UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
CHECK ONE
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the Quarterly Period Ended: June 30, 2003 | ||
| OR | ||
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the transition period from ____________ to ____________ |
American HomePatient, Inc.
| Delaware | 0-19532 | 62-1474680 | ||
|
|
||||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
5200 Maryland Way, Suite 400, Brentwood, Tennessee 37027
(615) 221-8884
None
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 o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o No x
16,367,389
Total number of sequentially
numbered pages is 58
PART I. FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
ASSETS
| June 30, | December 31, | ||||||||||
| 2003 | 2002 | ||||||||||
CURRENT ASSETS: |
|||||||||||
Cash and cash equivalents |
$ | 21,531,000 | $ | 22,827,000 | |||||||
Restricted cash |
467,000 | 67,000 | |||||||||
Accounts receivable, less allowance for
doubtful accounts of $19,685,000 and
$22,991,000, respectively |
55,984,000 | 55,437,000 | |||||||||
Inventories, net of inventory reserves of
$562,000 and $583,000, respectively |
15,048,000 | 16,565,000 | |||||||||
Prepaid expenses and other current assets |
2,695,000 | 2,276,000 | |||||||||
Total current assets |
95,725,000 | 97,172,000 | |||||||||
PROPERTY AND EQUIPMENT, at cost: |
170,280,000 | 171,021,000 | |||||||||
Less accumulated depreciation and amortization |
(117,664,000 | ) | (120,594,000 | ) | |||||||
Property and equipment, net |
52,616,000 | 50,427,000 | |||||||||
OTHER ASSETS: |
|||||||||||
Goodwill, net |
121,214,000 | 121,214,000 | |||||||||
Investment in joint ventures |
8,950,000 | 9,815,000 | |||||||||
Other assets |
12,661,000 | 12,315,000 | |||||||||
Total other assets |
142,825,000 | 143,344,000 | |||||||||
TOTAL ASSETS |
$ | 291,166,000 | $ | 290,943,000 | |||||||
(Continued)
2
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Continued)
LIABILITIES AND SHAREHOLDERS’ DEFICIT
| June 30, | December 31, | |||||||||||
| 2003 | 2002 | |||||||||||
LIABILITIES NOT SUBJECT TO COMPROMISE: |
||||||||||||
CURRENT LIABILITIES: |
||||||||||||
Accounts payable |
$ | 13,701,000 | $ | 13,267,000 | ||||||||
Other payables |
1,897,000 | 1,637,000 | ||||||||||
Accrued expenses: |
||||||||||||
Payroll and related benefits |
6,792,000 | 7,759,000 | ||||||||||
Insurance, including self-insurance reserves |
6,507,000 | 5,829,000 | ||||||||||
Other |
1,617,000 | 1,625,000 | ||||||||||
Total current liabilities |
30,514,000 | 30,117,000 | ||||||||||
NONCURRENT LIABILITIES: |
||||||||||||
Minority interest |
486,000 | 470,000 | ||||||||||
Other noncurrent liabilities |
106,000 | 121,000 | ||||||||||
Total noncurrent liabilities |
592,000 | 591,000 | ||||||||||
LIABILITIES SUBJECT TO COMPROMISE |
298,797,000 | 307,829,000 | ||||||||||
| |
||||||||||||
SHAREHOLDERS’ DEFICIT |
||||||||||||
Preferred stock, $.01 par value; authorized 5,000,000
shares; none issued and outstanding |
— | — | ||||||||||
Common stock, $.01 par value; authorized 35,000,000
shares; issued and outstanding, 16,367,000 shares |
164,000 | 164,000 | ||||||||||
Paid-in capital |
173,985,000 | 173,985,000 | ||||||||||
Accumulated deficit |
(212,886,000 | ) | (221,743,000 | ) | ||||||||
Total shareholders’ deficit |
(38,737,000 | ) | (47,594,000 | ) | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT |
$ | 291,166,000 | $ | 290,943,000 | ||||||||
(Concluded)
The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated financial statements.
