U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
(Mark
One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1997
|_| TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________
TO ___________
Commission file number 0-23524
PHC, INC.
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2601571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Lake Street, Suite 102, Peabody MA 01960
Address of principal executive offices) (Zip Code)
508-536-2777
(Issuer's telephone number)
(Former Name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 _____
No__X___ In a no action letter, the U. S. Securities and Exchange Commission
indicated that the company's failure to file a report on Form 8-K in connection
with its acquisition of Behavioral Stress Centers, Inc. in November 1, 1996 will
not preclude stockholders from selling under Rule 144.
Applicable only to corporate issuers
Number of shares outstanding of each class of common equity, as of April 30,
1997:
Class A Common Stock 2,646,884
Class B Common Stock 731,348
Class C Common Stock 199,816
Transitional Small Business Disclosure Format
(Check one):
Yes No X
<PAGE>
The Financial Statements as orginally filed have been adjusted to properly
account for warrants issued in connection with financing and services rendered.
<PAGE>
PHC INC. AND
SUBSIDIARIES
Item 1 Financial Statements CONSOLIDATED BALANCE
SHEETS
Mar. 31 June 30
1997 1996
-------- ---------
ASSETS (Unaudited)
Current assets:
$ $
Cash................................................. 59,846 293,515
Accounts receivable, net of allowance for bad
debts of 1,563,824 at March 31, 1997 and
1,492,983 at June 30, 1996.......................... 12,352,515 8,866,06
Prepaid expenses.................................. 567,996 259,893
Other receivables and advances.................... 1,582,293 66,513
Deferred Income Tax Asset......................... 515,300 515,300
---------- --------
Total current assets............................ 15,077,950 10,001,286
Accounts Receivable, Non Current..................... 2,201.645 740,000
Loan Receivable...................................... 126,305 113,805
Property and equipment, net.......................... 7,857,904 7,884,063
Deferred income taxes................................ 154,700 154,700
Deferred financing costs, net of amortization........ 773,936 702,948
Goodwill, net of accumulated amortization............ 891,690 709,573
Other assets......................................... 972,783 454,160
Net assets of discontinued operation................. --- 56,682
---------- ----------
Total Assets.................................... 28,056,913 20,817,217
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................... 3,942,029 3,127,052
Notes payable--related parties..................... 51,600 56,600
Current maturities of long term debt............... 1,892,220 403,894
Current portion of obligations under capital
leases............................................... 118,591 88,052
Accrued payroll, payroll taxes and benefits........ 712,201 715,515
Accrued expenses and other liabilities............. 448,570 738,784
---------- ----------
Total Current liabilities....................... 7,165,211 5,129,897
---------- ----------
Long-term debt....................................... 8,973,081 7,754,262
Obligations under capital lease...................... 1,585,958 1,468,475
Notes payable related parties........................ 23,696 47,394
7% Convertible Debentures (3,125,000 less discount
468,750)............................................. 2,656,250 ----
---------- ----------
Total noncurrent liabilities....................... 13,238,985 9,270,131
---------- ----------
Total liabilities.................................. 20,404,196 14,400,028
Stockholders' Equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized, none issued............................ --- ----
Class A common stock, $.01 value; 20,000,000
shares authorized, 2,646,884 and 2,293,568
issued, 2,638,228 and 2,293,568 outstanding
March 1997 and June 1996........................... 26,468 22,936
Class B common stock, $.01 par value; 2,000,000
shares authorized, 731,348 and 812,127 shares
issued March 1997 and June, 1996, convertible
into one share of Class A common stock............. 7,314 8,122
Class C common stock, $.01 par value; 200,000
shares authorized and 199,816 shares issued
March 1997 and June, 1996......................... 1,998 1,998
Additional paid-in capital......................... 9,202,296 8,078,38
Notes receivable related to purchase of 31,000
shares of Class A common stock..................... --- (63,928)
Less 8,656 Class A common treasury shares, at cost. (37,818) ---
Accumulated Deficit................................. (1,547,541) (1,630,322)
---------- ----------
Total Stockholders' Equity.......................... 7,652,717 6,417,189
---------- ----------
Total Liabilities & Stockholders' Equity............ 28,056,913 20,817,217
---------- ----------
See Notes to Consolidated Financial Statements
<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended
March 31 March 31
