<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(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, 1999
--------------
________ Transition report under Section 13 or 15 (d) of the Securities Exchange
Act of 1934 For the transition period from _____________ to _____________
Commission file number 0-24640
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COMMUNITY MEDICAL TRANSPORT, INC.
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(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 13-3507464
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(State or other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
4 Gannett Drive
White Plains, NY 10604
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(Address of Principal Executives Offices)
(914) 697-9233
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(Issuer's Telephone Number)
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(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 ______X_______ No________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes __________ No __________
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 1,015,114 shares of common
stock as of March 31, 1999
_________Transitional Small Business Disclosure Format (check one):
Yes __________ No ____X______
<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
INDEX
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Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 1999
(unaudited) and December 31, 1998 2
Consolidated Statements of Operations
for the Three Months Ended March 31,
1999 (unaudited) and 1998 (unaudited) 3
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1999 (unaudited)
and 1998 (unaudited) 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-8
Part II. Other Information
Item 6. Exhibits and reports on Form 8-K 9
<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
March 31, 1999 December 31, 1998
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(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................... $ 354,000 $ 92,000
Short-term investments...................................... 394,000 824,000
Accounts receivable, trade, less allowance for
doubtful accounts......................................... 3,862,000 3,587,000
Prepaid insurance........................................... 664,000 513,000
Prepaid and refundable income taxes......................... 63,000 199,000
Other current assets........................................ 569,000 418,000
Deferred tax assets......................................... 474,000 474,000
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Total Current Assets................................. 6,380,000 6,107,000
Property, equipment and leasehold
improvements - net........................................ 3,424,000 3,535,000
Licenses - net.............................................. 670,000 677,000
Customer lists - net........................................ 1,197,000 1,249,000
Other assets................................................ 730,000 247,000
Goodwill - net.............................................. 2,520,000 2,549,000
Covenant not to compete - net.............................. 17,000 33,000
Deferred tax assets......................................... 659,000 42,000
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Total Assets......................................... $ 15,597,000 $ 14,439,000
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt........................... $ 1,547,000 $ 1,701,000
Accounts payable and accrued expenses....................... 2,988,000 2,529,000
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Total Current Liabilities............................ 4,535,000 4,230,000
Long-term Debt:
Long-term debt - net of current portion..................... 4,948,000 4,540,000
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Total Liabilities............................................. 9,483,000 8,770,000
Stockholders' Equity:
Preferred stock, 4% cumulative, $.001 par value, 1,000,000 shares authorized
Common stock, $.001 par value, 5,000,000 shares authorized, 1,015,114 and
998,942 shares issued and outstanding at
March 31, 1999 and December 31, 1998 ...................... 1,000 1,000
Capital in excess of par value.............................. 14,054,000 14,054,000
Accumulated deficit......................................... (7,941,000) (8,386,000)
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Total Stockholders' Equity........................... 6,114,000 5,669,000
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Total Liabilities and Stockholders' Equity........... $ 15,597,000 $14,439,000
============= ===========
</TABLE>
Page 2
<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
- Unaudited -
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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1999 1998
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<S> <C> <C>
Net revenue............................................................ $4,045,000 $4,872,000
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Operating expenses:
Salaries and benefits................................................ 2,196,000 2,686,000
Fleet Maintenance.................................................... 246,000 306,000
Insurance............................................................ 151,000 160,000
Rent................................................................. 84,000 120,000
Depreciation and amortization........................................ 275,000 246,000
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Total operating expenses........................................... 2,952,000 3,518,000
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Gross profit....................................................... 1,093,000 1,354,000
Selling, general and administrative.................................... (1,132,000) (1,383,000)
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Income (loss) from operations.......................................... (39,000) (29,000)
Interest income........................................................ 1,000 19,000
Interest expense ...................................................... ( 126,000) ( 180,000)
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Income (loss) before provision for income taxes........................ (164,000) (190,000)
(Benefit) for income taxes............................................. (609,000) 0
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NET INCOME (LOSS).................................................. $ 445,000 $ (190,000)
========= ============
Net income (loss) available to common
shareholders - basic and diluted.................................... $ 445,000 $ (190,000)
Net income (loss) per share - basic and diluted........................ $ .44 $ (.19)
============= ================
Weighted average number of common shares
outstanding - basic and diluted...................................... 1,015,114 995,933
</TABLE>
Page 3
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COMMUNITY MEDICAL TRANSPORT, INC, AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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1999 1998
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<S> <C> <C>
Cash flow from operating activities:
