U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: DECEMBER 31, 2003
COMMISSION FILE NUMBER: 1-15587
MED DIVERSIFIED, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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NEVADA |
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84-1037630 |
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(STATE OR OTHER JURISDICTION OF |
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(I.R.S. EMPLOYER |
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100 BRICKSTONE SQUARE, FIFTH FLOOR, ANDOVER, MA 01810 |
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE) |
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(978) 323-2500 |
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(ISSUER’S TELEPHONE NUMBER) |
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MED DIVERSIFIED, INC. |
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100 Brickstone Square, Fifth Floor |
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Andover, MA 01810 |
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Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 issuer is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
Indicate by check mark whether the issuer has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No o
As of January 30, 2004, 148,661,526 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.
Explanatory Note
As more fully explained in Part II, Item 5 of the quarterly report on Form 10-Q we filed on November 19, 2003 for the three and six months ended September 30, 2003, in October 2003 we formally requested permission from the Securities and Exchange Commission (the “SEC”) to use modified reporting procedures under the Securities Exchange Act of 1934. We deferred the review of our financial statements filed as part of that quarterly report by our independent accountants, Brown & Brown, LLP (“Brown & Brown”), while our request was pending.
The SEC informally indicated to us that we could not use modified reporting procedures. Brown and Brown will commence its review of the Form 10-Q for the three and six months ended September 30, 2003, and for the three and nine months ended December 31, 2003, on April 1, 2004 or earlier, if practicable. At the completion of Brown & Brown’s reviews, we plan to file a Form 8-K to report the completion of the Brown & Brown reviews if those reviews do not result in any material adjustments to our unaudited financial statements, or one or more amended quarterly reports on Form 10-Q/A if any material adjustments are required.
INDEX
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
MED DIVERSIFIED, INC.
(Debtor-In-Possession as of November 27, 2002)
Condensed Consolidated Balance Sheets
(in thousands)
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December 31, 2003 |
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March 31, 2003 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
21,989 |
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$ |
10,072 |
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Accounts receivable, net of allowances of $20,637 and $26,209 at December 31, 2003 and March 31, 2003, respectively |
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29,949 |
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36,594 |
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Accounts receivable from affiliates, net |
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98 |
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186 |
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Prepayments and other current assets |
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7,744 |
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7,847 |
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Assets of discontinued operations |
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3,244 |
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891 |
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Total current assets |
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63,024 |
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55,590 |
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Non-current assets: |
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Property and equipment, net |
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10,983 |
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13,856 |
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Goodwill |
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20,840 |
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20,548 |
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Investments |
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10,357 |
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11,231 |
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Other intangibles, net |
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31,448 |
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32,042 |
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Assets of discontinued operations, net of current portion |
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— |
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3,105 |
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Other assets |
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1,816 |
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1,887 |
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Total non-current assets |
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75,444 |
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82,669 |
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TOTAL ASSETS |
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$ |
138,468 |
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$ |
138,259 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
7,859 |
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$ |
5,848 |
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Accrued salaries and benefit costs |
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15,338 |
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14,700 |
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Accrued liabilities |
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9,494 |
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8,886 |
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Liabilities of discontinued operations |
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12,127 |
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11,716 |
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Current maturities of capital leases |
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1,231 |
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10 |
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Liabilities subject to compromise (Note 3) |
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345,785 |
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— |
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Total current liabilities |
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391,834 |
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41,160 |
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Long-Term liabilities: |
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Liabilities subject to compromise (Note 3) |
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— |
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356,873 |
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Capital leases |
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12 |
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20 |
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Other liabilities |
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— |
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— |
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Liabilities of discontinued operations, net of current portion |
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— |
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1,852 |
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Total long-term liabilities |
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12 |
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358,745 |
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Minority interest |
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423 |
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377 |
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Stockholders’ equity (deficit): |
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Series A convertible preferred stock, 5,000 authorized, none issued or outstanding at December 31, 2003 and March 31, 2003 |
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— |
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— |
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Common shares, $0.001 par value, 400,000 shares authorized at December 31, 2003 and March 31, 2003, 148,662 issued and outstanding at December 31, 2003 and March 31, 2003 |
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149 |
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149 |
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Paid in capital |
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427,179 |
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427,179 |
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Stock subscription |
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(4,400 |
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(4,400 |
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Common stock options |
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377 |
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377 |
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Deferred compensation |
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— |
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(63 |
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Accumulated deficit |
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(675,737 |
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(683,896 |
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Accumulated other comprehensive income |
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(3 |
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(3 |
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Less: treasury shares at cost, 460 shares at December 31, 2003 and March 31, 2003 |
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(1,366 |
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(1,366 |
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Total stockholders’ deficit |
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(253,801 |
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(262,023 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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$ |
138,468 |
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$ |
138,259 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
MED DIVERSIFIED, INC.
(Debtor-In-Possession as of November 27, 2002)
Condensed Consolidated Statements of Operations
For the Three Months Ended December 31, 2003 and 2002
(unaudited, in thousands, except for per share information)
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2003 |
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2002 |
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NET REVENUE: |
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Non affiliates |
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$ |
87,847 |
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$ |
88,972 |
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Affiliates |
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111 |
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195 |
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Total net revenue |
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87,958 |
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89,167 |
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COSTS AND EXPENSES: |
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Cost of services |
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47,401 |
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51,103 |
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Selling, general and administrative |
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34,956 |
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36,392 |
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Depreciation and amortization |
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1,348 |
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1,509 |
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Total costs and expenses |
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83,705 |
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