<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 SEPTEMBER 30, 1999
------------------
Transition report under Section 13 or 15 (d) of the Securities Exchange
- ----- Act of 1934 For the transition period from to
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Commission file number 0-24640
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COMMUNITY MEDICAL TRANSPORT, INC.
------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 13-3507464
------------------------------ -------------------
(State or other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
4 Gannett Drive
White Plains, NY 10604
----------------------------------------
(Address of Principal Executives Offices)
(914) 697-9233
---------------------------
(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 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
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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: 1,015,947 shares of common
stock as of September 30, 1999
Transitional Small Business Disclosure Format (check one):
Yes No X
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<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
INDEX
Page
Part I. Financial Information ----
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1999
(unaudited) and December 31, 1998 2
Consolidated Statements of Operations
for the Nine and Three Months Ended September 30,
1999 (unaudited) and 1998 (unaudited) 3
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 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
<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
September 30, 1999 December 31, 1998
------------------ -----------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................... $ 269,000 $ 92,000
Short-term Investments...................................... 0 824,000
Accounts receivable, trade, less allowance for
doubtful accounts......................................... 4,260,000 3,587,000
Prepaid insurance........................................... 513,000 513,000
Prepaid and refundable income taxes......................... 130,000 199,000
Other current assets........................................ 427,000 418,000
Deferred tax assets......................................... 497,000 474,000
------------ ------------
Total Current Assets................................. 6,096,000 6,107,000
Property, equipment and leasehold
improvements - net........................................ 2,918,000 3,535,000
Licenses - net.............................................. 657,000 677,000
Customer lists - net........................................ 1,095,000 1,249,000
Other assets................................................ 732,000 247,000
Goodwill - net.............................................. 2,464,000 2,549,000
Covenant not to compete, net................................ 0 33,000
Deferred tax assets......................................... 659,000 42,000
------------ ------------
Total Assets......................................... $ 14,621,000 $ 14,439,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt........................... $ 6,025,000 $ 1,701,000
Accounts payable & Accrued expenses......................... 2,699,000 2,529,000
------------ ------------
Total Current Liabilities............................ 8,724,000 4,230,000
Long-term Debt:
Long-term debt - net of current portion..................... 296,000 4,540,000
------------ ------------
Total Liabilities.................................... 9,020,000 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,
1,015,124 and 998,942 shares issued and outstanding at
September 30, 1999 and December 31, 1998 ................ 1,000 1,000
Capital in excess of par value.............................. 14,084,000 14,054,000
Accumulated deficit......................................... (8,484,000) (8,386,000)
------------ ------------
Total Stockholders' Equity........................... 5,601,000 5,669,000
------------ ------------
Total Liabilities and Stockholders' Equity........... $ 14,621,000 $ 14,439,000
============ ============
</TABLE>
Page 2
<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
- Unaudited -
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
--------------------------- ---------------------------
1999 1998 1999 1998
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net revenue.......................................... $12,243,000 $14,128,000 $4,058,000 $4,524,000
----------- ----------- ---------- ----------
Operating expenses:
Salaries and benefits.............................. 6,711,000 7,664,000 2,247,000 2,516,000
Fleet Maintenance.................................. 828,000 924,000 310,000 323,000
Insurance.......................................... 442,000 479,000 144,000 159,000
Rent............................................... 242,000 316,000 79,000 88,000
Depreciation and amortization...................... 854,000 815,000 286,000 277,000
----------- ----------- ---------- ----------
Total operating expenses......................... 9,077,000 10,198,000 3,066,000 3,363,000
----------- ----------- ---------- ----------
Gross profit..................................... 3,166,000 3,930,000 992,000 1,161,000
