<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
/ / FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE 0-25856
CRA MANAGED CARE, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2658593
(State or other jurisdiction of (I.R.S. employer identification No.)
incorporation or organization)
312 UNION WHARF, BOSTON MASSACHUSETTS 02109
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 367-2163
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities exchange Act of
1934 during the preceding twelve months (or 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 / /
At November 1, 1996, the registrant had outstanding an aggregate of 8,907,532
shares of its Common Stock, $.01 par value.
<PAGE>
CRA MANAGED CARE, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Balance Sheet at December 31, 1995 and September 30, 1996 (Unaudited) 3
Statements of Operations (Unaudited) for the Three and Nine Months 4
ended September 30, 1995 and 1996
Statements of Cash Flow (Unaudited) for the Nine Months Ended
September 30, 1995 and 1996 5
Notes to Financial Statements (Unaudited) 6
Management's Discussion and Analysis of Financial Condition and
Results of Operation 8
PART II. OTHER INFORMATION 11
Signature 12
EXHIBIT INDEX 13
-2-
<PAGE>
CRA MANAGED CARE, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND SEPTEMBER 30, 1996 (UNAUDITED)
DECEMBER SEPTEMBER
ASSETS 31, 1995 30, 1996
------ -------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 3,005,000 $33,585,000
Accounts receivable, less allowance for doubtful
accounts of $430,000 and $1,119,000 respectively 26,380,000 32,395,000
Prepaid expenses 629,000 512,000
Prepaid taxes 319,000 1,173,000
----------- -----------
Total current assets 30,333,000 67,665,000
PROPERTY AND EQUIPMENT, AT COST 11,732,000 17,714,000
Less: Accumulated depreciation and amortization 5,864,000 10,639,000
----------- -----------
Net property and equipment 5,868,000 7,075,000
EXCESS OF COST OVER FAIR VALUE OF NET
ASSETS ACQUIRED - 19,568,000
OTHER ASSETS 355,000 386,000
----------- -----------
$36,556,000 $94,694,000
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Revolving credit facilities $ 4,300,000 $ -
Current portion of long-term debt 5,000,000 71,000
Accrued interest expense 18,000 -
Accounts payable and accrued expenses 5,927,000 9,582,000
Accrued payroll and related 7,595,000 9,403,000
Accrued income taxes - -
----------- -----------
Total current liabilities 22,840,000 19,056,000
LONG-TERM PORTION OF CAPITAL LEASES - 6,000
LONG-TERM DEFERRED TAX LIABILITIES 2,056,000 2,422,000
STOCKHOLDERS' EQUITY:
Common stock 74,000 89,000
Paid-in-capital 36,839,000 90,743,000
Retained deficit (25,253,000) (17,622,000)
----------- -----------
Total stockholders' equity 11,660,000 73,210,000
----------- -----------
$36,556,000 $94,694,000
----------- -----------
----------- -----------
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
CRA MANAGED CARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ---------------------------
1995 1996 1995 1996
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES $36,826,000 $46,048,000 $107,881,000 $131,032,000
COST OF SERVICES 30,843,000 37,812,000 90,600,000 107,981,000
----------- ----------- ------------ ------------
GROSS PROFIT 5,983,000 8,236,000 17,281,000 23,051,000
GENERAL AND ADMINISTRATIVE EXPENSES 2,759,000 3,746,000 8,180,000 10,491,000
----------- ----------- ------------ ------------
OPERATING INCOME 3,224,000 4,490,000 9,101,000 12,560,000
INTEREST (INCOME) EXPENSE, NET 251,000 (313,000) 2,260,000 212,000
----------- ----------- ------------ ------------
INCOME BEFORE INCOME TAXES 2,973,000 4,803,000 6,841,000 12,348,000
PROVISION FOR INCOME TAXES 1,189,000 1,993,000 2,736,000 5,124,000
----------- ----------- ------------ ------------
NET INCOME BEFORE EXTRAORDINARY ITEMS 1,784,000 2,810,000 4,105,000 7,224,000
LOSS ON RETIREMENT OF DEBT, NET OF
TAXES OF $1,610,000 - - (2,460,000) -
----------- ----------- ------------ ------------
NET INCOME $ 1,784,000 $2,810,000 $ 1,645,000 $ 7,224,000
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
EARNINGS PER SHARE:
