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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 June 30, 2002
 
OR
 
[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to             
 
Commission file number 0-23946
 

 
PEDIATRIC SERVICES OF AMERICA, INC.
(Exact name of Registrant as specified in its charter)
 
Delaware
 
58-1873345
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
310 Technology Parkway, Norcross GA 30092-2929
(Address of principal executive offices, including zip code)
 
(770) 441-1580
(Registrant’s telephone number, including area code)
 
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 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  ¨
 
As of July 31, 2002, the Registrant had 6,837,622 shares of Common Stock, $0.01 Par Value, outstanding.
 

 
Page 1 of 19


Table of Contents
 
FORM 10-Q
 
PEDIATRIC SERVICES OF AMERICA, INC.
 
INDEX
 
        
Page Number

PART I
      
ITEM 1:
      
      
3
      
5
      
6
      
7
ITEM 2:
    
10
ITEM 3:
    
17
PART II
      
ITEM 1:
    
17
ITEM 6:
    
18
      
19


Table of Contents
PART I— FINANCIAL INFORMATION
 
Item 1.     Financial Statements
 
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
    
June 30, 2002

    
September 30, 2001

 
    
(Unaudited)
        
Assets
                 
Current Assets:
                 
Cash and cash equivalents
  
$
7,151
 
  
$
15,259
 
Accounts receivable, less allowance for doubtful accounts of $5,379 and $5,520, respectively
  
 
34,671
 
  
 
31,456
 
Prepaid expenses
  
 
1,612
 
  
 
893
 
Deferred income taxes
  
 
1,666
 
  
 
1,778
 
Income taxes receivable
  
 
199
 
  
 
—  
 
Inventory
  
 
3,725
 
  
 
4,708
 
Other current assets
  
 
347
 
  
 
236
 
    


  


Total current assets
  
 
49,371
 
  
 
54,330
 
Property and equipment:
                 
Home care equipment held for rental
  
 
30,541
 
  
 
28,752
 
Furniture and fixtures
  
 
11,202
 
  
 
10,572
 
Vehicles
  
 
725
 
  
 
725
 
Leasehold improvements
  
 
1,642
 
  
 
1,222
 
    


  


    
 
44,110
 
  
 
41,271
 
Accumulated depreciation and amortization
  
 
(34,941
)
  
 
(32,315
)
    


  


    
 
9,169
 
  
 
8,956
 
Other assets:
                 
Goodwill, less accumulated amortization of $9,613
  
 
32,893
 
  
 
31,706
 
Certificates of need, less accumulated amortization of $575 and $505, respectively
  
 
97
 
  
 
167
 
Deferred financing fees, less accumulated amortization of $676 and $701, respectively
  
 
515
 
  
 
787
 
Non-compete agreements, less accumulated amortization of $1,129 and $1,110, respectively
  
 
41
 
  
 
50
 
Deferred income taxes
  
 
623
 
  
 
1,049
 
Workers’ compensation bond collateral
  
 
1,843
 
  
 
—  
 
Other
  
 
338
 
  
 
253
 
    


  


    
 
36,350
 
  
 
34,012
 
    


  


Total assets
  
$
94,890
 
  
$
97,298
 
    


  


 
See accompanying notes.

3


Table of Contents
 
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS—(Continued)
(In thousands)
 
    
June 30,
    
September 30,
 
    
2002

    
2001

 
    
(Unaudited)
        
Liabilities and stockholders’ equity
                 
Current liabilities:
                 
Accounts payable
  
$
6,293
 
  
$
5,611
 
Accrued compensation
  
 
5,280
 
  
 
5,757
 
Income tax
  
 
—  
 
  
 
498
 
Accrued insurance
  
 
6,475
 
  
 
6,086
 
Other accrued liabilities
  
 
4,582
 
  
 
5,162
 
Deferred revenue
  
 
632
 
  
 
621
 
Current maturities of long-term obligations to related parties
  
 
25
 
  
 