1997 1996 1997 1996
Revenues:
Patient Care net.............. 7,215,386 6,567,335 19,472,446 5,935,970
Management Fees............... 402,187 63,599 806,122 164,844
--------- --------- ---------- ---------
Total revenue................... 7,617,573 6,630,934 20,278,568 16,100,814
Operating expenses:
Patient care expenses......... 4,067,634 3,276,949 10,492,750 8,893,030
Administrative expenses....... 2.986,741 2,966,822 8,478,923 6,589,688
Contract expenses............. 92,200 31,671 232,098 93,673
--------- --------- ---------- ----------
Total operating
expenses.............. 7,146,575 6,275,442 19,203,771 15,576,391
--------- --------- ---------- ----------
Income from operations.......... 470,998 355,492 1,074,797 524,423
--------- --------- ---------- ----------
Interest income................. 73,457 4,225 106,788 10,787
Startup Cost Nursing Facility... --- --- --- (128,313)
Other income (Expense).......... 122,005 46,282 332,944 141,744
Financing Cost.................. --- --- (120,000) ---
Interest expense................ (558,561) (260,264)(1,318,226) (629,988)
Gain from operations held for
sale............................ --- 1,136 36,478 18,819
--------- --------- ---------- ----------
Total other income (363,099) (208,621) (962,016) (586,951)
(expense)............. --------- --------- ---------- ---------
Income (loss) before Provision
for Taxes....................... 107,899 146,871 112,781 (62,528)
Provision for Income Taxes...... 28,536 --- 30,000 ---
--------- --------- ---------- ----------
NET INCOME (LOSS)............... 79,363 146,871 82,781 (62,528)
--------- --------- ---------- ----------
Net Income (Loss) per share..... .02 .05 .03 (.02)
Weighted average number of shares
outstanding.................... 3,354,940 2,783,505 3,170,222 2,539,800
See Notes to Consolidated Financial Statements
<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended
March 31 March 31
--------- ---------
1997 1996
Cash flows from operating activities
Net income (loss).................... 82,781 (62,528)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization........ 456,215 352,231
Increase in accounts receivable...... (3,553,085) (3,139,612)
Compensatory Stock Options and Stoc
Warrants issued for Obligations...... 125,000 --
Increase in prepaid expenses and other
current assets....................... (308,103) (209,329)
(Increase) Decrease in other assets... 102,704 (31,971)
Decrease in net assets of operations
held for sale........................... 56,682 107,094
Increase in accounts payable............ 486,649 49,769
Increase in accrued and withheld
taxes.................................... --- 13,910
Increase (decrease) in accrued expenses
and other liabilities..................... (239,620) 155,637
----------- ----------
Net cash used in operating activities........ (2,790,777) (2,764,799)
----------- ----------
Cash flows from investing activities
Acquisition of property and equipment...... (359,372) (1,530,567)
Costs related to business acquisition...... (945,116) (575,000)
Loan Receivable............................ (2,923,290) ---
----------- ----------
Net cash used in investing
activities................................. (4,227,778) (2,105,567)
----------- ----------
Cash flows from financing activities
Issuance of Common Stock................... 1,027,854 2,274,501
Net debt activity.......................... 3,100,782 2,091,679
Convertible debt........................... 2,656,250 ---
----------- ----------
Net cash provided by financing
activities.................................... 6,784,886 4,366,180
----------- ----------
NET INCREASE (DECREASE) IN CASH (233,669) (504,186)
Beginning cash balance........................ 293,515 586,738
----------- ----------
ENDING CASH BALANCE 59,846 82,552
See Notes to Consolidated Financial Statements
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
PHC, Inc.
Registrant
Date: June 10 1997 /s/ Bruce A. Shear
Bruce A. Shear
President
Chief Executive Officer
Date: June 10, 1997 /s/ Paula C. Wurts
Paula C. Wurts
Controller
Assistant Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
This schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statement of income filed as
part of the report on Form 10-QSB/A and is qualified in its entirety by
reference to such report on Form 10-QSB/A.
</LEGEND>
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-1-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 59,846
<SECURITIES> 0
<RECEIVABLES> 13,916,339
<ALLOWANCES> 1,563,824
<INVENTORY> 0
<CURRENT-ASSETS> 15,077,950
<PP&E> 9,677,057
<DEPRECIATION> 1,819,153
<TOTAL-ASSETS> 28,056,913
<CURRENT-LIABILITIES> 7,165,211
<BONDS> 9,419,077
0
0
<COMMON> 35,780
<OTHER-SE> 7,616,937
<TOTAL-LIABILITY-AND-EQUITY> 28,056,913
<SALES> 0
<TOTAL-REVENUES> 20,278,568
<CGS> 0
<TOTAL-COSTS> 19,203,771
<OTHER-EXPENSES> 1,438,226
<LOSS-PROVISION> 837,524
<INTEREST-EXPENSE> 1,318,226
<INCOME-PRETAX> 112,781
<INCOME-TAX> 30,000
<INCOME-CONTINUING> 82,781
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,781
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