NET INCOME BEFORE EXTRAORDINARY ITEMS $0.24 $0.31 $0.66 $0.87
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
LOSS ON RETIREMENT OF DEBT, NET OF - - ($0.40) -
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
TAXES NET INCOME $0.24 $0.31 $0.26 $0.87
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
WEIGHTED AVERAGE SHARES OUTSTANDING 7,351,000 9,084,000 6,223,000 8,261,000
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
CRA MANAGED CARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
1995 1996
----------- ----------
CASH FLOWS FROM OPERATIONS:
Net income $ 1,645,000 $ 7,224,000
Items not requiring cash:
Depreciation and amortization 1,224,000 2,081,000
Amortization of deferred finance costs and
debt discount 228,000 -
Provision for doubtful accounts 50,000 183,000
Loss on retirement of debt 3,912,000 -
Change in assets and liabilities:
Accounts receivable (3,650,000) (4,266,000)
Prepaid expenses, prepaid income taxes
and deposits 131,000 (722,000)
Accounts payable, accrued expenses and
income taxes (2,656,000) 4,534,000
----------- ------------
Cash flows from operations 884,000 9,034,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Focus and QMC3, net of cash
acquired - (21,080,000)
Purchase of property and equipment (1,628,000) (1,960,000)
----------- ------------
Cash flows used for investing activities (1,628,000) (23,040,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities 5,000,000 24,700,000
Payments under revolving credit facilities (4,916,000) (29,000,000)
Payments on Term Loan (16,250,000) -
Payment on Senior Subordinated Notes (21,000,000) -
Payment on the Junior Subordinated Notes - (5,000,000)
Payment on Capital Leases - (31,000)
Net proceeds from the sale of Common Stock 36,507,000 51,840,000
Proceeds from the sale of Common Stock under
employee stock purchase plan and stock
option plans - 2,077,000
----------- ------------
Cash flows used for financing activities (659,000) 44,586,000
----------- ------------
NET INCREASE IN CASH (1,403,000) 30,580,000
----------- ------------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 2,197,000 3,005,000
----------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $794,000 $33,585,000
----------- ------------
----------- ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $2,589,000 $676,000
Income taxes paid $2,940,000 $4,893,000
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
CRA MANAGED CARE, INC.
Notes to Financial Statements
The accompanying unaudited financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments (all of which are of a normal recurring
nature) which, in the opinion of management, are necessary for a fair statement
of the results of the interim periods presented. These financial statements do
not include all disclosures associated with the annual financial statements and,
accordingly, should be read in conjunction with the attached Management's
Discussion and Analysis of Financial Condition and Results of Operation and the
financial statements and footnotes for the year ended December 31, 1995 included
in the Company's Form 10-K filed with the Securities and Exchange Commission on
April 1, 1996 and the Company's Prospectus for the sale of 2,500,000 shares of
Common Stock filed with the Securities and Exchange Commission on June 4, 1996.
(1) ACQUISITIONS
On October 23, 1995, the Company acquired Alta Pacific Corporation, a workers'
compensation case management company with eight offices in the state of
Washington, with revenues of approximately $3,000,000, in a pooling of interests
for 136,150 shares of Common Stock, or approximately $2,900,000 in value, based
upon the market value of the stock on the acquisition date. This acquisition
was not material to the Company's financial statements and the Company restated
its retained earnings as of the acquisition date to reflect the net assets of
Alta Pacific Corporation. As such, the results for the three and nine months
ended September 30, 1995 do not include the operating results of Alta Pacific
Corporation.
On April 2, 1996, the Company purchased Focus HealthCare Management, Inc.