25
 
Current maturities of long-term obligations
  
 
171
 
  
 
11
 
    


  


Total current liabilities
  
 
23,458
 
  
 
23,771
 
Long-term obligations to related parties, net of current maturities
  
 
—  
 
  
 
25
 
Long-term obligations, net of current maturities
  
 
24,683
 
  
 
32,352
 
Stockholders’ equity:
                 
Preferred stock, $.01 par value, 2,000 shares authorized, no shares issued and outstanding
  
 
—  
 
  
 
—  
 
Common stock, $.01 par value, 80,000 shares authorized, 6,837 and 6,711 shares issued and outstanding at June 30, 2002 and September 30, 2001, respectively
  
 
68
 
  
 
67
 
Additional paid-in capital
  
 
48,908
 
  
 
48,493
 
Accumulated deficit
  
 
(2,227
)
  
 
(7,410
)
    


  


Total stockholders’ equity
  
 
46,749
 
  
 
41,150
 
    


  


Total liabilities and stockholders’ equity
  
$
94,890
 
  
$
97,298
 
    


  


 
 
 
See accompanying notes.

4


Table of Contents
 
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
    
Three Months Ended
June 30,

    
Nine Months Ended
June 30,

 
    
2002

    
2001

    
2002

    
2001

 
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
 
Net Revenue
  
$
49,220
 
  
$
46,258
 
  
$
146,425
 
  
$
137,527
 
Costs and expenses:
                                   
Operating salaries, wages and employee benefits
  
 
22,844
 
  
 
20,861
 
  
 
67,956
 
  
 
61,992
 
Other operating costs
  
 
18,691
 
  
 
17,204
 
  
 
53,930
 
  
 
50,905
 
Corporate, general and administrative
  
 
4,551
 
  
 
4,600
 
  
 
13,691
 
  
 
13,696
 
Provision for doubtful accounts
  
 
322
 
  
 
353
 
  
 
987
 
  
 
1,793
 
Depreciation and amortization
  
 
980
 
  
 
1,867
 
  
 
3,068
 
  
 
5,626
 
    


  


  


  


Total costs and expenses
  
 
47,388
 
  
 
44,885
 
  
 
139,632
 
  
 
134,012
 
    


  


  


  


Operating income
  
 
1,832
 
  
 
1,373
 
  
 
6,793
 
  
 
3,515
 
Other income
  
 
—  
 
  
 
32
 
  
 
—  
 
  
 
32
 
Interest income
  
 
46
 
  
 
119
 
  
 
128
 
  
 
507
 
Interest expense
  
 
(693
)
  
 
(898
)
  
 
(2,126
)
  
 
(3,121
)
    


  


  


  


Income before extraordinary item
  
 
1,185
 
  
 
626
 
  
 
4,795
 
  
 
933
 
Extraordinary item
  
 
30
 
  
 
—  
 
  
 
417
 
  
 
3,263
 
    


  


  


  


Net income
  
$
1,215
 
  
$
626
 
  
$
5,212
 
  
$
4,196
 
    


  


  


  


Basic net income per share data:
                                   
Income before extraordinary item
  
$
0.17
 
  
$
0.09
 
  
$
0.71
 
  
$
0.14
 
Extraordinary item
  
 
0.01
 
  
 
—  
 
  
 
0.06
 
  
 
0.49
 
    


  


  


  


Net income
  
$
0.18
 
  
$
0.09
 
  
$
0.77
 
  
$
0.63
 
    


  


  


  


Diluted net income per share data:
                                   
Income before extraordinary item
  
$
0.16
 
  
$
0.09
 
  
$
0.67
 
  
$
0.14
 
Extraordinary item
  
 
0.01
 
  
 
—  
 
  
 
0.06
 
  
 
0.47
 
    


  


  


  


Net income
  
$
0.17
 
  
$
0.09
 
  
$
0.73
 
  
$
0.61