<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 June 30, 2000
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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
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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: 1,208,979 shares of common
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stock as of August 4, 1999
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Transitional Small Business Disclosure Format (check one):
Yes No X
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COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
INDEX
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Page
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Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 2000
(unaudited) and December 31, 1999 2
Consolidated Statements of Operations
for the Six and Three Months Ended June 30,
2000 (unaudited) and 1999 (unaudited) 3
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2000 (unaudited)
and 1999 (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
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COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
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(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents .................................................. $ 0 $ 152,000
Accounts receivable, trade, less allowance for
doubtful accounts ........................................................ 2,715,000 3,183,000
Prepaid insurance .......................................................... 421,000 285,000
Other current assets ....................................................... 230,000 213,000
Deferred tax assets ........................................................ 0 472,000
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Total Current Assets ................................................ 3,366,000 4,305,000
Property, equipment and leasehold
improvements - net ....................................................... 1,876,000 2,657,000
Licenses - net ............................................................. 637,000 650,000
Customer lists - net ....................................................... 952,000 1,044,000
Other assets ............................................................... 577,000 624,000
Goodwill - net ............................................................. 1,954,000 2,435,000
Deferred tax assets ........................................................ 796,000 684,000
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Total Assets ........................................................ $ 10,158,000 $ 12,399,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Cash overdraft ............................................................. $ 7,000 $ 233,000
Current portion of long-term debt .......................................... 5,544,000 5,988,000
Accounts payable & Accrued expenses ........................................ 2,889,000 2,032,000
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Total Current Liabilities ........................................... 8,440,000 8,253,000
Long-term Debt:
Long-term debt - net of current portion .................................... 176,000 234,000
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Total Liabilities ................................................... 8,616,000 8,487,000
Stockholders' Equity:
Preferred stock, 4% cumulative, $.001 par value, 1,000,000 shares authorized
Common stock, $.001 par value, 5,000,000 shares authorized, 1,208,979 and
998,942 shares issued and outstanding at
June 30, 2000 and December 31, 1999 ........................................ 1,000 1,000
Capital in excess of par value ............................................. 14,277,000 14,084,000
Accumulated deficit ........................................................ (12,736,000) (10,173,000)
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Total Stockholders' Equity .......................................... 1,542,000 3,912,000
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Total Liabilities and Stockholders' Equity .......................... $ 10,158,000 $ 12,399,000
============ ============
</TABLE>
Page 2
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COMMUNITY MEDICAL TRANSPORT, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
- Unaudited -
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
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2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenue ...................................... $ 5,883,000 $ 8,185,000 $ 2,772,000 $ 4,140,000
----------- ----------- ----------- -----------
Operating expenses:
Salaries and benefits .......................... 3,555,000 4,464,000 1,802,000 2,268,000
Fleet Maintenance .............................. 441,000 518,000 195,000 272,000
Insurance ...................................... 275,000 298,000 142,000 147,000
Rent ........................................... 158,000 163,000 101,000 79,000
Depreciation and amortization .................. 567,000 568,000 284,000 293,000
----------- ----------- ----------- -----------
Total operating expenses ..................... 4,996,000 6,011,000 2,524,000 3,059,000
----------- ----------- ----------- -----------
Gross profit ................................. 887,000 2,174,000 248,000 1,081,000
Selling, general and administrative .............. (2,298,000) (2,310,000) (1,160,000) (1,178,000)
----------- ----------- ----------- -----------
(loss) from operations ........................... (1,411,000) (136,000) (912,000) (97,000)
Loss on Impairment of Goodwill ................... 432,000 0 432,000 0
Interest income .................................. 0 5,000 0 4,000
Interest expense ................................. (345,000) (245,000) (174,000) (119,000)
----------- ----------- ----------- -----------
Income (loss) before provision for income taxes .. (2,188,000) (376,000) (1,518,000) (212,000)
Income taxes expense (Benefit) ................... 375,000 (609,000) 375,000 0
----------- ----------- ----------- -----------
NET INCOME ................................... $(2,563,000) $ 233,000 $(1,893,000) $ (212,000)
=========== =========== =========== ===========
Net income (loss) per share - basic and diluted .. $ (2.49) $ .23 $ (1.82) $ (.21)
=========== =========== =========== ===========
Weighted average number of common shares
outstanding - basic and diluted ................ 1,027,625 1,015,124 1,039,293 1,015,124
=========== =========== =========== ===========
</TABLE>
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COMMUNITY MEDICAL TRANSPORT, INC, AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
June 30,
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2000 1999