3
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||||
REVENUES: |
|||||||||||||||||||
Sales and related service revenues |
$ | 36,199,000 | $ | 33,757,000 | $ | 72,600,000 | $ | 68,580,000 | |||||||||||
Rentals and other revenues |
46,665,000 | 45,322,000 | 92,771,000 | 90,311,000 | |||||||||||||||
Total revenues |
82,864,000 | 79,079,000 | 165,371,000 | 158,891,000 | |||||||||||||||
EXPENSES: |
|||||||||||||||||||
Cost of sales and related services |
17,449,000 | 15,561,000 | 34,742,000 | 32,065,000 | |||||||||||||||
Cost of rentals and other revenues, including rental
equipment depreciation of $5,088,000, $4,767,000,
$9,829,000 and $9,406,000, respectively |
8,970,000 | 8,580,000 | 17,396,000 | 16,766,000 | |||||||||||||||
Operating, including bad debt expense of $2,206,000,
$2,699,000, $5,323,000 and $6,869,000, respectively |
46,018,000 | 44,853,000 | 93,254,000 | 91,189,000 | |||||||||||||||
General and administrative |
4,126,000 | 4,055,000 | 8,672,000 | 8,317,000 | |||||||||||||||
Earnings from joint ventures |
(1,191,000 | ) | (1,119,000 | ) | (2,421,000 | ) | (2,392,000 | ) | |||||||||||
Depreciation, excluding rental equipment, and amortization |
846,000 | 1,069,000 | 1,771,000 | 2,102,000 | |||||||||||||||
Amortization of deferred financing costs |
— | 719,000 | — | 1,543,000 | |||||||||||||||
Interest expense (income), net (excluding post-petition
contractual interest
of $6,210,000, $0, $12,510,000 and $0, respectively) |
22,000 | 5,076,000 | (50,000 | ) | 10,191,000 | ||||||||||||||
Other (income) expense, net |
— | (65,000 | ) | 94,000 | (169,000 | ) | |||||||||||||
Gain on sale of assets of center |
— | — | — | (667,000 | ) | ||||||||||||||
Chapter 11 financial advisory expenses incurred prior to
filing bankruptcy |
— | 314,000 | — | 314,000 | |||||||||||||||
Total expenses |
76,240,000 | 79,043,000 | 153,458,000 | 159,259,000 | |||||||||||||||
INCOME (LOSS) FROM OPERATIONS BEFORE REORGANIZATION ITEMS,
INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE |
6,624,000 | 36,000 | 11,913,000 | (368,000 | ) | ||||||||||||||
REORGANIZATION ITEMS |
2,004,000 | — | 2,856,000 | — | |||||||||||||||
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE |
4,620,000 | 36,000 | 9,057,000 | (368,000 | ) | ||||||||||||||
PROVISION FOR (BENEFIT FROM) INCOME TAXES |
100,000 | 100,000 | 200,000 | (1,912,000 | ) | ||||||||||||||
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE |
4,520,000 | (64,000 | ) | 8,857,000 | 1,544,000 | ||||||||||||||
| |
|||||||||||||||||||
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE WITH NO
RELATED TAX EFFECT |
— | — | — | (68,485,000 | ) | ||||||||||||||
NET INCOME (LOSS) |
$ | 4,520,000 | $ | (64,000 | ) | $ | 8,857,000 | $ | (66,941,000 | ) | |||||||||
INCOME (LOSS) PER COMMON SHARE BEFORE CUMULATIVE EFFECT OF |
|||||||||||||||||||
CHANGE IN ACCOUNTING PRINCIPLE: |
|||||||||||||||||||
– Basic |
$ | 0.28 | $ | — | $ | 0.54 | $ | 0.09 | |||||||||||
– Diluted |
$ | 0.24 | $ | — | $ | 0.47 | $ | 0.08 | |||||||||||
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE PER COMMON SHARE: |
|||||||||||||||||||
– Basic |
$ | — | $ | — | $ | — | $ | (4.19 | ) | ||||||||||
– Diluted |
$ | — | $ | — | $ | — | $ | (3.66 | ) | ||||||||||
NET INCOME (LOSS) PER COMMON SHARE: |
|||||||||||||||||||
– Basic |
$ | 0.28 | $ | — | $ | 0.54 | $ | (4.10 | ) | ||||||||||
– Diluted |
$ | 0.24 | $ | — | $ | 0.47 | $ | (3.58 | ) | ||||||||||
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: |
|||||||||||||||||||
– Basic |
16,367,000 | 16,367,000 | 16,367,000 | 16,349,000 | |||||||||||||||
– Diluted |
18,835,000 | 16,367,000 | 18,663,000 | 18,688,000 | |||||||||||||||
The accompanying notes to interim condensed consolidated financial statements are an integral part of these consolidated financial statements.