("Focus") from United HealthCare Corporation for $21,000,000 in cash. Focus,
based in Brentwood, Tennessee, has built and maintains one of the nation's
largest workers' compensation PPO networks, and last year had annual revenues of
approximately $9,900,000. In order to finance this acquisition, the Company and
First Union Bank signed an amendment to expand the Company's borrowing capacity
under the Credit Facility to $40,000,000 under similar terms and conditions.
The acquisition of Focus has been accounted for by the Company as a purchase
whereby the basis for accounting for Focus' assets and liabilities are based
upon their fair values at the date of acquisition. The preliminary allocation
of the purchase price to the assets and liabilities of Focus is as follows:
Estimated purchase price including fees and expenses: $21,555,000
Purchase price allocated to:
Current assets 1,795,000
Property and equipment 929,000
Other long term assets 5,000
Current liabilities (711,000)
Long-term deferred tax liabilities (324,000)
Long-term capital leases (39,000)
-----------
Net assets acquired 1,655,000
-----------
Excess of cost over fair value of net assets acquired $19,900,000
-----------
-----------
The foregoing purchase price allocation is based upon preliminary information.
The final purchase price allocation is contingent upon the final determination
of the fair value of the net assets acquired on April 2, 1996, the date of
acquisition. Based upon presently available information, the Company does not
believe that the final purchase price allocation will materially differ from the
preliminary allocation.
-6-
<PAGE>
CRA MANAGED CARE, INC.
Notes to Financial Statements
(1) ACQUISITIONS (CONTINUED)
On May 29, 1996, the Company acquired all the outstanding capital stock of QMC3,
Inc. ("QMC3") in exchange for 230,441 shares of the Company's Common Stock in a
pooling of interest transaction, which was valued at approximately $8,500,000 as
of the date of the acquisition agreement. QMC3, based in Denver, Colorado, is a
leading managed care services company serving the automobile liability insurance
market, and has been instrumental in helping to obtain the passage of
legislation in Colorado and New York enabling the mandatory direction of medical
care for automobile accident victims. QMC3 had annual revenues in 1995 of
approximately $2,000,000. This acquisition, which was accounted for as a
pooling of interests, was not material to the Company's financial statements and
the Company restated its retained earnings to reflect the net assets of QMC3.
As such, the results for the three and nine months ended September 30, 1996
include the operating results of QMC3 subsequent to the acquisition date.
On October 29, 1996, the Company purchased Prompt Associates, Inc. ("Prompt")
for approximately $30,000,000 in cash. Prompt, which is based in Salt Lake
City, Utah, is one of the leading providers of hospital bill audit services to
the group health payor community for claims that fall outside of an indemnity
carrier's, TPA's or HMO's network of hospital or outpatient facilities. Prompt
had annual revenues of approximately $10,000,000 for the year ended December 31,
1995. In order to finance this acquisition, the Company will utilize
approximately $25,000,000 of its existing cash supplemented by borrowings of
approximately $5,000,000 under the Company's existing $40,000,000 Credit
Facility.
(2) SALE OF COMMON STOCK
On June 7, 1996 and June 17, 1996, the Company completed the sale of 2,875,000
shares of its Common Stock, including the exercise of the underwriters' over-
allotment option, at a price of $46.00 per share. Of the aggregate shares of
Common Stock sold, 1,200,000 were sold for the account of the Company generating
net proceeds to the Company of approximately $51,840,000 and 1,675,000 shares
were sold for account of certain stockholders of the Company. The Company used
approximately $29,000,000 of the net proceeds to repay borrowings under the
expanded Credit Facility with First Union Bank.
