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 December 31, 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Yes ¨ No x
As of January 24, 2003, the Registrant had 6,854,147 shares of Common Stock, $0.01 Par Value, outstanding.
Page 1 of 26
FORM 10-Q
PEDIATRIC SERVICES OF AMERICA, INC.
| Page Number | ||||
| PART I |
||||
| ITEM 1: |
||||
| Condensed Consolidated Balance Sheets as of December 31, 2002 and September 30, 2002 |
3 | |||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| ITEM 2: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||
| ITEM 3: |
22 | |||
| ITEM 4 |
22 | |||
| PART II |
||||
| ITEM 1: |
22 | |||
| ITEM 6: |
23 | |||
| 24 | ||||
| 25 |
2
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, 2002 |
September 30, 2002 |
|||||||
| (Unaudited) |
||||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ |
9,256 |
|
$ |
10,990 |
| ||
| Accounts receivable, less allowance for doubtful accounts of $4,752 and $5,364, respectively |
|
34,383 |
|
|
32,412 |
| ||
| Prepaid expenses |
|
1,405 |
|
|
943 |
| ||
| Workers' compensation loss fund |
|
832 |
|
|
— |
| ||
| Income taxes receivable |
|
— |
|
|
441 |
| ||
| Deferred income taxes |
|
4,626 |
|
|
4,626 |
| ||
| Inventory |
|
4,796 |
|
|
3,312 |
| ||
| Other current assets |
|
137 |
|
|
266 |
| ||
| Total current assets |
|
55,435 |
|
|
52,990 |
| ||
| Property and equipment: |
||||||||
| Home care equipment held for rental |
|
31,419 |
|
|
31,065 |
| ||
| Furniture and fixtures |
|
11,197 |
|
|
11,278 |
| ||
| Vehicles |
|
700 |
|
|
725 |
| ||
| Leasehold improvements |
|
1,901 |
|
|
1,888 |
| ||
|
|
45,217 |
|
|
44,956 |
| |||
| Accumlated depreciation and amortization |
|
(36,350 |
) |
|
(35,779 |
) | ||
|
|
8,867 |
|
|
9,177 |
| |||
| Other assets: |
||||||||
| Goodwill, less accumulated amortization of $9,613 |
|
32,893 |
|
|
32,893 |
| ||
| Certificates of need, less accumulated amortization of $586 and $581, respectively |
|
86 |
|
|
92 |
| ||
| Deferred financing fees, less accumulated amortization of $721 and $699, respectively |
|
470 |
|
|
492 |
| ||
| Non-compete agreements, less accumulated amortization of $1,142 and $1,136, respectively |
|
28 |
|
|
34 |
| ||
| Deferred income taxes |
|
4,214 |
|
|
4,214 |
| ||
| Workers' compensation bond collateral |
|
2,759 |
|
|
1,851 |
| ||
| Other |
|
293 |
|
|
325 |
| ||
|
|
40,743 |
|
|
39,901 |
| |||
| Total assets |
$ |
105,045 |
|
$ |
102,068 |
| ||
See accompanying notes.
3
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS—(Continued)
(In thousands)
| December 31, 2002 |
September 30, 2002 | |||||
| (Unaudited) |
||||||
| Liabilities and stockholders' equity |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ |
7,415 |
$ |
5,224 | ||
| Accrued compensation |
|
4,321 |
|
4,907 | ||
| Income taxes payable |
|
78 |
|
— | ||
| Accrued insurance |
|
7,035 |
|
6,358 | ||
| Refunds payable |
|
1,185 |
|
1,148 | ||
| Accrued interest |
|
526 |
|
1,135 | ||
| Other accrued liabilities |
|
2,297 |
|
1,953 | ||
| Deferred revenue |
|
692 |
|
734 | ||
| Current maturities of long-term obligations to related parties |
|
— |
|
25 | ||
| Current maturities of long-term obligations |
|
146 |
|
169 | ||
| Total current liabilities |
|
23,695 |
|
21,653 | ||
| Long-term obligations, net of current maturities |
|
24,569 |
|
24,642 | ||
| 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 6,850 and 6,838 shares issued and outstanding at December 31, 2002 and September 30, 2002, respectively |
|
69 |
|
68 | ||
| Additional paid-in capital |
|
49,120 |
|
49,084 | ||
| Retained earnings |
|
7,592 |
|
6,621 | ||
| Total stockholders' equity |
|
56,781 |
|
55,773 | ||
| Total liabilities and stockholders' equity |
$ |
105,045 |
$ |
102,068 | ||
See accompanying notes.
4
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended December 31, |
||||||||
| 2002 |
2001 |
|||||||
| (Unaudited) |
(Unaudited) |
|||||||
| Net Revenue |
$ |
52,562 |
|
$ |
49,140 |
| ||
| Costs and expenses: |
||||||||
| Operating salaries, wages and employee benefits |
|
23,043 |
|
|
22,637 |
| ||
| Other operating costs |
|
21,273 |
|
|
17,257 |
| ||
| Corporate, general and administrative |
|
4,688 |
|
|
4,716 |
| ||
| Provision for doubtful accounts |
|
278 |
|
|
305 |
| ||
| Depreciation and amortization |
|
1,060 |
|
|
1,094 |
| ||
| Total costs and expenses |
|
50,342 |
|
|
46,009 |
| ||
| Operating income |
|
2,220 |
|
|
3,131 |
| ||
| Early extinguishment of debt |
|
— |
|
|
387 |
| ||
| Interest income |
|
30 |
|
|
58 |
| ||
| Interest expense |
|
(650 |
) |
|
(719 |
) | ||
| Income before income tax expense |
|
1,600 |
|
|
2,857 |
| ||
| Income tax expense |
|
629 |
|
|
— |
| ||
| Net income |
$ |
971 |
|
$ |
2,857 |
| ||
| Net income per share data: |
||||||||
| Basic |
$ |
0.14 |
|
$ |
0.43 |
| ||
| Diluted |
$ |
0.14 |
|
$ |
0.40 |
| ||
| Weighted average shares outstanding: |
||||||||
| Basic |
|
6,845 |
|
|
6,713 |
| ||
| Diluted |
|
7,080 |
|
|
7,101 |
| ||
See accompanying notes.
5
PEDIATRIC SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Three Months Ended December 31, |
||||||||
| 2002 |
2001 |
|||||||
| Operating activities: |
|
(Unaudited) |
|
|
(Unaudited) |
| ||
| Net income |
$ |
971 |
|
$ |
2,857 |
| ||
| Adjustments to reconcile net income to net cash used by operating activities: |
||||||||
| Depreciation and amortization |
|
1,060 |
|
|
1,094 |
| ||
| Provision for doubtful accounts |
| |||||||