<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
OCTOBER 31, 1997
Date of Report (Date of earliest event reported)
HORIZON HEALTH CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1-13626 75-2293354
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
1500 WATERS RIDGE DRIVE
LEWISVILLE, TEXAS 75057-6011
(Address of principal executive offices and zip code)
(972) 420-8200
(Registrant's telephone number,
including area code)
================================================================================
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 31, 1997, the Registrant acquired all the issued and outstanding
shares of capital stock of Acorn Behavioral HealthCare Management Corporation, a
Pennsylvania corporation ("Acorn"), pursuant to a Stock Purchase Agreement dated
October 20, 1997 by and among the Registrant, Dr. Melvyn S. Goldsmith, Barbara
C. Goldsmith and Acorn. The shares of Acorn capital stock were acquired from Dr.
Melvyn S. Goldsmith and Barbara C. Goldsmith, the sole stockholders of Acorn.
The purchase price was approximately $12.7 million in cash of which the
Registrant funded approximately $1.7 million out of working capital and
approximately $11.0 million from an advance under its existing revolving credit
facility with Texas Commerce Bank, N.A.
Acorn provides employee assistance programs and other related services to
self-insured employers. At October 1, 1997, Acorn had 122 contracts with
employers covering over 246,000 employees and, under most contracts, the
dependents of the employees. Acorn's services are provided by independent health
care professionals that have contracted with Acorn on a fee-for-service basis.
At October 1, 1997, Acorn's provider network was composed of over 7,000
individual providers located throughout the United States.
Acorn is headquartered in the Philadelphia metropolitan area and employs 52
employees, all of which are located in its corporate offices.
The Registrant will account for the acquisition of Acorn as a purchase.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Acorn Behavioral HealthCare Management
Corporation.
See Page F-1 of this Report for the Index to Financial Statements filed
as a part of this report.
(b) Pro Forma Financial Information
See Page F-1 of this Report for the Index to Financial Statements filed
as a part of this report.
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
2.1 -- Stock Purchase Agreement, dated October 20, 1997, among
the Registrant, Dr. Melvyn S. Goldsmith, Ph.D., Barbara
C. Goldsmith and Acorn Behavioral HealthCare Management
Corporation (incorporated herein be reference to Exhibit
2.1 to the Registrant's Current Report on Form 8-K dated
September 1, 1997 filed with the Commission on October
20, 1997).
23.1 -- Consent of Price Waterhouse LLP*
</TABLE>
- ---------------
* Filed herewith.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HORIZON HEALTH CORPORATION
Date: November 5, 1997 By: /s/ JAMES W. MCATEE
----------------------------------
James W. McAtee
Executive Vice President, Finance
& Administration
(Principal Financial Officer)
3
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Acorn Behavioral HealthCare Management Corporation
Report of Independent Accountants......................... F-2
Balance Sheet as of August 31, 1997....................... F-3
Statement of Income for the year ended August 31, 1997.... F-4
Statement of Changes in Stockholders' Equity for the year
ended August 31, 1997.................................. F-5
Statement of Cash Flows for the year ended August 31,
1997................................................... F-6
Notes to Financial Statements............................. F-7
Unaudited Pro Forma Condensed Combined Financial Statements
Introduction to Unaudited Pro Forma Condensed Combined
Financial Statements................................... F-10
Unaudited Pro Forma Condensed Combined Balance Sheet as of
August 31, 1997........................................ F-11
Unaudited Pro Forma Condensed Combined Statement of Income
for the year ended August 31, 1997..................... F-12
Notes to Unaudited Pro Forma Condensed Combined Financial
Statements............................................. F-13
</TABLE>
F-1
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Acorn Behavioral HealthCare Management Corporation
In our opinion, the accompanying balance sheet and the related statement of
income, of changes in stockholders' equity and of cash flows present fairly, in
all material respects, the financial position of Acorn Behavioral HealthCare
Management Corporation (the "Company") at August 31, 1997, and the results of
its operations and its cash flows for the year ended August 31, 1997, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Dallas, Texas
October 2, 1997
F-2
<PAGE> 6
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
BALANCE SHEET
AUGUST 31, 1997
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash and short-term investments........................... $1,446,603
Accounts receivable....................................... 185,234
Prepaid expenses.......................................... 19,463
Other current assets...................................... 1,725
----------
Total current assets.............................. 1,653,025
----------
Equipment:
Equipment and furniture................................... 489,684
Automobiles............................................... 79,976
Leasehold improvements.................................... 36,681
----------
606,341
