SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): OCTOBER 26, 2000
HEALTHPLAN SERVICES CORPORATION
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-13772 13-3787901
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3501 FRONTAGE ROAD, TAMPA, FLORIDA 33607
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (813) 289-1000
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a)
As announced on October 26, 2000, we completed the sale of our self-funded
business unit to Trewit, Inc., based in Minneapolis, Minnesota, for $13.6
million, consisting of $12.1 million cash and the assumption of additional
current liabilities in the amount of $1.5 million. Our self-funded business is
headquartered in Columbus, Ohio, and operates primarily under the names
Harrington Benefit Services and CENTRA HealthPlan. We used the net cash proceeds
from the sale to reduce our bank debt by $8.7 million and for other working
capital purposes. Pursuant to the Agreement which was amended as of the Closing
Date, we have guaranteed that the purchaser will collect $7.035 million dollars
of receivables as shown on the Final Closing Balance sheet within 90 days of the
Closing. To the extent such collections do not occur within such 90 day period,
we will reimburse the purchaser for the shortfall against an assignment of the
uncollected receivables. The purchase agreement contains customary
representations and warranties and cross indemnity provisions.
On July 5, 2000, we announced the sale of our unemployment compensation and
workers' compensation business units for approximately $19.4 million cash. We
used the cash proceeds from sale to reduce our bank debt by over $18.0 million.
On September 15, 2000, we announced the sale of our Ohio managed care
organization business for approximately $3.7 million cash. We used the cash
proceeds from sale to reduce our bank debt by $2.8 million.
As a result of these divestitures, we have recorded a loss on the disposal of
discontinued operations of approximately $36.4 million during the third quarter
of fiscal 2000.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
HEALTHPLAN SERVICES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ - $ -- $ -
Accounts receivable, net 24,029 (7,203)(a) 16,826
Prepaid expenses and other current assets 4,003 (909)(a) 3,094
Refundable income taxes 5,081 -- 5,081
Deferred taxes 3,144 -- 3,144
-------- -------- --------
Total current assets 36,257 (8,112) 28,145
Property and equipment, net 27,167 (5,701)(a) 21,466
Intangible assets, net 176,984 (49,468)(a) 127,516
Other assets, net 4,628 (227)(a) 4,401
-------- -------- --------
Total assets $245,036 $(63,508) $181,528
======== ======== ========
LIABILITIES, MINORITY INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 4,866 $ (3,442)(b) $ 1,424
Accounts payable 2,724 -- 2,724
Premiums payable to carriers 37,689 (439)(a) 37,250
Accrued liabilities 64,780 (50,424)(a,b) 14,356
Current portion of long-term debt 8,873 (70)(a) 8,803
Other current liabilities 5,292 (231)(a) 5,061
-------- ------- --------
Total current liabilities 124,224 (54,606) 69,618
Notes payable 68,963 (8,902)(a,b) 60,061
Deferred taxes 2,762 -- 2,762
Other long-term liabilities 2,432 -- 2,432
-------- -------- --------
Total liabilities 198,381 (63,508) 134,873
-------- -------- --------
Total stockholders' equity 46,655 -- 46,655
-------- -------- --------
Total liabilities, minority interest,
and stockholders' equity $245,036 $(63,508) $181,528
======== ======== ========
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements are an integral part of these financial statements.