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(Unaudited)
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) ............................................................. $(2,563,000) $ 233,000
Adjustments to reconcile net income (loss) to cash (used in)
provided by operating activities:
Depreciation and amortization expense ....................................... 935,000 815,000
Loss on Impairment of Goodwill .............................................. 432,000 0
Deferred Tax Benefit ........................................................ 360,000 (617,000)
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable-trade net ...................... 468,000 (733,000)
(Increase) in prepaid expenses and other current assets ................... (153,000) 0
Decrease (Increase) in other assets ....................................... 47,000 (628,000)
Increase in accounts payable and accrued expenses ........................ 857,000 257,000
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Net cash provided by (used in) operating activities ........................... 383,000 (673,000)
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Cash used in investing activities:
Acquisition of equipment-net of disposals ..................................... 0 (276,000)
Decrease in short term investments ............................................ 0 752,000
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Net cash provided by investing activities ..................................... 0 476,000
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Cash flow from financing activities:
Cash overdraft ................................................................ (226,000) 0
Proceeds from bank borrowings ................................................. 1,241,000
Principal payments on debt .................................................... (537,000) (263,000)
Principal payments on capital lease obligations ............................... (40,000) (410,000)
Issuance of common stock & Related Loans ...................................... 268,000 0
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Net cash (used in) provided by financing activities ........................... (535,000) 568,000
NET DECREASE INCREASE IN CASH ................................................. (152,000) 371,000
CASH - BEGINNING OF PERIOD .................................................... 152,000 92,000
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CASH - END OF PERIOD .......................................................... $ 0 $ 463,000
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Supplementary disclosure of cash flow information:
Cash paid during the period:
Interest .................................................................... $ 360,000 $ 202,000
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Taxes ....................................................................... $ 1,000 $ 1,000
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</TABLE>
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COMMUNITY MEDICAL TRANSPORT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Note A) - Organization and Basis of Presentation:
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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 six month period ended June 30, 2000 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2000. 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, 1999 filed with the Securities and Exchange Commission.
(Note B) - Reclassification:
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Certain items in the prior period have been reclassified to conform to
the current period's presentation.
(Note C):
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Goodwill
The decline in the financial results of the operations of its Community
Ambulette Service, Inc. ("CAS") subsidiary in Yonkers, New York has led the
company to re-evaluate the carrying value of its goodwill. The underlying
factors contributing to the decline in financial results include reductions in
service revenue and increased competition. Based upon the foregoing, the company
determined that a write-down of approximately $432,000 for impairment of
goodwill should be charged to operations. The company determined the fair value
of the assets, based upon the discounted expected future cash flows.
Income Taxes
As a result of the increased losses incurred during the three months ended June
30, 2000, the company re-evaluated its ability to realize the net carrying value
of its deferred tax asset. Based upon the foregoing, management increased the
deferred tax asset by $832,000 and the valuation allowance by $1,183,000. The
deferred tax asset and the related valuation allowance at June 30, 2000 is as
follows:
Deferred tax assets $ 2,736,000
Valuation allowance (1,940,000)
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$ 796,000
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Common Stock
On June 5, 2000, the company issued 193,032 shares of common stock at $1 per
share to Service World Inc. On June 29, 2000, the company entered into an
agreement providing for the issuance of 228,708 of its common shares at $1.50
per share to 3034930 Nova Scotia Limited for a total consideration of $343,563.
At June 30, 2000, $75,000 of the proceeds was received with the remainder
received in August at which time the shares were issued. The $75,000 was
included in other long-term liabilities in the accompanying balance sheet.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999 Three
Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999
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 $5,883,000 for the six months
ended June 30, 2000, as compared with $8,185,000 for the six months ended June
30, 1999, a decrease of $2,302,000 or 28.1%. The Company's total revenue
amounted to $2,772,000 for the three months ended June 30, 2000, as compared
with $4,140,000 for the three months ended June 30, 1999, a decrease of
$1,368,000 or 33.0%. The decrease is due to the Company's lack of capital and an
increase in competition.
Operating expenses decreased by $1,015,000 or 16.8% to $4,996,000 for
the six months ended June 30, 2000 from $6,011,000 for the six months ended June
30, 1999. Operating expenses decreased by $535,000 or 17.5% to $2,524,000 for
the three months ended June 30, 2000 from $3,059,000 for the three months ended
June 30, 1999. 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, 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) 15.0% for the six
months ended June 30, 2000 from 26.6 % for the six months ended June 30, 1999,
and (ii) 8.9% for the three months ended June 30, 2000 from 26.1% for the three
months ended June 30, 1999.
