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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (date of earliest event reported): December 31, 1998
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MHM SERVICES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 1-12238 52-1223048
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
8605 WESTWOOD CENTER DRIVE
SUITE 400
VIENNA, VIRGINIA 22182
(Address of principal executive offices)
Registrant's telephone number, including area code: (703) 734-0107
8000 TOWERS CRESCENT DRIVE
SUITE 810
VIENNA, VIRGINIA 22182
(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS.
The following pro forma financial information concerning the Company is
being provided, in accordance with the instruction to this item, not later than
sixty (60) days after the date that the Company's initial Form 8-K was required
to be filed.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Pro forma financial information is set forth at pages F-1 and
F-2, and is incorporated herein by reference.
(c) Exhibits:
10.1 Asset Purchase Agreement by and between Paradigm Health Services,
Inc. and MHM Extended Care Services, Inc.*
10.2 Interim Management Agreement by and between Paradigm Health
Services, Inc. and MHM Extended Care Services, Inc.*
10.3 Asset Purchase Agreement by and among Arbour Elder Services,
Inc., d/b/a Arbour Seniorcare and MHM Extended Care Services,
Inc. and MHM Services, Inc.*
10.4 Asset Purchase Agreement by and between BHG of Pennsylvania, LLC and
MHM Extended Care Services, Inc.*
10.5 Interim Management Agreement by and between BHG of Pennsylvania, LLC
and MHM Extended Care Services, Inc.*
10.6 Term Promissory Note of BHG of Pennsylvania, LLC, issued to MHM
Extended Care Services, Inc.*
10.7 Guaranty Agreement by and among Integrated Health Options, LLC, BHG,
Inc., and Illiana Behavioral Management, Inc., for the benefit of
MHM Extended Care Services, Inc.*
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10.8 Security Agreement by and between Integrated Health Options, LLC and
MHM Extended Care Services, Inc.*
99.1 Press Release of the Company dated January 11, 1999.*
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* Incorporated by reference to the Exhibits filed with the Company's Form
8-K filed January 15, 1999, with the Securities and Exchange Commission
(Commission File No. 1-12238).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MHM SERVICES, INC.
(Registrant)
Date: March 16, 1999 By:
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Cleveland E. Slade
Chief Financial Officer
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MHM SERVICES, INC. AND SUBSIDIARIES
Proforma Balance Sheets
September 30, 1998
<TABLE>
<CAPTION>
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Sale of
Extended Care (Unaudited)
Historical Services Proforma
1998 Operations(1) 1998
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<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 54,000 870,000 924,000
Accounts receivable,net 2,706,000 2,706,000
Prepaid expenses 134,000 134,000
Estimated third-party payor settlements 1,409,000 1,409,000
Notes receivable, net - 150,000 150,000
Repossessed property under contract for sale 1,172,000 1,172,000
Other current assets 8,000 8,000
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Total current assets 5,483,000 1,020,000 6,503,000
Property, plant, and equipment, net 335,000 (90,000) 245,000
Restricted cash 526,000 526,000
Other intangibles, net 431,000 (431,000) -
Other assets 223,000 (62,000) 161,000
Goodwill, net 538,000 (259,000) 279,000
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$ 7,536,000 178,000 7,714,000
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
Accounts payable $ 444,000 66,000 510,000
Accrued payroll and related expenses 746,000 746,000
Estimated third-party payor settlements 967,000 967,000
Other accrued expenses 2,258,000 2,258,000
Note payable 2,000,000 2,000,000
Line of credit 500,000 500,000
Current maturities of long-term debt 579,000 (5,000) 574,000