Less accumulated depreciation............................. 494,483
----------
111,858
----------
Total assets...................................... $1,764,883
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term capital lease obligations.... $ 20,978
Accounts payable and accrued expenses, including amounts
payable to a related party of $9,550................... 18,774
Accrued claims payable.................................... 123,135
----------
Total current liabilities......................... 162,887
Long-term capital lease obligation -- net of current
portion................................................... 26,216
----------
Total liabilities................................. 189,103
Commitments and contingencies
Stockholders' equity:
Common stock, $10.00 par value, 1,000 shares authorized;
100 shares issued and outstanding...................... 1,000
Retained earnings......................................... 1,574,780
----------
1,575,780
----------
Total liabilities and stockholders' equity........ $1,764,883
==========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE> 7
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
STATEMENT OF INCOME
FOR THE YEAR ENDED AUGUST 31, 1997
<TABLE>
<S> <C>
Revenues:
Net patient service revenues.............................. $7,045,604
Expenses:
Salaries and benefits..................................... 3,597,746
Purchased services........................................ 1,723,954
Depreciation and amortization............................. 57,656
General and administrative................................ 1,034,918
----------
Operating expenses.......................................... 6,414,274
----------
Operating income............................................ 631,330
Interest income............................................. 25,734
----------
Net income.................................................. $ 657,064
==========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 8
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
AUGUST 31, 1997
<TABLE>
<CAPTION>
COMMON SHARES
---------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------ ---------- ----------
<S> <C> <C> <C> <C>
Balance at August 31, 1996....................... 100 $1,000 $1,039,019 $1,040,019
Net income..................................... -- -- 657,064 657,064
Distribution to stockholder.................... -- -- (121,303) (121,303)
----- ------ ---------- ----------
Balance at August 31, 1997....................... 100 $1,000 $1,574,780 $1,575,780
===== ====== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 9
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31, 1997
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income................................................ $ 657,064
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 57,656
Changes in net assets and liabilities:
Increase in accounts receivable........................ (5,272)
Decrease in prepaid expenses........................... 14,107
Decrease in other assets............................... 5,000
Increase in accounts payable and accrued expenses...... 4,634
Increase in claims payable............................. 17,076
----------
Cash flows provided by operating activities................. 750,265
----------
Cash flows from investing activities:
Purchase of equipment..................................... (9,539)
----------
Cash flows used in investing activities..................... (9,539)
----------
Cash flows from financing activities:
Payments on debt.......................................... (8,131)
Distribution to stockholder............................... (121,303)
----------
Cash flows used in financing activities..................... (129,434)
----------
Net increase in cash and short-term investments............. 611,292
Cash and short-term investments at beginning of year........ 835,311
----------
Cash and short-term investments at end of year.............. $1,446,603
==========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest............................................... $ 2,831
==========
Supplemental disclosure of noncash investing activities:
Capital lease obligations assumed in connection with
equipment purchase..................................... $ 55,411
==========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 10
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1997
1. ORGANIZATION
Acorn Behavioral HealthCare Management Corporation (the "Company") provides
behavioral healthcare management services to self-insured health plans for
corporate clients. The clients of the Company are widely diversified, both
geographically and in type of business.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Short-Term Investments: Cash and Short-Term Investments include
securities with original maturities of three months or less when purchased.
Equipment: Property and equipment are recorded at cost. Depreciation
expense is recorded over the assets' estimated useful lives using an accelerated
method. The useful life of furniture and equipment and automobiles are estimated
to be five years to seven years. Routine maintenance and repair items are
charged to current operations.
Capital Leases: The Company has entered into leases for office equipment
which are accounted for as capital leases. At inception of the lease, the
equipment and the related obligations are recorded at the net present value of
future minimum lease payments, excluding executory costs, discounted using the
Company's incremental borrowing rate.