<PAGE>
HEALTHPLAN SERVICES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues $ 127,895 $ -- $ 127,895
Agent Commissions 38,940 -- 38,940
General and Administrative 82,495 -- 82,495
Gain on Sale of Investments (332) -- (332)
Interest Expense, Net 7,013 (2,655)(b) 4,358
-------- --------- ---------
Total Expenses 128,116 (2,655) 125,461
-------- --------- ---------
Income (loss) Before Provision for Income Taxes
and Minority Interest (221) 2,655 2,434
(Benefit) Provision for Income Taxes (187) 1,209 (b) 1,022
-------- --------- ---------
Income (loss) from Continuing Operations (34) 1,446 1,412
Loss from discontinued operations, net of taxes 206 206 (a) --
Loss on sale of assets, net of taxes 36,364 36,364 (a) --
Extraordinary loss from restructure of debt, net of taxes 954 -- 954
--------- --------- ---------
Net Income $(37,558) $ 38,016 $ 458
========= ========= =========
Basic (Loss) Earnings Per Share of Common Stock $ (2.75) $ 0.03
Basic Weighted Average Number of Shares Outstanding 13,677 13,677
Diluted Earnings Per Share of Common Stock $ (2.75) $ 0.03
Diluted Weighted Average Number of Shares Outstanding 13,677 13,677
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements are an integral part of these financial statements.
<PAGE>
HEALTHPLAN SERVICES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues $ 139,089 $ -- $ 139,089
Agent Commissions 43,118 -- 43,118
General and Administrative 89,911 -- 89,911
Gain on Sale of Investments (4,557) -- (4,557)
Interest Expense, Net 5,032 (1,549)(b) 3,483
Equity in Loss of Joint Venture 208 -- 208
-------- --------- ---------
Total Expenses 133,712 (1,549) 132,163
-------- --------- ---------
Income Before Provision for Income Taxes
and Minority Interest 5,377 1,549 6,926
(Benefit) Provision for Income Taxes 2,328 604 (b) 2,932
-------- --------- ---------
Income Before Minority Interest 3,049 945 3,994
Minority Interest 245 -- 245
--------- --------- ---------
Income from continuing operations 2,804 945 3,749
Loss from discontinued operations, net of taxes 1,367 1,367 (a) --
--------- --------- ---------
Net Income $ 1,437 $ 2,312 $ 3,749
========= ========= =========
Basic (Loss) Earnings Per Share of Common Stock $ 0.10 $ 0.27
Basic Weighted Average Number of Shares Outstanding 13,768 13,768
Diluted Earnings Per Share of Common Stock $ 0.10 $ 0.27
Diluted Weighted Average Number of Shares Outstanding 13,948 13,948
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements are an integral part of these financial statements.
<PAGE>
HEALTHPLAN SERVICES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues $277,424 $(94,818)(c) $182,606
Agent Commissions 55,923 (8)(c) 55,915
General and Administrative 211,589 (100,113)(c) 111,476
Interest Expense, Net 7,212 (2,292)(c,d) 4,920
Equity in Loss of Joint Venture 208 -- 208
-------- -------- --------
Total Expenses 274,932 (102,413) 172,519
-------- -------- --------
Income Before Provision for Income Taxes
and Minority Interest 2,492 7,595 10,087
Provision for Income Taxes 2,143 2,094 (c) 4,237
Minority interest 245 -- 245
-------- -------- --------
Net Income $ 104 $ 5,501 $ 5,605
======== ======== ========
Basic Earnings Per Share of Common Stock $ 0.01 $ 0.41
Basic Weighted Average Number of Shares Outstanding 13,742 13,742
Diluted Earnings Per Share of Common Stock $ 0.01 $ 0.40
Diluted Weighted Average Number of Shares Outstanding 13,922 13,922
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements are an integral part of these financial statements.
<PAGE>
HEALTHPLAN SERVICES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues $289,247 $(88,037)(c) $201,210
Agent Commissions 68,449 -- 68,449
General and Administrative 185,661 (95,361)(c) 90,300
Interest Expense, Net 5,643 (2,573)(c,d) 3,070
Equity in Loss of Joint Venture 11,849 -- 11,849
-------- -------- --------
Total Expenses 271,602 (97,934) 173,668
-------- -------- --------
Income Before Provision for Income Taxes
and Minority Interest 17,645 9,897 27,542
Provision for Income Taxes 8,683 3,177 (c) 11,860
Minority interest (736) 784 48
-------- -------- --------
Net Income $ 9,698 $ 5,936 $ 15,634
======== ======== ========
Basic Earnings Per Share of Common Stock $ 0.68 $ 1.09
Basic Weighted Average Number of Shares Outstanding 14,353 14,353
Diluted Earnings Per Share of Common Stock $ 0.67 $ 1.07
Diluted Weighted Average Number of Shares Outstanding 14,584 14,584
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements are an integral part of these financial statements.