Selling, general and administrative.................. 3,445,000 3,771,000 1,135,000 1,090,000
----------- ----------- ---------- ----------
(Loss) income from operations ....................... (279,000) 159,000 (143,000) 71,000
Interest Income...................................... (5,000) (44,000) 0 (11,000)
Interest expense..................................... 433,000 511,000 188,000 153,000
----------- ----------- ---------- ----------
(Loss) before provision for income taxes............. (707,000) (308,000) (331,000) (71,000)
(Benefit) for income taxes........................... (609,000) 0 0 0
----------- ----------- ---------- ----------
NET (LOSS) ...................................... $ (98,000) $ (308,000) $ (331,000) $ (71,000)
=========== =========== ========== ==========
Net (loss) available to common
shareholders - basic.............................. (98,000) (308,000) (331,000) (71,000)
Net (loss) available to common shareholders
including assumed conversion - diluted............ (98,000) (308,000) (331,000) (71,000)
=========== =========== ========== ==========
Net income (loss) per share - basic and diluted...... $ (.10) $ (.31) $ (.33) $ (.07)
=========== =========== ========== ==========
Weighted average number of common shares
outstanding - basic and diluted.................... 1,015,947 997,950 1,015,947 998,950
=========== =========== ========== ==========
Effect of potential common shares related to
stock options and assumed preferred stock
conversion........................................ 0 2,900 0 3,100
----------- ----------- ---------- ----------
Weighted average number of common shares
Outstanding - diluted ............................ 1,015,947 1,000,850 1,015,947 1,002,050
=========== =========== ========== ==========
</TABLE>
Page 3
<PAGE>
COMMUNITY MEDICAL TRANSPORT, INC, AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------
1999 1998
------ ------
(Unaudited)
<S> <C> <C>
Cash flow from operating activities:
Net (loss)................................................................... $ (98,000) $ (308,000)
Adjustments to reconcile net income (loss) to cash (used in)
provided by operating activities:
Depreciation and amortization expense...................................... 1,204,000 1,211,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable-trade net..................... (673,000) 375,000
(Increase) decrease in prepaid expenses and other current assets......... 60,000 807,000
(Increase) decrease in other assets...................................... (485,000) 91,000
Increase (decrease) in accounts payable and accrued expenses............. 170,000 (1,215,000)
(Increase) decrease in deferred tax assets .............................. (640,000) 0
---------- -----------
Net cash (used in) provided by operating activities.......................... (462,000) 961,000
---------- -----------
Cash used in investing activities:
Acquisition of equipment-net of disposals.................................... (295,000) (296,000)
Decrease in short term investments........................................... 824,000 346,000
---------- -----------
Net cash provided by investing activities.................................... 529,000 50,000
---------- -----------
Cash flow from financing activities:
Proceeds from bank borrowings................................................ 995,000 55,000
Net proceeds from exercise of stock warrants................................. 30,000 0
Principal payments on debt................................................... (460,000) (1,256,000)
Principal payment on capital lease obligations............................... (455,000) (183,000)
---------- -----------
Net cash provided by (used in) financing activities.......................... 110,000 (1,384,000)
---------- -----------
NET INCREASE (DECREASE) IN CASH.............................................. 177,000 (373,000)
CASH - BEGINNING OF PERIOD................................................... 92,000 925,000
---------- -----------
CASH - END OF PERIOD......................................................... $ 269,000 $ 552,000
========== ===========
Supplementary disclosure of cash flow information: Cash paid during the period:
Interest................................................................... $ 387,000 $ 433,000
========== ===========
Taxes...................................................................... $ 1.000 $ 10,000
========== ===========
</TABLE>
Page 4
<PAGE>
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 Company provides specialized medical emergency and non-emergency ambulance
transportation, as well as ambulette transportation services in the New York -
New Jersey Metropolitan area. Ambulettes are specialized vans that contain
wheelchair lifts or ramps for the transportation of 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.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine month period ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. The information contained in the interim financial statements should be
read in conjunction with the Company's audited financial statements and
footnotes thereto included in the Company's Form 10-KSB for the year ended
December 31, 1998 filed with the Securities and Exchange Commission.