Net Patient Service Revenue: Net Patient Service Revenue is reported when
earned at the estimated net realizable amounts. Under certain managed care
contracts the Company provides diagnostic and therapeutic services for a fixed
rate per member per month fee. Revenues from the capitated fees are recorded in
the month for which the member is entitled to service (see Note 5).
Long-Lived and Intangible Assets: The Company has adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-lived Assets and Assets to be Disposed of" ("SFAS 121"). Under SFAS 121,
the Company recognizes impairment losses on property and equipment whenever
events or changes in circumstances indicate that the carrying amount of
long-lived assets, on an individual property basis, may not be recoverable
through undiscounted future cash flows. Such losses are determined by comparing
the fair value of the asset to the carrying amount of the asset. Impairment
losses are recognized in operating income as they are determined. As of August
31, 1997, no impairment losses have been incurred.
Income Taxes: The Company has elected S Corporation status with the
Internal Revenue Service. As such, all income or loss of the Company accrues
directly to its stockholders. Accordingly, no provision for income taxes has
been made in these financial statements.
Use of Estimates: The Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
F-7
<PAGE> 11
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
3. LEASES AND RELATED PARTY TRANSACTIONS
Acorn has entered into leases for office equipment accounted for as capital
leases. Future minimum lease payments due under capital leases are as follows:
<TABLE>
<S> <C>
YEAR ENDED AUGUST 31,
1998........................................................ $ 20,978
1999........................................................ 20,978
2000........................................................ 10,495
--------
52,451
Less: amount representing interest.......................... 5,257
--------
Present value of minimum lease payments..................... 47,194
Less: Current............................................... (20,978)
--------
$ 26,216
========
</TABLE>
The Company leases its office building from an affiliated entity owned by a
stockholder of the company; these leases are considered to be at fair market
value and are accounted for as operating leases. The following is a schedule of
minimum rental payments due under these leases which expire at various dates:
<TABLE>
<S> <C>
YEAR ENDED AUGUST 31:
1998........................................................ $334,540
1999........................................................ 113,300
--------
$447,840
========
</TABLE>
Rent expense for the year ended August 31, 1997 was $318,572.
4. RETIREMENT PLAN
Acorn has a defined contribution 401(k) plan for the benefit of all
eligible employees. In general, employees become eligible after one year of
full-time employment with the Company. Eligible employees may contribute up to
15% of their compensation to this plan. Employee contributions are matched at a
rate of 50% up to 10% of an employee's compensation. The Company's matching
contributions are vested at 20% per year with full vesting occurring five years
from the date of eligibility. The Company's matching contributions were $43,842
for the year ended August 31, 1997.
5. COMMITMENTS AND CONTINGENCIES
Contracts
The Company participates in agreements with corporations to provide
behavioral healthcare management services to members of a group at a fixed rate
per-member, per-month, regardless of the actual services performed, and certain
other services as defined in the contract in accordance with an agreed upon fee
schedule. During fiscal year ending August 31, 1997, approximately 90% of the
Company's net revenues were derived from capitated contracts. Revenues under
these contracts are recorded in the month fees are earned. Expenses are recorded
as incurred including an estimate of expenses incurred but not reported.
The Company estimates the costs of providing services under these contracts
by using historical experience and anticipated utilization rates. The company
believes the future revenues under these contracts will exceed the costs of
services it will be required to provide under the terms of the contracts.
F-8
<PAGE> 12
ACORN BEHAVIORAL HEALTHCARE MANAGEMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Litigation
In the normal course of operations, the Company has become party to claims,
and complaints relating to general and professional services provided by the
Company. The Company has purchased general and professional liability insurance
to cover claims which may arise. Management does not believe that any of these
claims or complaints will have a material adverse effect on the Company's
financial position, liquidity or results of operations.
6. SUBSEQUENT EVENTS (UNAUDITED)
On October 31, 1997, the Company's stockholders sold all of the outstanding
capital stock of the Company to Horizon Health Corporation for approximately
$12.7 million in cash.
