentistry, podiatry
and optometry. We seek to add value by improving service delivery, enhancing
operating efficiencies, and combining administrative functions of these
non-physician practices."
MHM Extended Care Services, Inc. based in Vienna, Virginia, provides sub-acute
medical and behavioral health services via practice management of non-physician
medical specialties. The Company serves more than 655 extended care facilities,
nursing homes, assisted living centers, and other adult community
-more-
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Page two
living institutions in 10 states and is a leader in the privatization of
programs to underserved populations and beneficiaries of public funds. Services
provided include behavioral healthcare, podiatry, optometry and dentistry. MHM
also provides a range of management services for schools and dialysis centers.
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 the use of available
cash resources to fund continued operating losses, the amount and timing of
receipt of government reimbursement and the resolution of claim reviews, an
adverse decision in the Company's suit against MEDIQ, 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.
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