Net income (loss)............................................................ $ 445,000 $ (190,000)
Adjustments to reconcile net income (loss) to cash (used in)
provided by operating activities:
Depreciation and amortization expense...................................... 375,000 375,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable-trade net..................... (275,000) 624,000
(Increase) decrease in prepaid insurance and
other current assets..................................................... (166,000) 308,000
(Increase) decrease in other assets...................................... (483,000) 39,000
(Increase) in deferred taxes assets...................................... (617,000) 0
Increase (decrease)in accounts payable and accrued expenses.............. 459,000 (404,000)
Decrease in deferred taxes liabillity.................................... 0 (7,000)
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Net cash (used in) provided by operating activities.......................... (262,000) 745,000
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Cash used in investing activities:
Acquisition of equipment-net of disposals.................................... (160,000) (32,000)
(Increase) decrease in short term investments................................ 430,000 (55,000)
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Net cash provided by (used in) investing activities.......................... 270,000 (87,000)
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Cash flow from financing activities:
Proceeds from bank borrowings................................................ 715,000 0
Principal payments on debt................................................... (66,000) (369,000)
Principal payments on capital lease obligations.............................. (395,000) ( 40,000)
--------- ----------
Net cash provided by (used in) financing activities.......................... 254,000 (409,000)
-
NET INCREASE IN CASH......................................................... 262,000 249,000
CASH - BEGINNING OF PERIOD................................................... 92,000 925,000
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CASH - END OF PERIOD......................................................... $ 354,000 $ 1,174,000
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Supplementary disclosure of cash flow information: Cash paid during the period:
Interest................................................................... $ 39,000 $ 159,000
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Taxes...................................................................... $ 0 $ 8,000
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</TABLE>
Page 4
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COMMUNITY MEDICAL TRANSPORT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Note A) - Organization and Basis of Presentation:
The accompanying financial statements include the accounts of Community
Medical Transport, Inc. (the "Company") and its five wholly owned operating
subsidiaries, Community Ambulette Service, Inc. ("Ambulette"), First Help
Ambulance and Ambulette, Inc. ("First Help"), Empire Ambulance and Ambulette
Inc. ("Empire"), Century Ambulance and Ambulette Inc. ("Century") and Elite
Ambulance and Medical Coach, Inc., ("Elite") (collectively the "Companies"). All
intercompany balances and transactions have been eliminated in consolidation.
The companies operated in one business segment. It provides specialized
transportation for the handicapped and disabled, mentally retarded, elderly and
chronically ill to and from day treatment centers, day care programs, hospitals,
nursing homes and other health care facilities in the New York metropolitan
area. This service is provided in ambulettes, which are specialized vans that
contain wheelchair lifts or ramps. The Companies also provides emergency and
nonemergency ambulance transportation of patients who require basic medical care
or supervision during transport to and from hospitals, nursing homes and other
health care facilities.
Page 5
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
Overview
For all periods presented, the following financial information includes
the accounts of all operating subsidiaries of the Company.
The Company's total revenue, which is comprised primarily of ambulette
and ambulance service fees charged to Medicare, Medicaid, other third party
payers such as private insurance carriers and health maintenance organizations,
and directly to patients, is presented net of contractual and other adjustments.
Forward Looking Statements
Except for the historical information contained herein, the following
statements and certain other statements contained herein are based on current
expectations. Such statements are forward looking statements that involve a
number of risks and uncertainties. Factors that could cause actual results to
differ materially include, but are not limited to the following (I) general
economic conditions, (ii) competitive market influences, (iii) third party
reimbursement rate changes or changes in criteria of coverage, (iv) availability
of insurance at reasonable costs, (v) customer relations and (vi) increased
competition.
Results of Operations
The Company's total revenue amounted to $4,045,000 for the three months
ended March 31, 1999, as compared with $4,872,000 for the three months ended
March 31, 1998, a decrease of $827,000 or 17.0%. The decrease is due
substantially to the Company declining certain services, previously performed by
operations of acquired business, that had become unprofitable as a result of the
Company's stricter interpretations of reimbursement regulations and reduction in
reimbursement rates. These stricter interpretations caused changes in
relationships with certain customers thereby reducing revenues and increasing
competition.
Operating expenses decreased by $566,000 or 16.1% to $2,952,000 for the
three months ended March 31, 1999 from $3,518,000 for the three months ended
March 31, 1998. As a percentage of sales operating expenses increased less than
one percent Gross profit as a percentage of revenues decreased to 27.0% for the
three months ended March 31, 1999 from 27.8 % for the three months ended March
31, 1998.
Selling, general and administrative expenses decreased by $251,000 or
18.1.% to $1,132,000 for the three months ended March 31, 1999, from $1,383,000
for the three months ended March 31, 1998. The decrease was a direct result of
reductions primarily in administrative operating costs, marketing salaries and
benefits, administrative salaries and benefits, and amortization of intangibles.
Such expenses as a percentage of revenues decreased by .4% to 28.0% for the
three months ended March 31, 1999, from 28.4% for the three months ended March
31, 1998, primarily as a result of the decreased expenses.
Interest expense decreased by $54,000 or 30.0% to $126,000 for the
three months ended March 31, 1999 compared to $180,000 for the three months
ended March 31, 1998. This decrease is primarily due to the reduction in
borrowing and the pay down of debt.
Interest income decreased by $18,000 or 94.7% to $1,000 for the three
months ended March 31, 1999 compared to $19,000 for the three months ended March
31, 1998. The reduction in interest income is primarily due to significant
expenditures in connection with the reduction of debt.