F-9
<PAGE> 13
INTRODUCTION TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma financial statements give effect to the
acquisition by the Company of Acorn in a transaction to be accounted for as a
purchase. The unaudited pro forma balance sheet is based on the individual
balance sheets of the Company and Acorn appearing elsewhere in this Prospectus
and has been prepared to reflect the acquisition by the Company of Acorn as of
August 31, 1997. The unaudited pro forma statement of income is based on the
individual statements of income of the Company and Acorn appearing elsewhere in
the Prospectus, and combines the results of operation of the Company and Acorn
for the year ended August 31, 1997 as if the acquisition occurred on September
1, 1996. These unaudited pro forma financial statements should be read in
conjunction with the Consolidated Financial Statements and Notes thereto of the
Company and the Financial Statements and Notes thereto of Acorn included
elsewhere in this Prospectus.
F-10
<PAGE> 14
HORIZON HEALTH CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED)
AUGUST 31, 1997
ASSETS
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HORIZON ACORN ADJUSTMENTS COMBINED
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Current Assets:
Cash and short-term investments.... $ 5,516,575 $1,446,603 $(1,439,928)(a) $ 3,795,402
(1,727,848)(c)
Accounts receivable less allowance
for uncollectible accounts...... 11,995,254 185,234 -- 12,180,488
Income taxes receivable............ 951,256 -- -- 951,256
Receivable from employees.......... 63,303 -- -- 63,303
Prepaid expenses and other
assets.......................... 404,239 21,188 -- 425,427
Current deferred taxes............. 1,687,512 -- -- 1,687,512
----------- ---------- ----------- -----------
Total current assets....... 20,618,139 1,653,025 (3,167,776) 19,103,388
----------- ---------- ----------- -----------
Property and equipment:
Equipment.......................... 3,694,717 606,341 (494,483)(f) 3,746,465
(60,110)(a)
Building improvements.............. 255,406 -- -- 255,406
----------- ---------- ----------- -----------
3,950,123 606,341 (554,593) 4,001,871
Less accumulated depreciation...... 2,208,083 494,483 (494,483)(f) 2,208,083
----------- ---------- ----------- -----------
1,742,040 111,858 (60,110) 1,793,788
Goodwill, net of accumulated
amortization....................... 21,553,594 -- 9,281,358(e) 30,834,952
Management contracts, net of
accumulated amortization........... 4,451,426 -- 3,370,748(e) 7,822,174
Other assets......................... 363,208 -- -- 363,208
----------- ---------- ----------- -----------
Total assets............... $48,728,407 $1,764,883 $ 9,424,220 $59,917,510
=========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................... $ 1,747,393 $ 18,774 $ -- $ 1,766,167
Employee compensation and
benefits........................ 6,233,477 -- -- 6,233,477
Accrued expenses................... 7,572,929 144,113 -- 7,717,042
----------- ---------- ----------- -----------
Total current
liabilities.............. 15,553,799 162,887 -- 15,716,686
----------- ---------- ----------- -----------
Other liabilities.................... 355,803 26,216 -- 382,019
Deferred income taxes................ 987,704 -- -- 987,704
Long-term debt....................... -- -- 11,000,000(b) 11,000,000
----------- ---------- ----------- -----------
Total liabilities.......... 16,897,306 189,103 11,000,000 28,086,409
Minority interest.................... 148,648 -- -- 148,648
Stockholders' Equity:
Common stock....................... 69,668 1,000 (1,000)(d) 69,668
Additional paid-in-capital......... 16,739,425 -- -- 16,739,425
Retained earnings.................. 14,873,360 1,574,780 (1,500,038)(a) 14,873,360
(74,742)(d)
----------- ---------- ----------- -----------
Total stockholders'
equity................... 31,682,453 1,575,780 (1,575,780) 31,682,453
----------- ---------- ----------- -----------
Total liabilities and
stockholders' equity..... $48,728,407 $1,764,883 $ 9,424,220 $59,917,510
=========== ========== =========== ===========
</TABLE>
F-11
<PAGE> 15
HORIZON HEALTH CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED)
FOR THE YEAR ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HORIZON ACORN ADJUSTMENTS COMBINED
------------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
Revenues:
Contract management revenue...... $102,263,283 $ -- $ 102,263,283
Other............................ 7,003,512 7,045,604 14,049,116
------------ ---------- -------------
Total revenue............ 109,266,795 7,045,604 116,312,399
