(Mark One)
ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Florida (State or other jurisdiction of incorporation or organization) |
65-0735612 (I.R.S. Employer Identification No.) | |
| 600 301 Blvd West, Suite 202 Bradenton, FL Address of principal executive offices) |
34205 (Zip 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 ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.
| Class of common stock |
Outstanding as of August 8, 2003 | |
| Par value $0.01 per share | 18,542,255 |
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
| FOR THE THREE MONTHS ENDED JUNE 30, |
FOR THE SIX MONTHS ENDED JUNE 30, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 |
2003 |
2002 | |||||||||||
| Revenues | $ | 102,142 | $ | 92,901 | $ | 204,912 | $ | 184,033 | ||||||
| Cost of services | 74,281 | 70,330 | 152,273 | 138,412 | ||||||||||
| Gross profit | 27,861 | 22,571 | 52,639 | 45,621 | ||||||||||
| Operating expenses: | ||||||||||||||
| Salaries, wages and commissions | 12,989 | 13,058 | 25,517 | 26,742 | ||||||||||
| Other general and administrative | 8,104 | 6,353 | 15,030 | 12,665 | ||||||||||
| Depreciation and amortization | 1,792 | 1,998 | 3,616 | 4,060 | ||||||||||
| Total operating expenses | 22,885 | 21,409 | 44,163 | 43,467 | ||||||||||
| Operating income | 4,976 | 1,162 | 8,476 | 2,154 | ||||||||||
| Interest income, net | 415 | 489 | 815 | 956 | ||||||||||
| Other non-operating income (expense), net | 7 | 30 | (12 | ) | 71 | |||||||||
| Income before income taxes | 5,398 | 1,681 | 9,279 | 3,181 | ||||||||||
| Income tax provision | 1,781 | 572 | 3,062 | 1,081 | ||||||||||
| Net income | 3,617 | 1,109 | 6,217 | 2,100 | ||||||||||
| Non-cash charges attributable to beneficial | ||||||||||||||
| conversion feature and accretion of redemption | ||||||||||||||
| value of convertible, redeemable preferred stock | 17 | -- | 17 | -- | ||||||||||
| Preferred stock dividend | 276 | -- | 276 | -- | ||||||||||
| Net income attributable to common shareholders | $ | 3,324 | $ | 1,109 | $ | 5,924 | $ | 2,100 | ||||||
| Net income per common share | ||||||||||||||
| - Basic | $ | 0.16 | $ | 0.05 | $ | 0.29 | $ | 0.10 | ||||||
| - Diluted | $ | 0.15 | $ | 0.05 | $ | 0.27 | $ | 0.10 | ||||||
| Weighted average common shares outstanding | ||||||||||||||
| - Basic | 20,267,369 | 20,758,702 | 20,545,058 | 20,685,084 | ||||||||||
| - Diluted | 23,524,392 | 21,222,276 | 22,803,290 | 21,029,665 | ||||||||||
See notes to condensed consolidated financial statements.