<PAGE>
HEALTHPLAN SERVICES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues $281,644 (86,416)(c) $195,228
Agent Commissions 65,674 (4,633)(c) 61,041
General and Administrative 190,580 (75,060)(c) 115,520
Interest Expense, Net 2,468 (2,163)(c,d) 305
Equity in Loss of Joint Venture 2,850 -- 2,850
-------- -------- --------
Total Expenses 261,572 (81,856) 179,716
-------- -------- --------
Income Before Provision for Income Taxes
and Minority Interest 20,072 (4,560) 15,512
Provision for Income Taxes 9,276 2,606 (c) 6,670
-------- -------- --------
Net Income $ 10,796 $ (1,954) $ 8,842
======== ======== ========
Basic Earnings Per Share of Common Stock $ 0.72 $ 0.59
Basic Weighted Average Number of Shares Outstanding 15,004 15,004
Diluted Earnings Per Share of Common Stock $ 0.71 $ 0.58
Diluted Weighted Average Number of Shares Outstanding 15,164 15,164
</TABLE>
The accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements are an integral part of these financial statements.
<PAGE>
HEALTHPLAN SERVICES CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The foregoing Unaudited Pro Forma Condensed Consolidated Financial Statements
illustrate the effect of the Company's disposition of its unemployment
compensation and workers' compensation, self-funded and Ohio managed care
business units. The Unaudited Pro Forma Condensed Consolidated Balance Sheet of
the Company at September 30, 2000 reflects the financial position of the Company
after giving effect to the disposition of the self-funded business unit above as
if it had occurred at September 30, 2000. The Unaudited Pro Forma Condensed
Consolidated Statements of Income for the nine months ended September 30, 2000
and 1999 and the years ended December 31, 1999, 1998 and 1997, give retroactive
effect to the dispositions of the Company's unemployment compensation and
workers' compensation, self-funded and Ohio managed care business units as if
they had occurred at the beginning of the periods presented.
NOTE 2 - PRO FORMA BALANCE SHEET ADJUSTMENTS
a) Reflects the disposition of the Company's interest in net
assets and liabilities of the self-funded business unit.
b) Reflects the application of the proceeds of the sale, recognition of
the gain on the sale. Note that the proceeds are used to reduce the
line of credit and cash overdraft balances.
NOTE 3 - PRO FORMA INCOME STATEMENT ADJUSTMENTS
a) Reflects the elimination of the discontinued operations, loss on sale
of discontinued operations and the related tax effects for the nine
months ended September 30, 2000 and 1999.
b) Reflects incremental interest expense savings and the related tax
effect due to the reduction of indebtedness by the amount of the
proceeds from the sales. The reduction in expense was calculated based
upon the average interest rate on outstanding indebtedness during the
period.
c) Reflects the elimination of the discontinued operations, loss on
sale of discontinued operations and the related tax effects for the
years ended December 31, 1999, 1998 and 1997; respectfully.
d) Reflects incremental interest expense savings due to the reduction of
indebtedness by the amount of the proceeds from the sales. The
reduction in expense was calculated based upon the average interest
rate on outstanding indebtedness during the period.
<PAGE>
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.
HEALTHPLAN SERVICES CORPORATION
Date: November 13, 2000 /s/ Phillip S. Dingle
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President and Chief Operating Officer
(Principal Executive Officer)
Date: November 13, 2000 /s/ Gregory C. Fisher
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Senior Vice President and Controller
(Principal Accounting Officer)