(3) SUPPLEMENTAL PRO FORMA EARNINGS
Supplemental pro forma earnings per share has been calculated as if (i) the
acquisition of Focus had been consummated at January 1, 1996, (ii) the Company
repaid all its outstanding debt at the beginning of 1996 (including the
additional borrowings of $21,000,000 to acquire Focus) utilizing the net
proceeds of $51,840,000 from the sale of 1,200,000 shares of Common Stock in
June, 1996 and (iii) the excess proceeds from the sale of Common Stock, after
the repayment of debt, were invested in financial instruments generating a
return of 6.0%. Supplemental pro forma revenue, net income and earnings per
share for the nine months ended September 30, 1996 would have been $133,090,000
and $7,8660,000 and $0.88, respectively. The supplemental pro forma weighted
average number of shares of 8,928,000 is the actual weighted average number of
shares of Common Stock and Common Stock equivalents outstanding plus the impact
of the 1,200,000 shares of Common Stock that were sold.
(4) CREDIT FACILITY
On April 28, 1995, the Company entered into the $25,000,000 Credit Facility with
First Union Bank. On March 29, 1996, the Company and First Union Bank signed an
amendment to expand the Company's borrowing capacity under the Credit Facility
to $40,000,000 under similar terms and conditions in order to finance the
acquisition of Focus. Interest on borrowings under the Credit Facility are
payable, at the Company's option, at First Union Bank's prime rate plus an
additional percentage of up to 0.375%, or LIBOR plus an additional percentage
of up to 1.875%, depending on certain financial criteria. The Credit Facility
contains customary covenants, including, without limitation, restrictions on the
incurrence of indebtedness, the sale of assets, certain mergers and
acquisitions, the payment of dividends on the Company's capital stock, the
repurchase or redemption of capital stock, transactions with affiliates,
investments, capital expenditures and changes in control of the Company. At
September 30, 1996, there were no borrowings under the Credit Facility.
-7-
<PAGE>
CRA MANAGED CARE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND
FOOTNOTES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND THE YEAR ENDED
DECEMBER 31, 1995 CONTAINED IN THE COMPANY'S FORM 10-K FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION ON APRIL 1, 1996 AND THE COMPANY'S PROSPECTUS FOR THE
SALE OF 2,500,000 SHARES OF COMMON STOCK FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON JUNE 4, 1996.
REVENUES
Revenues increased 25.0% in the third quarter of 1996 to $46,048,000 from
$36,826,000 in the third quarter of 1995. Field case management revenues
increased 14.4% in the third quarter of 1996 to $30,130,000 from $26,340,000 in
the third quarter of 1995, while specialized cost containment revenues increased
51.8% in the third quarter of 1996 to $15,918,000 from $10,486,000 in the third
quarter of 1995. Revenues increased 21.5% for the nine months of 1996 to
$131,032,000 from $107,881,000 for the nine months of 1995. Field case
management revenues increased 13.1% for the nine months of 1996 to $88,900,000
from $78,604,000 for the nine months of 1995 while specialized cost containment
revenues increased 43.9% for the nine months of 1996 to $42,132,000 from
$29,277,000 for the nine months of 1995. The field case management revenue
growth is attributable to the acquisition of Alta Pacific Corporation in the
fourth quarter of 1995, the opening of five offices during the first nine
months of 1996 and growth in revenues from existing service locations. The
specialized cost containment revenue growth is attributable to the acquisition
of Focus on April 2, 1996 and QMC3 on May 29, 1996, the addition of 10 service
locations during the first nine months of 1996, including the service locations
associated with the Focus and QMC3 acquisitions, and continued growth in
retrospective bill review and telephonic case management services in existing
service locations.
COST OF SERVICES
Cost of services increased 22.6% in the third quarter of 1996 to $37,812,000
from $30,843,000 in the third quarter of 1995 due to an increase in revenues and
the acquisition of Focus and QMC3. Cost of services as a percentage of revenue
decreased to 82.1% in the third quarter of 1996 compared to 83.8% in the third
quarter of 1995. Cost of services increased 19.2% for the nine months of 1996 to
$107,981,000 from $90,600,000 for the nine months of 1995 due to an increase in
revenues and the acquisition of Focus and QMC3. Cost of services as a percentage
of revenue decreased to 82.4% for the nine months of 1996 compared to 84.0% for
the nine months of 1995. This improvement in gross margins is primarily the
result of productivity gains in field case management services coupled with a
continued shift in the Company's revenue mix towards specialized cost
containment services, especially retrospective bill review, which historically
had higher gross profit margins than revenues derived from field case management
services.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased 35.8% in the third quarter of 1996
to $3,746,000 from $2,759,000 in the third quarter of 1995, or 8.1% and 7.5% as
a percentage of revenue for the third quarter of 1996 and 1995, respectively.