| June 30, 2003 |
December 31, 2002 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 19,787 | $ | 33,769 | ||||
| Certificates of deposit - restricted | 6,281 | 13,431 | ||||||
| Marketable securities | 11,000 | -- | ||||||
| Marketable securities- restricted | 103,424 | 79,023 | ||||||
| Accounts receivable, net | 75,910 | 87,302 | ||||||
| Deferred tax asset | 5,597 | 7,984 | ||||||
| Other current assets | 13,159 | 13,068 | ||||||
| Total current assets | 235,158 | 234,577 | ||||||
| Property and equipment, net | 13,687 | 16,398 | ||||||
| Goodwill | 8,692 | 8,692 | ||||||
| Deferred tax asset | -- | 123 | ||||||
| Other assets | 5,649 | 5,745 | ||||||
| Total assets | $ | 263,186 | $ | 265,535 | ||||
| LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED | ||||||||
| STOCK AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accrued insurance premiums, health and | ||||||||
| workers' compensation insurance reserves | $ | 29,363 | $ | 33,999 | ||||
| Accrued payroll and payroll taxes | 81,192 | 93,379 | ||||||
| Accounts payable and other accrued liabilities | 3,919 | 4,408 | ||||||
| Income taxes payable | 1,663 | 3,971 | ||||||
| Customer deposits and prepayments | 7,017 | 8,150 | ||||||
| Dividends payable | 1,189 | 1,041 | ||||||
| Total current liabilities | 124,343 | 144,948 | ||||||
| Long-term accrued health and workers' compensation insurance reserves | 61,672 | 61,672 | ||||||
| Deferred tax liability | 202 | -- | ||||||
| Other long-term liabilities | 391 | 310 | ||||||
| Total liabilities | 186,608 | 206,930 | ||||||
| Commitments and contingencies (see notes) | ||||||||
| Series A convertible, redeemable preferred stock, $0.01 par value, | ||||||||
| ($30,000 liquidation preference) 30,000 shares authorized, issued and | ||||||||
| outstanding as of June 30, 2003 | 405 | -- | ||||||
| Shareholders' equity: | ||||||||
| Common stock, $.01 par value | ||||||||
| Shares authorized: 100,000,000 | ||||||||
| Shares issued and outstanding: | ||||||||
| June 30, 2003 - 21,336,155 | ||||||||
| December 31, 2002 - 20,810,557 | 213 | 208 | ||||||
| Additional paid in capital | 69,215 | 39,344 | ||||||
| Retained earnings | 23,122 | 19,158 | ||||||
| Treasury Stock (3,086,339 and 50,517 shares at cost, respectively) | (16,380 | ) | (106 | ) | ||||
| Accumulated other comprehensive income | 3 | 1 | ||||||
| Total shareholders' equity | 76,173 | 58,605 | ||||||
| Total liabilities, convertible redeemable preferred | ||||||||
| stock and shareholders' equity | $ | 263,186 | $ | 265,535 | ||||
See notes to condensed consolidated financial statements.
| For the six months ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 6,217 | $ | 2,100 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 3,616 | 4,060 | ||||||
| Deferred tax benefit (provision), net | 2,712 | (817 | ) | |||||
| Provision for bad debts | 135 | 259 | ||||||
| Other | 40 | (45 | ) | |||||
| Changes in operating working capital: | ||||||||
| Accounts receivable, net | 11,257 | 7,668 | ||||||
| Other current assets | (91 | ) | (1,407 | ) | ||||
| Other assets | 93 | (1,430 | ) | |||||
| Accrued insurance premiums, health and workers' compensation | ||||||||
| insurance reserves | (4,636 | ) | 6,619 | |||||
| Accrued payroll and payroll taxes | (12,187 | ) | 10,221 | |||||
| Accounts payable and other accrued liabilities | (488 | ) | (443 | ) | ||||
| Income taxes payable | (1,391 | ) | 720 | |||||
| Customer deposits and prepayments | (1,133 | ) | 1,184 | |||||
| Health and workers' compensation reserves - long term | - | (1,275 | ) | |||||
| Other long-term liabilities | 81 | 52 | ||||||
| Net cash provided by operating activities | 4,225 | 27,466 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of marketable securities and certificates of deposit | (78,868 | ) | (104,605 | ) | ||||
| Maturities of marketable securities and certificates of deposit | 50,622 | 67,043 | ||||||
| Capital expenditures | (945 | ) | (320 | ) | ||||
| Net cash used in investing activities | (29,191 | ) | (37,882 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payment of cash dividends to common shareholders | (2,089 | ) | (2,068 | ) | ||||
| Proceeds from issuance of Series A Convertible, | ||||||||
| Redeemable Preferred Stock, net of issuance costs | 27,686 | -- | ||||||
| Purchase of treasury stock | ||||||||