(Note B) - Reclassification:
Certain items in the prior period have been reclassified to conform to
the current period's presentation.
Page 5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998
Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 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) substantial
changes in the Company's costs including labor, insurance, supplies and other
costs, (v) customer relations and (vi) increased competition.
Results of Operations
The Company's total revenue amounted to $12,243,000 for the nine months
ended September 30, 1999, as compared with $14,128,000 for the nine months ended
September 30, 1998, a decrease of $1,885,000 or 13.3%. The Company's total
revenue amounted to $4,058,000 for the three months ended September 30, 1999, as
compared with $4,524,000 for the three months ended September 30, 1998, a
decrease of $466,000 or 10.3%. The decrease is due to increase competition in
the area causing a reduction in revenue.
Operating expenses decreased by $1,121,000 or 11.0% to $9,077,000 for
the nine months ended September 30, 1999 from $10,198,000 for the nine months
ended September 30, 1998. Operating expenses decreased by $297,000 or 8.8% to
$3,066,000 for the three months ended September 30, 1999 from $3,363,000 for the
three months ended September 30, 1998. The Company has made significant cost
reductions in connection the foregoing reduction in revenues, in particular to
salaries and benefits and fleet maintenance. However these reductions were
outweighed by the reductions in revenues due to increase competition and as a
result, the percentage decreases in operating expenses were lower than the
percentage decreases in revenues. As a result of the foregoing, gross profit as
a percentage of revenues decreased to (i) 25.9% for the nine months ended
September 30, 1999 from 27.8 % for the nine months ended September 30, 1998, and
(ii) 24.4% for the three months ended September 30, 1999 from 25.7% for the
three months ended September 30, 1998.
Selling, general and administrative expenses decreased by $326,000 or
8.6% to $3,445,000 for the nine months ended September 30, 1999, from $3,771,000
for the nine months ended September 30, 1998. Selling, general and
administrative expenses increased by $45,000 or 4.1% to $1,135,000 for the three
months ended September 30, 1999, from $1,090,000 for the three months ended
September 30, 1998. The decrease in costs was a direct result of reductions
primarily in administrative operating costs, marketing salaries and benefits,
and administrative salaries and benefits.
Page 6
<PAGE>
The increase in costs for the three month period was a direct result of
reductions referred to above, but with revenues decreasing and expenses not
decreasing enough on a proportion basis. Such expenses as a percentage of
revenues increased by 1.4% and 3.9% to 28.1% and 28.0% for the nine and three
months ended September 30, 1999 respectively, from 26.7% and 24.1% for the
corresponding periods in 1998.
Interest expense decreased by $78,000 or 15.3% to $433,000 for the nine
months ended September 30, 1999, compared to $511,000 for the nine months ended
September 30, 1998. Interest expense increased by $35,000 or 22.9% to $188,000
for the three months ended September 30, 1999, compared to $153,000 for the
three months ended September 30, 1998. The decrease and increase in interest
expense for the nine and three months period are a direct result of the new loan
package from Finova Capital Corporation.
Interest income decreased by $39,000 and $11,000 or 88.6% and 100.0% to
$5,000 and $0 for the nine and three months ended September 30, 1999
respectively, compared to $44,000 and $11,000 for the nine and three months
ended September 30, 1998 respectively. The reduction in interest income is
primarily due to significant expenditures in connection with the reduction of
debt, and cash used in operation.
The Company's income taxes consisted of a benefit of $609,000 for the
nine and three months ended September 30, 1999 compared with no tax benefit
being recognized for the nine and three months ended September 30, 1998,
respectively. The 1999 tax benefit resulted from the recognition of deferred tax
assets. The deferred tax assets were recognized for the nine and three months
ended September 30, 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 (loss) amounted to $98,000 and $331,000 or $.09 and
$.33 per share (basic and diluted) for the nine and three months ended September
30, 1999, respectively, as compared to a net loss of $308,000 and $71,000 or
$.31 and $.07 per share (basic and diluted) for the nine and three months ended
September 30, 1998, respectively. This increase and decrease in net income and
earnings per share is attributable to the factors described above.