Page 6
<PAGE>
The Company's income taxes amounted to a benefit of $609,000 for the
three months ended March 31, 1999 compared with no tax benefit being recognized
for the three months ended March 31, 1998. The 1999 tax benefit resulted from
the recognition of deferred tax assets. The deferred tax assets were recognized
for the three months ended March 31, 1999 based on management's belief that
there is a strong likelihood that such amounts will be realized based upon their
assessment of expected future operations and the resulting taxability.
The Company's Net Income amounted to $445,000 or $.44 per share for the
three months ended March 31, 1999, as compared to a net loss of $190,000 or $.19
per share for the three months ended March 31, 1998. This increase in net income
and increase in earnings per share is attributable to the factors described
above, primarily the recognition of the deferred tax asset.
Acquisitions
On March 29, 1999 the Company announced that it has signed a letter of
intent with Lifestar Response Corporation ("Lifestar") for a merger of Lifestar
and the Company.
Liquidity and Capital Resources
Cash used in operating activities amounted to $262,000 for the three
months ended March 31, 1999 as compared with cash provided by operating
activities of $745,000 for the three months ended March 31, 1998. The increase
in cash used in operating activities was the result of increases in accounts
receivable, prepaid and other assets and the recognition of the deferred tax
assets, partially offset by the increases in net income and accounts payable and
accrued expenses.
Cash provided by investing activities amounted to $270,000 for the
three months ended March 31, 1999 as compared to cash used in investing
activities of $87,000 for the same period in 1998. The increase in cash provided
by investing activities was primarily the result of a reduction in short-term
investments.
Cash provided by financing activities amounted to $254,000 for the
three months ended March 31, 1999 as compared with cash used in financing
activities of $409,000 for the same period in 1998. The increase in cash
provided by financing activities was largely the result of additional bank
borrowings as a result of the recently completely financing agreement with
Finova Capital Corporation.
In December 1996, the Company entered into a $10,000,000 credit
facility. A portion of the $10,000,000 credit facility consisted of a $6,500,000
revolving credit arrangement, which may only be drawn down if the Company has
sufficient qualified accounts receivable. The balance of the credit facility was
available under term notes. The Company, at times was unable to draw down
desired amounts because of slow payment by reimbursement agencies and as a
result of delays in collection. In addition, the Company may be required from
time to time to repay a portion of this facility under the provisions of the
credit agreement. At March 31, 1998, there was $5,663,000 outstanding under this
facility consisting of $3,800,000 under the revolving credit arrangement and
$1,863,000 under the term notes.
Page 7
<PAGE>
At December 31, 1997, the Company was not in compliance with several
financial covenants of its existing loan agreement. The lenders provided a
waiver in connection with amendment to the loan agreement, which was completed
on April 14, 1998. As a result of such amendment, the lenders amended certain
financial covenants at future measurement dates to accommodate the Company's
then current financial status. The lenders also extended the maturity date of
the revolving credit arrangements to January 18, 1999 and in conjunction with
such revisions, reduced the amount under the revolving credit arrangements from
$6,500,000 to $3,500,000.
In February 1999 the Company entered into a new financing arrangement
with Finova Capital Corporation. The Company obtained a term loan of $3,950,000
a revolving credit line of $4,000,000 and availability of $1,000,000 for future
equipment acquisitions. Under the Revolver, the Company has approximately a $2.5
million available line of credit, which the Company may use subject to the
availability of eligible accounts receivable. The prior loan was satisfied with
the proceeds of the Finova Loan.
At March 31, 1999, the Company had a working capital of $1,845,000 as
compared to a working capital deficit of $491,000 at March 31, 1998.
The Company expects that the combination of existing cash balances and
cash generated from operations based on present projections, will provide
sufficient liquidity and enable it to meet its currently foreseeable working
capital requirements for existing operations for the balance of the year.
Inflation
The Company believes that the relatively moderate rates of inflation in
recent years have not had a significant impact on its net revenues or its
profitability.
Page 8
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Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - Not Applicable
Page 9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on the 12th day of May, 1999.
Community Medical Transport, Inc.
---------------------------------
(registrant)
/s/ Dean L. Sloane
-------------------------------------
Dean L. Sloane
Chief Executive Officer and President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 354,000
<SECURITIES> 394,000
<RECEIVABLES> 5,588,000
<ALLOWANCES> 1,726,000
<INVENTORY> 0
<CURRENT-ASSETS> 6,380,000
<PP&E> 7,366,000
<DEPRECIATION> 3,942,000
<TOTAL-ASSETS> 15,597,000
<CURRENT-LIABILITIES> 4,535,000
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 6,113,000
<TOTAL-LIABILITY-AND-EQUITY> 15,597,000
<SALES> 0
<TOTAL-REVENUES> 4,045,000
<CGS> 0
<TOTAL-COSTS> 4,084,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126,000
<INCOME-PRETAX> (164,000)
<INCOME-TAX> 609,000
<INCOME-CONTINUING> 445,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 445,000
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