General and administrative expenses increased 28.3% for the nine months of 1996
to $10,491,000 from $8,180,000 for the nine months of 1995, or 8.0% and 7.6% as
a percentage of revenue for the nine months of 1996 and 1995, respectively. The
increase in general and administrative expenses in 1996 primarily was due to
increased expenditures for marketing initiatives, additional investments in the
information technology group and the acquisition of Focus.
INTEREST (INCOME) EXPENSE, NET
Interest (income) expense, net decreased $564,000 in the third quarter of 1996
to interest income of $313,000 compared to interest expense of $251,000 in the
third quarter of 1995. Interest expense, net decreased $2,048,000 for the nine
months of 1996 to $212,000 from $2,260,000 for the nine months of 1995. The
decrease in interest expense, net in 1996 was due primarily to the repayment of
the Term Loan and Senior Subordinated Notes with the proceeds from the sale of
Common Stock in May of 1995 and the investment of excess proceeds of the
Company's from the sale of Common Stock in June of 1996, partially offset by
interest expense on Credit Facility borrowings to finance the Focus acquisition
in April of 1996 until these borrowings were repaid with a portion of the
proceeds from the Company's sale of Common Stock in June of 1996.
-8-
<PAGE>
CRA MANAGED CARE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
PROVISION FOR INCOME TAXES
The Company's provision for income taxes for the first three and nine months of
1996 was $1,993,000 and $5,124,000, respectively, or an effective tax rate of
41.5%, compared to a tax provision for the three and nine months of 1995 of
$1,189,000 and $2,736,000, respectively, or an effective tax rate of 40%. The
Company expects to continue to provide for its taxes at the higher effective tax
rate for the remainder of the year.
LOSS ON RETIREMENT OF DEBT
The Company used the net proceeds ($36,507,000) from the Company's initial
public offering on May 10, 1995, supplemented by borrowings under the New Credit
Facility ($5,000,000) to repay fully the Term Loan ($16,250,000) and the Former
Revolving Credit Facility ($4,226,000) under the former loan agreement with
First Union Bank and the Senior Subordinated Notes ($21,000,000) issued to
Whitney and First Union. The early repayment of this debt resulted in the
Company recording a loss on the retirement of debt of $2,460,000 comprised of
the write-off of associated deferred finance costs ($1,772,000), debt discount
on the Senior Subordinated Notes ($2,140,000) and fees associated with the
termination of the interest rate swaps previously required by the former loan
agreement ($158,000), offset by a tax benefit of $1,610,000.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows generated from operations were $9,034,000 and $884,000 for the nine
months of 1996 and 1995, respectively. During the first nine months of 1996,
working capital used $454,000 of cash primarily due to an increase in accounts
receivable of $4,266,000 and an increase in prepaid expenses of $722,000 offset
by an increase in accounts payable and accrued expenses of $4,534,000. Accounts
receivable increased due to continued revenue growth while prepaid income taxes
increased due to the Company recording a tax benefit of approximately $1,082,000
due to the exercise of options. Accounts payable and accrued expenses increased
due to the timing of payments.
The Company used net cash of $21,080,000 in connection with the acquisitions of
Focus and QMC3. The Company also used $1,960,000 of cash to purchase property
and equipment during the first nine months of 1996, the majority of which was
spent on new computer and software technology.
On January 16, 1996 the Company retired the 10% Junior Subordinated Notes
utilizing borrowings under the Credit Facility.