------------ ----------
Operating expenses:
Salaries and benefits............ 60,048,345 3,597,746 $(1,473,800)(i) 62,172,291
Purchased services............... 16,466,115 1,723,954 18,190,069
Provision for bad debts.......... 3,033,693 -- 3,033,693
Depreciation and amortization.... 2,201,450 57,656 713,569(h) 2,972,675
Other............................ 12,795,910 1,034,918 13,830,828
Merger expenses.................. 3,527,671 -- 3,527,671
------------ ---------- ----------- -------------
Total operating
expenses............... 98,073,184 6,414,274 (760,231) 103,727,227
------------ ---------- ----------- -------------
Operating income................... 11,193,611 631,330 760,231 12,585,172
Interest and other income
(expense), net................... 119,986 25,734 (955,889)(g) (810,169)
------------ ---------- ----------- -------------
Net income before income taxes..... 11,313,597 657,064 (195,658) 11,775,003
Income tax expense................. 4,517,688 -- 175,334(j) 4,693,022
------------ ---------- ----------- -------------
Net income before minority
interest......................... 6,795,909 657,064 (370,992) 7,081,981
Minority interest.................. (139,893) -- (139,893)
------------ ---------- ----------- -------------
Net income......................... $ 6,656,016 $ 657,064 (370,992) $ 6,942,088
============ ========== =========== =============
Net income per common share........ $ 0.83 $ N/A $ .86
============ ========== =============
Weighted average common and common
equivalent shares outstanding.... 8,061,879 N/A 8,061,879
============ ========== =============
</TABLE>
F-12
<PAGE> 16
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The pro forma balance sheet and statement of income have been prepared to
reflect the acquisition of Acorn by the Company for an aggregate purchase price
of $12,727,848. Pro forma adjustments are made to reflect the following:
a) An adjustment to cash, property and equipment and retained earnings for
bonuses and distributions of cash and assets made at closing in accordance
with the Stock Purchase Agreement among Acorn, Dr. Melvyn S. Goldsmith,
Ph.D., Barbara C. Goldsmith and the Company.
b) The increase in debt for the portion of the purchase price that was borrowed.
c) The decrease in cash for the portion of the purchase price paid from existing
cash.
d) The elimination of the stockholders' equity accounts of Acorn.
e) The estimated excess of acquisition cost over the fair value of tangible net
assets acquired which has been allocated to management contracts and
goodwill.
f) An adjustment to property and equipment to reflect assets acquired at net
book value.
g) Annual interest charges on $11,000,000 of debt incurred in connection with
the acquisition and loss of interest income on cash to be distributed at
closing. Interest was calculated based on annual rate of 7.25% for the debt
incurred and 5.0% on the cash distributed.
h) Amortization of management contracts on a straight-line basis over 7 years
and goodwill on a straight-line basis over 40 years.
i) An adjustment to salaries and benefits for the differences between the
compensation paid to operating executives of Acorn prior to the acquisition
and the amount that the Company is contractually obligated to pay in
accordance with the acquisition agreement.
j) Adjustment of income taxes relating to adjustments (g), (h) and (i) and to
reflect a provision for income taxes on the net income of Acorn at an
effective rate of 38%. Prior to the acquisition, Acorn had elected S
Corporation status with the Internal Revenue Service. As such, all income or
loss of Acorn accrued directly to its stockholders and no provision for
income taxes had been made in the historical financial statements.
F-13
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
2.1 -- Stock Purchase Agreement, dated October 20, 1997, among
the Registrant, Dr. Melvyn S. Goldsmith, Ph.D., Barbara
C. Goldsmith and Acorn Behavioral HealthCare Management
Corporation (incorporated herein be reference to Exhibit
2.1 to the Registrant's Current Report on Form 8-K dated
September 1, 1997 filed with the Commission on October
20, 1997).
23.1 -- Consent of Price Waterhouse LLP*
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-2938) of Horizon Health Corporation and the
Registration Statement on Form S-8 (No. 333-36953) of Horizon Health Corporation
of our report on Acorn Behavioral HealthCare Management Corporation dated
October 2, 1997 appearing on Page F-2 of this Form 8-K.
PRICE WATERHOUSE LLP
Dallas, Texas
November 3, 1997