Liquidity and Capital Resources
Cash used in operating activities amounted to $462,000 for the nine
months ended September 30, 1999 as compared with cash provided by operating
activities of $961,000 for the nine months ended September 30, 1998. The
increase in cash used in operating activities was largely the result of an
increase in accounts receivable due mainly to a reduction in collections in the
current period, because of slow payments from governmental authorities.
Cash provided by investing activities amounted to $529,000 for the nine
months ended September 30, 1999 as compared to cash provided by investing
activities of $50,000 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 $110,000 for the nine
months ended September 30, 1999 as compared with cash used in financing
activities of $1,384,000 for the same period in 1998. The decrease in cash used
in by financing activities was largely the result of additional bank borrowings
as a result of the recently completed financial agreement with Finova Capital
Corporation and decreased principle payments in 1999 as compared to 1998 for the
same period.
Page 7
<PAGE>
In December 1996, the Company entered into a $10,000,000 credit
facility to replace its previously existing $3,200,000 credit facility for
working capital and capital expenditures. A portion of the $10,000,000 credit
facility consists 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 to be available under term notes. The Company
at times was unable to drawn down desired amounts because of slow payment by
reimbursements 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 provision of the credit agreement. At March 31, 1998, there
was $5,663,000 outstanding under this facility consisting of $3,000,000 under
the revolving credit agreement and $1,863,000 under the term notes. At December
31, 1997, the Company was not in compliance with several financial covenants of
its credit facility. The credit facility was amended on April 14, 1998 pursuant
to which the lenders waived past non-compliance and amended certain financial
covenants at future measurement dates to accommodate the Company's then current
financial status. Further, the lenders have extended the maturity date of the
revolving credit arrangement to January 18, 1999 and in conjunction with such
revisions, reduced the amount under the revolving credit arrangement from
$6,500,000 to $3,500,000. In February 1999 the Company entered into a new
financing agreement with Finova Capital Corporation. The Company obtained a term
loan of $3,950,000, a revolving a 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 September 30, 1999, the Company had a working capital deficit of
$2,628,000 as compared to a working capital deficit of $1,454,000 at September
30, 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. The
Company expects to reduce the net cash used in operating activities by
intensifying its billing and collection efforts in the second part of the year.
The Company is not in compliance with certain financial covenants
pertaining to the Finova Capital Corporation Loan Agreement. Waivers from the
lender of the foregoing covenants are forthcoming. The Company is in the process
of restructuring the loan agreement with the lender.
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
<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 16th day of November 1999.
Community Medical Transport, Inc.
---------------------------------
(registrant)
/s/ Dean L. Sloane
--------------------------------
Dean L. Sloane
President and Chief Executive Officer
/s/ Nicholas M. Puglisi
--------------------------------
Nicholas M. Puglisi
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 269,000
<SECURITIES> 0
<RECEIVABLES> 5,501,000
<ALLOWANCES> 1,241,000
<INVENTORY> 0
<CURRENT-ASSETS> 6,096,000
<PP&E> 7,365,000
<DEPRECIATION> 4,447,000
<TOTAL-ASSETS> 14,621,000
<CURRENT-LIABILITIES> 8,724,000
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 5,600,000
<TOTAL-LIABILITY-AND-EQUITY> 14,621,000
<SALES> 4,058,000
<TOTAL-REVENUES> 4,058,000
<CGS> 0
<TOTAL-COSTS> 3,066,000
<OTHER-EXPENSES> 1,135,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 188,000
<INCOME-PRETAX> (331,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (331,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (331,000)
<EPS-BASIC> (.33)
<EPS-DILUTED> (.33)
</TABLE>