Selling, general and administrative expenses decreased by $12,000 or
0.5% to $2,298,000 for the six months ended June 30, 2000, from $2,310,000 for
the six months ended June 30, 1999. Selling, general and administrative expenses
decreased by $18,000 or 1.5% to $1,160,000 for the three months ended June 30,
2000, from $1,178,000 for the three months ended June 30, 1999. The decrease in
costs was a direct result of decreases primarily in administrative operating
costs. Such expenses as a percentage of revenues increased by 11.3 and 13.4% to
39.4% and 41.8% for the six and three months ended June 30, 2000, respectively,
from 28.2% and 28.5% for the corresponding periods in 1999.
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The Company recorded a loss for impairment of Goodwill. For an
explanation See Note C.
Interest expense increased by $100,000 or 40.8% to $345,000 for the six
months ended June 30, 2000, compared to $245,000 for the six months ended June
30, 1999. Interest expense increased by $55,000 or 46.2% to $174,000 for the
three months ended June 30, 2000, compared to $119,000 for the three months
ended June 30, 1999. This increase is primarily due to the increase in
borrowings.
Interest income decreased by $5,000 and $4,000 or 100.0% and 100.0% to
$0 and $0 for the six and three months ended June 30, 2000 respectively,
compared to $5,000 and $4,000 for the six and three months ended June 30, 1999
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 amounted to $375,000 for the six and three
months ended June 30, 2000 compared with a tax benefit of $609,000 being
recognized for the six months ended June 30, 1999. The 1999 tax benefit resulted
from the recognition of deferred tax assets. The deferred tax assets were
recognized for the six months ended June 30, 1999, based on management's belief
that there was a strong likelihood that such amounts will be realized based upon
their assessment of expected future operations and the resulting taxability. The
write down of this asset resulted in income tax expense recognition within this
period.
The Company's net (loss)amounted to $(2,563,000) and $(1,893,000) or
$(2.12) and $(1.56) per share (basic and diluted) for the six and three months
ended June 30, 2000, respectively, as compared to a net income of $233,000 and
$212,000 or $.23 and $.21 per share (basic and diluted) for the six and three
months ended June 30, 1999, respectively. This decrease in net income and
earnings per share is attributable to the factors described above, primarily the
recognition of less revenue without a corresponding decline in expenses, the
Write down of Goodwill and the write down of the company's deferred tax asset.
Liquidity and Capital Resources
Cash provided by operating activities amounted to $383,000 for the six
months ended June 30, 2000 as compared with cash used in by operating activities
of $673,000 for the six months ended June 30, 1999. The increase in cash
provided by operating activities was largely the result of an increase in
accounts payable and accrued expenses.
Cash used in for investing activities amounted to $0 for the six months
ended June 30, 2000 as compared to cash used in investing activities of $476,000
for the same period in 1998. The decrease in cash used in investing activities
was primarily the result of a reduction in short-term investments and no
acquisitions of equipment..
Cash used in financing activities amounted to $535,000 for the six
months ended June 30, 2000 as compared with cash provided by financing
activities of $568,000 for the same period in 1999. The increase in cash used in
by financing activities was largely the result of increased principle payments
on debt in 2000 as compared to 1999 offset s partially by sale of the company's
stock in 2000.
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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. Since July of 1999 the company has been in
default of the Finova loan. The default relates to certain financial covenants.
The company remains current on its debit service payments.
At June 30, 2000, the Company had a working capital deficit of
$5,074,000 as compared to a working capital deficit of $1,966,000 at June 30,
1999.
The Company has issued stock and expects to issue additional shares to
meet it's currently foreseeable working capital requirements for existing
operations for the balance of the year. The Company expects to reduced the net
cash used in operating activities by intensifying its billing and collection
efforts and selling of certain operations during the remainder of the year.
Unless the Company is successful in selling sufficient assets and/or raising
capital, there is substantial doubt that the Company will be able to continue
as a going concern.
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.
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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
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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 14th day of August, 2000.
Community Medical Transport, Inc.
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(registrant)
/s/ Dean L. Sloane
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Dean L. Sloane
President and Chief Executive Officer
/s/ Nicholas M. Puglisi
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Nicholas M. Puglisi
Chief Financial Officer