4
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
| Six Months Ended June 30, | |||||||||||
| 2003 | 2002 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||||||
Net income (loss) |
$ | 8,857,000 | $ | (66,941,000 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |
|||||||||||
Cumulative effect of change in accounting principle |
— | 68,485,000 | |||||||||
Depreciation and amortization |
11,600,000 | 11,508,000 | |||||||||
Amortization of deferred financing costs |
— | 1,543,000 | |||||||||
Provision for doubtful accounts |
(3,306,000 | ) | (3,268,000 | ) | |||||||
Provision for inventory |
(21,000 | ) | (117,000 | ) | |||||||
Equity in earnings of unconsolidated joint ventures |
(1,338,000 | ) | (1,409,000 | ) | |||||||
Minority interest |
179,000 | 147,000 | |||||||||
Gain on sale of assets of center |
— | (667,000 | ) | ||||||||
Reorganization items |
2,856,000 | — | |||||||||
Reorganization items paid |
(2,660,000 | ) | — | ||||||||
Change in assets and liabilities net of dispositions: |
|||||||||||
Accounts receivable |
2,759,000 | 7,295,000 | |||||||||
Inventories |
1,538,000 | (132,000 | ) | ||||||||
Prepaid expenses and other current assets |
(419,000 | ) | (6,000 | ) | |||||||
Federal income tax receivable |
— | (2,112,000 | ) | ||||||||
Accounts payable, other payables and accrued
expenses |
(1,071,000 | ) | (3,594,000 | ) | |||||||
Other assets and liabilities |
(93,000 | ) | (20,000 | ) | |||||||
Other noncurrent liabilities |
(15,000 | ) | 124,000 | ||||||||
Net cash provided by operating activities |
18,866,000 | 10,836,000 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||||||
Proceeds from sale of assets of center |
— | 1,805,000 | |||||||||
Additions to property and equipment, net |
(13,782,000 | ) | (13,016,000 | ) | |||||||
Distributions and loan payments from unconsolidated
joint ventures, net |
2,203,000 | 1,610,000 | |||||||||
Net cash used in investing activities |
$ | (11,579,000 | ) | $ | (9,601,000 | ) | |||||
(Continued)
5
AMERICAN HOMEPATIENT, INC. AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Continued)
| Six Months Ended June 30, | ||||||||||
| 2003 | 2002 | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||
Principal payments on long-term debt and capital leases |
(226,000 | ) | (5,980,000 | ) | ||||||
Adequate protection payments |
(7,794,000 | ) | — | |||||||
Proceeds from exercise of stock options |
— | 11,000 | ||||||||
Deferred financing costs |
— | 189,000 | ||||||||
Distributions to minority interest owners |
(163,000 | ) | (119,000 | ) | ||||||
Restricted cash |
(400,000 | ) | 198,000 | |||||||
Net cash used in financing activities |
(8,583,000 | ) | (5,701,000 | ) | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS |
(1,296,000 | ) | (4,466,000 | ) | ||||||
CASH AND CASH EQUIVALENTS, beginning of period |
22,827,000 | 9,129,000 | ||||||||
CASH AND CASH EQUIVALENTS, end of period |
$ | 21,531,000 | $ | 4,663,000 | ||||||
SUPPLEMENTAL INFORMATION: |
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