On March 28, 1996, the Company and First Union Bank signed an amendment to
expand the Company's borrowing capacity under the Credit Facility to $40,000,000
under similar terms and conditions in order to finance the acquisition of Focus
which was purchased for $21,000,000 in cash.
On June 4, 1996, and June 17, 1995, the Company sold an aggregate of 1,200,000
shares of its Common Stock, including the exercise of the underwriters' over-
allotment option, at a price of $46.00 per share generating net proceeds to the
Company of approximately $51,840,000. The Company used approximately
$29,000,000 of the net proceeds to repay all of the outstanding borrowings under
the expanded Credit Facility with First Union Bank.
The Company believes that existing cash and cash flow generated from operations
will be sufficient to fund the Company's working capital and capital expenditure
requirements for at least the next twelve months.
-9-
<PAGE>
CRA MANAGED CARE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
On October 29, 1996, the Company purchased Prompt Associates, Inc. ("Prompt")
for approximately $30,000,000 in cash. Prompt, which is based in Salt Lake
City, Utah, is one of the leading providers of hospital bill audit services to
the group health payor community for claims that fall outside of an indemnity
carrier's, TPA's or HMO's network of hospital or outpatient facilities. Prompt
had annual revenues of approximately $10,000,000 for the year ended December 31,
1995. In order to finance this acquisition, the Company will utilize
approximately $25,000,000 of its existing cash supplemented by borrowings of
approximately $5,000,000 under the Company's existing $40,000,000 Credit
Facility.
-10-
<PAGE>
CRA MANAGED CARE, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Calculation of Shares Used in Determining Earnings Per Share
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the third quarter of 1996.
-11-
<PAGE>
CRA MANAGED CARE, INC.
SIGNATURE
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.
CRA MANAGED CARE, INC.
Date: November 5, 1996 By: /s/ Joseph F. Pesce .
---------------- ------------------------------
Joseph F. Pesce
Vice President - Finance and
Administration and Chief
Financial Officer
-12-
<PAGE>
CRA MANAGED CARE, INC.
EXHIBIT INDEX
PAGE
11(a) CRA Managed Care, Inc. - Calculation of Shares
Used in Determining Earnings Per Share 14
-13-
<PAGE>
EXHIBIT 11
CRA MANAGED CARE, INC.
Calculation of Shares Used in Determining Earnings Per Share
for the Three and Nine Months Ended September 30, 1995 and 1996
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ---------------------
1995 1996 1995 1996
--------- --------- --------- ---------
Weighted average number of
shares of common stock
outstanding during
the period 7,216,000 8,896,000 6,098,000 8,074,000
Common stock equivalents,
under the treasury stock
method 135,000 188,000 125,000 187,000
--------- --------- --------- ---------
7,351,000 9,084,000 6,223,000 8,261,000
--------- --------- --------- ---------
--------- --------- --------- ---------
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000942136
<NAME> CRA MANAGED CARE, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 33,585,000
<SECURITIES> 0
<RECEIVABLES> 33,514,000
<ALLOWANCES> 1,119,000
<INVENTORY> 0
<CURRENT-ASSETS> 67,665,000
<PP&E> 17,714,000
<DEPRECIATION> 10,639,000
<TOTAL-ASSETS> 94,694,000
<CURRENT-LIABILITIES> 19,056,000
<BONDS> 6,000
0
0
<COMMON> 89,000
<OTHER-SE> 73,121,000
<TOTAL-LIABILITY-AND-EQUITY> 94,694,000
<SALES> 0
<TOTAL-REVENUES> 131,032,000
<CGS> 0
<TOTAL-COSTS> 107,981,000
<OTHER-EXPENSES> 10,491,000
<LOSS-PROVISION> 183,000
<INTEREST-EXPENSE> 212,000
<INCOME-PRETAX> 12,348,000
<INCOME-TAX> 5,124,000
<INCOME-CONTINUING> 7,224,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,224,000
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0
</TABLE>
