(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 May 4, 2004 | |
| Par value $0.01 per share | 19,462,083 |
| For the Three Months Ended March 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| Revenues | $ | 125,912 | $ | 102,770 | ||||
| Cost of services | 90,122 | 77,992 | ||||||
| Gross profit | 35,790 | 24,778 | ||||||
| Operating expenses: | ||||||||
| Salaries, wages and commissions | 16,278 | 12,528 | ||||||
| Other general and administrative | 8,128 | 6,926 | ||||||
| Depreciation and amortization | 2,180 | 1,824 | ||||||
| Total operating expenses | 26,586 | 21,278 | ||||||
| Operating income | 9,204 | 3,500 | ||||||
| Interest income, net | 286 | 400 | ||||||
| Other income (expense), net | 10 | (19 | ) | |||||
| Income before income taxes | 9,500 | 3,881 | ||||||
| Income tax provision | 3,135 | 1,281 | ||||||
| Net income | 6,365 | 2,600 | ||||||
Non-cash charges attributable to beneficial conversion | ||||||||
| feature and accretion of redemption value of convertible, | ||||||||
| redeemable preferred stock | 94 | -- | ||||||
Preferred stock dividends | 321 | -- | ||||||
| Net income attributable to common shareholders | $ | 5,950 | $ | 2,600 | ||||
| Net income per common share | ||||||||
| - Basic | $ | 0.31 | $ | 0.12 | ||||
| - Diluted | $ | 0.24 | $ | 0.12 | ||||
| Weighted average common shares outstanding | ||||||||
| - Basic | 19,319,674 | 20,824,230 | ||||||
| - Diluted | 26,771,949 | 21,813,219 | ||||||
See notes to condensed consolidated financial statements.
| March 31, 2004 |
December 31, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Current assets: | ||||||||
Cash and cash equivalents | $ | 32,321 | $ | 44,682 | ||||
Certificates of deposit – restricted | 6,032 | 6,032 | ||||||
Marketable securities – restricted | 83,469 | 84,271 | ||||||
Accounts receivable, net | 127,588 | 100,829 | ||||||
Short-term workers' compensation receivable, net | 11,734 | 11,734 | ||||||
Deferred tax asset, net | 1,424 | 2,410 | ||||||
Other current assets | 14,560 | 8,281 | ||||||
| Total current assets | 277,128 | 258,239 | ||||||
Property and equipment, net | 11,679 | 12,253 | ||||||
Long-term marketable securities – restricted | 18,302 | 17,023 | ||||||
Long-term workers' compensation receivable, net | 27,336 | 12,621 | ||||||
Intangible assets, net | 43,943 | 7,128 | ||||||
Goodwill | 8,692 | 8,692 | ||||||
Other assets | 5,958 | 5,608 | ||||||
| Total assets | $ | 393,038 | $ | 321,564 | ||||
See notes to condensed consolidated financial statements.
| March 31, 2004 |
December 31, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| LIABILITIES,
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY |
||||||||
| Current liabilities: | ||||||||
Accrued payroll and payroll taxes | $ | 141,274 | $ | 119,432 | ||||
Accrued insurance premiums, health and | ||||||||
| workers' compensation insurance reserves | 36,396 | 32,071 | ||||||
Customer deposits and prepayments | 25,035 | 9,336 | ||||||
Revolving credit facility | 20,000 | -- | ||||||
Accounts payable and other accrued liabilities | 5,804 | 4,307 | ||||||
Income taxes payable | 1,969 | 1,833 | ||||||
Dividends payable | 1,384 | 1,161 | ||||||
| Total current liabilities | 231,862 | 168,140 | ||||||
Long-term accrued health and workers' compensation | ||||||||
| insurance reserves | 59,280 | 59,280 | ||||||
Deferred tax liability | 500 | 296 | ||||||
Other long-term liabilities | 963 | 914 | ||||||
| Total liabilities | 292,605 | 228,630 | ||||||
Commitments and contingencies | ||||||||
Series A convertible, redeemable preferred stock, $0.01 par value, | ||||||||
| ($30,000 liquidation preference) 30,000 shares authorized, issued and | ||||||||
| outstanding as of March 31, 2004 and December 31, 2003, respectively, net | 648 | 554 | ||||||
Shareholders' equity: | ||||||||
Common stock, $.01 par value | ||||||||
| Shares authorized: 100,000,000 | ||||||||
| Shares issued: | ||||||||
| March 31, 2004 - 22,475,930 | ||||||||
| December 31, 2003 - 22,251,477 | 225 | 223 | ||||||
| Additional paid in capital | 81,173 | 78,715 | ||||||
| Retained earnings | 34,515 | 29,734 | ||||||
| Treasury stock (3,044,372 and 3,062,751 shares at cost, respectively) | (16,128 | ) | (16,292 | ) | ||||
| Total shareholders' equity | 99,785 | 92,380 | ||||||
| Total liabilities, convertible redeemable preferred | ||||||||
| stock and shareholders' equity | $ | 393,038 | $ | 321,564 | ||||
See notes to condensed consolidated financial statements.
| For the Three Months Ended March 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 6,365 | $ | 2,600 | ||||
| Adjustments to reconcile net income to net cash provided by | ||||||||
| operating activities: | ||||||||
| Depreciation and amortization | 2,180 | 1,824 | ||||||
| Deferred tax provision, net | 1,190 | 1,320 | ||||||
| Provision for bad debts | 164 | 62 | ||||||
| Other | 86 | 30 | ||||||
| Changes in operating working capital: | ||||||||
| Accounts receivable, net | (26,923 | ) | 10,810 | |||||
| Other current assets | (6,279 | ) | 1,600 | |||||
| Workers’ compensation receivable | (14,715 | ) | (1,452 | ) | ||||
| Other assets | (351 | ) | (45 | ) | ||||
| Accrued insurance premiums, health and | ||||||||
| workers’ compensation insurance reserves | 4,325 | (3,336 | ) | |||||
| Accrued payroll and payroll taxes | 21,842 | (7,850 | ) | |||||
| Accounts payable and other accrued liabilities | 1,497 | (734 | ) | |||||
| Income taxes payable | 1,605 | (1,142 | ) | |||||
| Customer deposits and prepayments | 15,699 | (2,117 | ) | |||||
| Other long-term liabilities | 49 | (49 | ) | |||||
| Net cash provided by operating activities | 6,734 | 1,521 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of marketable securities and certificates of deposit | (29,060 | ) | (28,413 | ) | ||||
| Maturities of marketable securities and certificates of deposit | 28,583 | 17,650 | ||||||
| Purchase of intangible assets | (37,274 | ) | -- | |||||
| Capital expenditures | (1,232 | ) | (551 | ) | ||||
| Net cash used in investing activities | (38,983 | ) | (11,314 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payment of cash dividends to shareholders | (1,267 | ) | (1,041 | ) | ||||
| Proceeds of credit line borrowing | 20,000 | -- | ||||||
| Proceeds from issuance of common shares, net | 1,155 | 415 | ||||||
| Net cash provided (used) in financing activities | 19,888 | (626 | ) | |||||
| Net decrease in cash and cash equivalents | (12,361 | ) | (10,419 | ) | ||||
| Cash and cash equivalents - beginning of period | 44,682 | 33,769 | ||||||
| Cash and cash equivalents - end of period | $ | 32,321 | $ | 23,350 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | 340 | $ | 1,958 | ||||
See notes to condensed consolidated financial statements.
The accompanying unaudited condensed consolidated financial statements of Gevity HR, Inc., and its subsidiaries (the “Company” or “Gevity”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. These financial statemen