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Total current liabilities 7,494,000 61,000 7,555,000
Long-term debt 176,000 (2,000) 174,000
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7,670,000 59,000 7,729,000
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Stockholders' deficit:
Preferred stock ($.01 par value; authorized: 5,000,000; - -
issued and outstanding: none)
Common stock ($.01 par value; authorized: 15,000,000;
issued and outstanding:
3,538,000 and 3,513,000 in 1998 and 1997, respectively) 35,000 35,000
Additional paid-in capital 41,938,000 41,938,000
Accumulated deficit (42,107,000) 119,000 (41,988,000)
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Total stockholders' deficit (134,000) 119,000 (15,000)
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Commitments and contingencies
$ 7,536,000 178,000 7,714,000
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</TABLE>
(1) THE ADJUSTMENTS REFLECT THE ESTIMATED IMPACT ON THE COMPANY'S
BALANCE SHEET AT SEPTEMBER 30, 1998 IF THE SALE OF EXTENDED
CARE DIVISION WOULD HAVE INCURRED ON THIS DATE. THE ADJUSTMENTS
REFLECT THE RECEIPT OF $870,000 IN CASH AND A 90 DAY NOTE
RECEIVABLE OF $150,000 FOR THE OPERATIONS CONTRACTS, PERSONNEL
AND CERTAIN FIXED ASSETS FREE AND CLEAR OF ANY ENCUMBRANCES. IN
APRIL 1998, THE COMPANY SOLD ITS LAST FREESTANDING HOSPITAL,
MOUNTAIN CREST. THE SALE OF THIS FACILITY WAS ALREADY REFLECTED
IN THIS HISTORICAL 1998 AMOUNTS.
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MHM SERVICES, INC. AND SUBSIDIARIES
Proforma Statements of Operation
Year ended September 30, 1998
<TABLE>
<CAPTION>
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Sale of
Sale of Extended Care (Unaudited)
Historical Freestanding Services Proforma
1998 facility(1) Operations(2) 1998
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<S> <C> <C> <C> <C>
Revenues:
Net patient service revenue $ 14,864,000 (2,793,000) (11,485,000) 586,000
Premium revenue 14,430,000 14,430,000
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29,294,000 (2,793,000) (11,485,000) 15,016,000
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Costs and expenses:
Operating 20,040,000 (1,697,000) (6,373,000) 11,970,000
General and administrative 7,539,000 (890,000) (3,375,000) 3,274,000
Provision for bad debts 3,326,000 (85,000) (3,125,000) 116,000
Depreciation and amortization 597,000 (7,000) (501,000) 89,000
Gain on sale of freestanding facilities (2,465,000) 2,465,000 -
Writedown of long-term assets 430,000 (430,000) -
Other (credits) charges: -
Interest expense - MEDIQ 757,000 757,000
Interest expense - other 166,000 (80,000) 86,000
Other income, net - -
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30,390,000 (214,000) (13,884,000) 16,292,000
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Loss before income taxes and extraordinary item (1,096,000) (2,579,000) (2,399,000) (1,276,000)
Income tax (benefit) expense 93,000 (42,000) 51,000
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Loss before extraordinary item (1,189,000) (2,537,000) 2,399,000 (1,327,000)
Extraordinary item - gain on early extinguishment
of debt 9,185,000 9,185,000
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Net income (loss) $ 7,996,000 (2,537,000) 2,399,000 7,858,000
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Earnings (loss) per share-basic and diluted:
Loss before extraordinary item $ (0.34) (0.72) 0.68 (0.38)
Extraordinary item 2.60 0.00 0.00 2.60
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Net income $ 2.26 (0.72) 0.67 2.22
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Weighted average shares outstanding 3,528,000 3,528,000 3,528,000 3,528,000
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</TABLE>
(1) IN APRIL 1998, THE COMPANY SOLD ITS LAST FREESTANDING HOSPITAL,
MOUNTAIN CREST. THIS ADJUSTMENT ELIMINATES THE ESTIMATED
FINANCIAL IMPACT MOUNTAIN CREST HAD ON THE COMPANY'S 1998
OPERATIONS.
(2) THIS ADJUSTMENT ELIMINATES THE ESTIMATED FINANCIAL IMPACT OF
THE COMPANY'S OTHER EXTENDED CARE DIVISION ASSETS SOLD IN THE
FIRST QUARTER OF FISCAL 1999.
